Okay I did a 24 hour search on "subjects" of "china" and "debt", and this did not produce anything, So the DUPERS can hush.

So what implication does this have for the U.S.? If you do not know what I am talking about, go google, yahoo, or bing your heart out with the "subject" as your search phrase.

It means we are fucked.

This could be our economic Y2K.

Should there be a "buy" where you have "my"?

If not....I have no idea wtf you are talking about and neither will google.

Could it get any worse?



 

Why do you think Obama changed his policy to: save a dollar for every one spent?

Thanks.

I had not thought of that.

What it is going to mean is, the .gov will have to get serious about fiscal responsibility.

It actually will be a good thing IMHO. We will take an initial hit, then we will recover. America will still have the most powerful force on Earth........the middle class. The ones that REALLY make us the economic juggernaut we are.

Obama aims to make the most powerful force in America, the lower class. He's only begun to take from the middle to give to the lower. As usual, the elite rich will maintain wealth through various devices. The middle class don't have those options. They/we are screwed...

Personally, I think other countries will step up. There is a lot of wealth in the world, if we pay enough interest, they will loan us the money. But we are mortgaging our children's children's future and beyond.

They no longer love us long time, I see.

Hello stagflation, my old friend.

Is this a true story, or a hypothetical situation?

means Obama's socialism of the U.S. will come to a halt

Does this mean that China & Japan are going to save the US......kinda?

No it doesn't. It means it will be full speed ahead with devalued dollars and high inflation causing more economic pain, thereby increasing the willingness of the people to accept "government" as the answer.

John cut his moustache.....John cut his moustache

Search engine it. It appears to be a "real situation".

Then post a link. I searched and cannot find any news stories about this.

It means a great start to fixing this mess. Turn of the money faucet and FORCE this country to deal with it debt. I am 100% for it.

is there any type of source for this statement?

THIS MAKES ME EXTREMELY happy.
China Can’t Afford More U.S. Debt
China can no longer afford its massive lending to the United States, the International Herald Tribune has reported. China has already spent more than $1 trillion on American debt. In the past five years, Beijing has used as much as one seventh of the country’s entire economic output to buy up foreign debt—principally U.S. treasury bonds and mortgage-backed securities.

But China now has too many problems of its own to worry about the U.S. The Chinese government is planning a $600 billion stimulus package for its own economy, leaving less cash to stimulate America’s flagging economy. Chinese tax revenue has fallen sharply, so instead of spending Chinese cash on America’s debt, Beijing is trying to finance its own recovery.

In the past, China’s readiness to buy debt has kept an otherwise-sinking U.S. economy afloat. Now that flotation device is disappearing right when America needs it most. The Tribune writes, “In the United States, China’s voracious demand for American bonds has helped keep interest rates low for borrowers ranging from the government to home buyers. Reduced Chinese enthusiasm for buying those bonds takes away some of this dampening effect” (January 8).

“All the key drivers of China’s treasury purchases are disappearing,” Ben Simpfendorfer, an economist in Hong Kong, said. “There’s a waning appetite for dollars and a waning appetite for treasuries. And that complicates the outlook for interest rates” (ibid.).

The Tribune goes on to detail exactly why China is now unable to lend to the U.S. like it used to. China has bankrolled its huge reserves by effectively requiring its entire banking sector, which is state-controlled, to hand nearly one fifth of its deposits over to the central bank. The central bank, in turn, has used this money to buy foreign bonds.

Now the central bank is rapidly reducing this requirement, instead pushing banks to lend more money domestically.

At the same time, three new trends mean fewer dollars are pouring into China to begin with. As fewer dollars flow into China, the government has fewer dollars to buy American bonds and help finance the U.S. trade and budget deficits. The Tribune reports:

The first, little-noticed trend is that the monthly pace of foreign direct investment in China has fallen by more than a third since the summer. Multinational companies are hoarding their cash and cutting back on the construction of factories.

The second trend is that the combination of a housing bust and a two-thirds fall in the mainland Chinese stock markets over the past year has resulted in moves by many overseas investors—and even some Chinese—to get money quietly out of the country. They are doing so despite China’s fairly stringent currency controls, prompting the director of the State Administration of Foreign Exchange, Hu Xiaolian, to warn in a statement Tuesday of “abnormal” capital flows across China’s borders; she provided no statistics.

China’s most porous border in terms of money flows is with Hong Kong, a semi-autonomous Chinese territory that has its own internationally convertible currency. So much Chinese money has poured into Hong Kong and been converted into Hong Kong dollars that the territory has had to issue billions of dollars’ worth of extra currency in the past two months to meet the demand, shattering its previous records for such issuance.

A third trend that may further slow the flow of dollars into China is the reduction of its huge trade surpluses.

China’s trade surplus set another record in November, at $40.1 billion. But because prices of Chinese imports like oil are starting to recover while demand remains weak for Chinese exports like consumer electronics, most economists expect China to run trade surpluses closer to $30 billion a month.

This Chinese cash crunch comes at the same time the U.S. wants to borrow large amounts of cash in an attempt to borrow its way out of a borrowing-and-greed-induced recession. U.S. politicians have announced plans to spend trillions of dollars. If the money doesn’t come from China and other foreign lenders, the U.S. will have to create it from nothing. Common sense—not to mention history—should tell us that a nation cannot become richer by simply printing more money.

