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U.S. debt is losing its appeal in China - International Herald Tribune
We owe China too much?! WE OWE CHINA?!
We owe China too much?! WE OWE CHINA?!
Uh oh......this looks bad!
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1,559 Posts
Yup. When they dump U.S. securities it will cause a world wide sell off of U.S. currency that will collapse the U.S. dollar and bust it down the Peso levels. That combined with the continued printing of trillions of dollars for bail outs will flatline the U.S. economy.
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Mainland China 585.0
Japan 573.2
United Kingdom 338.4
Caribbean banking centers 185.3
Oil exporters 182.2
Brazil 141.9
Luxembourg 91.8
Russia 69.7
Hong Kong 60.9
Norway 52.2
Those are in billions of US Dollars and that's only the top ten foreign holders of US debt. If the debt holders refused to take dollars in repayment for the debt (as France did in 1941), we could use the 147.3 million troy ounces in Fort Knox, which, at today's closing price would almost pay off Brazil. Ooops, I think we might be in trouble...
Japan 573.2
United Kingdom 338.4
Caribbean banking centers 185.3
Oil exporters 182.2
Brazil 141.9
Luxembourg 91.8
Russia 69.7
Hong Kong 60.9
Norway 52.2
Those are in billions of US Dollars and that's only the top ten foreign holders of US debt. If the debt holders refused to take dollars in repayment for the debt (as France did in 1941), we could use the 147.3 million troy ounces in Fort Knox, which, at today's closing price would almost pay off Brazil. Ooops, I think we might be in trouble...
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Bro... China can single-handedly bring down the US, financially, if they were to pull all of their interest out of our economy.U.S. debt is losing its appeal in China - International Herald Tribune
We owe China too much?! WE OWE CHINA?!
thats assuming the gold is still there. its my understanding a audit hasnt been allowed in over 50 years. many MANY people believe the gold has long since vanished and they are guarding a empty vault.
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They are constantly selling the gold off to their friends under market value in order to drag down the market value of gold. They feel that dragging down the value of gold will erode confidence in non paper money. In reality they are just pumping new gold into the already rabid gold market and encouraging trading of precious metals.
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And it looks like they may do just that!
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I'm not a big believer that China would intentionally bring down the US economy, as they have as much to lose as we do. Those factories are going idle as we can't afford to spend. However, that doesn't mean that they won't lose confidence in the dollar as the safe-haven currency it has been for years. If people suddenly see the Euro, Pound Sterling, or Yen as the safest currency, then all bets are off. It's more an issue of confidence than maliciousness.
Re: Fort Knox, there was a public viewing to address concerns back in the 70s and the GAO did an audit in 1981. I'm not a big believer in government conspiracies because I've worked for the government most of my life. There's very few secrets that can be kept in the government that don't get leaked out eventually. You certainly couldn't keep something that big under wraps for that many years without a Washington Post cover story on it.
While most people are busy fretting about conspiracies, the reality of what we know is plenty bad enough. Nobody has to have evil intentions at this point, momentum alone is going to bring down this house of cards in due time.
Re: Fort Knox, there was a public viewing to address concerns back in the 70s and the GAO did an audit in 1981. I'm not a big believer in government conspiracies because I've worked for the government most of my life. There's very few secrets that can be kept in the government that don't get leaked out eventually. You certainly couldn't keep something that big under wraps for that many years without a Washington Post cover story on it.
While most people are busy fretting about conspiracies, the reality of what we know is plenty bad enough. Nobody has to have evil intentions at this point, momentum alone is going to bring down this house of cards in due time.
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Recently China bought the rights to all the oil in Syria. It's not impossible that a nation like China hungry for oil could strike a deal with a nation like Iran. The Iranians could negotiate that in return for turning over all their oil rights to China the Chinese would trash their U.S. securities and destroy the U.S. economy. Peak oil is still here and isn't going away. The few nations with oil are not friendly to the U.S. and could do anything to bring the U.S. down.
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While I'm a big believer in Peak Oil and the pressures it will place on global relationships, the China-Syria relationship is hardly worth mentioning. Syria is incredibly small potatoes, exporting less than 1/10th of all middle eastern oil. Iran has no problem selling their oil on the open market, so a one-on-one relationship with China serves no benefit to them. Besides, why would China give up a $300 billion per year trading partner in exchange for a single oil supplier that is either at or just past peak oil production?
The real concern for energy security should be what's in the headlines for the last two weeks; the stranglehold that Russia has on European natural gas supplies. This has already had an impact on Germany's foreign policy during the invasion of Georgia and will play a growing role as more European nations become even more dependent on Russian gas. This is the type of thing to be worried about.
Don't forget that it's Canada, not the Saudi's that are the current #1 supplier of US oil and Canada is far from reaching peak oil. So far, there's been little interest in finding other buyers for Canadian oil with your rich bretheren to the south buying up all that's available. It's an open market when it comes to oil. Any supplier can sell to the highest bidder because it's easy to put on a ship and send around the world. Natural gas is a different story. It's not as easy to ship and it generally takes pipelines that take years to build to transport from nation to nation. Even the UK hit peak natural gas production already, so Europe is screwed. Their one hope for non-Russian controlled Caspian Sea natural gas was dashed when Russia flexed its muscles and ran roughshod over the Georgian army. Construction on the southern pipeline, outside of Russia's control, has all but stopped as investors nerves were frayed by the events of last summer. Russia succeeded in both derailing the pipeline and Georgia's membership in NATO. By doing that, they've assured their role on Europe's center stage for the next century.
