China: "The US is "insolvent and faces bankruptcy"

[Avernus]

http://jessescrossroadscafe.blogspot.com/2...-and-faces.html

 

The common thought amongst even reasonably educated and economically literate Americans is that China is 'stuck with US Treasuries' and has no choice, so it must perform within the status quo and do as the US wishes, or face a ruinous decline in their reserve holdings of US Treasuries.

 

And with real short term US Treasury interest rates decidedly negative, meaning that it is costing you money to hold dollars, there is a case to be made that there are a lot of 'price takers' out there in this world. Wow, they are just that good, aren't they. Having their heyday in a genuine deflation. A subtle tax levied on all holders of US dollars, probably more significant because of the official understantement of inflation. Yo, come git some.

 

I think China is already diversifying their reserve portfolio, and more stealthily and effectively than one would imagine.

 

Further, I suspect that through the use of hedging short positions and derivatives such as Credit Default Swaps, China would be able to cover a greater portion of its reserves than the common mind might allow. And if this is in reality one theater in a global struggle for power, sacrificing a pawn or two, and even a bishop, would be a small price to pay to bring down the world's remaining superpower, as indirectly and gracefully as is possible. War is never cheaply waged.

 

It would most certainly be a nuclear option to outright dump Treasuries outright, and would raise the ire of what is still a formidable military power. But it is the Western mind that is so incapable of seeing the many shades of gray in every situation, the subtle gradations in a range of choices that I believe China not only sees but is already actively pursuing.

 

China is not the only country that resents the devastating frauds that the US has perpetrated on not only its own people but the rest of the world through its Wall Street banks and ratings agencies.

 

Most Americans overlook this developing estrangement that is beginning to isolate the US and UK from even their traditional allies in Europe and South America and Asia. This is a serious error, but so typical of the short term mentality dominated by greed, dishonesty, and self-delusion that captured the American psyche in the latter part of The New American Century. But what choice does Europe have except to take what the Anglo-Americans serve them. Take it or leave it. And ain't currency war hell?

[dmarc117]

China is not the only country that resents the devastating frauds that the US has perpetrated on not only its own people but the rest of the world through its Wall Street banks and ratings agencies.

 

i dont believe this at all. its those 'frauds' that allowed us to continue to buy things from them. lots of things. we die, they die.

[Savage Beatings]

What source produced the quote in your title? I didn't see it cited in the article at all.

[WaterMan]

I wonder what would happen to the value of our money if China decides it is no good or only worth half?

[matt770]

so typical of the short term mentality dominated by greed, dishonesty, and self-delusion that captured the American psyche in the latter part of The New American Century.

 

People tell me I'm a downer when I point this out, but it's proven true time and time again. It's almost laughable that such incompetent people are running this country -- the politicians and CEOs, bankers, etc. It boggles the mind that such short-sightedness is steering the ship -- the bottom line is that the people in power are mostly in it for themselves and could give a crap about everyone else's future.

 

I cringe when I think about the debt. And what this article is saying about China is my worst fear -- they are circling and waiting, and have a strategy to take us down economically. People think this country is infallible because it always has been, but IMO there is real cause for concern.

[SEC=UGA]

i dont believe this at all. its those 'frauds' that allowed us to continue to buy things from them. lots of things. we die, they die.

 

Umm, lest we forget, they do run over their citizens with tanks and have a pretty serious over-population problem...

[muck]

I wonder what would happen to the value of our money if China decides it is no good or only worth half?

 

Well, among other things, if it's only worth half, we can't buy much of their stuff any more.

 

China has a variety of issues of their own their dealing with. If we think we have a property bubble, then they have an arguably even bigger property bubble ... just theirs hasn't burst yet and, in fact, may still be getting bigger.

[Avernus]

What source produced the quote in your title? I didn't see it cited in the article at all.

