| why do you think China have to lend the US a Trillion dollars? | |
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| Mar 16, 2009 23:48 |   |
 | I don't know why it is that China had to lend the US a TRILLION dollars, I can understand the globalizition thing, but why it has to be so much? for the time being Chinese people's living standars are still low like hell! why China has to take half of the risk of Obama's plan to stimulate US's economy? well, US and its chief leaders have been very unfriendly to China for many years, is China too good? |
| Mar 17, 2009 01:20 | #1 |
| GUESTHAN | The answer may be found in this excellent interview with Gao Xiqing, the man who oversees $200 billion of China’s $2 trillion in dollar holdings, he explains why he’s betting against the dollar, praises American pragmatism, and wonders about enormous Wall Street paychecks. And he has a friendly piece of advice: http://www.theatlantic.com/ |
| Mar 18, 2009 19:13 | #2 |
| the U.S. is like a tiger chasing it's tail around the tree and will eventually turn itself into butter. Our government and corrupt, lobbying corporations will provide the syrup. Pancakes, anyone?? |
| Mar 18, 2009 19:14 | #3 |
| If you had chance to take a look at prospectus of most investment funds around early 2007, most of them are speculative madoff schem- betting on the price of paticular stocks...US depends on advanced financial trading and settlement tech. system and its corresponding rules reign the world, as a result it pops up lots of bubbles in its macro economy where a group continuously suck like vampires at the expense of the majority. According to a researcher who works with security analysis institution in China, it's reasonable the game in deravative markets is vital enough to collaps the whole economy mathematically. It's global economy, we are connected each other and benefit each other based on relative advantage..hope the money lended to US is best allocated to its base industry in stead of capital market! Also hope US would refer to Germany, Japan and China where there is no big hit in current crisis! |
| Mar 22, 2009 22:53 | #4 |
| Question: Why do you think China have to lend the US a Trillion dollars? Answer: China doesn't have to. Go tell your leaders not to. I dare ya.  |
| Apr 8, 2009 02:47 | #5 |
| Quote:Originally Posted by SHESGOTTOBE Question: Why do you think China have to lend the US a Trillion dollars?Answer: China doesn't have to. Go tell your leaders not to. I dare ya. Good answer, SHE.  Seriously, if there is no interest or benefit, China won't lend a penny to the US. This is the deal. |
| Apr 8, 2009 07:36 | #6 |
| The big news last week was a speech by Zhou Xiaochuan, the governor of China's central bank, calling for a new “super-sovereign reserve currency.” The paranoid wing of the Republican Party promptly warned of a dastardly plot to make America give up the dollar. But Mr. Zhou's speech was actually an admission of weakness. In effect, he was saying that China had driven itself into a dollar trap, and that it can neither get itself out nor change the policies that put it in into that trap in the first place. Some background: In the early years of this decade, China began running large trade surpluses and also began attracting substantial inflows of foreign capital. If China had had a floating exchange rate — like, say, Canada — this would have led to a rise in the value of its currency, which, in turn, would have slowed the growth of China’s exports. But China chose instead to keep the value of the yuan in terms of the dollar more or less fixed. To do this, it had to buy up dollars as they came flooding in. As the years went by, those trade surpluses just kept growing — and so did China’s hoard of foreign assets. ... Aside from a late, ill-considered plunge into equities (at the very top of the market), the Chinese mainly accumulated very safe assets,... U.S. Treasury bills... T-bills are as safe from default as anything on the planet... But ... any future fall in the dollar would mean a big capital loss for China. Hence Mr. Zhou's proposal to move to a new reserve currency along the lines of the S.D.R.'s, or special drawing rights, in which the International Monetary Fund keeps its accounts. ... S.D.R.'s aren't real money. They're accounting units whose value is set by a basket of dollars, euros, Japanese yen and British pounds. And there’s nothing to keep China from diversifying its reserves away from the dollar, indeed from holding a reserve basket matching the composition of the S.D.R.'s — nothing, that is, except for the fact that China now owns so many dollars that it can't sell them off without driving the dollar down and triggering the very capital loss its leaders fear. So what Mr. Zhou's proposal actually amounts to is a plea that someone rescue China from the consequences of its own investment mistakes. That's not going to happen. |
Last edited by YENJAMES: Apr 8, 2009 07:39 |
| Apr 8, 2009 07:37 | #7 |
| And the call for some magical solution to the problem of China's excess of dollars suggests something else:... China's leaders haven't come to grips with the fact that the rules of the game have changed in a fundamental way. Two years ago,... China could save much more than it invested and dispose of the excess savings in America. That world is gone. Yet the day after his new-reserve-currency speech, Mr. Zhou gave another speech in which he seemed to assert that China’s extremely high savings rate is immutable, a result of Confucianism, which values “anti-extravagance.” Meanwhile, “it is not the right time” for the United States to save more. In other words, let's go on as we were. That's also not going to happen. The bottom line is that China hasn't yet faced up to the wrenching changes that will be needed to deal with this global crisis. |
| Apr 8, 2009 17:06 | #8 |
| <<China's leaders haven't come to grips with the fact that the rules of the game have changed in a fundamental way. >> JAMES, so which FUNDAMENTAL WAY is the game moving? Are you gonna say, hey, U$ is the fundamental, if we USA cannot bear too much debt in U$, printing paper money can reduce debt- US treasure and wipe off other nation's wealth(GDP) which was earned thru hard work ? This is OLD game which has been proved, from the macro eco perspective, to let US tramp into the second round recession that could occure next year. Also no rule playing in financial mkt and currency manipulation - fundamental failed. I am still wondering why GM CEO is forced to step down instead of the guys in Wall Street? Does US still hold on to the financial fatancy- fundamental to rule the world. Wake up, the world is changing! |
Last edited by MARRIE: Apr 8, 2009 17:14 |
| Apr 8, 2009 19:51 | #9 |
| << I am still wondering why GM CEO is forced to step down instead of the guys in Wall Street?>> IMO...because wall street is now the "sacred cow" even though it (they) have scammed the U.S. and global markets. The head honchos of these private institutions and government positions have to be kept in place in order to further decimate the financial system(s) and to keep secret the devious deals done. The auto industry in the U.S. is now merely a "step-sister", a manufacturing entity rife with union labor ready to be plucked freely from manufacturing by Corporate America. This industry can be done more cheaply and efficiently overseas (at least in the eyes of the stockholders) and the U.S. infrastructure be damned. |
| Apr 9, 2009 21:21 | #10 |
| I agree on Gary's point. The other point, i guess is that US’s economic “tradition “ or “cultures” is stimulating consumptions on credits that is the US fundamental of bringing the messy economy back on rail. That’s why 95% bailout goes to banks and other investment institutions who are encouraged to continue lending and helping with bubble consumptions. Active consumptions is the key point of letting the static economy go. |
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