Exclusive: U.S. lets China bypass Wall Street for Treasury orders

Just in-case someone want's to understand what bearing this would or could have if it is in place.

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Eminent Domain

By Missouri Bar Center

What Is Eminent Domain?

"Eminent domain," often called "condemnation," is the legal process by which a public body (and certain private bodies, such as utility companies, railroads, redevelopment corporations and some others) are given the legal power to acquire private property for a use that has been declared to be public by constitution, statute or ordinance.

The "condemnor" is the public or private body having the legal power of eminent domain. The "condemnee" is the owner of the private property sought to be taken.

Under the United States and Missouri constitutions, private property may be taken by eminent domain so long as the taking is for a public purpose and the condemnor pays just compensation.

The "public purpose" is the use defined in the constitution, statute or ordinance. "Just compensation" is the "fair market value" of the property and any consequential damages. The "fair market value" is the current value of land and improvements, based on what price the property would bring if the owner did not have to sell and the buyer did not have to buy.

To use the power of eminent domain, the condemnor must be authorized, by statute or ordinance, to take the property for a specific public purpose. The condemnor must also try to buy the property from the property owner by good faith negotiation. The condemnor must make an unqualified offer to buy. Only after the condemnor and the property owner cannot agree may the condemnor bring the matter to local circuit court by filing a Petition in Eminent Domain.

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reply to post by neo96


I don't understand how this can really effect us.
How does it make a difference if someone other than the Federal Reserve owns our debt?
What's the worse case scenario?

reply to post by Bleeeeep


China is the largest foreign creditor who already holds over 1 trillion in debt which means they can buy direct and increase their holdings whenever they feel like it.

It also means anytime China wants to dump all their debt at one time they could they could in 1 day crash wall street and crash the dollar.

That's my take nothing says people have to agree with it.

reply to post by azureskys


Lets say America goes bankrupt and has to sell off all its property to China. That doesn't grant China the ability to place governmental establishments in our country. Only private sector type of businesses, right?

So why does it matter if its China who takes over our government property instead of the Federal Reserve? Once the buildings/land/items are acquired they are no longer government establishments.

reply to post by neo96


Why would dumping debt notes cause us any ill effect. If anyone loses in that situation it wouldn't be us. We still owe the same amount regardless of how much China or the Federal Reserve lose on buying and selling to each other. I think the only thing that should matter is if we fail to pay our fees.

reply to post by Bleeeeep


Selling small amouts of debts at one time is not the issue the issue is creating the circumstances that all of it could be dumped at one time.

Those get paid by cash we do not have.

reply to post by neo96


Any money going through a bank costs the Government and the taxpayer more money to process. Going direct could save the taxpayer money.

reply to post by neo96


Sorry, I'm not versed in the laws about national debt at all. I'm just using logic to try to understand the situation.
Is there a law that says we have to pay our debt immediately just because someone says they want to cash in their chips? (said cash in their chips because I don't know what the actual procedure is)

no NO NO

reply to post by neo96


And you gusy thought I was crazy, when I said these two nations weren't the enemies you took them for, or they were played out to be.



Now, live and learn.

There you go Americans, you are now officially sold.
I cant wait when "PBC express to exercise its financial capability", so to speak in market style.
2nd line

Originally posted by Bleeeeep
reply to post by azureskys

 

Lets say America goes bankrupt and has to sell off all its property to China.

It doesn't work quite like that.

If a country defaults - "goes bankrupt" then people, and other countries stop lending to it - imagine the 2008 financial crisis - only not only do the banks all fail, completely, and everyone loses all their savings, but also hyper-inflation - the US$ becomes worthless - think Zimbabwe.

So you can't import anything unless you have "hard currency" - ie you can only import as much as you are earning from overseas - the Chinese won't sell you cheap goods, you can't get Japanese cars, you cant' even get US cars because you can't import the steel or aluminium or plastic or whatever else is imported.

You won't be able to use cars anyway, because you won't be able to import oil - in fact you'll probably be desperately trying to export all the oil you can for "hard currency" in order to import raw materials to make basic consumer goods.

No more subsidies for farmers - no oil means massive losses in farm production - problems with distribution - potentially starvation in cities.

Bankruptcy of a country is nothing like bankruptcy of a person or a company - that is why the EU is trying so desperately to avoid having any European countries (eg Greece) default.

reply to post by Bleeeeep


Seems you have trouble digesting this..lets say 1 day..

"PBC want to perform liquidation exercise on its USD financial holding." - Weird words right ? You should be scared bloodless actually.

What happen is this - China dont want USD anymore, they think its not worth it to trade with USD, China want back their money. So US goverment have to pay, how ?
Goverment then do what the Greece done, first no more penchant, cuts in healthcare, fund transfer from Social Security, sold lots of business, halt imports etc etc (Read what Greece goverment have done).

People will revolt, why they take away my Social Security, 401k, healthcare etc ? Then suddenly the opressive law and FEMA camp become active. You revolt, law mandate you in jail, you dont revolt, you are screwed short and long term.

Nothing to buy since factories dont work, Walmart will last about few months and might not restocked, your goverment salary cut, private sectors declare in loss due to dollar volatility. Supply chain interrupted etc.

See Greece, that is bound to happen to USA if China want.

When "PBC released Yuan peg" news comes out, run!.
When "PBC want to perform liquidation exercise on its USD financial holding." news comes out, you are already too late.

