China Should Stop Buying the USA's Bonds

Discussion in 'Economy' started by philosophstar, Sep 20, 2012.

  1. philosophstar
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    philosophstar BANNED

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    Really. It wouldn't do the USA that much harm. Plus, it would make the USA's currency less valuable against other currencies, which would only be good for its exports and jobs.

    :cool:
     
  2. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    1) actually it would be great for the USA since it would mean China would have to buy our products with our money rather than our debt.

    2) China won't do it of course, they don't want to buy our products because they want to learn to make them themselves

    3) I don't see that it would have much impact on currency values

    4) if liberals could not sell our debt to China they would have to practice austerity, reduce the debt, and learn to behave responsibly.
     
    Last edited: Sep 20, 2012
  3. philosophstar
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    1: Yes, that is actually true.

    2: Yes, that is actually true. They wouldn't do it of their own volition.

    3: You don't see how selling a shit ton of dollars on the market would affect currency values? Why is that? That is what would happen if they sold their bonds, you know.

    4: No, probably not. The interest rate probably would not rise that much anyways. Besides, trying to balance the budget in an economy that has such a shitty labor market as ours would most likely be counter-productive, both in terms of balance sheets and job prospects.
     
  4. EdwardBaiamonte
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    its not a shit ton, its about a trillion against a world economy of about 50 trillion and it would not be done all at once in any case. Also, when they buy our bonds the money is put in circulation by our government anyway.


    of course they have every incentive not to sell our bonds quickly because that would drive down the prices they would get


    the Fed just announced they are trying to hold down interest rates with 40 billion a month(QE3) or 1/2 trillion a year. Its hard to say how much given Fed interference but it would but upward pressure on rates. The general point is , if liberals cant sell debt to China and others, interest rates go up, Democrats have to raise taxes for their new welfare programs, and they go out of business.


    a balanced budget for home or business or government is always a good thing! It helps the job market to be fiscally responsible, of course.
     
    Last edited: Sep 20, 2012

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