China quietly heads for the exit, page 1
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Topic started on 23-8-2009 @ 10:59 AM by leo123
www.businessinsider.com...

"China reduced its holdings of Treasury securities by $25 billion in June, the most China had ever sold in a month..."

What this means is the US is printing money to fund it's own deficit. A trashcan currency and inflation is likely.




reply posted on 23-8-2009 @ 11:27 AM by open_eyeballs
reply to post by leo123



But lets be realistic here. Since the inception of the Federal reserve we have been printing our own money. the fed has been buying treasuries for decades now.

So they buy a few more..keep interest rates low, and when the economy surges jack them interets rates back up to 5 and 6 %...

Do you think China has been funding American debt for the last 75 years?

Not hardly...



reply posted on 24-8-2009 @ 10:09 PM by leo123
Originally posted by open_eyeballs
reply to
post by leo123



But lets be realistic here. Since the inception of the Federal reserve we have been printing our own money. the fed has been buying treasuries for decades now.

So they buy a few more..keep interest rates low, and when the economy surges jack them interets rates back up to 5 and 6 %...

Do you think China has been funding American debt for the last 75 years?

Not hardly...


open_eyeballs:

You make a valid point, but as you know, this is now a different game.

We are now in uncharted waters.


reply posted on 24-8-2009 @ 10:23 PM by skepticantiseptic
Originally posted by open_eyeballs
reply to
post by leo123



But lets be realistic here. Since the inception of the Federal reserve we have been printing our own money. the fed has been buying treasuries for decades now.

So they buy a few more..keep interest rates low, and when the economy surges jack them interets rates back up to 5 and 6 %...

Do you think China has been funding American debt for the last 75 years?

Not hardly...


Yes you are semi right, but has America at any time been so outsourced?

Has America at any prior time had so many huge institutions go bankrupt?

Has America at any prior time been so reliant on foreign money to finance our own over indulgence?

Has America at any prior time imported more than we exported?

Many more I could mention, but you see the difference between your post being relevant to prior years versus the current situation I hope.


reply posted on 25-8-2009 @ 12:37 AM by stander
Originally posted by leo123
www.businessinsider.com...

"China reduced its holdings of Treasury securities by $25 billion in June, the most China had ever sold in a month..."

What this means is the US is printing money to fund it's own deficit. A trashcan currency and inflation is likely.



The Treasury says that the "ominous reduction" is a part of an expected fluctuation:
www.treas.gov...

The propagandist website you quoted from doesn't show that the Chinese increased the purchase in May by some $40 billion, which is an above-average increase. In June, the purchase went back to normal.


reply posted on 25-8-2009 @ 04:42 AM by THX-1138
It only means China is playing the game with us.
When selling pressure lowers the price of bonds the interest rate paid is increased.
China will come back later and buy some bonds that pay a higher interest rate.
Rates are probably not going to stay low for much longer.

When interest rates are low, consumerism runs rampant as people buy instead of save.
When interest rates are high, capitalism runs rampant as people save instead of buy.

The majority mass of poor people drive the markets in low interest rate times. They don't have much capital and they spend freely to enjoy the pleasures of life and use up almost all of their income. Rich people are spending also, just not spending such a large percent of their total wealth.

Rich people drive the markets in high interest rate times. The rich have incredible buying power when their accumulated capital is earning high rates of return. Poor people are supposed to learn the virtues of saving during these times when high interest rates reward them for accumulating capital. This is how the poor become rich eventually. This is the ''fairness'' of the Western Capitalist society. When the system makes it difficult to purchase because of high interest rates, then the poor are supposed to control themselves and tighten up, manage their debt load and restrict their consumption. Many times it just works itself out as a total failure, bankruptcy and debt payment defaults. Oh well. The game continues.

I am talking about the slightly intelligent here. The ones that can reason a little bit. The more intelligent are always cranking the engine of liquidity and drawing profits towards their capital stash. For those people it makes no difference what the interest rate is because they have other means. Of course they play the interest rate game's results, just not the rates themselves.
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