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Valued Member
United States
376 Posts |
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Pillar of the Community
United States
3670 Posts |
Simple, China knows the dollar is done and they are getting out fast and want to be sitting on a nice huge PM pile when it all hits the fan, can ya blame them....
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Bedrock of the Community
Australia
21788 Posts |
China has something like $5 trillion in U.S. bonds. The money the U.S. receives from those bonds help U.S. to continue buying imports.
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Pillar of the Community
United States
1454 Posts |
Quote:
What is there to stop the merchant from saying "today that suit is worth 20 pieces of gold as apposed to 10 pieces"? Or the farmer from telling you that a bunch of carrots is now worth 80 grains of gold instead of 40 pieces of silver?. One word: Competition. |
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Bedrock of the Community
13014 Posts |
Its true about the bonds. The gold stock up is more than likely just them planning for the future or trying to hedge against what happened in europe and here. As of right now destroying our currency would do them more harm than good. That can change in the future though and they probably do have a plan for how they would try and do it just like we have a plan of how to counter it.
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Pillar of the Community
United States
4008 Posts |
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The money the U.S. receives from those bonds help U.S. to continue buying imports. And yet, this is not an economically sustainable course of action. If we cannot pay all of our bills, how will be ever pay all of our bills AND the interest that is due on financing them? This looks a lot like a politician's answer to a difficult problem... stretch it out until they are safely out of office or dead because at that point they will not care if everything falls apart. "It won't be MY problem!"  |
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Pillar of the Community
United States
1903 Posts |
How do we pay off China? We end up giving them Alaska
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Bedrock of the Community
13014 Posts |
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How do we pay off China? The simple answer is we dont barring some huge turn arounds. The debts so high we will never pay it off unless theres a world war 3 and we save everyone and they all forgive it. Its basically just there now and everyone knows its there. China knows they wont see that money again, but they also know that the bonds do let them buy things and keeping us afloat helps them more with trade and grow their own economy than letting us sink |
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Bedrock of the Community
Australia
21788 Posts |
It seems to me that politicians worldwide, perhaps acting on strategic ecomonic advice, are not too worried if all countries together, have continually increasing debt that will be impossible to pay back.
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Pillar of the Community
United States
3294 Posts |
Umm, how do we pay China? If it ever got too bad, we would just tell China tough luck. If you want your money, you are welcome to try and take it. Remember the old saying where if you owe the bank $1,000, it has power over you, but if you owe the bank $10 million you have power over them.
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Bedrock of the Community
13014 Posts |
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It seems to me that politicians worldwide, perhaps acting on strategic ecomonic advice, are not too worried if all countries together, have continually increasing debt that will be impossible to pay back. Hit it right on the head. It comes and goes in cycles who can afford to be buying up debt and who needs it bought up. Its in trading partners best interest to keep each other going and even the buyers know one day they could need help. If they call in the debt they basically isolate themselves from the plan and would also in turn be hung out to dry if they hit a rough patch. Eventually the debt may or may not be wiped clean like we gave Europe a clean slate after WW2. That said we still need to stop wasting so much money, you get in trouble when you run up the debt to to high of a gpd % and were getting dangerously close to that line. Either production needs to increase or spending needs to decrease and ideally both |
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Pillar of the Community
United States
3294 Posts |
Japan's debt to GDP % is about 3x higher then the US, so they will be an early warning sign for what might happen later.
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Pillar of the Community
United States
1903 Posts |
Nod....are you saying Japan's debit is 300% of their GDP? As our is roughly 107%, 300% seems like Japan would be in he same place as Greece.
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Pillar of the Community
United States
830 Posts |
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Pillar of the Community
United States
3294 Posts |
Yeah CNN mentioned they were at about 300% GDP yesterday or the day before.
That in itself is not always a huge problem. Consider that many individuals who purchase a house might end up with debt at 300% of their annual salary and be able to make it work out.
Edited by nod2003
09/11/2012 5:52 pm
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Replies: 32 / Views: 3,645 |
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Posted 09/09/2012 10:58 pm