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Endurance - I think you made some good points. I guess what I was trying to get across is that the nations that have oil for export (excluding my own) are unfriendly towards the U.S. and the nations through which the oil passes (or which are competing for a market share) are also hostile. It's not a good situation for an oil hungry nation like the U.S.
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Agreed. I saw the best thing that's ever happened in the US in May, June and July: $3.75/gallon gas. Tens of millions of Americans found another way to get to work, bought more fuel efficient cars (the waiting list on Mini Coopers was out to six months!), and actually started conserving the stuff like it might be in limited supply. In June alone, US consumption of gasoline dropped by 6%! Unfortunately gas is cheap again, but there does seem to be some lasting effect on the choices people are making when making new car purchases. Probably the best thing for the environment the world could ever ask for is a global depression. People learning to live without, conserve, and change the places they live and the lifestyles they live is the only way we can avert disaster.
I was a cop for several years and the one thing I walked away with was the fact that people don't learn from joy, they learn from pain. For some, it's the DUI that makes them ride the bus that turns their lives around. For others, it's the domestic assault that put them in the hospital and made them re-examine their lives. For Americans, life has been far too easy to have any desire to change. Only rising energy and food costs with reduced job security will actually motivate people to change their wasteful behavior.
Hopefully we're entering an era of painful change that won't lead to the end of the world. Hopefully, the US can make dramatic changes in the face of inevitably tough economic times ahead. We're still the third largest oil producer in the world, unfortunately, we're the number one consumer by over 7,000,000 barrels per day. Things are going to have to get a lot tougher to change that, but I don't see a choice. We've already past peak oil and China is the number three importer (number two consumer) in the world and rising like a bullet. You're right, of the top 15 oil exporting nations, only two or three are anything I'd call real friends to the US. On the plus side, all but a handful of those countries are anything but greedy and capitalistic, always willing to deliver to the highest bidder.
In the end, we're left with a sad hope: the hope that the world suffers so badly economically in the next decade that it will shrink our thirst for oil to levels that are sustainable for long enough to put alternatives in place. No matter what, it's going to be painful. Since I was born, the global population has doubled, thanks in large part due to the use of fossil fuels in the "green revolution" of the 60's and 70's. While the world's ability to produce food has grown exponentially, the supply of the liquid that allows that growth has been proportionately used up. As the price of fuel rises, so too does the price of food. Heaven help those in third world countries that already struggle to put food on the table. As for the hungry populations of China and India, only time will tell what lengths these countries will go to in the years to come to feed their populations. Factor in another Mt. Pinatubo, or worse yet, a Mt. Tambora-sized eruption, and the lives of billions could lie in the balance.
I was a cop for several years and the one thing I walked away with was the fact that people don't learn from joy, they learn from pain. For some, it's the DUI that makes them ride the bus that turns their lives around. For others, it's the domestic assault that put them in the hospital and made them re-examine their lives. For Americans, life has been far too easy to have any desire to change. Only rising energy and food costs with reduced job security will actually motivate people to change their wasteful behavior.
Hopefully we're entering an era of painful change that won't lead to the end of the world. Hopefully, the US can make dramatic changes in the face of inevitably tough economic times ahead. We're still the third largest oil producer in the world, unfortunately, we're the number one consumer by over 7,000,000 barrels per day. Things are going to have to get a lot tougher to change that, but I don't see a choice. We've already past peak oil and China is the number three importer (number two consumer) in the world and rising like a bullet. You're right, of the top 15 oil exporting nations, only two or three are anything I'd call real friends to the US. On the plus side, all but a handful of those countries are anything but greedy and capitalistic, always willing to deliver to the highest bidder.
In the end, we're left with a sad hope: the hope that the world suffers so badly economically in the next decade that it will shrink our thirst for oil to levels that are sustainable for long enough to put alternatives in place. No matter what, it's going to be painful. Since I was born, the global population has doubled, thanks in large part due to the use of fossil fuels in the "green revolution" of the 60's and 70's. While the world's ability to produce food has grown exponentially, the supply of the liquid that allows that growth has been proportionately used up. As the price of fuel rises, so too does the price of food. Heaven help those in third world countries that already struggle to put food on the table. As for the hungry populations of China and India, only time will tell what lengths these countries will go to in the years to come to feed their populations. Factor in another Mt. Pinatubo, or worse yet, a Mt. Tambora-sized eruption, and the lives of billions could lie in the balance.
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Well, it looks like the economic doom that is "best for the environment" that I mentioned above isn't that far away. I will warn you, this article is a rabbit hole. If you're prone to depression or insomnia, you're probably better off skipping this one. Clicky on the rabbit hole
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if that article is correct, endurance, it would seem that it actually solves the "paradox of thrift" I alluded to in my previous post & is a cause for me (at least) to be happy that I only 'live within my means'... maybe I shall read it again to be sure I didn't juxtapose some of the points
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Yes, I agree. Inflation may not hit until the recovery, which could be five years off. The tricky part is making sure you can hold onto your job through the next few years. Right now the recession seems to be very selective, but as it deepens into a depression in 2009, more and more segments of the economy will be affected.
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Where the DOW hits 5000 and the S&P gets down to 500. You know, after the government pumps all this bail-out and stimulus into the ecomonmy with little to no results.
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