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China Becomes US Second Biggest Bondholder
The People's Daily (CCP News) ^ | 7/29/02

Posted on 07/29/2002 7:41:35 PM PDT by Enemy Of The State

China Becomes US Second Biggest Bondholder

China has risen from its 4th place to become the second biggest bondholder claiming US$82 billion worth securities in the US. Japan still with US$317.3 billion securities on hand stays atop.

The UK comes third with a sum of US$49.4 billion. Hong Kong takes the 6th place and China's Taiwan Province 9th alongside the others as known from US official data lately released.



TOPICS: Breaking News; Business/Economy; Foreign Affairs; Front Page News; Government; News/Current Events
KEYWORDS: chinastuff
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Not good!
1 posted on 07/29/2002 7:41:35 PM PDT by Enemy Of The State
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To: Enemy Of The State
i don't know about 'not good'.

i can hardly wait for the us gov't to default on its loans and leave china holding the bag. you would think that communists would be smarter than to invest in socialistic programs!

2 posted on 07/29/2002 7:44:44 PM PDT by mlocher
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To: Enemy Of The State
Why is it not good? They have no power to influence buy owning federal bonds. Bonds are debt, not stock. When you own stock, you can tell the company whose stock you own what to do. When you own bonds, you have no such rights whatsoever. A bondholder cannot tell the US government what to do just because he owns a government bond.
3 posted on 07/29/2002 7:45:08 PM PDT by Thane_Banquo
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To: mlocher
lol
4 posted on 07/29/2002 7:46:41 PM PDT by Texas_Jarhead
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To: Enemy Of The State
I especially liked that "China's Taiwan province" part.
5 posted on 07/29/2002 7:48:54 PM PDT by kezekiel
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Comment #6 Removed by Moderator

To: Enemy Of The State
Ha ha ha...bonds topped out last week!

Seriously - I'm laughing my myself silly...
7 posted on 07/29/2002 7:52:22 PM PDT by d4now
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To: Enemy Of The State
Hey, what's with the statement "China's province.....Taiwan"?

Jiang and the other octa-thugs should look to thier southwest for some renegade provinces. Lobelt Mugabe call home!

8 posted on 07/29/2002 7:54:48 PM PDT by free from tyranny
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To: Biker Scum
for my education, why is it absolutely not good?
9 posted on 07/29/2002 7:56:51 PM PDT by Red Jones
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To: Enemy Of The State
China Becomes US Second Biggest Bondholder

Such is the legacy of a debtor nation that negotiates one way trade deals that inures to the benefit of the other side. The Chickens are coming home to roost.

10 posted on 07/29/2002 7:57:46 PM PDT by WRhine
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To: Enemy Of The State
China's Taiwan Province

Right, Dorothy, click your red shoes together and keep saying, "China's Taiwan Province, China's Taiwan Province"--

[China, Delusional Loser; China, Delusional Loser. . . .]

11 posted on 07/29/2002 7:58:57 PM PDT by PhilDragoo
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To: Enemy Of The State
"Not good!"

I don't know about that. Would you nuke your bank?

12 posted on 07/29/2002 8:01:44 PM PDT by HumanaeVitae
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To: Enemy Of The State
So China for a long time has been one of the largest holders of US dollar reserves. I don't see this has a big deal. I'm more concerned about the Chicom gov't trying to steal US technology.
13 posted on 07/29/2002 8:07:49 PM PDT by caa26
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To: Enemy Of The State
Let's not lose sight of the fact that we are the biggest bond holders and our number is in the trillions. Trust me on this, nobody really understands what billions of dollars mean.
14 posted on 07/29/2002 8:08:40 PM PDT by SBeck
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To: kezekiel; Enemy Of The State
<< I especially liked that "China's Taiwan province" part. >>

Good to see that the psychopathological Peking based mass-murdering Maoist mob of 250 invading, colonising, enslaving, butchering, lying, looting, thieving gagster bastards that calls itself "china" is still delusional about its relationship with the FRee Men of the Taipei, Taiwan based FRee Republic of China, eh?

Dream on Peking butchers!

