Skip to comments.China holds sway over US$ (she hold a US$2-trillion mortgage on the United States and is unhappy)
Posted on 05/18/2009 5:37:56 AM PDT by SeekAndFind
"The U. S. should be afraid, very afraid. China is questioning the dollar's status as a reserve currency and, at US$1,000 an ounce, gold has become the world's de facto currency." -- John Ing, Maison Placements in Canada
It is a chilling statement from an expert on both gold and China. But he is speaking the truth: In a G2 world (the United States and China), he who is the piper calls the tune, and China holds a US$2-trillion mortgage on the United States and is not happy. This country, along with others that lend money to the United States, such as Saudi Arabia, will determine the value of the U. S. dollar and gold. And they have spoken. They are not buying more U. S. treasuries and are buying gold as a new asset class. China announced that it was doing so quietly, and recent reports are that the Saudis and others have been buying bullion and hocked gold jewellery from around the world.
The only way is up for gold prices because the United States, which backstops the International Monetary Fund, the world's lender of last resort, has had to become its own lender of last resort.
Washington has cranked up the printing presses in an unprecedented way, replicating the behaviour of its spendthrift corporations and consumers. This year's budget is US$3.5-trillion, bigger than any in history.
And as Ing points out, the "bi" in this bipolar global economy is China. Beijing has not only started to hoard gold but has continued to talk up a new reserve currency concept to replace the U. S. dollar. The only reason the Chinese and others don't dump U. S. dollars is because it would be like shooting themselves in the foot.
(Excerpt) Read more at nationalpost.com ...
Just like Japan was going to buy up everything in the 90s, right ? I wouldn’t be worrying too much about some of these types of hyperventilating articles.
While the printing presses are still smoking, let’s just roll off an extra 2T and send it along to them. I bet they succumb to their internal revolt before we do.
I’ve been thinking for awhile that the price of gold is artificially low, given the irresponsible massive printing of $ by the the Fed.
Where is all the money we lent to these countries over these many years?
Agreed. This will keep the Chinese from blowing up the Golden Goose.
They risk getting caught in a gold bubble if that is their only strategy. I would think natural resources would be their best bet,to buy oil companies and oil wells and farming as Jim Rogers suggests. Ironically when these prices skyrocket democrats will demand windfall profits taxes, but they cant tax foreign company profits beyond import tariffs, which would not go over well when prices are high.
Printing more dollars creates economic growth ping.
“Printing more dollars creates economic growth ping.”
That’s pure crap!
It creates inflation and has nothing to do with economic growth.
You’re apparently under 60 and went to a government school and ate their crap up.
Do you mean ‘gave’ to them?
Russia still owes us money from the wheat we “sold” them 50 years ago.
They could do something radical like buy some stuff from us. Of course they already manufacture it there, so I guess I see their point.
O’ba should sell them wind turbines.
There is an old saying that if you owe the bank a million dollars, they own you. If you owe the bank 100 million dollars, you own them.
No they won't.
We have some serious problems the greatest being the propping up of legacy industries and govt intervention in the mkt. It will take a generation to get back on the right track, but we will.
Perhaps the ChiComs should apply for relief under TARP?
Are you unbalanced? If I thought that why would I post the Greenspan post that you were pinging to earlier today that talked about the bad effects of creating tons of money in 2003? Do you even read these articles or are the voices in your head too loud?
That article was pure BS, printing money has nothing to do wirh the economy, the housing boom or anything but creating inflation.
Our problems are and were created by easy credit which should never happen, ever.
If you can’t pay for it lay down in the street and die.
The article might be hyperventilating, but how will we pay the debt? The debt is beyond normal comprehension at this point. It’s sort of like trying to understand distances in outer space.
What I’m trying to figure out is where China got money to loan to us? Up until the late 80’s China was a fairly moribund country until western INVESTORS poured money into China to build factories and hire workers cheaply. It seems to me they’ve been loaning us money we had already had LOANED or INVESTED in them. Perhaps we really owe CHINA nothing!
I know my analysis is wrong somewhere...but I never see the question asked, where did China get the money to loan to us?(IE, the money with which to buy US treasuries and bonds?)
The article might be hyperventilating, but how will we pay the debt? The debt is beyond normal comprehension at this point. Its sort of like trying to understand distances in outer space.
What will happen to their wealth will be the same thing that happens to ours. It will be destroyed. There is no safe haven that I can see.
chicom bump for later..........
Did you just type : “ Printing money has nothing to do with the economy or the housing boom ” ? If printing lots of money had nothing to do with the economy why would the Federal Reserve under both Bush and Obama do it during economic slowdowns? Same with Nixon and Ford in 1970s? What is a bubble anyway? Mal-investment to defend against inflation! If interest rates were high/limited money supply, why would anyone risk investing in a bubble?
Try basic economics and less talk radio.
Try monitoring the Swiss investment companies and their purchase of the very, very best vegetable crop land in the USA!!
Check out the farm land purchases in the midwest. See who the real investors are behind the purchases. Chilling thought.
Basic economics is in real short supply in Talk radio!!
That was and is the Donald Trump business model!!!
Oh I’m a financial realist. The debt is unsustainable. Basically, only thing that will get things under control is draconian reductions in government spending. Ie, social security and medicare will go down the tubes, and will have to be disbanded/discontinued. The socialists may wanna tax us all to death to ‘save’ these programs, but it only postpones the inevitable by a few years. More they tax the worse the econ will get and less money they’ll get. And, if the inflation really picks up the jig will really be up.
