reply to post by NickT916
I will try to respond as best as possible, given that it is obvious you do not understand some macro economic concepts. I do not mean that as an
insult by the way. Most people don't but my job requires me to.
Anyways, lets start with China. China has already dramatically reduced how much money they lend to the US. Instead they are buying traditional
dollar hedges. What this means is that when they buy commodities such as gold, silver, platinum, etc, those things go up in value as the dollar goes
down in value. They are hedging their dollar positions as we speak. If they just got out all together right away, they would destroy their reserve
holdings and therefore hurt themselves badly. So what they are doing is quite smart for them.
Now, on to why the US economy is still afloat. This topic could fill books, but I will keep it brief and simple. Its the Fed/Treasury printing money
and flooding the system with it through its various policies. In essence, they allow financial institutions to borrow money from them for near zero
interest, and place near any asset as collateral. In addition, they go into these financial institutions and buy toxic assets off their balance
sheets to infuse money onto their balance sheets. Its started as a way to keep the financial system from imploding, then turned into an effort to get
banks lending again both to individuals and businesses, which they hoped would lead to hiring. But it hasn't. In essence, imagine the economy is
like a broke family that was about to go bankrupt, but then got a bunch of credit cards. Suddenly bills can be paid and things feel better, but a
time will come when those credit cards need to be paid. And that will be painful.
Basically what you are seeing right now is two things. First, the US propped up with printed money. Second, an orderly unraveling of the world's
dependence on the US. So while you do not get why a collapse hasn't happened, their will be a great deal of pain coming. I know you want a complete
collapse, but that would be so painful and difficult on everyone, you really shouldn't want that. If that happened, chaos would reign, and you would
be fighting just to be able to eat or stay warm. Trust me, you don't want that. Most likely we are going to enter a Japan-style era of stagnant
growth and an aging population, with a govt ever increasing taxes, while removing services.
