What US can do if China dumps its debt

[Thomas]

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The same way the Soviets did: procure them through 3rd parties, front companies, and from non-US markets.

Your experience in the US does not match many other people's, especially the highly educated PhDs my father was lucky enough to be colleagues with. Your personal success does not mean the majority are successful. The majority are not. Of course, "investment immigrants" and political traitors paid for by the US government are the exception. US demographics will eventually force the white ruling class to accept a Mexican majority, who have far less ties to the US. When the inevitable revolt comes, the US will be severely weakened. What do you mean there's no brainwashing. Are you denying that children in the US must speak the pledge of allegiance every day?

you have a re-occuring theme in many of your posts that smacks of racism. The U.S. is and always has been a melting pot of people from all over the world. Those that immigrate here legally and become citizens consider themselves to be American.

 

[below_freezing]

you have a re-occuring theme in many of your posts that smacks of racism. The U.S. is and always has been a melting pot of people from all over the world. Those that immigrate here legally and become citizens consider themselves to be American.

I am not a racist. I have never said one race is better than another. You on the other hand are a fundamentalist, extremist and uneducated.

 

[Chinese-Dragon]

I am not a racist. I have never said one race is better than another.

That is true, below freezing has never claimed that one race is superior to another.

Besides, we have many different ethnic groups in China, just like they do in America. Nationalism requires an acceptance of these ethnic differences.

 

[Major Shaitan Singh]

I think Now Super power of 2011 is China and not anymore USA.
Most of things we get in US market are made in China.

China has man-power, Army and economy to be super power.

Now its time to de- value and remove Dollar from international trading and get on with Chinese Yen

China should bring back its past glory by dominating in each and every feild.

It will also benefits the neighbours.... lets put an end to US and Europe ruling the world now its time for Asian.

 

[bandit]

A sale of 1 trillion in securities and cutting economic ties to the US would plunge the value of the dollar. At this critical time, we can secure grain on the world markets, even taking a loss; this will further spike the price of grain. With economic ties to the US cut off, every non-food item they use will be in shortage, prompting even greater price increases. Angry at being deluded by US propaganda, american citizens will riot and revolt, forcing the US army to put it down, and reducing US legitimacy further in the eyes of its citizens. The US might not collapse completely but it would be severely weakened for decades.

We have a financial genius!!!
China dumps its debt, the dollar slides, US stops purchasing crap from China, who do you sell to? Europeans are US allies remember. Renminbi rises, you lose your comparative advantage of cheaper products, now who do you export to... Africa?
Stop smoking whatever you are and do realize you are holding US debt to hold your own currency down to make your exports viable, once that is gone why would anybody buy from China if its products aren't chepaer anymore. Your currency cannot be the equivalent of the dollar until you open up your markets to foreign competition, which you China obviously cannot do to protect its industries.
Better listen to your own president who acknowledges the power of dollar more than you since he is better informed...and they start shitting in their pants when US prints more dollars

What is that role? The dollar is more than just a reserve currency. For many countries, it is a “key” currency. Their exchange rates revolve around the dollar, just as the notes on a scale centre on a musical key. Their governments fear that if their currency falls too far against the dollar, inflation will take hold or the country’s dollar debts will become too heavy to bear. If their currencies rise too far against the greenback, their exporters will lose out wherever customers pay in dollars.
But the dollar is not always perfectly pitched. Mr Zhou and President Hu worry that America is printing too much money to try to revive its own economy, regardless of the consequences abroad. To stay in tune with a falling dollar, other central banks will have to print more of their own currency, risking inflation and asset-price bubbles. “The monetary policy of the United States has a major impact on global liquidity and capital flows,” Mr Hu told the Journal and the Post, “therefore, the liquidity of the dollar should be kept at a reasonable and stable level.”
Mr Hu admitted that making the yuan “an international currency will be a fairly long process.” Still, that process has begun. His government now seems keen to promote the yuan in international trade. In June it allowed most of the country to pay for imports in yuan and 365 Chinese companies to sell exports for the currency. Last month, it expanded the number to 67,359. By the end of November, trade worth 385 billion yuan ($58 billion) had been settled in China’s currency (see chart).
China's currency: Stranger than fiction | The Economist

I am not a racist. I have never said one race is better than another. You on the other hand are a fundamentalist, extremist and uneducated.

