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China says U.S. must control deficit as economy recovers

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posted on May, 20 2010 @ 08:07 AM
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China says U.S. must control deficit as economy recovers


www.financialpost.com

BEIJING -- Europe's debt crisis has laid bare the fragility of global finances and the United States, too, must tame its fiscal deficit, a senior Chinese official said on Thursday, spelling out Beijing's concerns before talks with Washington.


(visit the link for the full news article)




posted on May, 20 2010 @ 08:07 AM
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Here we go. It was only a matter of time for the China to start getting worried. Similarly to Greece, investors are becoming increasingly worried about the question if the US is capable of repaying the massive debts it has. As a consequence of bail-outs and stimulus programs, the debt is only going to increase and it seems that pumping more money into the economy is the only solution they can think of to keep the economy running, but who is gonna pay the bill for that? For long, foreign countries have been willing to do that, but that phenomena seems to come to an end. In my opinion, the stimulus programs everywhere are just intended as a postponement of execution.


The U.S. national debt will soon reach 100% of GDP, the IMF predicts in a new report.

The IMF predicts that the U.S. would need to reduce its structural deficit by the equivalent of 12% of GDP, a much larger portion than any other country analyzed except Japan. Greece, in the midst of a financial crisis, needs to reduce its structural deficit by just 9% of GDP, according to the IMF's analysis.

source







www.financialpost.com
(visit the link for the full news article)



posted on May, 20 2010 @ 08:20 AM
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Apparently the Chinese aren't aware that Obama is in control and that he has increased the country's deficit in 1 year more than EVERY other President COMBINED!!!


There are already reports that next year's budget is so deep into the red, they're having a hard time figuring out where the bottom is!

Or... maybe they are aware hence the warning. That being said, there is no way that the "Progressives" are going to stop purchasing votes with handouts. Bread and circuses!



posted on May, 20 2010 @ 08:22 AM
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They are worry because their second backing monetary currency in their investemtns is the Euro and that one is also in trouble right now.


Can you imagine the Euro down, the US dollars with nothing to back it up but a growing debt deficit what else China will have?

Then the trade gap is out of control, And China has invested enough in the US to exercise their own political power when it comes to the economic crisis.

[edit on 20-5-2010 by marg6043]



posted on May, 20 2010 @ 08:27 AM
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I don't know if anyone knows this, but historically, this is the sort of time everybody says "F**k it, we'll do it live" and they all go a merry go round killing each other.

Who ever comes out alive gets their debt cleared at the cost of so many many lives. Who ever doesn't come out alive gets their behinds served and their people and land absorbed to pay the debt.


hey, you can't owe a debt if you kill the debt holders.

....


....


Oh crap.



posted on May, 20 2010 @ 08:32 AM
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reply to post by Gorman91
 


Well China is big country with a lot of people, still is going to be difficult to kill those holding the American debt when is spread all over the globe.




posted on May, 20 2010 @ 08:34 AM
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Is this an official warning from China? On another note, the Harvard Professor is making a lot of sense. What investor is going to look at the US as a long term profit or in the near future, even a short term profit? This deficit is killing us, the people, while the elites are scraping and laughing it all up. the only ones who are going to pay in the end is the American people. We need to end this empire and refocus our economy on the people, rather than the elites as well as the corporate and special interests. Too bad that there is absolutely no way that this will ever happen. Our children may have to fight over scraps of meat in the crumbling streats.

--airspoon

[edit on 20-5-2010 by airspoon]



posted on May, 20 2010 @ 08:41 AM
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The debt situation with China is very troubling to me, and wondering if we will soon be saying, "yes master" with bowed heads.......


If you have time, watch the video below. It is a long one but
presents an interesting evaluaton of our economy, the relationship with China, and possible worse case scenarios.......



www.youtube.com...

[edit on 20-5-2010 by manta78]



posted on May, 20 2010 @ 08:52 AM
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I look at this situation in a similar way as the stock market. With the US being a "stock" in this scenario.

China, being a major holder in US "stock", they certainly are entitled to be concerned at the "company losses". However, just as if you or I had invested and stock and then that stock crashes; well, that's just tough luck, as we should have made wiser investments. For China to take any action beyond acknowledging that they made a bad investment is simply "bad business".

Imagine if we had the power to go after assets of companies we invested in, only because have decreased in value.

EX: I invested $100 dollars in this crummy stock and now it's only worth $10. I want my $100 back......Sorry China, it doesn't work that way...better luck next time. I suggest you sell it while you can still get $10 out of it.


[edit on 20-5-2010 by Aggie Man]



posted on May, 20 2010 @ 09:48 AM
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reply to post by Aggie Man
 


They are obviously worried about it, as this article from 2009 shows:


www.businessinsider.com...



posted on May, 20 2010 @ 09:55 AM
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reply to post by kozmo
 



Yea its like we have all our sails out in a raging storm! And so heavy...like a tub of lead.

Need to cut the sails back and start tossing junk over the side. Cut lose the tow!



posted on May, 20 2010 @ 09:59 AM
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The United States has so many problems that it will take years to fixed. The economy is not going to fix its self in one day. Many of these problems are not because of leadership in Washington. Mostly its the corporations that ran the economy to the ground and were and still allowed to run it to the ground. Wake up America and realize you're nothing more then labor.

[edit on 20-5-2010 by Romantic_Rebel]



posted on May, 20 2010 @ 10:02 AM
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Originally posted by airspoon
Is this an official warning from China? On another note, the Harvard Professor is making a lot of sense. What investor is going to look at the US as a long term profit or in the near future, even a short term profit?


