Wednesday, July 29, 2009

The Chinese Creditors come-a-callin'

Read an interesting article at Truthdig today.

The Chinese Communists invaded Washington on Monday demanding not that we sacrifice our freedoms but rather that we balance our budget. Creditors get to make that kind of call. And the Marxists of Beijing, who have turned out to be the world’s most prudent bankers, are worried about their assets invested in our banana republic.

“China has a huge amount of investment in the United States, mainly in the form of Treasury bonds. We are concerned about the security of our financial assets” was the way China’s assistant finance minister put it. Briefing reporters at the U.S.-China Strategic and Economic Dialogue, he added, “We sincerely hope the U.S. fiscal deficit will be reduced, year after year.” Quite sincerely, one suspects, given a U.S. budget shortfall this year that is slated to reach $1.85 trillion.

Suddenly, it was U.S. officials who were promising deep reform to their disgraced economic system rather than demanding it from incompetent foreigners. President Barack Obama’s economic team of Clinton-era holdovers, who a decade ago had hectored China on the virtues of fiscal responsibility, now were falling over themselves to reassure the Chinese that their $1.5 trillion stake in U.S. government-issued securities is safe, and that they should buy more at this week’s $200 billion Treasury auction. If they don’t, we’re in big trouble...

...And don’t blame any of this on peacenik liberals. The new conciliatory—nay, deferential—tone toward China precedes the Obama administration, having begun in bilateral talks during the last years of the Bush administration as the U.S. economy began its ignominious downfall. It was George W. Bush’s treasury secretary, Henry Paulson, who set the course when the former Goldman Sachs chairman realized how dependent were his Wall Street buddies on Chinese goodwill...

...The tone of this week’s talks, ironically held at the Reagan Building and co-chaired by Geithner and Secretary of State Hillary Clinton, finally signaled the end of the Cold War assumption that regimes with labels like communist and capitalist could not form profitable partnerships...For those who recall the rhetoric of the Cold War, the idea that we would someday be cooperating with Chinese Communists because they had humbled us economically rather than militarily is a startling turnabout. How did they get to be better capitalists than us, and being that they are good capitalists, why are we still spending hundreds of billions a year on high-tech military weapons to counter a potential Chinese military threat when the weapons they are using are all market-driven deployments?...

I feel like we're in an episode of Punk'd. Except for it isn't Ashton Kutcher playing a joke on us.

It's America playing it on herself.

21 comments:

DD2 aka Debonair Dude said...
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TAO said...

Since the early 80's various military experts have written books and articles about something they referred to as "World War III" and how America could win it...

Without a shot being fired we have lost WWIII and we continue to want to maintain a military to fight a war we have already lost....

bluepitbull said...

That's a pretty far stretch for a guy who the lefties tout as the wisest man...

The military has nothing to do with soft power, and you know that Tao.

So we should just rid ourselves of our armed forces? I'm sure that's what you mean given your hardon for China.

Your logic is like a sieve, full of holes. There will always be the need for a standing Army as we've learned the hard way in 1812 and to a lesser degree in 1950 (that would be the Task Force Smith incident).

I hope we take China out at the knees. They are everything thats wrong with the modern world. MacArthur wanted to take them out while those half pints were still week. Too bad that crapweasel Truman fired him.

Jennifer said...

This is a bit out there but this reminds me of a game I play on my sons Xbox. Revolution or something to that effect. Basically you can win by a economic, military, power or cultural. Anyway, my point is that although I think it is important to have a strong army to keep us protected, we can be just as defeated by economic means. Now I am not saying get rid of our military. We need a military equal to the protection we need. Where we are failing miserably short is the economy. I am certainly no expert but you'd think that the "experts" would be trying to figure out how the heck to get us back in the game. Right now the Chinese are getting stronger and if we don't get our act together soon, we are going to find ourselves in trouble. In fact, I'm inclined to say we are already in trouble!

bluepitbull said...

It's a misconception, Jen.

