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Originally posted by RichardDolan
i dont really get the point of economy, people seemed to get along fine even without trading with each other.....
Originally posted by NWRHINO
The Chinese economy is currently structured upon USA debt. Similar the the derivative market that is structured on mortgage debt.
So, China's economic future is based upon the USA's ability to pay back the debt structure. The Iraq war has been financed by China and the oil producing countries agreement to accept USA debt (promise) instead of goods, services or cash.
The USA is like the guy who can't pay his mortgage, which would cause a domino effect in the derivative market and extreme corrections through out the world.
The lending nations know that the USA must be given every possible opportunity to pay back the debt in order for the lending nations to exist economically.
So, Dollars, Euros, Ameros or even more structured debt, they will take what ever they can to "perpetually delay the inevitable"
The real concern is that this debt will have to paid back by the labor of the workers who have not even been born yet.
Yes , America your grandchildren will be born into bondage, but hey then again, so were we !!!
Originally posted by The_Modulus
reply to post by Karlhungis
What I meant to say was in response to people claiming the close economic relations between China and the US, and that they're not as close as between the US and Canada, and that if China was to ditch the dollar they are unlikely to adopt the Canadian coin.
I think that not only does China hold debt against the US but also holds massive reserves of the currency, just in case, reserves they would not devalue unnecessarily by such statements.
The dollar is in a tailspin, the trade deficit is growing and a recession is on the horizon. The American way of life is in serious danger. But the head of the Federal Reserve keeps on pumping easy credit into the system -- a crazy policy that will worsen the crisis.