> RoMunn wrote: > Not directly, of course, but imagine if China stopped buying U.S. bonds, > interests rates shot up, and the value of the dollar fell by 40-50%. I don't > know if it would happen right away or if the fall would be that dramatic,
Well, not to get into all of this again but I'd say that China doesn't need our money back as much as we need them to lend money to us. What we're doing is building China's infrastructure while we hallow out ours. Think of 2 factories: one is building machines, adding space, and growing. But it's selling to the second company. The other is selling it's machines and infrastructure in exchange for products from the first. And it buys those products on borrowed money - from the first! 2 things can happen here: 1.) the first company grows large enough to make new products and sell them to other customers. This the "soft landing". It would slowly stop borrowing to the first and shift it's production. In some ways this has already begun with the US. 2.) The First company suddenly suspends sales and capital to the second. This hurts the first because sales fall, but they can shift production. The second, however, can do nothing except find another benefactor. So, it's not like the "you owe the bank ..." saying. It's really just the hallowing out of the US economy which wouldn't be so dire if we had the best education in the world and thus were poised to produce the best ideas (creative economy). But we're not. Further we're facing a majority of our population who will soon not only leave the economy to become spenders rather than earners, but will slam the rest of us with a monstrous bill. Maybe too gloom and doom, but I'm preparing for the worst and hoping for the best. With this President, however, that's tough! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Message: http://www.houseoffusion.com/lists.cfm/link=i:5:200849 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