People said communist fail, capitalist rules, now socialist China show the other side of story.
Other workaround is - keep buying China junk product, you got to keep the boss happy!

reply to post by NullVoid

People said communist fail, capitalist rules, now socialist China show the other side of story.
Other workaround is - keep buying China junk product, you got to keep the boss happy!

That's right...stop buying the Chinese "junk product" and they have the US over a barrel.

Personally, I've been trying to avoid buying the made in China products for quite some time, but it is very difficult to do state-side.

My only hope in all of this is that there has been some "hidden agreement" involved with US-China financial/trade deals behind on this that requires China to end manipulation of currency....a pipe-dream of sorts, I suppose...

reply to post by neo96


Do you remember a story regarding Gold bullion where it was actually gold-plated tungsten? Im sure i didnt imagine it and may have even been a topic here on ATS. I may be wrong though.

Originally posted by Aloysius the Gaul

Originally posted by Bleeeeep
reply to post by azureskys

 

Lets say America goes bankrupt and has to sell off all its property to China.

It doesn't work quite like that.

If a country defaults - "goes bankrupt" then people, and other countries stop lending to it - imagine the 2008 financial crisis - only not only do the banks all fail, completely, and everyone loses all their savings, but also hyper-inflation - the US$ becomes worthless - think Zimbabwe.

I think it actually depends on the agreements the different parties made. If there was an eminent domain claus attached then not only do nations stop lending you money(buying your bonds), but you can also lose any property agreed upon as collateral. Just because snopes says it is impossible/illogical does not necessarily make it so.

So you can't import anything unless you have "hard currency" - ie you can only import as much as you are earning from overseas - the Chinese won't sell you cheap goods, you can't get Japanese cars, you cant' even get US cars because you can't import the steel or aluminium or plastic or whatever else is imported.

Is that not what every other country does? There are about 300 countries on this planet and they all trade in dollars, euros, yen, british pounds or some other strong currency. The way the system appears to be setup is that you have to have as many valuable products to export as possible for your currency to be in demand. Naturally a strong domestic economy(high gross domestic product) makes for a valuable currency.

So if america tanks it will become another second tier nation. Sure some discomfort from the royal status it had before but its not the end of the world either. The pathetic thing is that the people who run the american economy probably want this to happen as indicated by their arrogant and apathetic stance. In fact I am extremely suprised america has its credit rating as AA rather than BB at best. Sure america has(or had) lots of potential but horrible management leads to horrible results just the same. Debt to GDP ratio measures credit rating.

If the world dumps the dollar as the reserve currency that means some other currency will take its place like the euro or maybe the conspiracy theorists were correct all along and we will get a global digital currency from switzerland.

You won't be able to use cars anyway, because you won't be able to import oil - in fact you'll probably be desperately trying to export all the oil you can for "hard currency" in order to import raw materials to make basic consumer goods.

No more subsidies for farmers - no oil means massive losses in farm production - problems with distribution - potentially starvation in cities.

Bankruptcy of a country is nothing like bankruptcy of a person or a company - that is why the EU is trying so desperately to avoid having any European countries (eg Greece) default.

Oh please man! Stop making a #ing mountain out of a relative mole hill.

How the HELL did all the former COMMUNIST COUNTRIES SURVIVE with nato and the stupid capitalist countries BLOCKADING THE HELL OUT OF THEM? Nobody wanted russian rubles, yugoslav dinars, whatever they used in cuba, etc.

Some people know half the story and they pretend to know EVERYTHING.

reply to post by NullVoid


Or the pigg nations can turn communist and give nato and all the capitalist countries the middle finger.

Did you ever consider that option?

When you corner "snakes" they become the most dangerous!

This is good for America and the world. Cutting out the primary dealers means they'll have reduced assets on which to leverage their derivative market. This takes a weapon out of their arsenal. This rosy analysis assumes, of course, that the Chinese don't do exactly the same.

reply to post by Aloysius the Gaul and
reply to post by NullVoid


I am still having trouble following the logic.

Why does the government defaulting cause problems for the dollar, the banks, and the the private sector if the government doesn't pay national debt?

I think that since the government is a separate entity from the private sector(the people), the banks, and the Federal Reserve then what should happen, if China called in the debt (I still don't understand how they can do this if they agree to a payment plan in the first place), is that the government has to find money to pay China. To do so the best action would be to sell some assets - not stop paying other debts (government salary and funds to government aide programs etc).

Lets say you(government) can't pay the loan you took out(debt to China) to pay for the living room set you have so you stop paying(debt to China). It should not equate to you not being able to pay your electricity bill(government jobs) or any of your other bills(government aide programs) and it definitely shouldn't effect my bank(banks and money lenders in America) if you took out the loan from a bank(China) that I do not use.

Furthermore, your loan(money from China) should not cause any problems for the dollar(value of the dollar and federal reserve) because you(government) and your bank(China) and me(john q public), and my bank(money lenders of America) have nothing to do with you(government) and the loan(loan from China) that you took out.

I know that I must be missing something but all I can see is swindlers pulling a big scam job. Its a big illogical nightmare to me.

eta: Oh I think I see. The living room set is money paid to government programs and government salary. So the root of the problem must lie in government spending. Thanks guys you've helped me figure it out I think.

reply to post by Bleeeeep


Because the value of the US$ is covered by the government's willingness to accept it for payment of US govt debt.

If the US Govt refuses to accept the US$ as payment for US debt then the US$ becomes valueless (or devalues by an appropriate amount)