China and the United States

We are just sitting here burning our seed corn in our SUV's, borrowing to buy made in china garbge at walmart, target, and ebay, and we'll be SHOCKED and SURPRISED to find out we've sold the total worth of the nation to China and OPEC, at a rate of 6% more each year, till there is nothing left to borrow against.

5 yrs max, IMO

THEN WHAT? LOL
 
Quote from thriftybob:

We produce nothing. We play games on our screens and consume [/QUOTE

C'mon of friend, seriously..We the (US) produce/create EVERYTHING. If we think of the ideas get the specs on it and put the whole thing together, then bid it overseas to manufacture and china gives it back to us to sell is that really a trade deficit? No! Wake me up when the Chinese or foreigners create the ideas and intellectual properties and the US is merely a distributor. The US is a service provider that's what our economy is now. It is not a manufacturing economy. There's no way it could be. The US could not meet world demand if we were the primary manufacturers. The US provides the service and creates the ideas. Of course China will make money in the credit markets holding US currency, but they aren't pulling out of our credit markets anytime soon. Where else can they go to find stability? Not Europe.

The US sends the ideas overseas to manufacture cheaper, then US companies sell it back. It's all smoke and mirrors.
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I wouldn't argue with any of that, but you've left out the $9 trillion of govenment debt and probably another $9 trillion of dollars out there running around waiting to be cashed in (spent or traded for a more reliable store of value). Because nobody else worries about it, we'll also ignore the $59 trillion of promises made that can never be paid.

All those IOU's are the result of living beyond our means by borrowing from our trading partners instead of trading with them. There wouldn't be any problem with China if they were trading with us for goods and services we produce instead of just lending us back the money or buying our companies with it.

A study of the history of how fiat currencies collapse and the ramifications on the people caught in the crossfire is worthwhile. I feel we are on that slippery slope.

The question is how will our children survive the mistakes, and what standard of living should they expect to have?
 
Quote from monistat7:



if that is true then we should not defend and support that 80% and let them get phased out. let the competent 20% continue to prosper and reproduce and after several generations, our country will have 80% genetically competent people and only 20% stupid people.

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Who do you think procreate the majority of the smart 20 percentile?
 
I didn't mention the federal debt because it is insignificant. It's just a nominal figure only useful for political campaigns in hopes of altering policy. The interest payment on debt in relation to national income is what matters, and that is not in danger in the least bit. The Gov. has no intention of paying off the debt, nor should they. The national debt has risen since the 1800's and will continue to do so for many years to come. The US Gov. is the largest holder of treasury debt not foreigners. Nobody is going to "cash out" as you say. The US is a sovereign nation, therefore, holding on to US debt is a sound investment, especially for foreigners. Deficits which spur economic growth through R&D and increased production is a sound business model. Again, when we no longer create the ideas, or have a negative GDP, then we will have an issue. But until then, I'm not passing around a collection plate for the United States. This government prints money, literally, because it can.

I for one wouldn't want the US to become the leading manufactures of the world. Wages would go down and taxes would be high. Nobody will make a pair of Nike sneakers for $2/hr. here in the states, yet demand for Nikes are strong abroad. The US creates the design and asia manufactures it, but it all comes back to america.
 
Quote from Stevie_G_5:

now it is obvious that the relationship between the chinese and the americans has changed from one of hostility to friendship
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Unless you think that international trade is a zero-sum game, as many short-term traders on ET do.
 
Quote from Dr.Greenback:

I didn't mention the federal debt because it is insignificant. It's just a nominal figure only useful for political campaigns in hopes of altering policy. The interest payment on debt in relation to national income is what matters, and that is not in danger in the least bit. The Gov. has no intention of paying off the debt, nor should they. The national debt has risen since the 1800's and will continue to do so for many years to come. The US Gov. is the largest holder of treasury debt not foreigners. Nobody is going to "cash out" as you say. The US is a sovereign nation, therefore, holding on to US debt is a sound investment, especially for foreigners. Deficits which spur economic growth through R&D and increased production is a sound business model. Again, when we no longer create the ideas, or have a negative GDP, then we will have an issue. But until then, I'm not passing around a collection plate for the United States. This government prints money, literally, because it can.

I for one wouldn't want the US to become the leading manufactures of the world. Wages would go down and taxes would be high. Nobody will make a pair of Nike sneakers for $2/hr. here in the states, yet demand for Nikes are strong abroad. The US creates the design and asia manufactures it, but it all comes back to america.
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And trees will grow to the sky...

Argentina thought the same thing at one point, and they weren't the worlds reserve currency.
 
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