China won’t Finance U.S. Debt; We Hate You…you are devaluing your Dollar! Hyperinflation Collapse?

Who will finance our debt? Who has confidence in the fiscal responsibility of the U.S. congress? Will our dollar collapse, and if it does, what will be the consequence of such a collapse? I don’t know the answers to these questions, but I do know one thing, and that is that I hate my government; they are corrupt, right down to the bone. The corruption is cancerous, so drastic steps must be taken; they must be replaced in their entirety.
jbranstetter04

Why do Japan and China keep on buying dollars?

The dollar has fallen about twenty percent against the Euro in the last year but China and Japan continue to accumulate large dollar surpluses. At the same time, many economists worry that they will dump their holdings, sending the dollar into a free fall.
Michael Dooley, Peter Garber, and David Folkerts-Landau suggest that this financial policy is no accident. They view the Chinese and Japanese as pursuing deliberate full employment policies. They buy and hold dollars, not as an investment, but rather to subsidize their own exports. Read this summary of the argument, or buy an NBER working paper here. Garber puts the point bluntly:

http://www.marginalrevolution.com/marginalrevolution/2004/01/why_do_japan_an.html

China is right to have doubts about who will buy all America’s debt

Chinese doubts about the value of US Treasury bonds highlight a crucial question: who will buy the estimated $2.7 trillion (£1.9 trillion) to $4.2 trillion of debt expected to be issued over the next two years?

With annual foreign purchases accounting for less than a tenth of the low end of that range, and domestic investors unable to bridge the gap, the Chinese are right to worry.
Yu Yongding, former adviser to the Peoples Bank of China, recently demanded guarantees for the value of Chinas $682bn of Treasury securities. Then Luo Ping, director of the China Banking Regulatory Commission, said that China had misgivings about the US economy, but despite this it would continue to buy Treasuries. The two statements appear designed to raise the issue non-confrontationally before new chief US diplomat Hillary Clintons visit to Beijing on February 20.
China worries about the dollars value against other currencies, particularly the yuan. With US interest rates so low, the dollars value may slide. However, President Barack Obama has repeatedly said he wants a strong dollar, and indeed its trade-weighted value rose 13.9pc between April and December 2008.
The other area of concern for China is the value of its Treasuries. Given the US borrowing requirement and its lax monetary policy, Treasury bond yields could well rise sharply, causing a corresponding price decline. If Chinas holdings match Treasuries average 48-month duration, then a 5pc rise in yields, from 1.72pc on the 5-year note to 6.72pc, would lose China 17.5pc of its holdings value, or $119bn.
Foreign buyers have absorbed a little over $200bn of Treasuries annually, a useful contribution to financing the $459bn 2008 deficit, but only a modest help towards the $1.35 trillion minimum average deficit forecast for 2009 and 2010.
Unless that changes substantially, there will be $1trillion annually to be raised by the Treasury from domestic sources, more than double the previous record from domestic and foreign sources together, plus whatever is needed to bail out the banks.
Even if the US savings rate were to rise from zero to its long-term average of 8pc of disposable personal income, that would create only an additional $830bn of savings — not enough to fund the domestic share of the deficit. Interest rates would probably have to rise substantially to pull in more foreign investors.
Yu is right to worry.
http://www.telegraph.co.uk/finance/breakingviewscom/4611408/China-is-right-to-have-doubts-about-who-will-buy-all-Americas-debt.html

Duration : 0:3:37

By the Editor

Comments

Battery9876 March 9th

don’t believe …
don’t believe everything you read… all those numbers you know, they’re fabricated.
WeatherMan23 March 9th

lol come get the …
lol come get the 14trillion. ill be waiting at my house with a gun.
mrsuavecool March 9th

@Battery9876 – Hmm …
@Battery9876 – Hmm – no wonder you and the rest of the good old USA are in the red.. what are u? Dummy? So soon forgetting half ur ppl buying up houses w/out any means of income or savings? The exponential debt increase of the US will be result in 1.2 Billion of interest alone to China per month. Even if you stop spending today and carve out 10% of your total GDP to repay China, it will take 50 yrs. I’m an American and this is out of control, and those dummies in Congress should be shot!!!
garyomglol March 9th

Buckle up your seat …
Buckle up your seat belts ladies and gentlemen. Its 1991 all over again, except this time its USA instead of USSR.
angryaznman March 9th

@MikeSilk007

are …
@MikeSilk007

are you retarded. please get your facts straight. Ming OWNED vietnam at that period.

not to mention viets whole culture is carbon copied from Chinese. without Chinese, viets would still be in trees.

get the out of here. built what city, before French VIET WROTE IN CHINESE.
akusuijin March 9th

glenn beck is fat …
glenn beck is fat and stupid. i hate seeing him talk. i wonder why people like him…
B0rnAl0neDieAl0ne March 9th

Does this mean the …
Does this mean the Yuan will gain in value?
lilzokiller3 March 9th

I’m not pay shit.!! …
I’m not pay shit.!!!!
Battery9876 March 9th

well I pay my …
well I pay my mortgage with my credit card.. there’s a problem with that??
ACHEUNG379 March 9th

