Article

2011-08-04 China-Japan-Koreas

China says US deal 'failed to defuse debt bomb'

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Posted by Fred 2011-08-04 00:00|| || Front Page|| [3 views ] Top

#1 I'm reminded of the old banking saying.

If you owe the bank a $1,000 and can't pay, you have a problem.

If you owe the bank $1,000,000 and can't pay, the bank has a problem.

Posted by phil_b 2011-08-04 02:03|| 2011-08-04 02:03|| Front Page Top

#2 But a failure to rein in US borrowing could "jeopardise the well-being of hundreds of millions of families within and beyond the US borders", the official Xinhua news agency said in a blistering commentary on the deal.

China is now concerned about....families? Enuf of your kak. FOAD die you communist bastards!

Posted by Besoeker 2011-08-04 05:55|| 2011-08-04 05:55|| Front Page Top

#3 It would be hard for the Chinese to find a place to invest so much money with the security the US has, the translation is the Chinese want the interest rate on US bonds to increase. Mind you with the debt ratio the US has now and the reality in the short term that it will go up dramatically they have a valid point.

Posted by Bernardz 2011-08-04 06:33|| 2011-08-04 06:33|| Front Page Top

#4 The Wan is useless without the Dollar. The value of currency in China is directly based on the useless currency in the US. We print they buy. They send us cheap goods and we send them devalued currency.

Posted by newc 2011-08-04 08:36|| 2011-08-04 08:36|| Front Page Top

#5 And the sinos hold 1.2 Trillion at last count.

As for the debt-bomb, the road to paying off 14.5 Trillion begins with $1 at a time.

However, given that Foreclosure actions in some states are backed up 50 years, collapse would mean: a lot of people would get a house for free. Would there be starvation? No! There would be a barter economy, with a lot of things going on as usual (except banking; the homeless will be living in banks). Food production would be a priority. Luxury vehicle production would collapse. Alien workers and aliens with alien ideas about sex-after-death, would get the quit boot. A lot of angry people would have a go at the parasites who caused the collapse. (Where is Dick Fuld these days?). But how would international accounts be settled? Quasi-barter is already used. The country would stagnate, but a rudimentary cash economy would likely be revived within a few months.

Who is for a meaner and nastier America?

Posted by Thumper and Tenille2812 2011-08-04 08:48|| 2011-08-04 08:48|| Front Page Top

#6 A lot of truth in what Xinhua says, but they won't mention their own hugh real estate bubble. It will be interesting to see who collapses first.

Posted by SR-71 2011-08-04 08:52|| 2011-08-04 08:52|| Front Page Top

#7 Whichever collapses first, both are screwed and of course us in flyover land. I could see a scenario like outlined by Thumper and Tenille2812.

The Dow is heading south again today by 160 points. The debt limit ~~deal~~ conspiracy is not trusted by the money men.

Posted by JohnQC 2011-08-04 09:41|| 2011-08-04 09:41|| Front Page Top

#8 I suspect the detonation of the US debt bomb would hurt Red China more than it would hurt the US. That's for the PRC to worry about.
The US is already stagnating. We might experience starvation if international trade is that severely damaged. Petro imports are necessary to grow domestic food & to transport it to consumers. People can & will die if the air conditioning and the fuel for heating their homes is not available. How would that be paid for, if & when TSHTF? Barter? Do US Navy ships still carry chests of gold coins to pay for supplies in foreign ports where credit is not available, as they did in the 19th century? Give me a break.

Posted by Anguper Hupomosing9418 2011-08-04 12:50|| 2011-08-04 12:50|| Front Page Top

#9 Bleeding your main trading partner try works up to a point. Past that point, not so much.

Posted by Matt 2011-08-04 13:32|| 2011-08-04 13:32|| Front Page Top

#10 One interesting development: Negative interest rates now payable for some of BNY Mellon Bank's biggest customers.

Posted by Anguper Hupomosing9418 2011-08-04 14:01|| 2011-08-04 14:01|| Front Page Top

#11 Petro imports are necessary to grow domestic food & to transport it to consumers.

No. The US has plenty of oil to handle food production, electricity production, important goods distribution and a certain amount left to waste.

Do US Navy ships still carry chests of gold coins to pay for supplies in foreign ports where credit is not available, as they did in the 19th century? Give me a break.

In a SHTF situation the USN would be a huge money maker, not an expense. Protection pays well.

Posted by S 2011-08-04 14:21|| 2011-08-04 14:21|| Front Page Top

#12 Then their is the option of piracy. I always wanted to see the Jolly Roger on a 122 VLS armed cruiser.

Posted by Chesh Panda5654 2011-08-04 15:50|| 2011-08-04 15:50|| Front Page Top

#13 Well, the Constitution does expressly permit "letters of marque and reprisal." It'd be nice to see the Navy become the first self-sustaining branch of the military.

Posted by Matt 2011-08-04 16:02|| 2011-08-04 16:02|| Front Page Top

#14 The republican nominee during the debate should utter: is anyone suprised that the road to big Gov't would be easy. But of course, we'll get some meely mouth McShame-type who won't say any such thing.