The fact is, the Great Recession is here, and America’s patched-up, jury-rigged economy is simply out of options. Built on a faulty foundation, it has to fall. No ad hoc repairs can fix it permanently. Because they ignore altogether the foundational failures of our economy, these “solutions” simply prolong the agony.

For more information on the economic problems facing the U.S., read “The U.S. Recession and the Zimbabwe Option.” •

Um, that article consists of nothing more than speculation about what MIGHT happen. You will note a decided lack of official comment, and the total absence of any mention of Japan. It also nowhere specifically talks about long term US debt instruments.

The OP posted a very specific set of facts. I would still like to see where this information is coming from. I used his thread title to do a Yahoo! search and got a year-old article.

ETA: Someone sure bought a load of 30 year bonds at least week's Treasury auction. It was a strong enough auction to push the yield down several basis points. <shrug>

For the internet "end users"

http://www.guardian.co.uk/commentisfree/cifamerica/2009/mar/30/us-economy-china-debt

A three months-old OPINION PIECE from the Guardian? Seriously.

The entire global economy is a big ponzi scheme, they stop that, we invalidate all the debt they hold and society gets reset back to Zero.

You rember the saying " You can't spend money you don't have" it will prove to be true. Its a blessing in disguise.

Come to my city near Detroit and ask yourself that question again. You folks have no idea how bad it can, and will, get.

That's called pumping and dumping. Buy massive amounts to make it look good, talk it up, let all the fools drive it up and then sell all quickly just as everyone is jumping in.
Institutional investors and brokers do it all the time.

Well, I admire your optimism.

Pessimists are right more often, but optimists have more fun.  I wish I could be an optimist.

China and Japan are going to be buying less US debt... but not for the reasons you mention.

Ask yourself, where does the savings that China/Japan lends us come from?

From us buying their products.

And what happens if the US consumer stops buying their products and saves the money instead? (as is happening now) Does the financial system die?

No. Because the money is indirectly coming from us in the first place.

China/Japan are overrated, their economies live vicarously through our consumers. The only money they lend us is the money that we bought their products with and is recycled back to us. What is happening now? we are no longer buying their products (China's exports are down 26%, Japan down 40%+) and the money that would have spent on their products (and then lent back to us) is just being saved (lent to ourselves) in the first place.

China/Japan depends on us far more than we do on them. People place far to much importance on their shell economy.

It means that they expect deflation and rock bottom rates for the next few years.  And I agree.

If I had a dollar for every pessimistic doomsday forecast that never came true, I could buy my own Island, everyone on Arfcom an NFA rifle, and still have enough leftover for a thousand lifetimes of hookers and blow...

In my opinion it means that the collapse of the newly forming Socialist System will come all that much more quickly. There is no way that the government will be able to finance all of the debt they are creating without investment from outside sources and they sure as hell can't cover the costs through taxation. The Socialist Revolution is spending it's way into collapse.

The current administration is making pessimistic predictions regarding the growth of the Federal government and the destruction of personal liberty come true every fucking day now.  Wake the fuck up.

Do you truly think the government will restrain it's spending?  Ever?  I don't.  I think we'll end up with european level taxation and WORSE before it all collapses.

≠

Wow, that's so original. I seriously never heard that used before. How many of your 29,000 post have included that statement? Why not through in a couple +1s and a few "in on ones".

This is the change people voted for.

This is my opinion as well.  To get to the root of the sitiuation just look at which which way the capital is flowing.  The U.S. is their employer.

Pumping and dumping a penny stock is just a bit easier than trying to pump and dump hundreds of billions of Treasuries, the worlds most widely traded debt instrument.



I see my sigline is still broken. Oh well...

Yep.

People continually underestimate how important the US is to the global economy. It reminds me of the "decoupling" nonsense floating around this time last year...

Oh thank heavens! The last thing I want is another 'gubment to give our 'gubment more money via loans. Loaning money to the US 'gubment is like giving a minimum wage college kid a mortgage.

We will not have the flood of credit we had over the last decade and a half.
Thus we will have to buy fewer things
Much of those fewer thigns will not come from China nor Japan
China and Japan will see a general malase as the rest of the world struggles in recovery

This sounds like famous last words. It sounds like what the Emperors of Rome must have said with the Barbarians massing a few hills over.

Look, the cosmos is not favoring the U.S. over any other country. The simple fact is that we, as a country, managed to produce more via a free society than other countries have in the last 100 years or so. Thus, we became "rich". We did not become "rich" by consuming - a ideology a lot of so-called economists seem to be pushing.

We, as a nation, are not producing as much as we used to. We outsourced it. Now other countries are producing much more than they used to. This means that, eventually, maybe not tomorrow, but someday, we will no longer be top dog.

...unless we pull our collective heads out of our ass, stop stupid spending for spending's sake and get back to making stuff.

1) Does the term comparative advantage mean anything to you?

2) Does my sigline mean anything to you?

No, it's just that no one gives a damn about the opinion of a lettered anarchist.  Talk about irony.  He would have fared better as a comedian.

Whether one agrees with Rothbard's economics does nothing to detract from the truth of the statement I quoted. I can point to half a dozen threads in the first 2 pages of GD at any time to demonstrate Rothbard was correct in this regard. This is just one among many.