FUCK YOU, …
YOU,ungreatfull bitch. We lend your county 80 billion U.S. dollars so you can invade and occupied Iraq and Afgahnistan in the name of Democarcy. Do you think the U.S. War machine is for free? boo hoo, boo hoo, cry baby
101raptorkill101 March 9th

YOU BETTER PAY YOU …
YOU BETTER PAY YOU SON OF A CHINA I HATE U TO AND STOP SLAUGHTERING THE POOr ANIMALS U DIRTY DICKHEADS
liveitupalways05 March 9th

China dumped $35B. …
China dumped $35B. Japan floated $11B to the US and that made Japan to become the largest US Bond holder while TOYOTA is being lynched.

The whole thing is some sort of conspiracy by Detroit producers?

The US off China, so China would dump their US bonds. As a result, US$ would be devaluated like hell. Lets say, into half.

Now, Big 3 find that their car prices are halved in export markets. At the end, they sell them like hot cake over the dead body of the United States of America?
rocksiphone March 9th

The GDP of the …
The GDP of the United States & The European Union is around 32 Trillion These two Unions are really viewed as one alliance. China’s GDP is about 4 Trillion. When the U.S. & the European Union stops buying, that will bring down all countries that also buy from China. So China is in a Catch 22 situation, they are dammed if they do & Dammed if they don’t. This does not count Japan’s GDP who are our Lap Dog
rocksiphone March 9th

The GDP of the …
The GDP of the United States & The European Union is around 32 Trillion These two Unions are really viewed as one alliance. China’s GDP is about 4 Trillion. When the U.S. & the European Union stops buying, that will bring down all countries that also buy from China. So China is in a Catch 22 situation, they are dammed if they do & Dammed if they don’t. This does not count Japan which is the lap dog of the U.S. So who own’s Who?
rocksiphone March 9th

The GDP of the …
The GDP of the United States & The European Union is around 32 Trillion These two Unions are really viewed as one alliance. China’s GDP is about 4 Trillion. When the U.S. & the European Union stops buying, that will bring down all countries that also buy from China. So China is in a Catch 22 situation, they are dammed if they do & Dammed if they don’t. So China is really Screwed
rocksiphone March 9th

The GDP of the …
The GDP of the United States & The European Union is around 32 Trillion These two Unions are really viewed as one alliance. China’s GDP is about 4 Trillion. When the U.S. & the European Union stops buying, that will bring down all countries that also buy from China. So China is in a Catch 22 situation, they are dammed if they do & Dammed if they don’t.
rocksiphone March 9th

We won’t pay it …
We won’t pay it back for sure. The GDP of the United States & The European Union is around 32 Trillion These two Unions are really viewed as one alliance. China’s GDP is about 4 Trillion. When the U.S. & the European Union stops buying, that will bring down all countries that also buy from China. So China is in a Catch 22 situation, they are dammed if they do & Dammed if they don’t.
0100OO March 9th

@chinaownsusa I’m …
@chinaownsusa I’m an independent so slap away but understand that when Americans vote, a very large percent will say they voted for the lesser of two evils. R&D is a word game the gov plays. Rs wage war, Ds cry foul and vote to fund it. It is transparent to most. The ONLY two worth a crap are Dennis Kucinich – D an Ron Paul-R. Not much difference. The majority want out of Iraq and didn’t want to give wall street a Trillion $ but our alleged representatives did it ANYWAY ! Oh Well !
chinaownsusa March 9th

@0100OO the old 2 …
@0100OO the old 2 party system still runs america. when that changes, i’d be happy to stop slapping republicans.
chinaownsusa March 9th

china’s b/c …
china’s b/c they realize america won’t pay it back. at least according to some economists
0100OO March 9th

@chinaownsusa You …
@chinaownsusa You are correct , why blame China ? I think we should direct our anger at the group that owns 49% of our debt. Americas worse enemy is the beloved Federal Reserve bank. ALL federal income tax goes directly to the FRB to service the INTEREST on the 4.7 Trillion dollars we owe them. The MSM never seems to mention this FACT. Hobbies ” pummeling republicans with logic ” Fell for the old two party nonsense I see !
jayrush01 March 9th

we hate u!!!! ….. …
we hate u!!!! ….. dibs on liberty statue and warren buffet… in the deceased america everything must go sale
chinaownsusa March 9th

useless? usa is …
useless? usa is fucked!!!! don’t blame the chinese, you fucktard.
chinaownsusa March 9th

hi guys! we hate …
hi guys! we hate you!
tickyul March 9th

I just don’t know …
I just don’t know what to think anymore about my country-THE UNITED STATES OF AMERITARD. The national debt will be 14 trillion at the end of 2010, Ameritards demand more and more goodies, no end in sight. On top of that, we have decided to go to war every couple of years in some 6th world craphole. Oh yeah, it is now OUR job to rebuild Haiti, we have already spent 600 million on the most recent disaster, money that is based on our debt to China. This country has the most crazy people running it.