tag:blogger.com,1999:blog-8282587.post7810228895783013013..comments2024-03-19T01:48:39.709+00:00Comments on Power and Control: China Has A Few Economic ProblemsM. Simonhttp://www.blogger.com/profile/09508934110558197375noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8282587.post-89092092734613468562009-01-26T18:43:00.000+00:002009-01-26T18:43:00.000+00:00Inflation is the usual way out.Inflation is the usual way out.M. Simonhttps://www.blogger.com/profile/09508934110558197375noreply@blogger.comtag:blogger.com,1999:blog-8282587.post-81969400520438090262009-01-26T18:03:00.000+00:002009-01-26T18:03:00.000+00:00Whose money is the Treasury borrowing when Congres...Whose money is the Treasury borrowing when Congress spends more than revenue?<BR/><BR/>Well, the Chinese provide a fair chunk of it. Along with japan, Saudi Arabia, et al.<BR/><BR/>With the <I>world wide</I> economic recession, China and the other countries aren't going to have as much surplus to lend us. And China, at least, may well start spending not merely out of current revenues, but out of savings.<BR/><BR/>I.e., China may stop rolling over all of it's stash of US Treasury Bonds, let alone adding to them. Which means the Treasury very well might be unable to sell enough bonds to cover Washington's deficits. Then what?LarryDhttps://www.blogger.com/profile/10955273945502612268noreply@blogger.comtag:blogger.com,1999:blog-8282587.post-42334592851101126782009-01-26T05:35:00.000+00:002009-01-26T05:35:00.000+00:00What do you think will happen when the US cannot h...<I>What do you think will happen when the US cannot honour its maturing bonds, largely in the coffers of the Chinese and the Japanese central banks?</I><BR/><BR/>Honour them with what? Dollars? No problem. We can always print more. We are not on the gold standard. <BR/><BR/>And what are they going to do with the dollars? Spend them in the USA? Fine. That creates demand. Trade them outside the USA? What is the problem?<BR/><BR/>We are not letting foreigners buy major chunks of the economy. They can buy goods and services. <BR/><BR/>US Currency is holding up rather well to all but the Japanese Yen. And the Japanese are thinking of increasing their money supply because the high yen is hurting exports.<BR/><BR/>Now we may be in a fools paradise. The deal is all the fools are in the same paradise. It kind of keeps the fools focused.M. Simonhttps://www.blogger.com/profile/09508934110558197375noreply@blogger.comtag:blogger.com,1999:blog-8282587.post-37027969614190630002009-01-25T23:14:00.000+00:002009-01-25T23:14:00.000+00:00What do you think will happen when the US cannot h...What do you think will happen when the US cannot honour its maturing bonds, largely in the coffers of the Chinese and the Japanese central banks? OK the US coult honor the bonds but only at the cost of closing its public schools and scaling down its military power. <BR/><BR/>Most say it will come to a mean crunch inside the US, with civil unrest, mass poverty, mass emigration and so on. <BR/><BR/>I say it will come to nothing - Obama and the press will invent the parole of the mean yellow-skinned empires, who lended all this money to the democratic US only to get the chance to strangle the great nation. They did it because they hate democracy, just lika Osama Bin Laden. So the US will simply say "piss off, we'll pay you the money back as and when we can afford to. Call us again in 50 years". That in turn will put Japan and China in economic trouble, since they have all that debt on the other side of their balance sheet - and suddenly have to write it down to nothing. And with the gigantic US army still in place, there is nothing they can do about it.Unknownhttps://www.blogger.com/profile/03262340848851817524noreply@blogger.com