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HereToSeePics

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Staff member
Moderator - World Affairs
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zgx09t said:
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.
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Time is money, it is true since the dawn of time regardless of what you think. You have to comprehend the difference between the USD losing value from rate policy and inflation is something manageable and something economic policy makers in China can account for either through careful hedging or investing. China's US bonds and FX reserves being sanction is not and would be considered crossing the line as outright theft.

You forget that Afghanistan, Iran, Venezuela, are small powers military with few ways of backing up the theft of their assets through military means. Russia has their hands tied and cannot fight a 3 front war both in Ukraine, Atlantic and Pacific. If you haven't noticed, one aspect of the strength of the USD comes from the United State's global military reach and might(whether perceived or otherwise).
 
Z

zgx09t

Junior Member
Registered Member
HereToSeePics said:
Time is money, it is true since the dawn of time regardless of what you think.
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When facts do not support a theory, facts must be wrong. Being rigid and dogmatic is a true sign of weakness, intellectually and mentally.
HereToSeePics said:
You have to comprehend the difference between the USD losing value from rate policy and inflation is something manageable and something economic policy makers in China can account for either through careful hedging or investing.
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That's commonly understood, so no comments.

HereToSeePics said:
China's US bonds and FX reserves being sanction is not and would be considered crossing the line as outright theft.
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That's obvious to anyone paying attention, so there is no contention against the basis of this argument. But empty threats would not get far.

HereToSeePics said:
You forget that Afghanistan, Iran, Venezuela, are small powers military with few ways of backing up the theft of their assets through military means. Russia has their hands tied and cannot fight a 3 front war both in Ukraine, Atlantic and Pacific. If you haven't noticed, one aspect of the strength of the USD comes from the United State's global military reach and might(whether perceived or otherwise).
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And how does it differ in substance to what I mentioned? Not clear if you are repeating after me or what?
 
N

nixdorf

New Member
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MrCrazyBoyRavi said:
From an economic point of view, I don’t know why we see people in twitter celebrating trade deficit with US increasing. Western nation basically froze 400B of Russian foreign currency reserve in an instant. They won’t hesitate to freeze 4T of Chinese foreign reserve in a blink of an eye during conflict. Atbest Moody and S&P will downgrade US bonds from AAA to AA.
If you owe a bank 10,000$ its your own problem,
But if you owe 10,000,000$ to bank, then its your Bank’s problem to get back money.

Basically Western nation enjoyed a high standard of living for last 25 years issuing cheques they didn’t intended to pay at all. While Chinese boomers saved money working hard 24/7 that they are uncertain to cash out when they want.
so in a way China has been taken economic hostage by western power. You can’t buy any western companies or technology due to laws. Neither can you dump all those treasury bills to other buyers for loss, as there is no other big buyers as such.

That’s why trades should be balanced. This huge trade imbalance will definately be giving sleepless night to economic planners. And China isn’t even capable militarily to collect its debt. I wonder what CCP economic planners are thinking right now.
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They use the foreign exchange money to fund BRI investments as well as foreign aid. That gets the freezable dollars off their books and onto somebody else's books. In the meanwhile it increases their economic and political influence worldwide. I don't think they're too worried about their trade surplus.
 
4Runner

4Runner

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4Runner said:

Warren Buffett gives his most expansive explanation for why he doesn’t believe in bitcoin​

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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.
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Warren Buffett rips Wall Street for turning the stock market into ‘a gambling parlor’​

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For those who want to dig what Warren was alluding to, I recommend here a great movie about the WST leading to the great financial crisis.

Margin Call
on Netflix now.

Allen Greenspan flooded market for the non-existing Y2K bug. Ben Bernanke flooded market for the MBS wreckages. Janet Yellen and Jerome Powell don't know what they are doing.

The catch is: Greenspan had low debt ratio; Helicopter Ben had QE and Mark-to-Model; what is Powell going to do other than raising rates?

Still under current extreme circumstances, US politicians are not capable of making slightest corrections, such as resetting all import tariffs. I don't think this war would help much to Joe in November.
 
bajingan

bajingan

Senior Member
HereToSeePics said:
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.
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Just wondering though, western countries hold sizeable assets in China. I read somewhere at the end of last year, foreigners owned $3.6trn in direct investments, including immovable factories, and $2.2trn in shares, bonds and other “portfolio”
If the americans dares to sanction China fx reserves and bonds, these assets that americans hold in China can be confiscated, no?
 
4Runner

4Runner

Junior Member
Registered Member
bajingan said:
Just wondering though, western countries hold sizeable assets in China. I read somewhere at the end of last year, foreigners owned $3.6trn in direct investments, including immovable factories, and $2.2trn in shares, bonds and other “portfolio”
If the americans dares to sanction China fx reserves and bonds, these assets that americans hold in China can be confiscated, no?
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From my understanding, US/China have achieved MUD in economics, including finance and commerce. IF and WHEN the west imposes on China what they have imposed on Russia, the west will go down a path of the greatest depression in history. Certainly, at that point, China's economy would suffer similarly. At that point, I don't think the western politicians can survive their own domestic careers without starting a hot war. No government in the west would survive any general election just on economic terms.

The west has never faced a peer as wholesome as China. I am not worried about the western capacity. Rather, I am very worried about western illusions that would lead them into a sleep-walk situation.

Therefore, any western MSM talk about seizing Chinese assets on a global scale is just my entertainment.
 
horse

horse

Colonel
Registered Member
bajingan said:
If the americans dares to sanction China fx reserves and bonds, these assets that americans hold in China can be confiscated, no?
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Yup.

Foreign investment into China keeps going up too.

It is a simple idea. If the economy is growing at 5%, then a business should be able to grow at 5% because it is growing at 5% so everyone should get a piece of that action and benefit.

Capital will seek out the best rates of return.

If there are options to invest capital or cap-ex into factories the factors of production, where will they go - to the place where the economy grows 0%-1% or 2%-3% or 5%+ for the last 40 years and well into the foreseeable future.

That is what those clueless Western politicians are up against. In fact, they cannot grasp what they are up against.

That is why their tactics do not work, and they are puzzled why it did not work.


Keep in mind, that capital is global. Also capital gets what it wants, either by legit ways or by hook 'n crook.

Not only China's economy is still growing at 5% or more, the industry we see in China goes from simple stuff to very complicated high tech goods.

Blah blah blah.

All they can hope for is comrade Chang to be proven right!

:oops::rolleyes::p
 
Bellum_Romanum

Bellum_Romanum

Brigadier
Registered Member
KYli said:
Boycott, shortage, inflation.
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How's that banning of cottons from Xinjiang is going to play out on those virtue signaling companies who had relented from the pressures of both their government and their broke us consumers that pretend it won't be begging for their favorite fashion s..t to become as cheap as before.
 
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