Get It Straight: We Own China

The Voice of Reason ^ | January 22, 2011 | Texas Peartree

[Doe Eyes]

Not my fault either. Its those other Americans.

[llandres]

“I doubt that President Obama would consider Taiwan’s defense worthy of upsetting China.”

True, but hopefully there’s life (and a stand-up President) after BHO. I also hope and pray there are no attacks from anyone (either on us or any of our allies) within this next two years, but the odds aren’t looking good.

Heck, he doesn’t consider OUR defense worthy of upsetting anyone.

[mrsmith]

“Arguing... China does not have the power over us that many seem to think it does. “

By saying those Nazis are now ‘just’ our partner... the partner with the money... the senior partner.

[llandres]

“They can trade their debt for equity and wind up owning large chunks of the economy. The saudis are already doing this, the Chinese are also doing this. So far they are buying key strategic companies, like specialty minerals, or companies that have access to key military technology.”

True that! We have LOTS of collateral that can be seized - industry, real estate and countless natural resources.

[llandres]

“The Chinese dilemma reminds me of a quip once made by economist John Maynard Keynes...”

Keynesian economics? Oh no, you DIDN’T just go there!

[wac3rd]

At least someone else can understand Norman Rockwell has left the building.

[SunkenCiv]

• The real cost of Chinese NPLs (bailout of Chinese banks nearing its limit)
• China: Crouching Tiger, Paper Dragon
• TIME ARTICLE: Why China Does Capitalism Better than the U.S.
• Why China Does Capitalism Better than the US(CNN-dictatorships will always be more efficient)
• China Confirms $19 Billion In Boeing Orders [Update, see #6]
• China GDP up 10.3 percent in 2010, from 4.95 trillion USD last year to 6.1 trillion USD this year
• Analysis: What is Plan B if China dumps its U.S. debt?
• Genius Obama To China: "We Want To Sell You All Kinds Of Stuff" (video)
• China agrees to purchase $45B in US exports
• Hu-pla Around Chinese President's Visit Centers On American Debt
• China Is Net Seller Of Treasurys In November
• Schumer's Bad-Cop Role on Yuan Has Its Benefits
• China, US sign US$600m business deals in Texas (Hu Jintao to get 21-gun salute?)
• Senators Threaten Currency Bill Ahead Of Hu Visit
• China bill puts heat on Obama
• China's President Resists U.S. Pressure on Yuan
• As China moves to free up yuan, investors want more
• Pay Attention, This Was A Huge Week For The Yuan Becoming A Global Currency
• China Questions Value of $USD
• Hedge funds bet China is a bubble close to bursting
• How Beijing Plans to Turn the Chinese into Consumers
• UPDATE 4-Many business deals seen during U.S.-China summit(Santa Hu bearing gifts?)
• Economists see US decline, China's ascension
• China Has $1.5 Trillion 'Hidden' Debt: Lawmaker
• China Demands The US Make Statement Promising Its Dollar Assets Will Be Held Safe
• Treasury's Geithner says China needs faster yuan rise
• China Vice Fgn Min: Would Welcome US Comment on Asset Safety
• China bars O.C. businessman from returning home, citing contract dispute
• Euro Crisis Would Hit China, Then America: Author
• Two Banks Gain Access Within China(JP Morgan Chase & Morgan Stanley)

[SunkenCiv]

...what would happen if China tried to manipulate America through ownership of our debt? It is not like Saudi Arabia who could threaten to not sell oil on the world market. China's "output" is excess money that needs to be safely invested. China's dumping of our debt would devalue their assets. Frankly, America could inflate away our debt to China and the world. We could default in total, or simply default on Chinese-owned US bonds. What would be the cost (other than in reputation) of doing so? Sure, our government could no longer borrow easily on the world market, especially from China. However, this would have the salutary effect of forcing Washington to live within her means without borrowing.

Thanks Texas Peartree.