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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Thu May 29, 2008 9:39 pm Post subject: |
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| RJjr wrote: |
| mises wrote: |
Hyperbole. Dumping their foreign reserves would be as much a disaster for them as it would be for the USA. And the US would be able to raise interest rates to 8 or 9% for a couple years or less and mop up the excess bucks. This will probably happen anyways over the next 5 years.
And even if that failed, the US can lean on friendly states to mop up some of the extra bucks the Chinese dumped. |
I don't think you're aware of how vast their USD reserves are. They amount to over $900,000,000,000.00. (twice as much as we've wasted in Iraq so far, to put it in perspective). Look at the foreclosure disaster in the US these days with 2% interest rates, yet you think 8% or 9% interest rates would be wonderful?
A weak dollar wouldn't hurt China long-term. I tend to agree with Peter Schiff's assertion that it would cause a surge in the purchasing power of China and its citizens.
| mises wrote: |
| Hyperbole. Who "crapped"? |
Who crapped? Paulson and others.
| mises wrote: |
| The political left is not only bitter and rude, as Gopher said, it is also obsessed with hyperbole and sky-is-falling nonsense. For secular types, they sure have been influenced by the New and Old Testament. |
Look at our reasons for attacking Iraq if you want to see hyperbole and sky-is-falling nonsense. What color is the threat level today? :roll:
Hyperbole in Boston. http://youtube.com/watch?v=4G-D0F4Q9yk |
I know Schiff and am attending his conference in Vegas . I agree with some of his ideas. He is totally blind to the economic problems in Asia. The rapid monetary expansion in the US is actually a great deal worse in most of Asia. China doesn't have a solid grip on exactly how much yuan they have created. Where Schiff is wrong is that he misses that Asian demand can't rise as they the exact same problems as America. This is why inflation is likely double digit in Korea, Singapore, Hong Kong and China. It is bizarre. They are upwardly moving the yuan yet creating inflation. Remove the stabilizing force of the USD reserves and the yuan will crash in value, not peak.
What I gave you is the actual outcome of China dumping a large portion or even all of her reserves. Interest rates would go to 8-9% for two years +/- and Japan, ROK, Saudi etc would be leaned on to mop up the rest. It would be very hard on the American economy in the short run but your word was "wreck". In the long run, I suspect it would actually be a good thing.
Henry Paulson did not "crap" or the equivalent in regular discourse. I can find little reference to them doing much at all. They know that China can't do it as they have massive internal problems (monetary, demographic etc) and the relationship (a Nash Equilibrium, in math terms) will continue.
The left is as nutty as the right. They both speak in hyperbole and are obnoxious. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Thu May 29, 2008 10:27 pm Post subject: |
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[quote="RJjr"]
| Joo Rip Gwa Rhhee wrote: |
| You never know the nature of a threat until it happens or doesn't. |
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| That kind of logic has gotten over 4,000 of our men killed in Iraq over nothing. |
9-11 showed the mideast as it was was a threat to the US.
Besides Saddam never gave up his war.
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| But the Chinese actually have money. We're in debt. We're like the guy in the neighborhood a Rolex, Jaguar, Armani suit, all bought with more loans than he can ever repay. The Chinese are like the guy in the cheap car with the "Don't Laugh. It's Paid For." bumper sticker. |
Japan had the same thing going for them in the 1980's.
Being in debt is not a good thing but there are other factors to consider
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| The Chinese save half of their income, while we spend more than we earn and are losing our homes at a record pace because of debt and we even take money from home equity to spend. |
I am just curious do your number include what Americans invest in the stock market?
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| Our level of personal and national debt is killing our national economy, personal finances, and the dollar itself. We're at our limit as consumers. |
The US budget deficit is what it was in the 1980's as a % of GDP .
US military spending even with the Iraq war is what is was in the 1980's as a % of the US budget.
sure the US has huge entitlements social security and medicare to pay, but Europe has it even worse.
and China don't they have something called a one child policy? That means there will be lots of old people and not so many young people to support them. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Thu May 29, 2008 10:49 pm Post subject: |
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| mises wrote: |
[
The left is as nutty as the right. They both speak in hyperbole and are obnoxious. |
The far right and the far left not only cooperate together sometimes they combine to become one in the same forming a new entity. |
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