Posted by jack salami 2011-08-04 16:27|| 2011-08-04 16:27|| Front Page Top

#15 Matt, USAF could be a moneymaker if they were allowed to charge for GPS use.

Posted by lotp 2011-08-04 17:15|| 2011-08-04 17:15|| Front Page Top

#16 Heh, charging for GPS would be fun... make it free and perfectly accurate 80% of the time, other 20% free but maybe accuracy not so good from time to time.

Posted by S 2011-08-04 18:44|| 2011-08-04 18:44|| Front Page Top

#17 Next day scenarios of total collapse would not be as harsh as everyone thinks. The big problem would be: the super-rich (2%) would want to retain a cash economy; the beleaguered 98% would want same put on hold. Who do you think would win? Landlords couldn't afford to maintain their properties; Tenants couldn't afford to pay them; Banks couldn't squeeze from Debtors. Hence, everyone stays put in their residence. And everyone eats because the 98% would demand: maintenance - with rationalization in product and packaging - of food production levels. The US doesn't need to import a single food product. (Hawaii grows coffee for those afraid of their daily fix)

More DAY-AFTER scenarios please. Your ideas are as good as mine; or better.

Posted by Hupusoper Gurly-Brown8756 2011-08-04 19:24|| 2011-08-04 19:24|| Front Page Top

#18 A new monthly report will be released Friday for unemployment. This doesn't show 2 million people gone from IRS reporting income.

Posted by Dale 2011-08-04 20:21|| 2011-08-04 20:21|| Front Page Top

#19 Hupusoper Gurly-Brown8756 Hello. Next day scenario
is good. The problem is your assuming that the population will be well behaved. "Them that has gets and them that don't waits". Weak family ties and many antisocial issues. NRA (national recovery act) again. Rationing and stock outs. Breeding ground for another power mad leader. With all the new technology greater intrusion.
Rather development of each persons gifts to their maximum potential. Everyone that can does something to contribute. Every possible resource must be developed to its fullest potential. We must be engaged and press forward. No other choice for humankind. Should factories be shuttered and the people idle invites death of a people. When you kill the spirit of a people the will alone cannot overcome that.

Posted by Dale 2011-08-04 20:52|| 2011-08-04 20:52|| Front Page Top

#20 People just calm down.

Look, the US just passed a debt deal that will eventually stop deficit spending and return the dollar to stability as the population grows.

So suddenly the dollar looks like a better bet than the stock market. So, everyone trades their stocks for dollars.

The problem over the past year is that no one knew where to park their money. In oil? Gold? Uranium, Stocks, Bonds, Euros, BRICs? No one knew. Now they know.

The only big country trying to really get a grip on things is -- wait for it -- the good ole US of A and its pesky dollar.

So, now the best bet is to sell all that other crap and get some dollars to stuff under your mattress.

Personally, I prefer handguns and ammo as the currency of the future, but dollars are probably pretty ok too. Everyone who was selling stocks sure thought so today.

Posted by rammer 2011-08-04 20:58|| 2011-08-04 20:58|| Front Page Top

#21 To China with Love:

Blow us.

Posted by bigjim-CA 2011-08-04 21:02|| 2011-08-04 21:02|| Front Page Top

#22 Good points rammer and bigjim.

Posted by swksvolFF 2011-08-04 22:28|| 2011-08-04 22:28|| Front Page Top

#23 Dale

Pure speculation, but why wouldn't people get together to create food continuity? Renters couldn't afford rents; landlords and home owners couldn't pay property taxes. But everyone has to eat. A cash economy is a non starter, but people would have to contribute. It sounds communistic, but nobody is going to grab private property. But bank deposits wouldn't be worth squat. Farm enterprises would continue as is, with people paid only in what could be bartered.

Someone should start a DAY-AFTER website. There would be no solution other than partial debt-repudiation - China's $1.2 T would be paid back in bartered goods; others too - and a short term subsistence economy with both martial law and considerable political freedom (there are precedents), would end once a balanced economic system was established.

The DAY-AFTER wouldn't be as bad as you think. You would miss some of non-staple foods but very little cultural product.

Posted by Hupusoper Gurly-Brown8756 2011-08-05 00:11|| 2011-08-05 00:11|| Front Page Top

00:11 Hupusoper Gurly-Brown8756
23:50 JosephMendiola
23:45 JosephMendiola
23:31 swksvolFF
23:23 Procopius2k
23:11 chris
23:01 USN,Ret.
23:00 USN,Ret.
22:29 RandomJD
22:28 swksvolFF
22:10 JosephMendiola
21:57 bigjim-CA
21:54 bigjim-CA
21:48 bigjim-CA
21:46 bigjim-CA
21:45 bigjim-CA
21:44 bigjim-CA
21:06 rammer
21:05 Alaska Paul
21:02 bigjim-CA
20:58 rammer
20:52 Dale
20:40 tu3031
20:32 tu3031