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When Henry Ford wanted to sell Model Ts he raised his workers salaries high enough they could afford one. Maybe the chicoms should try that, although it would probably end their communist dictatorship at the same time.

Too much money to the people is something people like Obama can't stomach. The money begets economic freedom which in turn leads to real freedom

The American economy runs on two things, cheap food and cheap energy. That's why the Joker has to take those down. If you have cheap food, you don't have to spend all day trying to figure out where you are going to get enough to eat. And cheap energy allows you freedom of movement to do what you want, as long as you have the money to do it — So you get a job.

Yes, Chinas leaders understand capitalism and good government administration, even though they are in some places incredibly corrupt.

Here we have a national socialist goverment transfixed with an idea about Utopia.Obama's fiddlers green. And nnow we all know it is unattainable except through totalitarian administrative methods. They are now beginning to come down the pike, with allauthority evolving to centralization in the Oval office.

America has become the banana Republic that CHina once was. And we are weak and leaderless. Not a good place to be.

China's problem is not that it “has too much money” it's that China's policies have and are squandering the capital resources they have, in order to artificially boost their GDP growth, because otherwise the peasants will riot and throw the communists out of office. Remember as a centrally planned economy, loans are not made on an economic basis, but on a personal basis, are you connected to the communists. Their banking system is thought to be holding huge amounts of non-performing loans. 2 years ago the made the majority of the globes toys, now something like 70% of those factories are closed.

At some point in time the credit bomb will burst, their currency will be forced to float and the Chinese miracle will evaporate. As will the politicians running the store and probably china as a single country.

Go to the bank who holds the mortgage on your house, and say to them, “I can't pay my mortgage payments, which means that you have a serious problem.” Once the bank's loan officer finishes laughing, he or she would reply, “No problem. We'll simply take your house.”

That's fine if you're the only one defaulting. But if the owners of 1/2 or 2/3 of the houses that the bank holds mortgages for walk in and tell the loan officer this he's going to stop laughing and start sweating. That's what's happening now. The glut of those assets on the market and the large number of people who can't pay a mortgage means that the bank is owed more money than they can recover by attempting to sell the assets. And since the bank is in the loan business, not the landlord business, those assets start degrading and becoming even less and less valuable.

But I digress. The main point is that if China has too many eggs in the U.S. basket, our failures do become their problems after a fashion. While China does make a lot of our basic consumer needs, they also make a lot of our frivolous consumer wants, and if people cut out buying the latter China has a real problem.

This guy’s a dick. First, the US does not spend as much on it’s military as the rest of the world, since, if we did, we would have taken care of issues like Cuba, Ven, and other tin-pots long ago.

As to who holds the cards, I specifically remember reading an article earlier this year stating, in effect, that (today) a banker’s worst nightmare (particularly in places like California, Florida, Phoenix, or Vegas) is to have a borrower call up and say they’re done paying the mortgage...since the bank will be lucky to see 50% of the loan balance if sold at foreclosure in those places (and well under 100% just about everywhere, these days). The banks are MUCH happier to see their borrowers continue paying. So it really depends on the situation as to who is in charge.

Finally, Iceland told their creditors to shove it (last year they defaulted on debt valued at about three times their Gross Domestic Product...and amount that can NEVER be paid back in real dollars). Instead Iceland will commit 6% of future economic growth towards debt repayment...and that’s it. That number comes out to well under 1% of what they owe. In essence, Iceland told their creditors that they would be unwilling to ever borrow again, if the deal was rejected. Needless to say, the creditors understood, and are happy with the crumbs that they get under this arrangement, provided Iceland starts borrowing again (go figure).

As to the US...our default will be painful, to say the least. As I see it, we will get some big-time inflation as the dollar crashes, we may get price controls, and then the enviable shortages of necessities (depending on who’s in power...either very high prices and plenty to buy, or reasonable prices, but a 3-hour line to buy...like the old Soviet Union). The end-game is that we will have most of our savings wiped out, and our income will only buy half of what it buys now...it will hurt. The rest of the world, including China, will bypass us and it will be weird for us, not to be king of the planet anymore.