China having to tell us what to do...yes funny and sad.



[edit on 20-5-2010 by Logarock]



posted on May, 20 2010 @ 10:09 AM
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reply to post by Logarock
 


Can you repeat yourself? Of course anyone telling anyone to do is sad. But the truth is money is power and money get's you what you desire in the world.



posted on May, 20 2010 @ 10:10 AM
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reply to post by Romantic_Rebel
 



What corps ran the thing into the ground?

Its a big crap sandwitch and everybody helped out including labor.



posted on May, 20 2010 @ 10:12 AM
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Originally posted by Romantic_Rebel
reply to post by Logarock
 


Can you repeat yourself? Of course anyone telling anyone to do is sad. But the truth is money is power and money get's you what you desire in the world.


My meaning is that 50 years ago the US didnt need anyone to give it advice about how to handel money. The fact we have to listen to the Chi-Coms is very sad....the US has been sold out to you dam reds!



posted on May, 20 2010 @ 10:14 AM
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reply to post by Logarock
 


You got that right! It is pointless pointing the finger. A lot of people seem so misinformed on this issue. It is caused by several. highly related causes. It isn't caused by one huge thing and if you think that's the case then you're shooting yourself in the foot. It's NOT the companies. It's NOT the illegal immigrants. The COMPANIES provide you with jobs. The ILLEGAL IMMIGRANTS are a source of cheap labor. They're willing to work in those fields on those hot summer days for a LOT less than you will. They keep costs low so you can buy goods cheaply.

1) High oil prices
Remember how gas was going up, up, and up? It has come back down now but the damage really has been done. During this time prices for goods had a little lag time before they could catch up. Gas is down now, sure, but companies need to recoup all the losses so don't expect food prices to go down anytime soon. Since this country depends so much on oil for transportation, consumers could take the hit but only for a certain amount of time. People are driving less, you still notice that there is an energy efficiency craze now. People aren't driving as much as they used to even though gas was going down. This is just a small factor in the crisis. It did lead to high food pricesfinally during the summer of 08, keep that in mind.

2) Mortgage crisis + Housing bubble.
A lot of people who had bad credit were issued loans, called subprime loans. These loans generally have a higher interest rate and can get downright nasty if they weren't reading the terms carefully. I think a lot of people ended up taking variable loans and in some cases people were to the point where they were just paying the interest rate and not the loan itself. At this point, the interest rates still kept going up for some people so you have people defaulting on their loans and for others, they were having a tough time paying bills and food so for some it was that they couldn't afford to pay for everything anymore. This causes a foreclosure to occur, so since the person/family can't pay the loans, the issuer of the loan takes up the property. Kinda like getting your car repossessed if you don't pay off the car loan. Which leads us to... the housing bubble.
A lot of people kept buying up homes in the anticipation that housing values would only keep going up. Well, the reality is that what goes up must come down in certain cases like these. You have people's homes being foreclosed. Remember that good old supply and demand graph. If there are lot of properties up for grabs then the value of the land generally goes down. In theory if you have a lot of homes for sale the land is generally undeseriable and hence declines in value. And as you can imagine, the banks who loaned people more money than the property is worth now is in quite a predicament.

3) Banks
Something everyone's not too excited about. The banks are partially as much as to blame as the people who took out the loans. However, a lot of this economy was built on the banks lending a lot of bad loans so you really can't point the finger at them. The people are just as guilty as the banks, after all the people also could have said no to the bad terms right?
The banks went happy go lucky with the loans and when the whole energy crisis hit and people couldn't start paying off their loans, well it really stacked up on each other to the point where a lot of people couldn't handle the payments. You have banks issuing more money than they had and that causes a big problem when the time came for them to repay money they didn't have.

So now you have people who don't have homes. People who are still having to deal with paying a lot more for food and other goods/services. People who don't want to drive. People who don't know where we are at in the recession. This drives people to save their money. Saving money means less consumer spending thus companies are now scrambling and you will see that now they aren't hiring as often as they used to. They are now laying off more people and finding ways to save money themselves because people aren't spending. This is something you really can't control though, I'm not pointing the blame at the people here although it seems like it. Far from it.

I think these three factors. High Oil, Housing Bubble/Subprime Crisis, and bad lending eventually led to this economy that we have now. I hope that was pretty thorough.



posted on May, 20 2010 @ 10:16 AM
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reply to post by Logarock
 


Well America is capitalist and with capitalism you have to trade over seas to make money. I remember reading when President Theodore Roosevelt challenged the big business leaders of using labors as tools and then getting most of the profit off of them.



posted on May, 20 2010 @ 10:18 AM
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Originally posted by Romantic_Rebel
reply to post by Logarock
 


Can you repeat yourself? Of course anyone telling anyone to do is sad. But the truth is money is power and money get's you what you desire in the world.



By the way ....here is the trap that I think JFK tried to warn us about near his killing.

He called it take over by "covetouness means" ....some money just and worth having and our desires have lead us into a trap.



posted on May, 20 2010 @ 10:22 AM
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Originally posted by Romantic_Rebel
reply to post by Logarock
 


Well America is capitalist and with capitalism you have to trade over seas to make money. I remember reading when President Theodore Roosevelt challenged the big business leaders of using labors as tools and then getting most of the profit off of them.


Yea like a rat on a spinning wheel. But the big game was moving american industry out of the US for any number of reasons and then turning americans in to cheep junk junkies with easy credit and bam! Slave labor around the world, cheep goods, big flow..



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