How long will China hang on?

[LiveFree79]

To our worthless dollars and bonds? I mean this whole nonsense that China needs us as much as we need them is utter horseshit. There are PLENTY of emerging markets opening up all over the world..........India, the middle east (Dubai), etc. The Euro is gaining ground. China is going after oil anywhere it can get it. It's not like the U.S. has the monopoly on oil in the world. Seems to me wee need China a lot more than China needs us. I'm sure China can find another 300 million people to buy their cheap shit.

 

[The_Orlonater]

To our worthless dollars and bonds? I mean this whole nonsense that China needs us as much as we need them is utter horseshit. There are PLENTY of emerging markets opening up all over the world..........India, the middle east (Dubai), etc. The Euro is gaining ground. China is going after oil anywhere it can get it. It's not like the U.S. has the monopoly on oil in the world. Seems to me wee need China a lot more than China needs us. I'm sure China can find another 300 million people to buy their cheap shit.

You make a valid point. I'll admit I don't know, but this should be interesting.


On a side note, is it because people have dignity in their quality products?

 

[tmosley]

Emerging market are just that--emerging. Those countries just don't have the purchasing power to make up for the loss of the US market. They tend to be much MUCH smaller than the western markets--generally about 20x less per capita. Better to prop up as long as they can until those other markets become powerful enough to stand without the US market. Once that happens, well. . .

 

[LiveFree79]

Emerging market are just that--emerging. Those countries just don't have the purchasing power to make up for the loss of the US market. They tend to be much MUCH smaller than the western markets--generally about 20x less per capita. Better to prop up as long as they can until those other markets become powerful enough to stand without the US market. Once that happens, well. . .

That's what I'm saying. The purchasing power of the U.S. is decreasing. The purchasing power of countries like Dubai, India, Europe, Russia, Latin America are increasing. All the more reason for China to slowly start dropping its dollar assets. The thing is all this is happening fairly quickly. So I don't think it matters which choice China makes. If things continue down the road for the U.S. and the dollar things will start to snowball. The Chinese are now trading with anyone and everyone..Cuba, Iran, etc. And what does America talk about? Putting missile defense systems in Russia's backyard????????

 

[tmosley]

What I'm saying is that yes, the US is going down, but I doubt that China will dump US currency (they might slow down the uptake as you suggest--and start diversifying), becaue it will destroy the US economy, and do enormous damage to most other world economies. As soon as they can be reasonably sure the US can fall without destroying their other markets, they'll dump the dollar immediately, and not a minute before.

Of course, if the US starts to collapse before they make a move, they'll dump, because the damage is already done, and propping them up won't help.

 

[muh_roads]

China will begin to stop propping us up when those emerging countries combined can replace what the US does for them. When a demand is destroyed somewhere, it is always created elsewhere. I say the shift will begin in 5-15 years when the majority of baby boomers have entered their phase of medicare & SS. Obligations that just can't be sustained. Walker says 5 years. He's probably right.

The warfare and welfare state alone is already showing the begining signs of the screwjob we are about to inherit. And we aint seen nothing yet.

The US has accumulated over 5 trillion of debt in the last 240 years. During this last administration alone we have almost doubled that to 9.5 trillion between the warfare and socialism for the rich (bailouts). When most of the baby boomers start sucking on the government...that jumps very quickly to 60 trillion. Some say even more.

Unless the empire is transformed back into a republic, we are going down like Rome. Our great halls have been built with mud and glue. The end is nigh.

 

[Fox McCloud]

I'm inclined to say this disaster will hit when we least expect it, and I have a feeling it's not a distant event anymore--for a number of years I always thought it was a good 10+ years away...not anymore; I honestly believe the whole system could come crashing down in a very very short period of time.

At this point in time I don't think China will do it, but I wouldn't put it past them either--especially if they think they can buy up a lot of our companies and land in the process.

 

[Gideon]

Economic warfare perhaps?

I'm inclined to say this disaster will hit when we least expect it, and I have a feeling it's not a distant event anymore--for a number of years I always thought it was a good 10+ years away...not anymore; I honestly believe the whole system could come crashing down in a very very short period of time.

At this point in time I don't think China will do it, but I wouldn't put it past them either--especially if they think they can buy up a lot of our companies and land in the process.

China will dump FRNs when China deems it strategically viable.

Consider the following:

China is hosting the 2008 Olympics
China is a militarily strategic ally of Iran
Prince George has given the amber light to Israeli air strikes of Iran
The FRN house of cards is collapsing before our eyes
The Plunge Protection Team has nearly exhausted its arsenal of manipulative tricks
An attack on Iran would make for a really nifty distraction from global depression
China will restrain its 100 million man army in lieu of exercising economic sanctions

THEN China will strategically dump FRNs


Got monetary metals?

 

[BLuegreengrey]

2040

 

[Truth Warrior]

List of countries by GDP (nominal)
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

 

[IRO-bot]

How much could it really hurt us? Can't we still hurt China by not buying their goods? What "necessities" in life are made in China? Isn't it mostly garbage anyways?

I guess what I am trying to get at is that if we all have to buckle down in the end and survive off basic necessities, what do we need from China?

 

[slacker921]

I saw somewhere that the US only represents about 10% of all exports from China.. i.e. we aren't as big a fish as we'd like to believe and if our market collapsed it would hurt them but not crush them.

Also consider that they have the manufacturing base to recover from an economic downturn - we don't.

 

[Johnnybags]

My conspiracy theory is that

as Asia sells the bonds, the Middle Easterners are buying as long as oil is over a certain level. Those trips to the middle east publicized as begging for oil are not what they appear. Probably a quid pro quo where Opec gets huge dollar revenues for oil and reinvests it in our bonds. Best thing for us to do is cash out of all savings bonds, all government paper, all treasury funds and put it into something physical other than real estate. When the oil bubble burst, I actually expect treasuries to eventually sell off hard. Its seems a worldwide phenomenon that virtually no government bonds are keeping up with the particular countries actual inflation yet it is what it is. Of course after the election I will see if I am correct as they will patch all holes until then and more than likely stick Obama with the sinking ship, and of course he will be the first one to jump overboard telling everyone else to remain calm.

 

[fatjohn]

Oh they need the US be certain of that, but less and less each day. When it won't be one day you know. They will graduatly let US dollar fall and I think they already begon.