The Chinese soft power aka economic influence that Tao loves soooo much is only as good as it's investments.

We could easily rid ourselves of the Chinese problem with the right set of laws in place and alot less social spending. I won't reveal too much right now, but I'll post about my ideas on the Chi com problem soon.

Jennifer said...

I admit a bit of ignorance regarding economic affairs, and am looking forward to it blue! :-)

I am guessing that Chinese investments in our country is like those in Wall Street, or do they differ?

What I would like to see is the end of being dependent on Chinese products. There may be so much more too this, but can't we just put such a high tax on their products that we can buy American.

TAO said...

Jen,

Bluepitbull is RIGHT! The Chinese are investing in their own economic growth by making sure that we have enough credit to hang ourselves...

So you think the Chinese are everything that is wrong with the world...well, then I suppose you have nothing that says, "Made in China" on it....

Jen, the 'experts' which is wall street make a tremendous amount of money off the Chinese and the Arabs....

They would sell anybody up river if the bonus was good enough...

Can't wait for bluepitbull's thesis....

bluepitbull said...

It's not really a thesis Tao. Interesting that you are so hateful of Wallstreet, though. They might profit off of your beloved Chinese Tao.

Part one is up. It's just the beginning.

TAO said...

Ah, Bluepit, is it that I love the Chinese or hate them? One time you make it sound one way and in another you make it sound the other...

In 12 years China will have more miles of roads than we do....then they will focus on building up their own consumer base and we can do nothing about it because we no longer have a manufacturing base and are dependent on China.

They are one of the top owners of our Treasury Bonds as baby boomers retire our need for China to purchase our treasury bonds will increase as our social security shortfall increases.

Yet you believe we can take the Chinese out at the knees in a conventional war? How would we pay for this war without money that we would have to raise through selling treasury bonds?

Thank you for flattering me with "..a guy who the lefties tout as the wisest man..."

Its a shame considering I am a conservative capitalist...which in reality makes me a radical to you.

bluepitbull said...

You claim to be a conservative capitalist, but you march to the tune of the socialist.

Perhaps you do it for the sake of argument, or maybe not.

We could easily take China in a conventional war. Perhaps you have some technical data you'd like to share to prove contrary?

James' Muse said...

Blue: We can't take them in a war when so much of our deficit is owned by them. We have to pay it back, and soon. They have us by the cajones economically. If we were to go to war with them, all they'd have to do is call in the debt.

If you think the economy is bad now, we'd be ruined if that happened.

Pamela D. Hart said...

I’ve worried about China for a long time now. They not only hold a major portion of our debt, but they’ve been buying up parts of America for quite some time to boot. We may have military strength, but the Chinese have us beat economically, I’m sorry to say. What good is a military when China could call in our debt at a moment’s notice and knock us to our knees? THAT would cripple us! I’m not an economic genius, but even I can see the writing on the wall, they OWN us.

TRUTH 101 said...

Then lets raise our taxes enough to pay our own debts and send the Chinese on their way folks. Another 10 or 12 bucks a week for most of us is a whole helluve lot better than going down the path we're going now.

And it sure beats a war with a billion Chinese BPB. Just how do you propose defeating a country with technology and a billion people in a conventional war anyway? We've been in Iraq for years and still can't say we've won anything.

Do you propose nuclear strikes? That will go over big with Russia, which shares a border with China in case you've forgotten.

Think and reread your posts before hitting the publish button BPB.


And in the interests of accuracy buddy, I think I am the one that declared TAO the wisest man on the internet. I stand by that.

bluepitbull said...

Actually, yes. We could take them in a war regardless of our debt.

The edge they have right now isn't only economic, but I'll post about this at my leisure and give Tao a chance to make his "That's disappointing" macro ready.

TRUTH 101 said...

You remind me of Ross Perot Pitbull. He also would delay until he could think of an answer he thought plausible. Good luck coming up with your plan to defeat China. I'm sure it will include calling me a socialist and TAO not wise. The Chinese are quaking in fear as you ponder.

TAO said...

