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Originally posted by silent thunder
Asking countries to repay their debt in currencies other than their own is a manoeuvre more usually applied to third-world nations than the US.
market-ticker.org...
See, if your currency declines when you have issued debt in a foreign currency then the principal value of that loan has just gone up. This in turn causes your credit rating to decline (your debt-to-income goes up) which in turn forces your currency lower, which makes the principal value go up again, which.....
Got it? Good. This is called a "death spiral" and is how you destroy a nation's ecoinomy, right before you come in and destroy its government...
Originally posted by SJE98
... let them know we need our manufacturing jobs back.
Also throw in there that America cannot survive on call center jobs.
www.stratfor.com...
Beijing’s age-old problem has been trying to keep China in one piece. Beijing has to underwrite massive (and expensive) development programs to stitch the country together with a common infrastructure,.
[...]
The cost of such linkages instantly guarantees that while China may have a shot at being unified, it will always be capital-poor.
[...]
Modern China has turned to a state-centered finance model for this. Under the model, all of the scarce capital that is available is funneled to the state, which divvies it out via a handful of large state banks. These state banks then grant loans to various firms and local governments at below the cost of raising the capital. This provides a powerful economic stimulus that achieves maximum employment and growth
[...]
but comes at the cost of encouraging projects that are loss-making, as no one is ever called to account for failures. (They can just get a new loan.) The resultant growth is rapid, but it is also unsustainable. It is no wonder, then, that the central government has chosen to keep its $2 trillion of currency reserves in dollar-based assets; the rate of return is greater, the value holds over a long period, and Beijing doesn’t have to worry about the United States seceding.
Because the domestic market is considerably limited by the poor-capital nature of the country, most producers choose to tap export markets to generate income. In times of plenty this works fairly well, but when Chinese goods are not needed, the entire Chinese system can seize up. Lack of exports reduces capital availability, which constrains loan availability. This in turn not only damages the ability of firms to employ China’s legions of citizens, but it also removes the primary reason the disparate Chinese regions pay homage to Beijing.
[...]
China’s survival technique for the current recession is simple. Because exports, which account for roughly half of China’s economic activity, have sunk by half, Beijing is throwing the equivalent of the financial kitchen sink at the problem. China has force-fed more loans through the banks in the first four months of 2009 than it did in the entirety of 2008. The long-term result could well bury China beneath a mountain of bad loans
[...]
The bottom line remains, however: China’s recovery is completely dependent upon external demand for its production, and the most it can do on its own is tread water.
Originally posted by wonderworld
Do you know why?
The BRIC's are trying to control the NWO.
See link;www.abovetopsecret.com...
Also the IMF wants the global currency to be SDR's.
See link www.abovetopsecret.com...
Originally posted by Rivyolie
Is anyone else connecting the dots here? Or am I imagining it? 3rd world coutries have debts issued to them in foreign currencies, often have crippling inflation, go into the same "death-spiral" described, and have some of the worst governments in the world. Naturally not everything can be blamed on foreign-currency debts, but some sure can.
[edit on 10/6/2009 by Rivyolie]
[edit on 10/6/2009 by Rivyolie]
Originally posted by js331975
it sounds like China is trying to get us to shell out more cash. Maybe they are trying to squeeze an already strapped country (so they tell us) in an effort to destabilize us even more or maybe they are just trying to break even and not lose money.
This only works if there isn't a clause in the loan stating Party B will get paid the worth amount of 10 Y at the time that the loan was enacted.
Other wise China is just trying to raise their prestige. Or they could be saving money by not paying their moneychangers.
Originally posted by mmiichael
Beijing struggles to hold the country together with massive bank loans throughout it's the less productive regions that never really are repaid. It's the cost of keeping the country together.
Mike
BEIJING -- The cost of China's stimulus program is turning out to be much larger than official figures indicate, raising the stakes for the government's attempt to restart high growth through massive borrowing.
"There is no such thing as a free stimulus package. There is a huge amount of unreported government debt, and we're adding to it now clearly," said Stephen Green, an economist for Standard Chartered in Shanghai.
Originally posted by silent thunder
Furure of [Fill in the Blank]: A tiny elite achieves unimaginable wealth through strategic control and use of multinational financial and commodity assests that can me moved rapidly aroud the world. These wealth sources cannot be seen to originate in any one "country," as they are put together by dozens of remote, temporary teams and processsed in different global areas.
[...]
Meanwhile, an increasingly poverty-stricken, and desperate rabble of near-skeletons far outnumbering the elites cower in crude shacks amidst a ruined, toxic landscape, their barely literate and psyches dulled with the natrural sedititaves of depression and failure and the stimulant of simmering, ambient rage.
2 Japanese carrying $134 bil worth of U.S. bonds detained in Italy
Thursday 11th June, 06:18 AM JST
ROME —
Two Japanese nationals were detained by Italian financial police last week after trying to enter Switzerland with $134 billion worth of undeclared U.S. bonds, mostly Treasury bonds, an Italian daily said Wednesday. The Japanese consulate general in Milan confirmed that the detention had taken place and said it was trying to confirm with Italian authorities whether the two were indeed Japanese nationals and their identities.