Miscellaneous News
- Thread starter bd popeye
- Start date
How much FDI do US companies have in China? Value of Chinese leased US owned assets? What about the total value of their patent licenses?
Warren Buffett gives his most expansive explanation for why he doesn’t believe in bitcoin
The Oracle of Omaha is always prescient on money and capital. Seeing Warren and Charlie are still up there doing what they have been doing well in the past 5+ decades is really encouraging. They are part of the reasons US is the hyper-power. And they are what capitalists are supposed to be.
If Uncle Sam is short on cash they’ll just pull a Kashogi clause and confiscate all the Saudi assets. Everything is fair game now.
Are we going to see young Saudi kids in gold plated Bugattis driving around Shanghai in summer now?
I generally agree, if China's ~1T in US bonds and 2T in FX reserves were sanctioned, it would essentially mean nearly all other Chinese assets(both private and owned by companies) in American/NATO counties will be at risk. The economic shock would be immeasurable on a global scale. But this kind of decoupling won't happen overnight, we'll see plenty of signs of smaller "red lines" being crossed from both sides before this happens. And the stock markets will surely pay attention to the smaller news events and go into a sell off before this happens especially the with Ukraine conflict fresh in every trader's minds. You'll also see gold and silver prices start skyrocketing. I'm hoping the politicians in the US will step back from escalation when the see the DOW drop by 1000-2000 points each day for a week straight.
I personally feel that it does matter a lot because the preverbal phrase "time=money and money=time" can't be more relevant. The bottom line is that each US dollar China that has in a bond(or in reserves) represents a loan that a Chinese worker made to the United States. That worker sacrificed(exchanged) his/her time, blood, sweat and energy to manufacture something that got sold to the United States in exchange for an IOU(US dollar). It is a unit of labor that the Chinese worker put into making an iPhone so an American consumer can have the phone now without putting in a unit of labor himself. To dismiss the 1-2T of USD reserves as a wash is a slap in the face of generations of Chinese workers who worked hard and loaned someone their time with the promise that they will get a similar unit of time back to them for their retirement, for a vacation, to help their children, to live a better life in the future that they sacrificed earlier for.
The only solution I can foresee to protect China's currency assets would be for China to declare publicly and reinforced though diplomatic channels what their USD currency reserves mean to the people of China and that any sanctions against their FX reserves/bonds constitutes an open declaration of military war and will result in a 100% assured M.A.D. outcome. This will be more of a draw/stalemate, and create a status quo, which sometimes is a rather elegant solution in itself.
Last edited:
Nope. And I don't want them to be in my home town. Business only.
The only reason OPEC+ does not treat Europe like Japan is that European engineering is the basis of whole Global energy/transport/food complex. but it does not mean that all those in OPEC+ will not reduce asset exposure to EU but not enough to cause a sudden collapse. it is in both US and China interest to save European engineering. because the impact on both US and Asia will be huge if European Engineering goes down for what ever reason in this Ukraine conflict.
I don't think you caught the drift that US has been consistently telegraphing the whole wide world it's a privilege to use dollars, not rights. The notion of time=money is simply ridiculous within the context of the existing fact that most of the OECD effective rates are in the negative territory. All these time and money, and blood and sweat sounds all nice and convincing, but once the chips are down, all of them get thrown out the doors at the very first minute. How about Afghanistan, Iran, Venezuela, Russia, etc? It's their blood and sweat too. What can they do about it? So far not a lot, hence the implied notion a privilege, not a right. So face the reality and don't delude oneself with those true, but practically empty slogans. For sure, China has to back it up with her military might to make it a right, an actual IOU, not a privilege, just like US makes her military might to back up her implied grant of privilege, not an actual right to use dollar.