What Happens When China Holds So Much Of Our Debt?

[kayin]

The USA is in debt to China what does that mean for the country and for me?

[bertie98]

Listed here is the offer you: The UNITED STATES, if needed, could create much more income to spend for your debt. May this outcome in inflation? Yes. But since it hasbeen practically the state position of the Bush administration to destroy the dollar against other currencies to promote move, we are carrying out that currently. Moreover, at this time the Treasury Bill and Notice continues to be a valued item. China sells it on the open market ostensibly and one more person retains it and buys it. Like I described, if required the Treasury printing stacks of $one hundred bills and hand them to the Chinese central bank. I am significantly more worried that the Us Government owes itself $3.five Billion. They played a shell game on-us in the 90s. We did not use anything, but we did not truly spend all of the interest that accumulated. Hence if we'd 'balanced budgets' even, the total debt went up. Ostensibly, they quit funding income, but deferred-payment towards the Intergovemental(Federally kept) debt. So yes, theoretically receipts=outlay. But just in the manner that you was previously in a position to spend the minimum balance on charge cards and not shield the interest.

[Alba]

Neither "health" nor "beauty" are appropriate topics for this question.davidh

[Garrin]

I don't know what beauty has to do with it, but the answer is: nothing Most nations have debt - our debt relative to GNP is relatively small. Let's say the chinese were getting, say, a couple million a day in interest. It's really more like 100-150K. But let's just say:The US GDP is $13.13 trillion or about 36,438,356 a day There's still plenty left.http://www.willisms.com/archives/2005/04/federal_tax_rev.htmlTax revenues are over 1 trillion bucks or well over 3 million a day. If 100K of that goes out to the Chinese, that leaves 2 million 900 thousand to run the government.Of course, if we would cut out the stupid stuff in our government not covered in our constitution(education control, control of national lands, re-distribution of wealth via entitlements such as welfare and medicaid(at least people pay INTO social security), then we wouldn't need as much revenue. Sources: My answer awarulz 77 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Colt]

Not Much Here's the deal: The US, if necessary, will print more money to pay the debt. Will this lead to inflation? Yes. But since it has been pretty much the official position of the Bush administration to weaken the dollar against other currencies to stimulate export, we're doing that already. Additionally, right now the Treasury Bill and Note is still a valued commodity. Basically China sells it on the open market and someone else buys it and holds it. Like I said, if necessary the Treasury print stacks of $100 bills and hand them to the Chinese central bank. I'm far more concerned that the Federal Government owes itself $3.5 Trillion. They played a shell game on us in the 90s. We didn't borrow any money, but we didn't actually pay all the interest that accrued. So even when we had 'balanced budgets', the total debt went up. Basically, they stopped borrowing money, but deferred payment to the Intergovemental(Federally held) debt. So yes, technically receipts=outlay. But only in the way that you used to be able to pay the minimum balance on credit cards and not cover the interest. Sources: US Treasury legis 78 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Tohias]

Psi_Phi_Org said: 1 Neither "health" nor "beauty" are appropriate topics for this question.davidh 78 months ago

[burt]

Nancy: Before we even get started on this question, let me give as background that China gets much of its oil from Iran, as well as from Russia, and China and Russia are snugging up behind Iran, giving support and forming alliances. They clearly don't want the mess in Iraq to spill over into Iran. Then there's another side, which is that our debt is being supported by China sinking a lot of dollars into it. The trade imbalance is such that the US buys a lot of China stuff, it's cheap, but they don't buy a lot of our stuff. Consequently, the Chinese get all these dollars when we buy their stuff, so they've got all these dollars they've got to invest, and they do it by buying our bonds. Since our dollar is dropping, even with interest, they might be getting back less than they put in. So if you rattle China, and they don't buy our bonds but instead dump our dollars, this not only does not float our debt, we need a huge amount of cash infusion to float our debt, but it would cause our dollar to drop even more than it is, and this creates an inflationary situation in the US. Iran also wants to open an oil bourse, which will allow the world to trade for oil in Euros rather than dollars. What's holding the US dollar up is the fact that the Saudi's, decades ago, agreed to only trade in US dollars, and they're one of the biggest producers, have one of the largest reserves. Even though Norway and Venezuela and some other countries have switched to the Euro, Iran would have been the straw that breaks the camels back, trading that would rival the London oil trade which deals in dollars. If that happens, countries like China do not need to hold their dollars for oil. They can just switch over to the Euro. In anticipation of this kind of a disaster, the US stopped reporting their M3 report, which shows where the money is coming from. This means they can print money like a banana republic, and no one would know it. But when you flood a lot of printed money into the market, every dollar that's out there loses value and rampant inflation sets in. Another issue is that China is pinning their Yuan to the US dollar, which makes their goods remain cheap in the US, where the US wants them to free their Yuan from the dollar. This would allow the dollar to drop and reduce the value of the bonds China holds, thereby reducing the US debt load. This is the background to the question.

[Udale]

What happens when China holds so much of our debt Nancy: Before we even get started on this question, let me give as background that China gets much of its oil from Iran, as well as from Russia, and China and Russia are snugging up behind Iran, giving support and forming alliances. They clearly don't want the mess in Iraq to spill over into Iran. Then there's another side, which is that our debt is being supported by China sinking a lot of dollars into it. The trade imbalance is such that the US buys a lot of China stuff, it's cheap, but they don't buy a lot of our stuff. Consequently, the Chinese get all these dollars when we buy their stuff, so they've got all these dollars they've got to invest, and they do it by buying our bonds. Since our dollar is dropping, even with interest, they might be getting back less than they put in. So if you rattle China, and they don't buy our bonds but instead dump our dollars, this not only does not float our debt, we need a huge amount of cash infusion to float our debt, but it would cause our dollar to drop even more than it is, and this creates an inflationary situation in the US. Iran also wants to open an oil bourse, which will allow the world to trade for oil in Euros rather than dollars. What's holding the US dollar up is the fact that the Saudi's, decades ago, agreed to only trade in US dollars, and they're one of the biggest producers, have one of the largest reserves. Even though Norway and Venezuela and some other countries have switched to the Euro, Iran would have been the straw that breaks the camels back, trading that would rival the London oil trade which deals in dollars. If that happens, countries like China do not need to hold their dollars for oil. They can just switch over to the Euro. In anticipation of this kind of a disaster, the US stopped reporting their M3 report, which shows where the money is coming from. This means they can print money like a banana republic, and no one would know it. But when you flood a lot of printed money into the market, every dollar that's out there loses value and rampant inflation sets in. Another issue is that China is pinning their Yuan to the US dollar, which makes their goods remain cheap in the US, where the US wants them to free their Yuan from the dollar. This would allow the dollar to drop and reduce the value of the bonds China holds, thereby reducing the US debt load. This is the background to the question. Sources: http://www.zetatalk.com/index/zeta277.htm newbie2268986 77 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[hrafn]

Most nations have debt - our debt relative to GNP is relatively small. Let's say the chinese were getting, say, a couple million a day in interest. It's really more like 100-150K. But let's just say:The US GDP is $13.13 trillion or about 36,438,356 a day There's still plenty left.http://www.willisms.com/archives/2005/04/federal_tax_rev.htmlTax revenues are over 1 trillion bucks or well over 3 million a day. If 100K of that goes out to the Chinese, that leaves 2 million 900 thousand to run the government.Of course, if we would cut out the stupid stuff in our government not covered in our constitution(education control, control of national lands, re-distribution of wealth via entitlements such as welfare and medicaid(at least people pay INTO social security), then we wouldn't need as much revenue.