"As US politicians of both political parties are still
shuffling back and forth between the White House and the Capitol Hill without
striking a viable deal to bring normality to the body politic they brag about,
it is perhaps a good time for the befuddled world to start considering building
a de-Americanised world," the editorial said.
It asks why the self-declared protector of the world is
sowing mayhem in the financial markets by failing to resolve political
differences over key economic policy."
"... the cyclical stagnation in Washington for a viable
bipartisan solution over a federal budget and an approval for raising debt
ceiling has again left many nations' tremendous dollar assets in jeopardy and
the international community highly agonised," the agency said."
According to US Treasury Department data, China is the
biggest foreign owner of US Treasuries at $1.28 trillion as of July. Besides,
China also holds close to $3.5 trillion of dollar-denominated assets.
A US debt default and consequent credit downgrade would
significantly erode the value of China's holdings."
IBT
37 comments:
Internally we are always going on about how terrible the tone and discord is between right and left.
What about the tone coming from China?
Does China sees our internal politics as a weakness.
If they Do they understand that it is our strength, why fain it?
Couldn't the GOP use this to illustrate why we need to control runaway spending?
A better question is why do we personify national governments?
This morning I selected the yellow coffee mug because I felt sorry for it.
You'll find your answer in that vicinity.
I Don't Lend Money to a Beggar, I Give It To Him, So I Am Free to Insult If I So Desired. But I Am a Nice Man, So I Simply Give Him a Dollar For His Beer and Then Go Wash My Hands.
The Dirt. Won't. Come. Off. Scrub-Scrub-Scrub: It Is Still There, I Can Feel It, Creeping Over My Skin, Making Its Way Up My Arms. Damned Dirty Leprous Wino.
A better question is why do we personify national governments?
National governments are made up of people?
Seriously. Ever Since I Gave That Scabrous Hobo That Dollar Everything Itches, My Fingertips Tingle: I Am Afraid to Hold My Penis When I Urinate. Yes: I Am the Guy Who Used the Bathroom Before You at Starbucks. Sorry.
A debt default isn't in the cards unless Obama is really crazy.
As the Jews said of Hitler, when he got elected, "Okay, how crazy is he?"
The consequences to the US are too immediate, like nobody lends to it, and every financial institution goes insolvant.
Inflation is so much easier.
If you owe the bank $100, it's your problem. If you owe the bank $1,280,000,000,000, it's the banks problem.
I Think That Filthy Dutch Hobo Gave Me Hobo Disease. I Have Shaved All the Hair From My Forearms But the Invisible Mites are Still There, I Can Feel Them. My God, I Can Feel Them in My Eyebrows.
He is No Doubt Drinking His Beer, Comfortable and Content in His Disease and Filth. I Hope You Enjoy the Beer, You Bastard.
I Have Burned My Clothing and Washed My Hair With Bleach, But it is to No Avail. My Act of Generosity is Now Burrowing Under My Skin.
Steel Wool. I Need More Steel Wool.
Those Chinese guys have got it absolutely right!
If you owe the bank $100, it's your problem. If you owe the bank $1,280,000,000,000, it's the banks problem.
If you owe the bank $1,280,000,000,000 and YOU HAVE SUPERIOR FIREPOWER, it's the bank's problem.
The Red Chinese have money problems of their own, but, like everyone else, they're getting tired of King Putt's incompetence and pettiness.
phx said..
Even the Taliban was trying to score points with the American people by pointing out how we're caught between the President and the Congress. I don't think Congress is much more popular than the Taliban.
And Choom may be doing worse.
That poll that had his approval at 37% had a sample 20% of which was government workers when they only make up 8% of the population.
China, the world's largest glass house.
Ha Ha! For a change a the Chinese find out what it's like to buy junk. I'd say they deserve it.
The ridiculous lecturing the ridiculous. Welcome to our new brave world.
Funny because the Chi-coms have so much in common with the Obama-Pelosi-Reid Potemkin Power Brokers.
Shovel ready - lol. Fake cities - lol.
It's all the same.
ah well. I have more important things to ponder.
Couldn't the GOP use this to illustrate why we need to control runaway spending?
Low hanging fruit left to rot on the vine.
The GOP is mostly terrible at presenting the right message.
Layer on top of that a media that is openly working for one political party.
"Deng Xiaoping openly praised dictatorships for being able to act quickly, mocking the United States for having 'three governments' (executive, legislative, and judicial) in one, which collectively often rendered it incapable of dealing with serious problems in a timely and decisive manner."
