ChinaWatch

[ScotlandYard]

Hi all..I am a newbie here and hopfully I can make a contribution to this culture. I see a few familiars are here

[Xiao Jie]

Glad to have you aboard. 

[Gary Oak]

  I am back too 

[Cartman]

Why is the subject line "China Watch"?

[ScotlandYard]

Why is the subject line "China Watch"?

Why not

[ScotlandYard]

http://www.nytimes.com/2011/09/10/world/asia/10chinabrf.html?_r=1&ref=china

Big Drought In China

[Xiao Jie]

SY,

As we all reflect back at the horrific events that occured a decade ago, I know not everyone had sympathy for the victims of 9/11. I`m not talking crackpots in the Middle East either. I`m referring to the uncorking of champagne bottles bottles in China. Made me sick to my stomach.

[Maggie]

SY,

As we all reflect back at the horrific events that occured a decade ago, I know not everyone had sympathy for the victims of 9/11. I`m not talking crackpots in the Middle East either. I`m referring to the uncorking of champagne bottles bottles in China. Made me sick to my stomach.

i never really heard about that........but seeing as this is a thread about China...........what is everyone's opinion as too which is the wiser......to be a creditor (china) to the tune a few Trillion dollars or be a debtor (the USA)......being in the financial industry for most of my career taught me the risk and downside of being a creditor..........especially when the debt is only secured by "good faith and credit".....i fear that at some point the debt will become so unmanageable the USA in it's wisdom will simply say to China......"**** off an die"...they will know the consequences of such actions, including loss of the USD as a reserve currency...but maybe the choices will be to severe to avoid this eventuality.....on the other hand holding so much of someones paper literally gives China control or at the very least input over ALL US policy decisions.....this is a position they have coveted for at least two generations so from their point of view maybe the risk is worth it......what say you

[Xiao Jie]

HMMM, you raise some interesting points Mr Munday. Having never worked in the financial industry, I`ll defer to people like yourself who are far more knowledgeable than I.

Just on the question of borrowing though, it`s a problem not just unique to the USA. Most of the West spends more money than their mediocre economies can afford. Mr Munday, what do you foresee for the USA/West vis-a-vis China?

[Maggie]

not sure how knowledgeable i am about world finances.....only the bankers really know how bad it is.......but i am a student of history and certainly in the past when countries and governments have been placed in impossible positions they tend to lash out as a final recourse.....as some point the USA will reach that untenable position.....it is most certainly their own fault but nevertheless they will arrive there.......so the question becomes what will they do when they have exhausted all other options and the easiest one on the table is simply refusing to honor their debt obligations.....i think they, in conjunction with other western democracies will at some point choose the default option......if they do it together then they will be able to at least retain credit worthiness among  themselves......from their point of view there will be much wailing and knashing of teeth from the populace but probably the lesser of two evils......if they were to go that route think of the weight taken off their economies if they simply canceled all their debts.........or at least postponed paying interest payments for some term say 10 years.....................

XJ...sorry but i wrote out a two page essay dealing with what i thought would be the response from the three main debt holders......China, the Saudis and national band holders but i pushed a key and it all disappeared and i am too pissed to do it over again....**** windows 7...............i want XP back again

[Xiao Jie]

Mr Munday, I think that postponing paying interest might be a real possibility. I also think Westerners will have to save more as cash-strapped governments won`t even feign being able to pay for these costly social transfers. Some of the mentally-challenged posters on MMB would say all you have to do is tax the hell out the wealthy and ta da, the economy booms, heaps of cash suddenly appear and it rains Dom Perignon.

[ScotlandYard]

China was and still is being financed to be #1.It got to this spot with the help of the Federral Reserve its own Central Banking System. George Soros and like minded Communist\Capitalist corporations [there are such entities] are keeping China front and centre ..the enemy of the [free] Western World.

[ScotlandYard]

subversive elements within and without the US want to see it crushed and replace it with China. There has been a war of this nature going on for decades now[and in Canada too] and non dare call it so. Pivotal will  be the changeover of the financial architecture of our world..a global system, probably relying heavily on Carbon Credit [Tax] AKA\ Communist,Maurice Strong. Campbell shoved this evil tax in remember. Just the start!

not sure how knowledgeable i am about world finances.....only the bankers really know how bad it is.......but i am a student of history and certainly in the past when countries and governments have been placed in impossible positions they tend to lash out as a final recourse.....as some point the USA will reach that untenable position.....it is most certainly their own fault but nevertheless they will arrive there.......so the question becomes what will they do when they have exhausted all other options and the easiest one on the table is simply refusing to honor their debt obligations.....i think they, in conjunction with other western democracies will at some point choose the default option......if they do it together then they will be able to at least retain credit worthiness among  themselves......from their point of view there will be much wailing and knashing of teeth from the populace but probably the lesser of two evils......if they were to go that route think of the weight taken off their economies if they simply canceled all their debts.........or at least postponed paying interest payments for some term say 10 years.....................

XJ...sorry but i wrote out a two page essay dealing with what i thought would be the response from the three main debt holders......China, the Saudis and national band holders but i pushed a key and it all disappeared and i am too pissed to do it over again....**** windows 7...............i want XP back again

Mr Munday, tsk tsk

[Xiao Jie]

Carbon credit aka tax. I wince when I hear politicians talking about that.

[Maggie]

ok condensed version

"not sure how knowledgeable i am about world finances.....only the bankers really know how bad it is.......but i am a student of history and certainly in the past when countries and governments have been placed in impossible positions they tend to lash out as a final recourse.....as some point the USA will reach that untenable position.....it is most certainly their own fault but nevertheless they will arrive there.......so the question becomes what will they do when they have exhausted all other options and the easiest one on the table is simply refusing to honor their debt obligations.....i think they, in conjunction with other western democracies will at some point choose the default option......if they do it together then they will be able to at least retain credit worthiness among  themselves......from their point of view there will be much wailing and knashing of teeth from the populace but probably the lesser of two evils......if they were to go that route think of the weight taken off their economies if they simply canceled all their debts.........or at least postponed paying interest payments for some term say 10 years....................."

1. the Saudis are really of little consequence.....they have no military options to pressure the west and if they were silly enough to threaten the flow of oil we would just ignore them and go and get it

2. China on the other hand is a different story...they are patient, thinking in terms of generations not quarters....they have the money to quickly ramp up their military capabilities if required and they chose to do so, they have an unlimited supply of military fodder and losing several million troops in a war to secure their interests would be inconsequential to their leadership....they have been wanting to influence US policy for decades and knew the risks when they set out on this path.....owning so much US debt gives them outright control or at the very least strong influence of many if not most policy decisions made by the US government regarding fiscal policy.....this is done directly through diplomatic channels  but also by pressuring all the US corporations that now have their manufacturing bases in China to lobby Washington for what policies China favors.........if the USA reneged on it's obligations it would be interesting to see which china responds...patient china or expansionist china

3. By far the largest group and of course the one with the least influence is the normal government bondholder.....the pensions, IRA's, state and municiple bondholders, equivelents in europe ..these poor bastards will really take it in the neck should default become an option.........gotta go now