China Threatens to Destroy the Dollar

Phantom · 08-08-2007, 10:54 AM

I'm sure many of you have seen the article: China threatens 'nuclear option' of dollar sales - Telegraph

It seems the Dems want to plunge the world into recession with their stupid plans to mess with China (currency bullying, "human rights" pushes etc).

I don't blame China in the least for this - if I were them I would do the same thing when confronted by silly threats from iognorant American politicians.

Hopefully the threats for either side will never materialize...

DosEquis · 08-08-2007, 11:21 AM

Not one single politician or otherwise will do anything to china. We have a 200 billion dollar trade deficit with them and depend on them like a crack whore depends on crack. Any tough talk on china is an empty promise. We might be able to work a better deal with them, but the cage rattling we saw in say.. the AFL-CIO debate.. was all bullshit.

avsp · 08-08-2007, 12:06 PM

They've been well canny in lending all that money to the US.

At least they've got a very strong vested interest in a stable US economy now.

As suggested its a two way street & its a bit like the cold war MAD setup.

OTOH so much for an 'ethical foreign policy' as the UK electorate was promised 10 years ago.

Watching the Olympics will be interesting. I'm sure some winning athlete will signal support for Tibet from the podium, ..., OTOH many may mention Iraq I suppose..

edit to add
this isnt going to go down well
US legislators propose China Olympics boycott over rights

Publius · 08-08-2007, 12:09 PM

China is bluffing, they know as well as we do that if they try to wreck our economy they'll wreck their own in the process.

Phantom · 08-08-2007, 12:29 PM

Originally Posted by Publius

China is bluffing, they know as well as we do that if they try to wreck our economy they'll wreck their own in the process.

I think if we try to mess with them too much, they will start to mess with us in return, don't you think?

I doubt things will come out as drastic as threatened, but there's no reason for any of this in the first place.

hsmith · 08-08-2007, 01:10 PM

Originally Posted by Publius

China is bluffing, they know as well as we do that if they try to wreck our economy they'll wreck their own in the process.

lol

both sides are beating their chests

nothing will happen

Publius · 08-08-2007, 01:13 PM

Originally Posted by hsmith

lol

both sides are beating their chests

nothing will happen

Nor should anything.

Rouger2 · 08-08-2007, 01:57 PM

God this makes me sick sick sick. This thing didn't just happen it has been going on for years and years. Yea there is nothing wrong with buying all that cheap stuff from china and running up a huge trade deficit. Like I have posted before Trade deficits are an IOU that has to be paid. The billions and billions of dollors that we have in trade deficit with them means they get the billions and billions in dollors, and just think each year it is more billions and billions that we owe them and it will just go on forever untill they own us lock stock and barrel. Yea people your saving money with the cheap Chinese goods but it costs us. It is at a stand off right now but that dam insane deficit grows like a cancer every year.

thomez · 08-08-2007, 05:52 PM

Originally Posted by Rouger2

Like I have posted before Trade deficits are an IOU that has to be paid.

and you are corrected every single time, yet you continue to still post it again

kinggovernor · 08-08-2007, 09:01 PM

Originally Posted by Publius

China is bluffing, they know as well as we do that if they try to wreck our economy they'll wreck their own in the process.

that hasn't stopped countries in the past

Stylerod · 08-08-2007, 10:23 PM

Is anyone else like me that when I roll over a Drudge headline and see it's from the Telegraph I just don't bother to click it

Rouger2 · 08-09-2007, 11:09 AM

Originally Posted by thomez

and you are corrected every single time, yet you continue to still post it again

How have you proved me wrong. If trade with a country is not paid for with equal trade then there is a deficit that is paid for with dollars that the country does not want to use to buy our things. The US must stand by those dollars. They use them to buy treasury bonds and our debt. They now with all those dollars are threating to use them to hurt our country by increasing the slow decline of the dollar. How do you think they got all those dollars that they want to use against us. The trade deficit. I don't always answer you because you are having a hard time gettin you head around this and you want to nit pick small things that just change the subject.

thomez · 08-09-2007, 05:14 PM

Let's say Intel is making processors in China and Intel-China is receiving payment in US Dollars. They are buying products in a bunch of currencies but maybe they aren't buying as much from the US as they are taking in dollars. This means Intel-China is both turning a profit and is saving cash in US Dollars. This doesn't mean that the government of China is holding those billions of dollars nor does it mean that there is a debt to China. The trade deficit is largely with private corporations, not public ones. A trade deficit does not mean anyone else is "owning" our country.

Rouger2 · 08-09-2007, 06:24 PM

Originally Posted by thomez

Let's say Intel is making processors in China and Intel-China is receiving payment in US Dollars. They are buying products in a bunch of currencies but maybe they aren't buying as much from the US as they are taking in dollars. This means Intel-China is both turning a profit and is saving cash in US Dollars. This doesn't mean that the government of China is holding those billions of dollars nor does it mean that there is a debt to China. The trade deficit is largely with private corporations, not public ones. A trade deficit does not mean anyone else is "owning" our country.

The Article said that China has billions and billions of dollars and they do not want or need to buy our stuff so they are buying our treasury bonds. They have gained those dollars because of keeping their currancy artifically low causing the trade deficit. Now they are threating to sell all those treasury bonds and ruin our economy and it is not private business that is promising this it it the Chinese government. Is that enough reason for us to try to lower the trade deficit. The dollars are IOU's the paper is worth nothing it gives them a stake in our country so they use it to buy treasury bonds. They could also buy if allowed land or businesses. They want to buy an oil company but are not able to. They have the dollars to do it because of the trade deficit and it is growing monumentally every year. Yea everything is alright. They have us over a barrel but we need to get tough. We don't need to force them to raise their currancy over night or have big tarrifs but we need to let them know this will not continue and needs to slowly start changing. The trade law that they do not allow to happen is that when a country has a huge trade surplus their currancy value is suppose to go up and like us if with a huge trade deficit our currancy value is suppose to go down. We are letting that happen slowly and it will hurt our economy but we must all realize that and tough it out. They have let the imbalance go on to long and now it is going to hurt unless we are stupid and just let things go as they are now and get farther and farther into debt, and just the size of it ought to be scary to anyone and it grows insanely every year.

thomez · 08-09-2007, 08:26 PM

I'm just not following how the trade deficit is putting billions in the hands of the Chinese government rather than in private corporations.