You are a closet racist who pretends he is not to be politically correct. Insinuating that US IQ is falling and implying Chinese have more of it and statements like

force the white ruling class to accept a Mexican majority, who have far less ties to the US. When the inevitable revolt comes, the US will be severely weakened.

inevitably betray your true thoughts. You sir, are not even bold enough to accept your true thoughts.

 

[Dharmocol]

A sale of 1 trillion in securities and cutting economic ties to the US would plunge the value of the dollar. At this critical time, we can secure grain on the world markets, even taking a loss; this will further spike the price of grain. With economic ties to the US cut off, every non-food item they use will be in shortage, prompting even greater price increases. Angry at being deluded by US propaganda, american citizens will riot and revolt, forcing the US army to put it down, and reducing US legitimacy further in the eyes of its citizens. The US might not collapse completely but it would be severely weakened for decades.

a perfect american dystopian society,sometime fantasies overwhelm any sane mind.

if u dump American bonds,their r plenty of nation's,with their arms open to purchase it,for example the Arabs,u r not the only nation which is rising.

Eventually u will also initiate a trade war,and believe me thats not going to be a favorable situation for u.

about american grain stock's,u r talking about a nation which flood the grain market with its stocks.

In such a situation it will not be US who will be falling,once they withdraw their stocks,it will be the rest of the world who will get assaulted by rising food price.

Another themes in ur post r lack of patriotism and low IQ figures,from were do u got this holy crap.

From were do u got that non whites r not patriotic,dont tell u have personal experience,such craps dont work.

For the past some days i am witnessing Chinese call's about nation's which have huge ethnic diversity r not patriotic,is this what they teach in ur school,their is no other powerful democracy as US and a role model for many nation's including India.American's r more patriotic than any other citizen's I had witnessed,even the immigrants proudly call themselves an American.

About the IQ crap,can u give me a source for this,no I am not asking about some maths and physics Olympiad results.

It seems ur source for this holy crap is the controversial 2002 book,IQ and the Wealth of Nations which had been discarded by most of the people,definitely accepted in China because it place China in the top league,even above US,Vietnam and India,the 3 nation's usually I had witnessed in this forum again and again targeted by Chinese insulting their IQ's.

R u racially motivated or simply type this due to trolling purpose

 

[luckyyy]

US has just bought back $600bn of it's debt/bonds...

china could have dump , why didn't they..?

 

[Brotherhood]

Does Decline in US Bond Holdings Mean a Change of Tack??Economy?In-depth?WantChinaTimes.com
011-01-19

China's slowing purchase of US bonds in Nov. caused speculation of whether China had begun to shy away from US bonds in its foreign reserve position out of fear for the depreciation of the US dollar. (File Photo/CFP)

The US Treasury Department reported Tuesday (Jan. 18) that China's holdings of US bonds shrank to US$895.6 billion in November last year, a drop which followed four consecutive months where China increased its bold holdings. As the US announced a new round of quantitative easing (QE2) in that month, the move aroused suspicions that China was beginning to shy away from US bonds in its foreign reserve position over fears of the depreciation of the US dollar.

In November, the Federal Reserve announced it would buy US$600 billion in long-term treasury bonds to spur the economy. The move drew criticism from China and other emerging countries that this would cause an influx of speculative capital into their economies, leading to inflation and economic bubbles.

China's holdings of US bonds in November dropped by US$11.2 billion from October's level of US$906.8 billion, almost a one-year high. China had increased its US bond position for consecutive months from July to October.

