Skip to comments.Is China Quietly Dumping US Treasuries?
Posted on 09/05/2007 1:34:50 PM PDT by blam
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well the George Bush honeymoon of low taxes-—high spending / endless line of credit had to end sometime
a shame our government has so completely screwed us (citizens) with regard to our currency, trade, and fiscal policy. The dollar loses more in buying power each year than any normal interest-return will replace, ignoring tax on the interest as well.
This momentum is undetectable by mere mortals, but something is causing my uncle's bunions to act up.
Well, if they are selling then someone is buying and judging from the yields, the sellers made a nice profit.
This could be an indication of their fear of the effect on the US economy that might come about if a Dim is elected president next year.
Watch if Thompson entering the campaign might result in a decline in Chinese sales of US bonds.
...or it’s a delayed reaction to Clinton.
Get real. They don’t like the way we’re handling our economy.
Money is one of the most important inventions of humankind. Without it, a complex, modern economy based on division of labor, and the consequent widespread exchange of goods and services, would be impossible. Unfortunately, many experts believe we are on the verge of a financial crisis. In recent years the value of the US dollar has dropped significantly, inflation has increased, consumer debt has reached an all-time high, and the US housing market has become dangerously unstable.
At present, approximately two thirds of world trade is conducted in dollars and two thirds of central banks' currency reserves are held in the American currency which remains the sole currency used by international institutions such as the International Monetary Fund. This confers on the US a major economic advantage: the ability to run a trade deficit year after year. US always spends more than it earns, whereas the rest of the world always earns more than it spends.
The strength of the dollar is closely related to the fact that oil, the most important commodity traded in the world, is priced in US currency. The majority of countries that are oil importers have to buy their oil in dollars, which forces them to keep most of their foreign currency in dollars. However that could change. More and more nations are moving away from the dollar. China, Sweden, Italy, Switzerland, Iran, Russia, the United Arab Emirates and others have already announced plans to gradually move their reserves from the dollar into other currencies such as the euro. A widespread move away from the dollar could cripple the US economy - a sudden shift could even cause the US dollar to crash. David M. Walker, Comptroller General of the United States, has warned that the nation is on the path to financial ruin: "What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of the economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it." If the US government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. A hole that big could paralyze the US economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today. And every year that nothing is done about it, the problem grows by $2 trillion to $3 trillion (yes, that's with a "t"). It doesn't take a genius to recognize that an economic upheaval is in the making.
The quandry the chinese are in is that the long-term trend of the US Dollar is clearly down - our interest rates aren’t going any higher, yet they have such a large position they are somewhat stuck.
anticipating a terrorist attack - a crippling one?
time to raise interest rates
The Dims have only controlled the House and Senate for about 8 months. That’s fast work even for them.
“a shame our government has so completely screwed us (citizens) with regard to our currency, trade, and fiscal policy.”
It was bipartisan. A trade. All for the financial industries getting the chance to provide services in foreign countries, Bush gets to temproarily hide the effect of his tax deferrment, a.k.a., “tax cuts”.
I see only lately Bush is pretty much alone saying his tax deferments “grew” the economy. Of course, he is of the mentality that a domestic wage deflation policy that hurts workers, dumps costs on tax payers, but juices short term profits for the few at the top, he calls that “growth.”
I can’t wait to see he and his cabal of mediocrities out of office.
China with the help of the Clintons, ala HSU, the Soros’ and maybe the Lewis’ are ALL trying to destroy America’s dollar and economy.
It could also be a realization that George Bush is increasingly serious about doing something re: Iran's nuclear program and continuing support of insurgents killing Americans in Iraq.
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