Rouger2 · 08-09-2007, 09:27 PM

Originally Posted by thomez

I'm just not following how the trade deficit is putting billions in the hands of the Chinese government rather than in private corporations.

The Article says it is the government who is threatening to sell off its treasury bonds. China is mostly a socialistic country so many companies are owned by the government so profits go to the government. That is another thing that is wrong with our companies competing with chinese companies they have all the resourses of the whole country to use on there side it is not fair. They say China even uses prison labor.

thomez · 08-09-2007, 10:26 PM

The problem with that is the fact that China has a very cut-throat capitalistic economy these days with private enterprise and intense competition. From what I know, they don't have much state-owned industry anymore... Americans invest billions there every year to start up new private enterprise and they also have a lot of their own cash as well that is reinvested in their economy.

Rouger2 · 08-10-2007, 04:15 PM

Originally Posted by thomez

The problem with that is the fact that China has a very cut-throat capitalistic economy these days with private enterprise and intense competition. From what I know, they don't have much state-owned industry anymore... Americans invest billions there every year to start up new private enterprise and they also have a lot of their own cash as well that is reinvested in their economy.

Maybe so but it is still the government of China whos says they will trade all the US treasury bonds not private industry. Trade is exactly that a trade. One country trades goods to another country for it's goods and if you don't have equal trade then one country is loser, debtor, and the other a winner, a loaner. You can have a overall balance but US has a deficit with everyone. Since US does not have equal trade with China what ever goods over equal trade with them we are simply paying with dollars and they are collecting in China so they buy our treasury bonds billions and billions of dollars worth of bonds and growing by billions and billions every year. When are they going to want US land, businesses for their dollars. They want an oil company now but have been denied. As a gigantic debtor to them how long can we deny them. Now they are black mailing us by saying they will sell off their treasury bonds ruining the value of the dollar that is the problem they have us by the nuts. That is as clear as I can explain it and I am getting tired of this so that is all I am going to say on it untill maybe another thread.

6SpeedTA95 · 08-11-2007, 01:37 PM

Originally Posted by Rouger2

The Article said that China has billions and billions of dollars and they do not want or need to buy our stuff so they are buying our treasury bonds. They have gained those dollars because of keeping their currancy artifically low causing the trade deficit. Now they are threating to sell all those treasury bonds and ruin our economy and it is not private business that is promising this it it the Chinese government. Is that enough reason for us to try to lower the trade deficit. The dollars are IOU's the paper is worth nothing it gives them a stake in our country so they use it to buy treasury bonds. They could also buy if allowed land or businesses. They want to buy an oil company but are not able to. They have the dollars to do it because of the trade deficit and it is growing monumentally every year. Yea everything is alright. They have us over a barrel but we need to get tough. We don't need to force them to raise their currancy over night or have big tarrifs but we need to let them know this will not continue and needs to slowly start changing. The trade law that they do not allow to happen is that when a country has a huge trade surplus their currancy value is suppose to go up and like us if with a huge trade deficit our currancy value is suppose to go down. We are letting that happen slowly and it will hurt our economy but we must all realize that and tough it out. They have let the imbalance go on to long and now it is going to hurt unless we are stupid and just let things go as they are now and get farther and farther into debt, and just the size of it ought to be scary to anyone and it grows insanely every year.

Those billions of dollars are completely unrelated to the trade deficit, the billions of dollars are largely from china exchanging hteir currency for dollars. They have a rapidly growing economy and the government has been running large surplusses for more than 7 years. They keep much of this in dollars.

Your notion of trade deficits being IOU's is wrong its been discussed manytimes and no matter how many times you say it, it is still wrong a trade deficit is not an IOU. It is a political hockey puck that primarily democrats like to throw around.

6SpeedTA95 · 08-11-2007, 01:40 PM

Originally Posted by Rouger2

Maybe so but it is still the government of China whos says they will trade all the US treasury bonds not private industry. Trade is exactly that a trade. One country trades goods to another country for it's goods and if you don't have equal trade then one country is loser, debtor, and the other a winner, a loaner. You can have a overall balance but US has a deficit with everyone. Since US does not have equal trade with China what ever goods over equal trade with them we are simply paying with dollars and they are collecting in China so they buy our treasury bonds billions and billions of dollars worth of bonds and growing by billions and billions every year. When are they going to want US land, businesses for their dollars. They want an oil company now but have been denied. As a gigantic debtor to them how long can we deny them. Now they are black mailing us by saying they will sell off their treasury bonds ruining the value of the dollar that is the problem they have us by the nuts. That is as clear as I can explain it and I am getting tired of this so that is all I am going to say on it untill maybe another thread.

Dude you are completely wrong on this. The trade deficit simply means we BUY more stuff from other countries than they buy from us. We trade US dollars for their goods. I give them 10 dollars I get a shirt, the "trade" as you call it has taken place we both got something of value. I a willing buyer paid a willing seller 10 bucks for a shirt which makes the market value of that shirt 10 dollars. If he buys nothing from me in return, by US government measurement I have a 10 dollar trade deficit with this guy...I STILL engaged in "trade" and got value out of the transaction. I recommend brushing up on your economics especially in the area of trade amongst countries.