China threatens 'nuclear option' of dollar sales

Discussion in 'Politics, Religion, Social Issues' started by Ugg, Aug 8, 2007.

  1. Ugg macrumors 68000

    Ugg

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    #1
    44% of US federal debt is foreign owned. How independent can the US remain if foreign policy decisions are made based on threats from debt holders?

    Telegraph article
     
  2. Swarmlord macrumors 6502a

    Swarmlord

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    #2
    It is a shame that so much of our debt is owned by a foreign interests. It would certainly be better for more Americans to invest in T Bills and Notes.

    I don't believe that China is going to cut their own throat and bite the hand that feeds them though. First, doing anything to the bond value is only going to cost them huge sums of money and second, the main source of their wealth is from the zillion goods they manufacture for us. A stunt like what they proposed would dry that up faster than a sidewalk puddle in Phoenix in July.
     
  3. Ugg thread starter macrumors 68000

    Ugg

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    #3
    Of course they're not going to dump it all, maybe a few hundred million just for show. Anyone who thinks they would are pretty naive.

    The point is, the threat itself is enough to have a huge impact on the world's economy. Much less the fact that it skews the US' relations with China. Should China invade Taiwan, how could the US possibly react? I'll bet you anything that the US is already treading softly when it comes to China's forays into SE Asia and Africa. China's simply too powerful.

    What's more, the 2008 Olympics in Beijing will allow China to show the world how much progress they've made. There's no way they're going to jeopardize their standing in the world's eyes before the Olympics.
     
  4. Desertrat macrumors newbie

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    #4
    Much of this is a response to Sen. Chucky Schumer's notions of protectionist tariffs on Chinese-made goods. It'll please the unions, although it won't save any jobs to amount to a hill of beans, and it'll be on the backs of lower-income folks who won't understand, anyway--and who aren't high-percentage voters.

    I imagine China will be more careful in the future, though, as they seek to join the other countries who are moving away from the dollar. They've already been burned by their investment in Blackstone.

    As said elsewhere, political folks aren't real smart about money.

    'Rat
     
  5. Ugg thread starter macrumors 68000

    Ugg

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    #5
    I think it goes beyond Chucky, there's been a lot of high profile people who have raised the issue over the past couple of years. It also ties in with the shoddy and dangerous products coming out of China. China really needs to get its act together before they end up with a major poisoning disaster on their hands.

    China really doesn't have much of a choice when it comes to investments. What else are they going to do with all of those dollars? I don't see a major change in their strategy, like everyone else, they will diversify but selling dollars right now would mean a major loss.

    I do think that China's investments in Africa and SE Asia have largely gone without comment from the US because of the amount of US debt China owns. A decade ago, the US would have been all over China for exploited the third world masses.

    The US will keep fighting China on American soil but it's already lost the battle in the third world and the US knows it.
     
  6. solvs macrumors 603

    solvs

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    Uh, I'm guessing it's more because the dollar is plunging in value, and it doesn't seem to be getting any better. Worse actually. Politicians make these claims all the time, the latest is nothing new. Hadn't even heard about it until now.

    Way to find a way to blame it on a Dem though.
     
  7. Desertrat macrumors newbie

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    #7
    solvs, Schumer and a couple of others have been talking up the idea of tariffs on Chinese goods for a couple of years, now. It's not new at all. Gebhardt did the same thing back when he was a would-be presidential candidate. I didn't make them Democrats, nor do I really care. I'm looking at the potential effects of proposed actions, no matter who does the proposing.

    The poisoned pet food or unsanitary human food thing is relatively new. The Chinese recetnly executed the guy who'd been the head of their equivalent of our FDA, for accepting bribes However, the food thing is also part of Schumer's efforts for more inspections of imports.

    I'm not saying that more inspections are bad; I'm just pointing out that there are reasons from the Chinese side as to the "why" of their threats. They're not threatening economic warfare for no particular reason beyond the thrill of conflict...

    IOW, this whole deal is not reasonless. Somebody had to start fussing, and Schumer has been a lead fusser.

    I assume the methodology of getting rid of US paper would entail selling the paper and reinvesting in assets denominated in other than dollars. As long as this is not done in a precipitous manner, they can avoid large losses. The end result, however, would be a further decline in our currency's value. Our only hope of maintaining stability would be to raise interest rates--which would further clobber our housing market and reduce our exports.