Truth, these young folks, so cocksure on everything...

Besides Treasury Bonds ever wonder how much and which stocks of US companies the Chinese own? Didn't the Chinese buy a US legal firm a few years ago?

Then make a list of what items we use regularly that we depend on the Chinese for and then from that list look at how many things we no longer have the ability to manufacture...

I know we would go without socks real quick and shoes would pretty much follow next.

How much steel could we logically produce and I wonder how many of those old abandoned factories in Detroit and all over Ohio and Pennslyvania we could start back up...producing 21 century goods with equipment that was turned off in the 60's/70's?

Oh on one hand everyone goes on and on about globalization and how great it is to have so much cheap stuff....

How great it is to have Chinese willing to work for shit to fund our retirement...

Then BPB is going to write up something that will prove that we can pay the Chinese off and then wipe them off the face of the earth and then we would go on with life as if nothing ever happened...

BEAM ME UP SCOTTY...

We know what Iraq cost us as far as war goes...can you IMAGINE what it would cost to fight the Chinese? How many bullets would you have to produce to mow down wave after wave of chinese hordes coming at you...

Complain about high taxes now? Wait till the day we put boots on the ground in China...

I wonder how well a draft would be received nowadays....I know one thing we sure are going to be glad all those illegal aliens hung around because we would have to put them all to work real quick...

bluepitbull said...

Yeah, I'm delaying, that's what it is.

So far your magical power to delude yourself from the obvious when it comes to the direction of this country is amazing.

I don't always visit every site every minute, but thanks for your LSD laced analysis, Truth.

Tao, I am starting to think that you are blogging from Beijing at this very moment.

Since you know so much about what our armed forces are capable of, perhaps you'd like to elaborate.

Waves of Chinese? So they are throwing the elderly and children at us as well? I've heard this argument in the past. Size and lethality are not synonymous. I would say more, but I like keeping you in suspense and confounding you all at the same time. So, please, keep saying that I'm delaying.

The government got us in this mess and they'd damn well better start focusing on a way to pay these guys back or get us back on our feet. The way they are doing it right now isn't working. And, it was GWB and Clinton and even the other Bush that got us where we are. Your savior isn't making it better, though.

TRUTH 101 said...

"The government got us in this mess and they'd damn well better start focusing on a way to pay these guys back or get us back on our feet. The way they are doing it right now isn't working. And, it was GWB and Clinton and even the other Bush that got us where we are. Your savior isn't making it better, though."


So true Pitbull. And so true that government panders to people that want everything and are willing to borrow any amount to get it.

I've said at least a hundred times I'm willing to pay more tax to get my Country out of debt. I've yet to read you write anything that truly patriotic Bluepitbull. But no doubt, with a wave of your mighty fist, the Chinese would crumble.

Is that the big plan you're making us all sit on the edge of our seats waiting for BPB?

bluepitbull said...

Nope.

I just have more confidence in our Armed Forces than you guys.

Plus, if you've ever eaten REAL Chinese food, you would know true horror.

TAO said...

Yes BPB there are more of them than there is of us....lots more.

I am also assuming that we would be fighting in China which would allow them to use everyone...

China could also rely on North Korea for help and Burma...and we would have who?

No, I am not in China Blogging and you know exactly where I am as you noted just the other day...

I have no doubt of our military technological advances but a war with China would hurt us more long term, even if we won, than it would hurt them.

Britain was a winner in WWII and now look at them.

Now you can let your pride, fascination, and male hormones create what ever reality you want it to but at the end of the day you would have to ask yourself what would beating China get us? What would it cost us? And then do a cost benefit analysis...

Oh, you are not keeping me in suspence because I have no interst in anything other than reality and you cannot even begin to devise a plan to pay them back because it is an ever increasing debt....

Its a debt caused by Americans love for cheap consumer goods and Wall Streets love for quick and easy profits.

So study and type a way big boy...knock yourself out....you might be able to turn it into some sort of science fiction novel and publish it.

bluepitbull said...
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