Despite the decline in China's US debt in November, it still remains the United States' largest creditor, followed by Japan.

Some experts have argued that the decrease in China's US bonds following QE2 is significant, suggesting that in the long run China will gradually switch its foreign reserves from US bonds to other countries' assets as it loses confidence in the US dollar.

Guy LeBas, chief fixed income strategist with Janney Montgomery Scott in Philadelphia, said this could be the beginning of a long-term trend for China to diversify its central bank's debt holdings, while eurozone bonds may become its target, according to CNN.

Yuan Jiang, researcher of Agricultural Bank of China, told the China-based National Business Daily that while the US dollar is weakening due to QE2, China's loss in US debt is unavoidable. This being the case, China should reflect on its strategy regarding foreign reserves.

Yet some experts disagree that the November decline is a sign of a change in strategy. "There have been some suggestions that China may be off-loading Treasuries and that this may have been behind the sell-off and, while that was true in November, it is not necessarily the start of any particular trend," said Richard Gilhooly, strategist at TD Securities, according to Financial Times.

Wang Jianxi, the executive vice president of the China Investment Corporation, said despite the depreciation of the US dollar, other currencies are not necessarily more stable; the euro is in the doldrums and Japan's economy is not good despite the relative strength of the yen. The US dollar is still a desirable asset, Wang added.

Wang also said the US remains the most powerful debtor and the US government will not default in the foreseeable future.

Given the market's expectations for a weak US dollar, a stronger US economy and the weak outlook of the European and Japanese economies, continuing support for US securities still remains, said IHS Global Insight, according to Wall Street Journal.

 

[Brotherhood]

US has just bought back $600bn of it's debt/bonds...

china could have dump , why didn't they..?

Wise guy, buying back the so-called bonds from US herself meant printing more paper money, its nothing like buying back from other country.

In November, the Federal Reserve announced it would buy US$600 billion in long-term treasury bonds to spur the economy.Does Decline in US Bond Holdings Mean a Change of Tack??Economy?In-depth?WantChinaTimes.com

 

[below_freezing]

We have a financial genius!!!
China dumps its debt, the dollar slides, US stops purchasing crap from China, who do you sell to? Europeans are US allies remember. Renminbi rises, you lose your comparative advantage of cheaper products, now who do you export to... Africa?
Stop smoking whatever you are and do realize you are holding US debt to hold your own currency down to make your exports viable, once that is gone why would anybody buy from China if its products aren't chepaer anymore. Your currency cannot be the equivalent of the dollar until you open up your markets to foreign competition, which you China obviously cannot do to protect its industries.
Better listen to your own president who acknowledges the power of dollar more than you since he is better informed...and they start shitting in their pants when US prints more dollars




You are a closet racist who pretends he is not to be politically correct. Insinuating that US IQ is falling and implying Chinese have more of it and statements like


inevitably betray your true thoughts. You sir, are not even bold enough to accept your true thoughts.

Sigh, you still have NO idea what actually makes the Chinese economy competitive, what the real purpose of holding "down" the RMB is (it's not being held down), and you still do not know basic statistics. Come back when you leave the 40% illiterates category of your country.

 

[below_freezing]

a perfect american dystopian society,sometime fantasies overwhelm any sane mind.

if u dump American bonds,their r plenty of nation's,with their arms open to purchase it,for example the Arabs,u r not the only nation which is rising.

Eventually u will also initiate a trade war,and believe me thats not going to be a favorable situation for u.

about american grain stock's,u r talking about a nation which flood the grain market with its stocks.

In such a situation it will not be US who will be falling,once they withdraw their stocks,it will be the rest of the world who will get assaulted by rising food price.

Another themes in ur post r lack of patriotism and low IQ figures,from were do u got this holy crap.

From were do u got that non whites r not patriotic,dont tell u have personal experience,such craps dont work.

