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Rhino2K

⭐ CHINA is an Evil Empire

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China is an evil empire. Period. Full stop. Do not pass go. Do not collect $200. 

Anyone who overlooks what they're doing right now (and will only continue to do) is either completely ignorant of history, woefully naive, or complicit in the power grab. 

Whatever the totalitarian concerns about Soviet Union might've been are fully realized in the Chinese Empire. 

To ignore the threat to human civilization that is China, is to court the utter ruin of Western Civilization. 

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For the economic/policy geeks out there:
Geopolitical Diary: Why China Needs U.S. Debt

Quote
China does not see any choice but to keep buying U.S. government debt, Luo Ping, a director-general at the China Banking Regulatory Commission (CBRC), told a New York risk-managers conference on Thursday. The Financial Times quoted him as saying: “Except for U.S. Treasuries, what can you hold? Gold? You don’t hold Japanese government bonds or U.K. bonds. U.S. Treasuries are the safe-haven. For everyone, including China, it is the only option.” Even if the dollar depreciates because of Washington’s financial bailouts, he added, China has no other options.

Luo is acknowledging something of an open secret. Despite occasional hints (or threats) that China might attempt to bankrupt the United States by suddenly selling all of the U.S. debt it holds, that really is not an option. China would be economically destroyed in the process, unless there was some alternative place for Beijing to invest. For a number of reasons, there is none.

Over the past two decades, the United States and China have developed a special relationship based on the safety of U.S. debt. In essence, the United States gives China access to the wealthiest consumer market in the world, which in turn soaks up China’s massive output of consumer goods. This not only provides income for Chinese exporters, but also helps ensure social stability in China by providing employment — which is Beijing’s primary economic policy goal. China in turn invests its large trade surpluses, earned in U.S. dollars, into U.S. Treasury debt (e.g., 30-year bonds or 10-year notes). This allows China to store its earnings in one of the largest and most liquid financial markets in the world, without needing to convert between currencies. Meanwhile, the recycling of surpluses into Treasury instruments helps to bankroll continued U.S. spending. It is vendor financing on a global scale.

This relationship has fueled unprecedented booms in both U.S. consumer spending and Chinese industrialization. Even in the midst of recession, China continues to sock away savings — but now, because of the financial crisis, questions are being raised as to whether U.S. Treasury debt is the best vehicle for storing those funds.

Simply put, it costs a lot to buttress a collapsing financial market. As the cost of U.S. financial bailouts piles up, Washington’s balance sheet is deteriorating. Since the credit crisis began in the fourth quarter of 2007, bailouts have put U.S. government commitments at nearly $9 trillion. To be sure, this is more akin to a line of credit than a tally of real spending — though the actual federal outlays to date, around $3 trillion, represent roughly 20 percent of U.S. gross domestic product (GDP). At any rate, the stakes are high and investors are nervous.

China is the largest holder of U.S. government debt, so it is no wonder that Yu Yongding, the head of China’s World Economics and Politics Institute and a former adviser to the central bank, on Wednesday said that because of its “reckless policies” the United States should “make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way.” His remarks were meant to impress upon Washington that, as the primary financier of U.S. debt, China holds considerable power in the relationship.

In general, as a country’s balance sheet comes under increasing strain, investors tend to sell that country’s assets and move their funds to places with more attractive fundamentals (such as a trade or budget surplus). But the notion that U.S. debt is becoming a questionable asset and is about to be dumped by investors has not proved true. Instead, money from all over the world has been flooding into American markets, sending the dollar to its highest levels — and bond yields to their lowest — in years.

U.S. Treasuries remain the primary vehicle for investing surpluses, and for Chinese surpluses in particular. The reasons are many. For one thing, few other countries have debt markets large enough to support the level of investment China needs to make. The U.S. debt market is larger than the three next largest combined. In fact, only Japan has a debt market larger than that of the United States — but because Japan’s debt represents some 170 percent of its GDP, it has a credit rating no better than that of the better-run states in sub-Saharan Africa. The U.S. Treasury debt market, while large, represents only about half of U.S. GDP — a much more manageable fraction.

Of the top ten largest debt markets, the four that are in the eurozone — Germany, France, Italy and Spain — could provide viable alternatives for China. But these also pose problems. Much like Middle Eastern oil states, China not only receives most of its income in dollars, but also effectively pegs its own currency on the dollar. This means that for the Chinese, savings and investments held in dollar-denominated assets are relatively safe, stable and accessible. From Beijing’s perspective, it makes little sense to convert surplus dollars into euros, only to grow more exposed to currency fluctuations. (And even that assumes that one trusts the financial governance of other states – for example, Italy.)