We’re definitely up for a serious ride, however, Chinese are in the same boat with us - actually, much worse one. They rely on continued economic expansion to maintain the social order and the government. If that fails they’ll have themselves about 700M peasants rampaging. I’m far more worried as to when the people in the US will wake up (ie, how much economic damage will be done before that happens).
I had to ping you to show an example of what they are teaching. I still listen to Rush but had to give up Hannity and Levin. They have a simple narrative they are selling and to sell it they have to write their own history. It goes :“Bush tax cuts ALONE saved the economy” This is repeated over and over and although I think they really mean upper income tax cuts and capital gains specifically, it is usually not clarified as such(which is problematic in itself because Bush tax cuts included removing many from tax rolls) .
Greenspan/Bush printing 2003 does not fit into that narrative. Obama/Bernake printing now and future inflation fits the Jimmy Carter 1970s narrative they are using so they dont mind warning us about that.
I am under 60 but, I agree with you. lol
Yet we also direct invested and poured money into their factories and infra structure...giving them gifts that keep on giving especially as they have quasi nationalized these businesses and also have stolen technology from us as well.
Fine if the Chinese don’t want to lend to us any-more but I think they need to be quiet about the stuff they already have gotten or stolen from us! I think we owe them nothing!(Especially with FIAT currencies involved in most countries, there is probably no reliable way to value who truely owes who what and to whom! I think that is that the dirty secret all of the world’s ruling elite don’t want discussed out in the open!)
When you owe the bank a billion dollars and cannot pay it back, you are in trouble. When you owe the bank a TRILLION dollars and cannot pay it back, the bank is in trouble.
China can do little to effect us economically with the bonds she is holding. Sure they can be sold off but that will have to be done in an orderly fashion and over a long period of time because to dump them quickly would crash the bond markets and cost China a ton of money.
Since we are the largest single buyer of Chinese goods it is in China’s best interest to do us no harm. In as bad a shape as we are now, we are still the engine which pulls the worlds economic train with America being responsible for close to 24% of the entire worlds GNP
You owe the bank 100,000 the bank owns you.
You owe the bank 100,000,000 you own the bank.
If the Chinese make anykind of hostile move to the dollar,
that 2 trillion they “own” becomes toilet paper.
It’s the financial version of MAD (Mutually Assured Destruction)
Greenspan/Bush printing 2003 does not fit into that narrative. Obama/Bernake printing now and future inflation fits the Jimmy Carter 1970s narrative they are using so they dont mind warning us about that.”
What tax cuts they left the corporate at 35% and helped the offshore migration.
Wonder how the investment companies will react when cash strapped local governments, knowing this land is being bought up by deep pockets folks, raise property taxes on them in a serious multi per centage fashion?
Possession still is 9/10th’s of the law and some-one still has to farm the land, can these out of country investment firms guarantee they can fully possess and use their properties? Contracts and Laws you might say? It will take occupying force to guarantee it, and slavery of the population.
Thanks. And they changed capital gains for houses too. BTW: If this tax cut expires bad news for house prices/sales.
FLASHBACK: 1988 Japan Hold Sway over US
His dealing with Fox in Mexico the complete and utter contempt for our borders and culture made him the most hated person of the time and that includes Bin Laden.
I thought McQueeg was finished also and would have bet money on it.. The Rats got the house because of them then look at what followed.
Money GW is not a Texan he is a damm NE. money spending Liberal.
They made stuff with near slave labor and sold it to us. We sent them money for the stuff they made.
US companies closed plants here because they could make a lot more money on Chinese goods.
They made more stuff. Repeat this enough and you're in the hole big time.
Everyone's happy until the slaves begin to look for something other than IOU's after their 12 hour days.
A hard rain is gonna fall.
WOW! Unfortunately many Freepers don't realize how poisonous he is politically, don't realize that seeing Cheney on TV just makes Obama MORE popular by contrast to Bush/Cheney. I believe GWB had good motives for Amnesty and other screw ups but it doesn't make reality any better. The talk radio mantra is “Bush is a nice man with good motives that got tricked by democrats, but he saved the economy and ALL our lives from terrorists but let evil democrats trick him. Obama on the other hand may be doing similar things but he has EVIL motives and wants to destroy us all.”
press beating tom-toms for internatioal currency.
He did some real just plain stupid things that caused the core to sit out the midterms, I will never forgive him for that and even with everyone up in arms about his Amnesty, the Turd still did not change tack. We supported and elected him twice then HE turns his back on us!!! WE employ him no different than an employee that is given work to do.
The Conservative base was going wild, People who usually are very reserved were voicing their displeasure loudly..
Then the Arrogance talking down to us calling names and the Johnny Sutton the sawed off little Gonzales AG the NON Fence.. THEN THEN we get stuck with his partner in this assualt on America The Traitor McQueeg LOL fat chance this Zombie had.
Would that mean no more Barney Frank?
I disagree. Real property and solid businesses have real value that transcends inflation. The Chinese have dollars, so they can and will buy our property and businesses.
Our children may very well have bosses (and landlords) from China.
Capital gains on housing changed in 1997. It's not set to expire.
Tthanks I was strugging this morning!
Erm... they don’t have that many. And, they’ve been spending their reserves through their own stimulus internally propping up all the failing businesses.
Don’t know if you remember, but before this whole mess last year all the talk was about all these BAD loans in the Chinese banking/industrial system. In other words, due to corruption et al, the Chinese central bank has been lending massive ammounts of money to all kinds of companies that weren’t really turning a profit.
Ouch! (for China)