Posted on 10/08/2013 8:52:18 AM PDT by honestabe010
Just about everyone worries that Beijing, perturbed by the ongoing squabble in Washington, will sour on Treasuries. This concern is embedded in the provocative title of Eamonn Fingleton’s recent Forbes posting: “If Republicans Want to Shut Down Washington, They’ll Have to Ask China’s Permission First.”
The Republicans in fact did not seek Beijing’s approval, and neither did Democrats. Are both sides making a mistake by not taking into account China’s “feelings,” as the Communist Party demands everyone do?
It’s clear Chinese officials are watching closely. “The United States, the world’s sole superpower, has engaged in irresponsible spending for years,” observed Xinhua News Agency in an editorial on Wednesday. “With no political unity to redress its policy mistake, a dysfunctional Washington is now overspending the confidence in its leadership.”
(Excerpt) Read more at forbes.com ...
Bernanke will buy it.
I thought they already did, and that’s why the Fed started just printing money (buying the debt themselves).
Better call Saul!
Chang must have head in sand. China doesn’t buy our debt anymore. They’re worried about the debt they’ve already bought.
This would cause a drop in China’s exports of about 20% almost over night.
The Chinese economy would implode.
Then they will find a horse head in their bed. . . .
> I thought they already did, and that’s why the Fed started just printing money (buying the debt themselves).
Yup. This is like three years already when all net debt is being monetized by The Bernank.
It is sad that we are reduced to this question.
We sell debt at auction to the lowest bidder. If they aren’t willing to buy at a rate low enough, then the Federal Reserve will step in and buy it.
Thus there will always be a market for our debt, until our currency is so debased as to be meaningless.
I was hoping the shutdown would stop the cheap imports coming in from China at least temporarily. And make domestic producers think twice about relying on Chinese goods instead of American goods. But apparently customs was designated as essential personnel.
We sell debt at auction to the lowest bidder. If they aren’t willing to buy at a rate low enough, then the Federal Reserve will step in and buy it.
Thus there will always be a market for our debt, until our currency is so debased as to be meaningless.
I was hoping the shutdown would stop the cheap imports coming in from China at least temporarily. And make domestic producers think twice about relying on Chinese goods instead of American goods. But apparently customs was designated as essential personnel.
Our economy would collapse, they’d be unable to ship any more crap to Walmart, a billion ChiComs would be laid off, and all ranking Party members would be swinging from lampposts within two weeks.
It’s Mutual Assured Destruction, 21st. Century style.
That’s why all the huffing and puffing about the “debt ceiling” is so phony. We already blew right by the real debt ceiling when no one buys your debt anymore, and that happened several years ago.
We’re already in free fall and they just haven’t acknowledged it.
The Chinese stopped buying our debet and have been unloading it.
The oly buyer now is the Fed.
Who buys theirs? Us. That just keeps the cycle going like they want.
I’m not up to speed on this topic, but didn’t a recent bond sale go poorly, and China is no longer buying our debt? Like I said, I’m not up to speed, it’s Mrs. Liberty’s department.
China already stopped buying US debt. Right now, the Fed is dumping $85 billion per month into the US Treasury. Over the last 12 months, that amount actually exceeds the revenue shortfall for current spending levels. We did not have to borrow a single dime over the past year, which is why interest rates remain so low.
The Chinese have to buy it. They run a surplus with us, the surplus being US dollars. Therefore those dollars have to come back to the US in some form since they are worthless in China. The Chinese can take those dollars to buy US real estate, products, services, companies or debt.
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