For the past some days i am witnessing Chinese call's about nation's which have huge ethnic diversity r not patriotic,is this what they teach in ur school,their is no other powerful democracy as US and a role model for many nation's including India.American's r more patriotic than any other citizen's I had witnessed,even the immigrants proudly call themselves an American.

About the IQ crap,can u give me a source for this,no I am not asking about some maths and physics Olympiad results.

It seems ur source for this holy crap is the controversial 2002 book,IQ and the Wealth of Nations which had been discarded by most of the people,definitely accepted in China because it place China in the top league,even above US,Vietnam and India,the 3 nation's usually I had witnessed in this forum again and again targeted by Chinese insulting their IQ's.

R u racially motivated or simply type this due to trolling purpose

sigh, you still cannot accept basic statistics. Even if we accept that the IQ and the Wealth of Nations is totally wrong and all races have the same IQ, China still has the highest number of high IQ persons due to the standard deviation of IQ being invariant across populations, while China has the largest population. Add to that Chinese IQs can be fully realized thanks to no starvation and universal education, while some other country's IQs, even if equal, cannot be realized due to starvation and illiteracy, and it is exceptionally easy to see that surpassing the US is merely a matter of time.

 

[faithfulguy]

In term of economic development, its clear that China is in a miracle. A 30 year miracle that surpass many people's prediction. But the US economy is still 3 times bigger than China's. Its likely that China will have a bigger economy in a couple of decades. But US will continue to be the destination of many people, including Chinese. Also, people who come here embrace America and will defend America, its value and its constitution that make this country great. Its true there are some illiterates and racist here. But most America are actually very tolerant, more tolerant than most people out there. So do not under estimate America.

 

[below_freezing]

In term of economic development, its clear that China is in a miracle. A 30 year miracle that surpass many people's prediction. But the US economy is still 3 times bigger than China's. Its likely that China will have a bigger economy in a couple of decades. But US will continue to be the destination of many people, including Chinese. Also, people who come here embrace America and will defend America, its value and its constitution that make this country great. Its true there are some illiterates and racist here. But most America are actually very tolerant, more tolerant than most people out there. So do not under estimate America.

Never underestimate the US, that's why we're pointing our ICBMs at it. Americans should be happy that they're targetted by the nuclear arsenals of 2 countries. Sympathy is free, fear is earned.

 

[bandit]

Sigh, you still have NO idea what actually makes the Chinese economy competitive, what the real purpose of holding "down" the RMB is (it's not being held down), and you still do not know basic statistics. Come back when you leave the 40% illiterates category of your country.

If I have no Idea I would be glad to learn from you, do share your thoughts on what makes the chinese competitive other than chepare production costs, don't even think of typing quality.

,what the real purpose of holding "down" the RMB is
(it's not being held down),

Decide what you want to say, its undervalued or not, I cant make out from that contradictory statement of yours.

Come back when you leave the 40% illiterates category of your country

If I represent the uneducated part of my country and you the educated part of your country, I can see what an education really means in China, and its not flattering to say the least.

 

[below_freezing]

If I have no Idea I would be glad to learn from you, do share your thoughts on what makes the chinese competitive other than chepare production costs, don't even think of typing quality.

,what the real purpose of holding "down" the RMB is [/COLOR](it's not being held down),

Decide what you want to say, its undervalued or not, I cant make out from that contradictory statement of yours.



If I represent the uneducated part of my country and you the educated part of your country, I can see what an education really means in China, and its not flattering to say the least.

sigh, you think it's because it's cheap? Ok. Indian wages are 1/4 chinese ones. Why is India not a big manufacturer? Why not Africa? Why not Vietnam? Hell, Vietnam is exactly like China from 20 years ago, from wages to culture to government, why not Vietnam? They even have an advantage over 20 years ago China: better English. So why? No critical thinking, typical Indian/American education.

I'm not going to cherrypick statistics for you, follow the curve of China's GDP and follow the curve of the RMB valuation, it's not that challenging... maybe for an illiterate.