How Long Will China Indirectly Finance Its Own Exports Via US Debt Purchases ?

[libertad]

http://www.ft.com/cms/s/0/ba857be6-f88f-11dd-aae8-000077b07658.html

Thus the question of the US monetizing its debt....will depend on China's continued willingness and/or ability to indirectly finance its own exports by financing US debt ....

 

[jueco2005]

No for long................the question is what will happen when china is not longer able to finance its own exports via us debt??
It wont be good.

 

[Martinghoul]

Quote from libertad:

http://www.ft.com/cms/s/0/ba857be6-f88f-11dd-aae8-000077b07658.html

Thus the question of the US monetizing its debt....will depend on China's continued willingness and/or ability to indirectly finance its own exports by financing US debt ....

It's a vicious circle for them. If they stop supporting the mkt, USTs will implode and their reserves will evaporate. Not conducive to the nation's health, especially these days.

 

[libertad]

So the next question becomes....supposed currency manipulation....

The US is suggesting that China manipulated their currencies lower....in order to increase exports....which they in turn indirectly finance....

Thus Chinese "savings" which currently finance the US debt would be largely erased if their currency was "properly" valued....

Thus if the currency were to increase in value versus the dollar....would this not be "financial" suicide for the US to want to enact such a policy ?

The US deficit will increase just due to the drop in tax revenue alone....

And just where will cheaper goods come from that the US currently enjoys ? Have cheaper goods not enhanced the quality of life in the US ?

 

[Mvic]

For as long as it feels that a $1 put in to US debt generates more economic activity in China than a $ spent domestically.

 

[janvir19]

China may finance the U.S. for another 2-3 decades....long enough to build their own consumer class. They are still poor, and their gov't has no clue what is happening right now.

U.S. Treasury bonds could perform very well for another 5-10 years. Inflation may be much further away than most on ET realize.

Read informed commentary from investment managers like GMO, Bridgewater, Hoisington.

Stop getting all of your info from chat rooms and annoying ranter types like Mish Shedlock, Derringer (Denninger?), Peter Schiff and the like.

 

[libertad]

janvir19


Read informed commentary from investment managers like GMO, Bridgewater, Hoisington.

Stop getting all of your info from chat rooms and annoying ranter types like Mish Shedlock, Derringer (Denninger?), Peter Schiff and the like.

................................................................................

Very good suggestion....

Skin in the game ....by the "well informed"....

 

[Sam Mcgee]

Do you have any evidence that GMO, Bridgewater or Hoisington have better investment advice other than they use a lot of big words when they write something? Maybe they do have better advice, but I'd be interested to see an actual track record or such before I came to that conclusion.

Attached is a chart of Mish Shedlock's Hedge Fund. Is there anything from those three investments advisors that can compare?

 

[jjf]

Quote from janvir19:

................................................. and their gov't has no clue what is happening right now.

What a stupid comment to make.

 

[libertad]

janvir19


GMO in particular....very noteworthy....
J. Grantham


Thank you....