Yeah, the Chinese aren't dangerous...

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Madness...

via Drudge

UPDATE: And the Chinese back away from their own threat.

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11 Comments

Dave said:

We've asked for this! By having large budget deficits ("borrow and spend" by the Republicans), and supporting large trade deficits to fund them (thereby keeping inflation low), we've put more of our nation in control of other countries.

Who do think we're borrowing money from? Mostly China and Saudi Arabia! Together, they could probably buy the entire U.S. west of the Mississippi.

Open your eyes and tell the Republicans to stop their Borrow and Spend mentality.

Ted said:

I wonder how much food the Chicoms are buying from U.S. farmers? (hint)

Singleton said:

Dave,

Update your democrat talking points. Version 2006 is out of date. The dems control the budget process now, and I doubt we'll see spending drop now either.

On one point, I agree. The Republicans made a grievous error by allowing DC to corrupt them and to allow spending to continue increasing.

stay puft said:

as if you guys need another group to get all paranoid about! "Chicoms" Come on! It's not Chinese communism that's created this situation, in fact it's driven more by their move toward capitalism. It's the government of every country that determines how much foreign currency to hold in reserve.

Hey, it's Bush's insane spend-and-spend policy that we're in debt to China. You can say that now it's the dems problem, but you can't say it's their fault. but our debt to China and the dollars that China is holding in reserve are two separate matters.

In reality, I don't think this would be quite the shock that Druge describes (surprise) Ultimatly it's the US gov that controls how many dollars are floating around. If China dumped a bunch of them, the fed reserve could buy them up. We'd maintain a stable valuation of the dollar by removing the extra ones from circulation. It might be a hiccup, but probably not a catastrophe. We'd have a harder time adjusting to an unpegged yuan.

"The Republicans made a grievous error by allowing DC to corrupt them" Ha!

why do we trade with commies anyway? This might wake us up to stop buying their goods.

stay puft said:

please, this has nothing to do with communism, this is global capitalism hardball. Try to enjoy the excitement!

...but keep in mind that as long as the yuan is pegged to the dollar, a devaluation in our currency = a devaluation in the yuan. China's economy has some issues with stability, which is why part of the reason they peg their currency in the first place. A sudden devaluation of the dollar/yuan could hurt them more than us. Although unpegging the yuan could be even riskier for the Chinese economy.

Somebody forgot to close a div or an href, it looks like. I do not have access to the admin area so will one of you please go in and edit that top post? thanks

stay puft said:

I think it wasn't entirely correct to suggest that there's no relation between the dollars china has in reserve and the US debt it owns. It seems like china selling it's debt would essentially have the same effect as china dumping the dollars it's holding in reserve.

I'll stand by everything else! China is a huge investor in the US, they can't sabotage our economy without sabotaging their own. Ah, the beauty of global economic integration!

jacob said:

Marshmallow,
I am forced to agree with you, to a degree. We are their biggest market. No one else would tolerate so much dumping of cheap and shoddy, goods into their country. Lead paint for the childrens toys, what a laugh.

If the Chinese decide they want to hurt us by selling of the US debt they own they will find themselves hurt even worse than we are. For as much as we buy from them they are but a small part of our economy.

I will disagree on this Marshamallow, they are not capitalistic, for their markets are closed to us. They instead are playing the old game of goods for gold, which if memory severves me, is called mercantilism, a precursor to capitalism.

Furthermore the Chinese are still ruled by a communist dictatorship. This dictatorship is increasing its military spending at a double digit pace every year, which is made possible by the gold they make selling us shoddy goods, made with slave labor. They are not our friends.

ACTivist said:

Puft and Jacob

You both make good points. We may not have too much to fear and, yes, the Chinese have never been our friends. I still wonder how many industrial as well as military spies they still have in this country. They have another leverage tool which I feel is just as important as well as detrimental-big business. We have been setting up major businesses in China that is healthy for our economy (stock value as well as untapped resource) and shakey also (installation, manufacturing and disclosure of some of our best technologies). They are a smart people and now how to hold these businesses hostage or exclude them from doing business in their country. Not that they would (it would hurt them also) but can you think of a better group of lobbyists to the federal government? Just a thought.

Had Enough said:

The relationship with them should never have begun in the beginning.

clinton even welcomed them here. They should be on the same level as cuba.

Goods so inferior that you must constantly replace them. I have gone without, rather than buy anything made by them.

They are socking all their money into building up their military, missiles, weapons, subs, etc. and we and walmart are funding it.

They are building a big new port in mexico to ship their cheap goods to. Those goods will be shipped to the US and canada via mexican truckers and rail on the new super highway.

This will avoid our more expensive ports and truckers.

On top of that, mexico is opening their own customs station in Kansas City but say it needs to be declared soverign mexican territory (in the middle of the US).

The cargo that will be inspected will be done in mexico and then in the Kansas station (sure, that's what they say).

Doesn't that make you feel more secure. Maybe china will just ship weapons to sell to street gangs like they did when clinton leased them a old military base in California.

bush is meeting next week in canada with mexico and canada to discuss the SPP (North American Union). bush is classifying this as trade to avoid congress and the senate. What do rice and chertoff have to do with trade? They have been at these meetings.

Think we have problems now, just wait!

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