[You and the four hundred million islamanazis who delude themselves of the day they would invade and attack Israel's similarly FRee Men!]

Dream on!
15 posted on 07/29/2002 8:10:15 PM PDT by Brian Allen
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To: *China stuff
.
16 posted on 07/29/2002 8:13:44 PM PDT by Libertarianize the GOP
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To: Enemy Of The State
Well since the US national debt is about 6 trillion, about half of that external (debt owed to third parties rather than inter government debt, most of the latter of which is owed to the social security trust fund), that means the Chinese have about 1.35% of total debt and 2.7% of external debt, and that we are all going to die.
17 posted on 07/29/2002 8:14:18 PM PDT by Torie
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Comment #18 Removed by Moderator

To: HumanaeVitae
no I wouldnt nuke my bank but I would sure collect on the debt owed or maybe consider selling off the bonds in such a rate that would affect the value of the dollar.
19 posted on 07/29/2002 8:18:24 PM PDT by Enemy Of The State
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To: Enemy Of The State
Just joking there. But if the ChiComs have their money here, I guess they can't hate the capitalist system too much...cheers HV.
20 posted on 07/29/2002 8:22:38 PM PDT by HumanaeVitae
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Comment #21 Removed by Moderator

To: Enemy Of The State
TRADE DEFICIT: Formally termed a balance of trade deficit, a condition in which a nation's imports are greater than exports. In other words, a country is buying more stuff for foreigners than foreigners are buying from domestic producers. A trade deficit is usually thought to be bad for a country. For this reason, some countries seek to reduce their trade deficit by--
  1. establishing trade barriers on imports,
  2. reducing the exchange rate (termed devaluation) such that exports are less expensive and imports more expensive, or
  3. invading foreign countries with sizable armies.

 U.S. Trade with China 
(billion dollars)
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
U.S. Imports
19.0
25.7
31.5
38.8
45.5
51.5
62.6
71.2
81.8
100.1
U.S. Exports
6.3
7.4
8.8
9.3
11.7
12.0
12.9
14.2
13.1
16.3
Trade Deficit
12.7
18.3
22.7
29.5
33.8
39.5
49.7
56.9
68.7
83.8

WEALTH: The net ownership of material possessions and productive resources. In other words, the difference between physical and financial assets that you own and the liabilities that you owe. Wealth includes all of the tangible consumer stuff that you possess, like cars, houses, clothes, jewelry, etc.; any financial assets, like stocks, bonds, bank accounts, that you lay claim to; and your ownership of resources, including labor, capital, and natural resources. Of course, you must deduct any debts you owe.

VALUE ADDED: The increase in the value of a good at each stage of the production process. The value that's being increased is specifically the ability of a good to satisfy wants and needs either directly as a consumption good or indirectly as a capital good. A good that provides greater satisfaction has greater value. In essence, the whole purpose of production is to transform raw materials and natural resources that have relatively little value into goods and services that have greater value.

SERVICE: An activity that provides direct satisfaction of wants and needs without the production of a tangible product or good. Examples include information, entertainment, and education. This term good should be contrasted with the term good, which involves the satisfaction of wants and needs with tangible items. You're likely to see the plural combination of these two into a single phrase, "goods and services," to indicate the wide assortment of economic production from the economy's scarce resources.

Wealth is created only by engaging in value-added activities. By the same token, Service sector activities do not create wealth, they merely transfer, redistribute and eventually dissipate wealth as consumption. Thus, as value-added activities move offshore and the U.S. labor force shifts to the Service Sector, wealth is dissipated, not created. And the U.S. standard of living declines as a result.
22 posted on 07/29/2002 8:30:05 PM PDT by Willie Green
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To: Biker Scum
thanks for education! and I didn't think i could learn anything from Biker Scum.

But George Bush says that entrepreneurial class in China is on our side. I'm sure they will overthrow communists so that they can continue lending us money forever.

23 posted on 07/29/2002 8:53:14 PM PDT by Red Jones
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Comment #24 Removed by Moderator

Comment #25 Removed by Moderator

Comment #26 Removed by Moderator

To: Biker Scum
Yeah but what about creative accounting?

