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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 12/21/2008 : 14:32:25
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BEIJING (AFP) – China warned Wednesday it would not keep lending money to the US economy indefinitely, even as new data showed it had consolidated its position as the top buyer of American government bonds.
"China's increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis," the China Daily said in an editorial.
The warning from the state-run newspaper, an English-language daily that mainly addresses a foreign audience, came after the US Treasury Department reported a steep increase in Chinese holding of US Treasury bonds.
China held 652.9 billion dollars of US Treasury bonds at the end of October, up 11.2 percent from 587 billion dollars a month earlier, when China became the largest creditor ahead of Japan, according to the data released Tuesday.
Japan remained in second place, with total holdings of 585.5 billion dollars at the end of October.
The China Daily said that, given the global economic crisis , the consequences would be serious if China and other nations stopped channelling money into the US economy.
"Interest rates in the US would rise to undermine that government's efforts to bailout distressed financial institutions and companies," it said.
China was also constrained by a lack of other places to put its money, according to the paper.
"With few options to invest its increasing reserves safely and profitably, China may thus have to buy more US Treasury securities in spite of growing domestic skepticism that such purchases may incur huge losses later," it said.
However, as China and other nations help prop up the US economy, the United States should use the window of opportunity to undertake necessary reforms, the China Daily said.
"The current strong foreign appetite should not be taken by the US government as solid proof of the long-term value of its Treasury bonds," it said.
"Instead, it should race against time to undertake painful but critical reforms to revive its economy before such demand peaks any time soon."
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Think positive. |
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n/a
deleted
84 Posts |
Posted - 12/21/2008 : 14:37:08
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had to happen eventually... this did
:) |
I currently have no signature. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 12/21/2008 : 19:25:12
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......um, TEOTWAWKI knocking at the door?
Well, we knew it would happen, the only question now is how soon, weeks, months?
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 12/22/2008 : 12:24:00
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Their problem is what choice do they have? They don't have a choice. They have to buy U.S. Treasuries or stop selling to America. They can't stop selling to America or they will have to many job losses at home, which their government will not allow. Look at how the current government came to power.... the will do whatever it takes to keep the economy going.
I keep hearing about people not wanting to buy U.S. treasuries, but they don't have a choice. That is the beauty of the system.
If you are outside the U.S. then you have two choices for your dollars... save or spend them. That is for the most part buying U.S. treasuries (if you put them in a bank, then the bank is going to buy treasuries with them right now), or spend them in the U.S. by buying goods.
Well, we would love for them to spend them in the U.S. but that is a lot of goods to buy.
All of this is noise.... if they don't want Treasuries, then they will have to stop selling to us... which isn't going to happen anytime soon.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 12/22/2008 : 19:18:25
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quote:
All of this is noise.... if they don't want Treasuries, then they will have to stop selling to us... which isn't going to happen anytime soon.
-SWUSC
It may only be noise, in the same manner as the music in musical chairs is just noise. Remember, they've got a potential customer base of about 1.1 billion people....themselves.
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 12/22/2008 : 20:00:28
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| I just have to think that right about now we need them more than they need u.s.. |
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Think positive. |
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redneck
1000+ Penny Miser Member
1273 Posts |
Posted - 12/22/2008 : 20:32:48
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[
quote]Originally posted by Ardent Listener
I just have to think that right about now we need them more than they need u.s..
[/quote]
Sad, but probably true...
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fb101
Administrator
USA
2856 Posts |
Posted - 12/22/2008 : 20:40:05
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But I've been wondering about this.....
The dollar got to be what it was because at one time the dollar was pegged to PM, and all other countries by pegging to the dollar, were by proxy pegged to PM without the cost of it.
Now if China started buying PM, and soon pegged the yuan to PM, they would pretty much take world dominance because in this time of the world economy, a lot of countries might love to go back to the proxy situation by pegging their currencies to the yuan.
Am I wrong? |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 12/23/2008 : 12:54:13
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quote:
Originally posted by fb101
But I've been wondering about this.....
The dollar got to be what it was because at one time the dollar was pegged to PM, and all other countries by pegging to the dollar, were by proxy pegged to PM without the cost of it.
Now if China started buying PM, and soon pegged the yuan to PM, they would pretty much take world dominance because in this time of the world economy, a lot of countries might love to go back to the proxy situation by pegging their currencies to the yuan.
Am I wrong?
Why in the world would china want the yuan to be strong? They have been trying to keep it weak for years and years. They don't have the demand in their economy to keep everyone employed. That is why they must keep exporting so much stuff to keep their people working.
We want them to keep shipping us goods on the cheap. They need to keep shipping us the goods.
The Federal Reserve has more than doubled them money supply in the past few months. Yet everything is down. The dollar buys more today than it did just a few months ago.
Is inflation going to come back? of course.. it always comes back in the current currency system. That said, we have printed a lot of money with no cost to the holders of US dollars. Now in the future we might have to suck some of them back up through treasury sales, but right now we just got a bunch of money out of thin air.
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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fb101
Administrator
USA
2856 Posts |
Posted - 12/23/2008 : 21:41:14
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If China thought the way we do, I wouldn't consider such things.
I believe China wants world dominance at any price.
I still wonder if the manipulation of the oil that hit us at an economically weak point
may have been a volley across the bow in an economic war, although I'm not sure who fired the
first shot there. |
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Computer Jones
1000+ Penny Miser Member
USA
1112 Posts |
Posted - 12/25/2008 : 16:08:57
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Hope for the best.
Expect the worst.
Sort more faster.
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There's profit if you melt things!!
8{> |
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PreservingThePast
1000+ Penny Miser Member
USA
1572 Posts |
Posted - 12/25/2008 : 17:37:50
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quote:
Originally posted by Computer Jones
Hope for the best.
Expect the worst.
Sort more faster.
Nicely stated. |
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 12/25/2008 : 18:00:17
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Computer Jones, I like the way your thinking!
Hope for the best.
Expect the worst.
Sort more, faster.
That needs to be a sticker placed on the Reydale! Sell the idea to Andy!
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China warns it will not keep loaning
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