China, the West and debt
Discussion
Accept for a moment the facts of life in the world economy show China is slowly buying America and the West. Increasing amounts of Western debt are owed to China. What happens when,
a) China says, "we want our money and we want it now"?
or
b) The West says, "we've decided to change the rules and won't be repaying after all"?
a) China says, "we want our money and we want it now"?
or
b) The West says, "we've decided to change the rules and won't be repaying after all"?
Why did we in the west hand over vast amounts of money and thus power to China, was it just so we could all have cheap tele's, or is there a more altruistic reason?
Surely we've made a rod for our own back, now we've given them most of our manufacturing jobs? I wonder if we'd have the same unemployment and social problems if we'd been less globalised.
Surely we've made a rod for our own back, now we've given them most of our manufacturing jobs? I wonder if we'd have the same unemployment and social problems if we'd been less globalised.
XJ40 said:
Why did we in the west hand over vast amounts of money and thus power to China, was it just so we could all have cheap tele's, or is there a more altruistic reason?
Surely we've made a rod for our own back, now we've given them most of our manufacturing jobs? I wonder if we'd have the same unemployment and social problems if we'd been less globalised.
We are doing it again with all this green sSurely we've made a rod for our own back, now we've given them most of our manufacturing jobs? I wonder if we'd have the same unemployment and social problems if we'd been less globalised.
te.China has somethign like 90% of all 'rare earths' all those wierd elements that are used in green technology.
We migh as well just ship them bucket loads of money while taxing ourselves out of existence as they completely destroy the enviroment to save us some carbon.
nonuts said:
It's all made up money anyway, so maybe just go 'ah well, lets try this again, based in reality'. 
Optimism has it's place
Optimism has it's place
Even though China has two trillion dollars or whatever it is currently, the Federal Reserve has infinite dollars as it owns the right to magic more dollars into existance, so what does all that mean in the end !?RichardD said:
nonuts said:
It's all made up money anyway, so maybe just go 'ah well, lets try this again, based in reality'.
Optimism has it's place
Optimism has it's place
Even though China has two trillion dollars or whatever it is currently, the Federal Reserve has infinite dollars as it owns the right to magic more dollars into existance, so what does all that mean in the end !?Widget costs $100 to produce in China.
China borrows $100 from itself to make widget.
America pays $50 for widget, of which $25 is freshly minted fake debt.
China takes $50 from America, throws $25 at peasants, claims $25 profit, still owing $100 to itself.
China spends $25 fake profit on $25 US fake debt, claims it's worth $125, pays back $100 to itself, claims $25 more profit, spunks $25 on middle classes.
Or something.
My head hurts.
China borrows $100 from itself to make widget.
America pays $50 for widget, of which $25 is freshly minted fake debt.
China takes $50 from America, throws $25 at peasants, claims $25 profit, still owing $100 to itself.
China spends $25 fake profit on $25 US fake debt, claims it's worth $125, pays back $100 to itself, claims $25 more profit, spunks $25 on middle classes.
Or something.
My head hurts.
RichardD said:
nonuts said:
It's all made up money anyway, so maybe just go 'ah well, lets try this again, based in reality'.
Optimism has it's place
Optimism has it's place
Even though China has two trillion dollars or whatever it is currently, the Federal Reserve has infinite dollars as it owns the right to magic more dollars into existance, so what does all that mean in the end !?Let’s say, for the sake of argument, you’re sitting on about $2.4 trillion in assets. And let’s say that to pay the bills, you need only about a quarter of that – $600 billion – in ready cash.
What do you do with the rest?
As you might guess, this is not a hypothetical question. $2.4 trillion is what China holds in foreign exchange reserves. And it needs only about a quarter of that to handle three months of imports and short-term external debt.
While we were in China last week, we got an official answer to that question.
The Caixin news agency reported that China’s State Administration of Foreign Exchange has begun using some of that money for loans to foreign governments. And when China makes those deals, it’s usually for something tangible in return.
Right now, that something tangible is oil.
In the last 18 months, China has signed loan-for-oil agreements worth more than $60 billion with Russia, Kazakhstan, Turkmenistan, Brazil and Venezuela, among other countries. The deals represent more than 500 million barrels of crude every year.
In just one of those deals, China agreed in February to provide $25 billion in long-term loans to Russia in exchange for 100 million barrels a year between 2011-30.
The deals haven’t been a secret. But the Caixin report confirms something that’s only been rumored to this point: China is drawing on its forex reserves to make these deals happen. That is, China is using its paper reserves to buy real assets in the ground.
source
TEKNOPUG said:
RichardD said:
nonuts said:
It's all made up money anyway, so maybe just go 'ah well, lets try this again, based in reality'.
Optimism has it's place
Optimism has it's place
Even though China has two trillion dollars or whatever it is currently, the Federal Reserve has infinite dollars as it owns the right to magic more dollars into existance, so what does all that mean in the end !?Edited by XJ40 on Wednesday 26th May 19:20
TEKNOPUG said:
RichardD said:
nonuts said:
It's all made up money anyway, so maybe just go 'ah well, lets try this again, based in reality'.
Optimism has it's place
Optimism has it's place
Even though China has two trillion dollars or whatever it is currently, the Federal Reserve has infinite dollars as it owns the right to magic more dollars into existance, so what does all that mean in the end !?
. What is the US deficit going to be this year (1 trillion $ ish?) and wasn't it over 1 trillion dollars the Fed made up in 2009 to prop up the US housing market?
Without the world reserve currency status (and inparticular trading in oil) the dollar could suffer, but for now I think it seems amazing what can be done whilst still maintaining its value.
RichardD said:
[So the west better invent some reason to use consume less of these assets due to a "threat" ....
How about calling it global warming
?
How about calling it global warming
?Pesty said:
We are doing it again with all this green ste.
China has somethign like 90% of all 'rare earths' all those wierd elements that are used in green technology.
and where do you think all these green tech gadgets will be made. That power consuption monitor aint going to be made in cardif
.
te.China has somethign like 90% of all 'rare earths' all those wierd elements that are used in green technology.
and where do you think all these green tech gadgets will be made. That power consuption monitor aint going to be made in cardif
.
Edited by Pesty on Wednesday 26th May 16:48
Pesty said:
We are doing it again with all this green ste.
China has somethign like 90% of all 'rare earths' all those wierd elements that are used in green technology.
and where do you think all these green tech gadgets will be made. That power consuption monitor aint going to be made in cardif
.
te.China has somethign like 90% of all 'rare earths' all those wierd elements that are used in green technology.
and where do you think all these green tech gadgets will be made. That power consuption monitor aint going to be made in cardif
.
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