China's Stock Market is Failing Fast...

originally posted by: bjarneorn
However, the market appears to see gold decrease in value ... that's odd, isn't it, when you have a buyer and industrial need. Another is oil ... oil is one of Russias greatest commodities. And there is no "decrease" in the demand for oil.

All commodity prices are down and oil consumption has been relatively flat since 2006, up less than 6%, versus a 16% increase the decade preceding that.

a reply to: SLAYER69
Dear lord those blues are too close to each other and the chart too small to see. Can you connect the dots for me please?

originally posted by: superman2012
Step 3: start selling American debt

How does this hurt us? The debt instrument was already sold by us.

Step 4: watch as American government tries to get the public to invest in US debt.

We already 'invest' in our own debt, so much so that we are the largest holders of our own debt by a huge margin. It makes China's holdings look pitiful.

Step 5: watch America try to get other countries to buy debt, not too likely.

Why? United States debt is still very highly rated and offers a very secure return for the purchaser.


ETA: I see Slayer already posted this. Nice graph.

originally posted by: superman2012
Dear lord those blues are too close to each other and the chart too small to see. Can you connect the dots for me please?

China owns less than 9% of our debt, we own over 60%.

originally posted by: combatmaster
a reply to: tothetenthpower

Rumor is - in October Chinese Yen will become a new world reserve currency.

True or false, what say u ATS?

That was a possibility although clearly the concerns that people had about the Chinese economy that had kept that from happening are proving true. Although it would not have had much of an impact on the reserve market it would have let them get their foot in the door. It still could happen but, who would use it?

originally posted by: Krazysh0t
I'm not surprised about this really. The warning signs have been there for a long while now, what with their need to build ghost cities that are too expensive for anyone to move into all so they can prop up the construction industry. It was only a matter of time before the bottom fell out. It may cause the world to go into a recession, but I don't think it will be the big one.

They propped up their economy by continued borrowing for construction they didn't need .



" The Chinese economy has soared in the 21st-century much in the same way that a BRIC dosen't". ( paraphrased quote and pun intentional )

a reply to: tothetenthpower

Why can't China do a quantitative easement to prop up it's market like the US is doing?

a reply to: AugustusMasonicus

How does this hurt us? The debt instrument was already sold by us.

If china sells their debt, it would show they don't have faith in the US dollar. Trust me, that's gonna hurt.

We already 'invest' in our own debt, so much so that we are the largest holders of our own debt by a huge margin. It makes China's holdings look pitiful.

Right. Compared to one arm borrowing and paying the other arm, it does look pitiful. That would be the same as my children and I each having our own company. We sell things to each other so we both owe each other money. I go bankrupt. I don't pay my kids companies. They still live in my house so I still have to look after them either way. I don't even bother looking at government owed to a different arm of the government debt, even though it is over 30%. It doesn't make sense and in the case of any sort of bankruptcy, it wouldn't matter.

Why? United States debt is still very highly rated and offers a very secure return for the purchaser.

Which country is in a position at this time to buy it? Which one would want to if China is selling?

There's more to it than patriotism. I also hope nothing happens that would hurt the US economically as our countries are financially linked!

right now the currency market is showing bad news....on the currency that sings first in the crashes.....gbp/jpy just three hours ago....I post in the blogs.....TEOTWAWKI....
last week I wrote ...." it's the end of the world as we know it but my favorite 7:42 pm in New York everyday trade is still working "

originally posted by: superman2012
If china sells their debt, it would show they don't have faith in the US dollar. Trust me, that's gonna hurt.

They cannot afford to sell it all, it is a huge part of their future investment strategy.

Right. Compared to one arm borrowing and paying the other arm, it does look pitiful. That would be the same as my children and I each having our own company. We sell things to each other so we both owe each other money. I go bankrupt. I don't pay my kids companies. They still live in my house so I still have to look after them either way. I don't even bother looking at government owed to a different arm of the government debt, even though it is over 30%. It doesn't make sense and in the case of any sort of bankruptcy, it wouldn't matter.

It is however a reality and their debt holdings are not nearly as large and influential as people think they are.

Which country is in a position at this time to buy it? Which one would want to if China is selling?

There's more to it than patriotism. I also hope nothing happens that would hurt the US economically as our countries are financially linked!

The other countries on the list considering that China, to sell the instruments, would have to do so below par to entice a buyer. Who is going to pay the same price the Chinese paid when they can bend over the Chinese and get a bargain?

a reply to: AugustusMasonicus

Didn't the u.s buy up its own debt with quantitative easing, one of the things ron Paul argued would damage America further because they would be printing like mad men to stave off a derivatives crash?

Think he mentioned $1tr due to mature....

a reply to: beezzer

They did.

a reply to: AugustusMasonicus
Like I said, I hope your "could be's" are right and mine are wrong. Mine was only one of many possible scenarios.

originally posted by: EA006
Didn't the u.s but up its own debt with quantitative easing, one of the things ron Paul argued would damage America further because they would be printing like mad men to stave off a derivatives crash?

Think he mentioned $1tr due to mature....

He did, which is why I constantly advocate for a dollar linked to commodities to keep the government from uncontrollable printing and devaluing of currency.

originally posted by: superman2012
Like I said, I hope your "could be's" are right and mine are wrong.

Certainly the last point. If offered a choice to buy from the source or a third party at the same price what would you do?

Now if the third party was selling at a discount, the situation changes greatly.

a reply to: AugustusMasonicus

That statement seems like a clue of sorts.

Discounted materials from a third party.....interesting.

originally posted by: EA006
That statement seems like a clue of sorts.

How so?

Discounted materials from a third party.....interesting.

In the case of Treasury Bonds the yields are so low that the ROI is almost nullified by selling below the purchase price. It would be a real 'fire sale'.

originally posted by: AugustusMasonicus
a reply to: beezzer

They did.

Would it be fair to say that we're looking at our future?

originally posted by: beezzer
Would it be fair to say that we're looking at our future?

If we do not get our ridiculous spending under a bit more control we are looking more like Greece than China, however this is a ways off due to our much more massive economy.

China is the result of government interference in the market coupled with currency rigging and shady economic reporting.

originally posted by: AugustusMasonicus

originally posted by: superman2012
Like I said, I hope your "could be's" are right and mine are wrong.

Certainly the last point. If offered a choice to buy from the source or a third party at the same price what would you do?

Now if the third party was selling at a discount, the situation changes greatly.

If China was just looking to increase the RMB's value (only reason I can think of why they would sell en masse) then why wouldn't they sell the US debt at a discount? If other countries see this happening, why would they buy it? Who is in a position to buy it? Japan, Russia, and maybe a couple others?

Honestly, it wouldn't matter to me who was selling it. If I wanted to buy it and everyone had the same price, why would it matter if you bought from the source or a third party? What if that third party were offering different incentives to help you buy? There are honestly so many different scenarios that you can't say for sure, but neither can I.