"Creative accounting" is definitely wealth transferrence.
There is no "value-added", no wealth creation.

27 posted on 07/29/2002 9:14:20 PM PDT by Willie Green
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To: Enemy Of The State
If they want to be repaid, they should stop making stupid statements about nuking Los Angeles if the US tries to prevent the PRC from taking over Taiwan. For the Chinese to own so much US debt actually gives us quite a bit of leverage with them (pun intended). It is not like that of a third world country with respect to the World Bank or an ordinary person versus creditors; it is more analogous to the position that Donald Trump faced in the 90's versus his creditors. Donald Trump's creditors did not want to liquidate his assest, because they would have lost hundreds of millions of dollars.
28 posted on 07/29/2002 9:15:43 PM PDT by Paleo Conservative
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To: Willie Green
Hahaha! Boy, you need to take a course in economics! So, let me get this straight, there is no value added from education? Tell me, what are a hundred factories worth without an education system? Answer: Nothing! Value is not a tangible object. It is an individual's set of preferences, of choices about having this rather than that. Anything can have value, including physical objects or services. The fact that something is tangible does not mean it has value. A sculpture may be very valuable to one person and worthless to another. And the same is true of a course on how to build a nuclear reactor. The idea that wealth is derived from physical objects is the same flawed Marxist reasoning that productivity is the result of muscle labor, and that intellectual endeavors are essentially worthless.
29 posted on 07/29/2002 9:16:47 PM PDT by billybudd
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Comment #30 Removed by Moderator

To: billybudd
So, let me get this straight, there is no value added from education?

Correct.

Value is not a tangible object.

Correct. Wealth is, at its most fundamental level.

Services that have value result in a transferrence of wealth.
However they do not ADD value, hence, they do not create wealth.

31 posted on 07/29/2002 9:27:09 PM PDT by Willie Green
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To: free from tyranny
The original source of this news is the ChiComs; hence their delusional dreams of getting Taiwan back.

Jiang ought to not be looking ANYWHERE <VBG> (I don't want the ChiComs forming up and marching in any direction except to the unmarked grave of history's discarded ideas).

32 posted on 07/29/2002 9:30:03 PM PDT by steveegg
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To: Biker Scum
That's right! I should know by now sarcasm don't work well on the net!

LOL! I caught your sarcasm, friend!
But you came up with such a good example with "creative accounting", I couldn't resist!

33 posted on 07/29/2002 9:30:32 PM PDT by Willie Green
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To: Norvokov; Biker Scum
actually the devaluation of the dollar provides a great opportunity to decrease the amount of the trade deficit which the Chicoms presently have against us. Having such a strong dollar has both its pros and cons, lets just hope that we can manage the inflation rate at the same time. (Inflation is something the Chicoms are hoping to use against us)
34 posted on 07/29/2002 9:35:22 PM PDT by Enemy Of The State
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To: Torie
Good perspective.
35 posted on 07/29/2002 9:36:11 PM PDT by wardaddy
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To: Enemy Of The State; Jeff Head
Bump.
36 posted on 07/29/2002 9:39:17 PM PDT by Tolerance Sucks Rocks
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To: Enemy Of The State
China's Taiwan Province ??? Oh please. A "province" with its own banking system, elected government, currency, military, embassies. Sigh... apologies if this is a little off the topic, but I'm still trying to get around the bs.
37 posted on 07/29/2002 9:41:12 PM PDT by Libertina
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To: Thane_Banquo
A bondholder cannot tell the US government what to do just because he owns a government bond.


The bondholder can tell the debtor to pay, and right now the government is not in a position to do that.
38 posted on 07/29/2002 9:42:17 PM PDT by MarshalNey
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To: Willie Green
Service sector activities do not create wealth, they merely transfer, redistribute and eventually dissipate wealth as consumption

Completely wrong. What is the difference between a) fixing a broken car so it runs like new and b) taking steel and plastic and making a new car ? How about renovating an old house vs. manufacturing a new one ? If the US had better investment advisors (service) they would not have wasted trillions of dollars building (manufacturing) telecom plants and facilities and internet and wireless infrastructures. Here services were more important than manufacturing because the services could have saved trillions, the manufacturing and building wasted trillions. Services are just as important as manufacturing.