 

 

it's the headline

[Ursa Majoris]

People tell me I'm a downer when I point this out, but it's proven true time and time again. It's almost laughable that such incompetent people are running this country -- the politicians and CEOs, bankers, etc. It boggles the mind that such short-sightedness is steering the ship

This. For our government, we have set up a system that forces them to spend 50% of their time actively campaigning. For our companies, we have a system that trashes them even when profits increase if they don't meet the "expectations" of some jerkwad on Wall Street. It's an entirely stupid system lending itself to a day to day mentality not a strategic vision.

[peepinmofo]

People tell me I'm a downer when I point this out, but it's proven true time and time again. It's almost laughable that such incompetent people are running this country -- the politicians and CEOs, bankers, etc. It boggles the mind that such short-sightedness is steering the ship -- the bottom line is that the people in power are mostly in it for themselves and could give a crap about everyone else's future.

 

I cringe when I think about the debt. And what this article is saying about China is my worst fear -- they are circling and waiting, and have a strategy to take us down economically. People think this country is infallible because it always has been, but IMO there is real cause for concern.

 

 

Well said, and spot on.

[dmarc117]

People tell me I'm a downer when I point this out, but it's proven true time and time again. It's almost laughable that such incompetent people are running this country -- the politicians and CEOs, bankers, etc. It boggles the mind that such short-sightedness is steering the ship -- the bottom line is that the people in power are mostly in it for themselves and could give a crap about everyone else's future.

 

I cringe when I think about the debt. And what this article is saying about China is my worst fear -- they are circling and waiting, and have a strategy to take us down economically. People think this country is infallible because it always has been, but IMO there is real cause for concern.

 

 

stop scaring people

[Duchess Jack]

If our money is not good - than China's money is not good, because they won't be able to unload 75% of their junk on the US.

 

...and this is a socialist/communist nation talking about our economy, right?

[wiegie]

you know what is really cool--if they truly believe that we are going bankrupt, then they are basically giving us sh|t for free via their trade surplus with us

 

[dmarc117]

you know what is really cool--if they truly believe that we are going bankrupt, then they are basically giving us sh|t for free via their trade surplus with us

 

 

 

which is why they will never nuke us. the ponzi scheme stays alive.

[rattsass]

So it's decided. We need world war 3 to pull us all out of this unpleasantness. Where shall we wage it?

[CaP'N GRuNGe]

Count me as one of those delusional people that think our interconnected financial relationship, as f'd up as it is, actually makes the proposition of war between our two countries even less likely.

[rattsass]

Count me as one of those delusional people that think our interconnected financial relationship, as f'd up as it is, actually makes the proposition of war between our two countries even less likely.

It was a trick question. The war will be waged against us. It has already begun.

[Hugh 0ne]

So it's decided. We need world war 3 to pull us all out of this unpleasantness. Where shall we wage it?

 

In mah pants.

[bpwallace49]

Count me as one of those delusional people that think our interconnected financial relationship, as f'd up as it is, actually makes the proposition of war between our two countries even less likely.

 

You know who germany's #1 trading partner was prior to WWII?

 

 

 

France

 

 

It doesnt always have to make sense when nations go to war to further their own agendas . .

[rattsass]

In mah pants.

Can't you ever be cereal?

[dmarc117]

In mah pants.

 

 

there wont be any wmd's used in that war

[peepinmofo]

The war will start with Israel attacking Iran. We will then back Israel. Then the nukes start to fly. Im guessing come November, we will see a lot of this happening.

 

[Yukon Cornelius]

So it's decided. We need world war 3 to pull us all out of this unpleasantness. Where shall we wage it?

the south is ripe for the picken .

[Savage Beatings]

it's the headline

 

I see. I thought maybe some Chinese official was quoted as saying that, but I guess it was just the author's projection of what he thinks China is thinking. Or something like that.

[wiegie]

there wont be any wmd's used in that war

unless wmd stands for "weiner of miniscule dimensions"