If Beijing does not view euro-based debt as a viable alternative to the United States because of currency stability, it has even less confidence in other Top Ten debt markets, which are denominated in even less stable currencies. The markets for the Brazilian real, the South Korean won, and even the Canadian dollar and British pound are simply too small, fractured and volatile to provide the level of safety that the U.S. dollar does. And in any case, all of these markets are much too small to absorb Chinese trade surpluses month after month. Only the regular issuance of multibillion-dollar debt tranches by the United States, fueled by U.S. budget and trade deficits, can suffice.

If government paper cannot fill its needs, China could turn to commodities — if anything, perhaps gold could provide a viable store of value without subjecting China to the fiscal swashbuckling of a foreign government. But even here, the size of the gold market could not support Beijing’s investment needs. Even if China were somehow able to absorb the total annual output of the world’s gold mines — roughly 80 million troy ounces — doing so would both collapse global debt markets and send gold prices to stratospheric heights. (Not exactly a welcome scenario for a country utterly dependent upon international trade.) And for all that, China could sock away the same amount of value after only about three months of trading with the United States.

Ultimately, steering funds clear of American debt markets is not desirable — or even possible — for the Chinese. Luo, the CBRC official (who is known for his colloquial style), stated Beijing’s viewpoint about as plainly as it can be put during his speech in New York, saying: “We hate you guys, but there is nothing much we can do.”

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It worked....that guy won't ever steal again......talk about rehabilitation..........

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the obamanazi is just continuing in Clinton and W's footsteps in the massive sell out to China......and we allow it to continue by sending the same people back to washington every election.......

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We owe China around $900 Billion plus interest already - when is this going to stop?

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We owe China around $900 Billion plus interest already - when is this going to stop?

 

 

Kinda funny how china is doing to us what we did to the third world countries in the 20th century.

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Kinda funny how china is doing to us what we did to the third world countries in the 20th century.

Ironic, yes... funny, no.

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We owe China around $900 Billion plus interest already - when is this going to stop?

 

 

One day I am going to come home from work and meet some guy named chong ching ,and he is gonna kick me out of my house becuase his bank bought my mortgage company and sold my house to him.

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i think that in the Red Dawn remake coming out China is the country that invades us.....dum da dum

dum.....

 

 

 

 

and guess where one of the places they "invade".....Michigan.....lol.

 

Could this movie be a metaphore? yes.

Is China circling the wagons around detroit? maybe, they did buy Hummer.

Is this all just a coincidence? you decide

 

 

the movie looks pretty good though.

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Nixon sold us out long ago...

 

 

hard to say he sold us out but he was instrumental in opening the door for others.

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http://www.cnbc.com/id/33909820

 

BHO is going to go and discuss things with his comrades next week. We should have never allowed for China to invest in the first place. Now, a foreign government is telling our elected officials how we should manage our own affairs. Did Americans not tell you first.

 

Today, I was in a heated discussion with the younger generation. They were complaining about student loans and interest. How those things are evil, and shouldn't be shouldered by them. Capitalism does have it's flaws, but it's the only way that we can maintain freedom. We can choose to work for our own prosperity, or we can depend on the government to give it to us.

 

I want to live in America, not Europe, not Asia, not Central America, not Canada, and not Africa. I don't want us to be subject under the same laws and regulations that they are. I don't desire to conform to their lifestyles, but I'm wrong for not supporting the government.

 

 

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Sounds like some very good advice as far as I'm concerned......

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Sounds like some very good advice as far as I'm concerned......

 

me too. China is in deep. our dollars ain't worth ####.

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Sounds like some very good advice as far as I'm concerned......

 

In my opinion, our elected officials should have already known that you can't write blank checks to cover an economy. I'm still fuming mad about the Stimuless package. Who are the Chinese to be telling U.S. how to run our economy ? We should be telling them, how things are done. When I read that, I thought this is a sad day in American History. No one tells Americans what to do, we'll we're being scolded now.

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China is our daddy!

 

 

I was trying and trying to convey that point a month ago and nobody would listen.

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I was trying and trying to convey that point a month ago and nobody would listen.

 

 

It just seemed no one was listening because you were preaching to the choir.....

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I was trying and trying to convey that point a month ago and nobody would listen.

 

I suppose I had a little bit of hope in our President to show he was made of something. I try to look for the good in people. BHO is showing how irrelevant he is as a Commander in Chief. He is our President, but he is making George W. Bush look like a genius.

 

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