    'Rat
     
  8. killr_b macrumors 6502a

    killr_b

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    #8
    How 'bout,

    you want to object to lead paint in your kids toys? We'll kill the $
    you want to object to poisonous chemicals in the food? We'll kill the $
    you want to object to us torturing tibetans? We'll kill the $
    you want to object to us invading Taiwan?
    using deadly pesticides
    human rights abuses (tiananmen square, one child policy)
    nuclear programs
    sweat shops
    poaching endangered animals
    health standards

    NO objections. All we could do now is threaten nuclear war. (See Iran and their attack on the US dollar)
    Do you really thing Bush and Co will put up with China having power over our economy? Queue WWIII.
     
  9. skunk macrumors G4

    skunk

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    #9
    How 'bout,

    you want to object to GM organisms in your kids food? We'll kill your economy
    you want to object to poisonous chemicals in your environment (Bhopal)? We'll kill your economy
    you want to object to us torturing Muslims? We'll kill your economy
    you want to object to us invading Iraq?
    using banned munitions (napalm, white phosphorus, cluster bombs, landmines)
    human rights abuses (special rendition, waterboarding, child execution, etc, etc)
    nuclear programs (need I say more?)
    sweat shops in other countries

    Do you not see the ludicrous imbalance in your view of the world?
     
  10. killr_b macrumors 6502a

    killr_b

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    #10
    I don't remember ever backing the nonWar in Iraq or Bush's (the skull and bones member of the new tyranny) policy on anything. I never said that muslims were a threat, and I never said Iran was a threat.

    But everything you typed has already taken its toll on the dollar, hasn't it.
    SO, I was citing a few new ones yet to occur.
     
  11. skunk macrumors G4

    skunk

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    #11
    You are painting everything China might do as an unreasonable threat while ignoring the fact that the country whose flag you wrap yourself in has already done as much or worse. What goes around comes around.
     
  12. killr_b macrumors 6502a

    killr_b

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  13. skunk macrumors G4

    skunk

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    #13
    I very much doubt it. What was your point again?
     
  14. killr_b macrumors 6502a

    killr_b

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    #14
    You can't read two posts up?
    Do I need to do an equally divided piece of that for you too?
     
  15. skunk macrumors G4

    skunk

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    #15
    I can read, but my comprehension appears to be below par. All I see is some loony rant ending with the mysterious acronym WWIII. Makes little sense to me. :confused:
     
  16. pseudobrit macrumors 68040

    pseudobrit

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    #16
    Invest in a bomb shelter.
     
  17. skunk macrumors G4

    skunk

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    #17
    Can't I just crouch under a sturdy table and buy some duct-tape?
     
  18. MACDRIVE macrumors 68000

    MACDRIVE

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    #18
    I think it's high time to start sinking some Chinese merchant ships with USA made torpedoes.
     
  19. solvs macrumors 603

    solvs

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    #19
    That was my point. It's not new. It's just rhetoric and has been for as long as they've been talking about it. Which is a really long time. Which is why I really doubt it has anything to do with anything going on right now.

    The big deal right now, what has changed lately (besides the concerns over the very real problems with the imports, which should be inspected) is that the dollar is losing value.

    I hope you're joking, but that wouldn't be a good idea if you aren't.
     
  20. Swarmlord macrumors 6502a

    Swarmlord

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    #20
    Nice, so in your mind bad behavior can be justified by other bad behavior.
     
  21. Roger1 macrumors 65816

    Roger1

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    #21
    No. Duct tape is good only for biolgical and chemical weapons. It won't work for the bomb (use gaff tape for that).

    Sorry (goes back to corner):p
     
  22. leekohler macrumors G5

    leekohler

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    #22
    Not at all. It's called karma- you get what you give.
     
  23. Swarmlord macrumors 6502a

    Swarmlord

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    #23
    Hmm, you and others haven't been as thrilled by us dishing it out to a culture that's waged war on the world for 1,300 years. You should be thrilled with the fulfillment of Karma there then.
     
  24. skunk macrumors G4

    skunk

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    #24
    Mohammedanism has not been waging war on the world for 1,300 years any more than Christianity has been.
     
  25. leekohler macrumors G5

    leekohler

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    #25
    Oh please. Muslims are the only people who do anything bad in the world? Is that according to the Swarmlord Manifesto?
     

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