Wealth and Power: China's Long March to the Twenty-First Century by O. Schell & J. Delury
Thomas Friedman heartily agrees. Messy democracy is so much less efficient than a nice, streamlined dictatorship.
Ignorance is Bliss said...
If you owe the bank $100, it's your problem. If you owe the bank $1,280,000,000,000, it's the banks problem.
Without a doubt, the absolute thread winner.
OMG you guys are hilarious. The U.S. is now China's bitch. They can insult us all they want. The creditor's the one with the upper hand. Isn't that obvious?
"The creditor's the one with the upper hand. Isn't that obvious?"
It depends entirely on what the value of the collateral is and who controls it. The creditor has a piece of paper.
Of course, on our side we have non-working people with big screen TVs, and government employees with ski boats and promises of a problem free early retirement.
I'd say everyone is fucked, because the money is already spent, and not particularly well.
Rhythm and Balls said...
OMG you guys are hilarious. The U.S. is now China's bitch. They can insult us all they want. The creditor's the one with the upper hand. Isn't that obvious?
There you go with that "you guys" thing again, sigh. :(
What you say is culturally true of Asian lenders to a certain degree based on my experience while living in Asia for three years. The creditor does "feel" they have the pimp hand.
Truth is, both in Asia and here (2007-2008 Fiscal Collapse ...ding ding ding...Hello?!) that a creditor is only as secure as the collateral he holds, and if that collateral is contingent in nature, if failure occurs, everyone gets screwed. Fiat money is just that. For both sides of a deal.
China is in a credit bubble as we speak. See all those pretty colors above the blue ones? That is contingent risk.
H/T Internation Business Times, 13 Oct 2013.
The Treasury Department has the authority to pay interest on America's borrowings without approval of the President or Congress.
Sticky, in the end the big financiers got bailed out by the US government, so the collateral they held, which was the politicians like Bush and Obama, was quite good.
"Sticky" should be Aridog. Damned autocorrect....
And of course it is "you guys" - you're either on their side (Ritmo, phx, Crack, etc) or you are "you guys".
And the Chinese aren't lending to the US, or buying other dollar denominated assets, out of the goodness of their hearts, or even because they think it is good business per se. They are doing it because they are drowning in dollars because of the trade surplus they are running with the USA. They've got to do something with all those dollars....
Michael Haz said...
The Treasury Department has the authority to pay interest on America's borrowings ...
1. True, up to a point ...e.g., if the President/Administration doesn't muddle with the system.
2. A failure of contingent collateral securing debt leaves debt insecure and at risk of a domino like collapse. If a government's money cannot survive a collapse, there can be no bailout. Contingent debt is founded on the idea of "full faith & credit"..when that is gone, it's done.
3. After this "shut down" charade I have no confidence that this administration party and this President won't do something incredibly stupid just to make a what he imagines is a political point.
4. Here is our vaunted Secretary of the Treasury's official unenlightened testimony about the debt ceiling, this week. And this after he advised the House earlier that we're out of money 17 Oct 13.
5. Do you feel encouraged?
6. Mr Lew has said: "Extending borrowing authority does not increase government spending; it simply allows the Treasury to pay for expenditures Congress has already approved..." Right. Okay. It allows Treasury to pay for expenditures not yet obligated, apparently. This man studied government accounting at the elbow of Elmer Fudd.
7. Me, I think they're all bat shit crazy and no amount of harm they inflict is too much in order to further their cause.
Aridog, I don't think the financiers will let Obama & Co. slip the leash too much. They WILL make them play ball, and the Republicans too, if it comes to that.
...
There's been a lot of joking since Joe Biden was picked to be VEEP that he's insurance FOR Obama. That is, the idea of President Biden is enough to give anyone pause, even America's enemies. But Biden is also insurance AGAINST Obama. Anyone think a President Biden wouldn't deal to get the debt limit raised? That is reportedly why Reid does NOT want Biden involved in the negotiations. I'm sure a President Biden would deal, given that Shut-the-fuck-up-Joey is wholly owned by Wall Street.
I've clicked by a couple of times today and wondered...
Why *not* insult the people you lend to? That's the direction the power goes, after all.
Why *not* insult the people you lend to? That's the direction the power goes, after all.
Synova, the power going that way depends on (a) what kind of collateral exists for the loan and/or (b) the ability to collect if the debtor tells the creditor to commit anatomically impossible acts.
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