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To: Alberta's Child
Yes, but buying products made in China has the effect of creating tax payers to fund their military and space programs. Meanwhile, we're funding more entitlement programs.

As for the bonds, the interest is only part of the expected income. The face value over their initial cost is also part of the equation. Now I'm not sure of the type of bonds and treasuries we're selling to other nations, so maybe they are taking a loss by buying our debt. But I doubt it.

11 posted on 05/16/2015 6:27:15 AM PDT by TwelveOfTwenty (See my home page for some of my answers to the left's talking points.)
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To: TwelveOfTwenty
so maybe they are taking a loss by buying our debt

Like many markets these days, US debt is a greater fool market. In the case of our debt the greatest fool of all is the Fed, or more precisely, the American people who tolerate the Fed printing money to buy debt and the politicians who benefit from it. The simple reason that any foreigners would buy our debt right now, or at any moment in tine, is that they expect to resell it. Some greater fool will buy it from them.

The only other reason for buying US debt is the expectation that US income tax slaves will be able to pay it back. That is potentially a sign of economic recovery but that pales in comparison to the foolish recipe for economic failure promulgated by the Fed: funnel printed money into Keynesian spending and large banks to trickle down into the greater economy. They ignore the fact that undermining the currency penalizes long term investment and encourages speculation and bubbles.

12 posted on 05/16/2015 6:41:24 AM PDT by palmer (Net "neutrality" = Obama turning the internet into FlixNet)
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To: TwelveOfTwenty
Don't focus too closely on the connection between consumer purchases in the U.S. and funding for military expenditures in China. The U.S. has less than 5% of the world's consumers, and as time goes on we become less and less relevant to these Asian countries who are doing more and more business with each other.

Astonishing as it may seem, I believe there are more people living within 2,500 miles of Singapore than in the rest of the world combined. The U.S. is basically fading into history as the rest of the world catches up and surpasses us ... and it has nothing to do with our trade policy.

13 posted on 05/16/2015 7:10:38 AM PDT by Alberta's Child ( "It doesn't work for me. I gotta have more cowbell!")
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