39 posted on 07/29/2002 10:10:57 PM PDT by staytrue
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To: Thane_Banquo
Why is it not good?

Some folks believe that, in a fit of anger, China would dump all its bonds into the secondary market... pummeling the value of our bonds instantly.

We, or someone else, would have to buy them up promptly.

40 posted on 07/29/2002 10:15:41 PM PDT by Principled
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To: Biker Scum
The result will be a collapse in the U.S. Treasury market

Selling 40 billion will not collapse the treasury market. In the 3rd quarter this year, the US govt. is selling an additional 78 billion and I don't see the collapse anywhere in sight.

41 posted on 07/29/2002 10:16:58 PM PDT by staytrue
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To: staytrue
William Green has some odd ideas about economics.
42 posted on 07/29/2002 10:17:14 PM PDT by Principled
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To: Principled
If they dumped them all, it would be less than the US treasury sells in a single year. Now if china, japan, hong kong and britain dumped them all together, it might collapse the market, but even then, I'm not sure if it would or would not. A bigger threat is the US banks and hedge funds dumping treasuries via derivatives leveraged at 20-1 or more. The hedge funds could mount a concerted 10 trillion dollar attack on virtually any market via derivatives, but even they can be punished by the market if they are wrong.
43 posted on 07/29/2002 10:21:02 PM PDT by staytrue
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To: staytrue
In the 3rd quarter this year, the US govt. is selling an additional 78 billion ...

Some think China can sell at the same time, making our bonds worth so much less... meaning we'd have to increase their yield to sell enough to make ends meet.

It's nothing more than a blunt stick in they eye... making us pay more for our credit. But if they had $ trillions, it would be a sharp stick.

44 posted on 07/29/2002 10:23:46 PM PDT by Principled
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To: staytrue
Looks like we're on the same page here.
45 posted on 07/29/2002 10:24:59 PM PDT by Principled
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Comment #46 Removed by Moderator

To: mlocher
Weren't we worried about the Japanese in the 80's? Some smart investers in China.
47 posted on 07/29/2002 10:33:47 PM PDT by chnsmok
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To: staytrue
What is the difference between a) fixing a broken car so it runs like new and b) taking steel and plastic and making a new car ? How about renovating an old house vs. manufacturing a new one ?

All are examples of value-added activities, not services. Repairs/renovations do add-value and create wealth, albeit not as much as new manufacturing/construction. Essentially, they restore wealth that had been allowed to deteriorate/depreciate in value.

48 posted on 07/29/2002 10:53:46 PM PDT by Willie Green
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To: MarshalNey
We are always in a position to pay, WE PRINT THE MONEY!! Its a beautiful scheme really. bSure we could cause inflation, but defaulting is really not even an issue. If the U.S. ever defaulted, the entire world econmy would be destroyed.
49 posted on 07/29/2002 11:12:36 PM PDT by Blackyce
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To: Willie Green
SERVICE: An activity that provides direct satisfaction of wants and needs without the production of a tangible product or good. Examples include information, entertainment, and education. This term good should be contrasted with the term good, which involves the satisfaction of wants and needs with tangible items. You're likely to see the plural combination of these two into a single phrase, "goods and services," to indicate the wide assortment of economic production from the economy's scarce resources.

So, let me get this straight, Hollywood produces "entertainment" and sells movies all over the world making billions of dollars and this doesn't create wealth?

Wealth is created only by engaging in value-added activities. By the same token, Service sector activities do not create wealth, they merely transfer, redistribute and eventually dissipate wealth as consumption. Thus, as value-added activities move offshore and the U.S. labor force shifts to the Service Sector, wealth is dissipated, not created. And the U.S. standard of living declines as a result.

If we didn't have any "value-added" activities left in the U.S., we wouldn't need to import steel, or make any, so why do we need steel tariffs?

50 posted on 07/30/2002 2:40:15 AM PDT by Toddsterpatriot
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