small change compared to our deficit.
A big part of this trade surplus is coming right back to the US, to purchase some of our national debt. Since the US has the reputation of always paying their debts (even if they hae to borrow more money to do it), and the rate of return os pretty good for Treasury securities, China makes more money by buying into our debt than they would investing practically anywhere else.
And have you wondered about these "1%" mortgage loan rates? Of course this is a teaser rate, and is only good for about a year or so, at which time it begins to rise, with a cap that is well above the current fixed mortgage rate. Where the borrower gets nailed is the purchase of points, ostensibly to "buy down" the rate, but this gets rolled into the mortgage principal, so a refinance into one of these mortgages means that the borrower never gets much equity built up.
And does anybody question where this "1%" money is coming from? Again, taking the long view, Chinese money funding people are buying up these mortgages in the secondary market, knowing that holding these mortgages is almost as good as holding gold. And they get the cash up front.
currency black hole. goes in, never comes out.
It’s better than just giving them handouts. China has a long way to come but at lest we don’t have the socialist problem in China like we do in Africa.