Article

2013-10-08 Economy

Get your fiscal house in order: China warns US as superpower expresses concern for $1.3tn of investments

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Posted by Fred 2013-10-08 00:00|| || Front Page|| [11127 views ] Top

#1 Wait until they start dumping T-bills & T-Notes on the open market...

Posted by Raj 2013-10-08 00:26|| 2013-10-08 00:26|| Front Page Top

#2 As mentioned times before, CHINESE PERTS-BLOGS > CHINA DOESN'T REALLY NEED TO FIGHT A WAR AGZ THE US-ALLIES IN EAST ASIA.

All China has to do is demand that the US pay its massive debts = accounts payable, or in the alternate, demand that the US unilaterally give up collateral, e.g. SOVEREIGN TERRITORIES, in lieu of paying off its debts.

CHINA HAS SUCH AN OPPORTUNITY WID THIS SEQUESTER + NOW SHUTDOWN.

* IIRC FOX NEWS AM > BOEHNER = ARGUED BEFORE THE FLOOR OF THE HOUSE THAT THE BAMMER WOULD RATHER SEE THE US GOVT DEFAULT THAN NEGOTIATE WID THE GOP ON OBAMACARE + DEBT CEILING.

Remember, the Bammer wants to RAISE the debt ceiling, which in turn means or infers he = USA will have to borrow from China.

* RIGHT WING WATCH > GLEN BECK: OBAMA [ + Marxist Revolutionaries widin US Govt.] ARE [seriously] PLANNING TO KILL MILLIONS OF AMERICANS IN THE USA, SAYS HE MAY TAKE TEABAGS, FLEE TO CANADA.

As if the Globalists or Jihadists won't eventually attack Mackenzie-land.

Lest we fergit, 9-11 + GWOT > WAR FOR OWG-NWO > WAR FOR CONTROL OF THE WORLD = THERE'S NO WHERE/PLACE TO RUN TO. ONE MUST EITHER STAND-N-FIGHT, OR ELSE MUST DIE.

* TALKING POINTS MEMO > WHITE HOUSE: OBAMA WILL NEVER NEGOTIATE ON THE DEBT CEILING AGAIN, as long as he is POTUS.

ITS THE BAMMER'S WAY, OR THE HIGHWAY.

* BLOOMBERG NEWS > US DEFAULT SEENS AS CATASTROPHIC DWARFING LEHMAN'S FALL.

* REUTERS, CHINA DAILY > CHINA WARNS US, JAPAN, + AUSTRALIA NOT TO GANG UP IN [East China Sea + South China Sea] SEA DISPUTES.

* WORLD NEWS [Middle East Online] AFTER EVAPORATION OF US THREATS, ASSAD SLAMS REBELS, WARNS TURKEY.

Ditto as per "evaporation of US threats" by Obama vee IRAN? CHINA?

IFF THE US THREAT DISAPPEARS FOR WHATEVER REASON, CHINA WON'T ACT LIKE BABY ASSAD AGZ JAPAN, ROK, TAIWAN, PHIL, VIETNAM, ASEAN, + INDIA????

WORLD POLITICAL, MILITARY HISTORY SAYS THE RISE OF GREAT POWERS IS VERY RARELY, IFF EVER, "PEACEFUL".

CHINA WANTS GUAM + HAWAII + 1/2 OF CONUS-NORAM FOR "LIVING SPACE".

Posted by JosephMendiola 2013-10-08 00:34|| 2013-10-08 00:34|| Front Page Top

#3 Giggle

Posted by g(r)omgoru 2013-10-08 01:14|| 2013-10-08 01:14|| Front Page Top

#4 I see a return to the old fashioned system of only lending with an carefully evaluated risk premium.

I'd argue the current world problems stem from the false idea that there is risk free sovereign lending.

There isn't.

Posted by phil_b 2013-10-08 01:55|| 2013-10-08 01:55|| Front Page Top

#5 OBAMAS CUT OFF, oh woe what will "O Holy Obama" do?

Posted by Redneck Jim 2013-10-08 02:19|| 2013-10-08 02:19|| Front Page Top

#6 >Because if there's any country in the world that's responsible with economic development and currency stability, it's China

Don't want to sound rude, but compared to Bernankeville, Carneyton-on-thames or Junkerbond-sur-la-Reine; China's potemkin economy is least worst.

Posted by Bright Pebbles 2013-10-08 05:28|| 2013-10-08 05:28|| Front Page Top

#7 Demographics underlies it all. I am still trying to figure out how to explain it, but feel there is an inevitability to the national and global economic changes we are seeing. The politicians may only be pretending to try to do anything, or they may actually believe they can paddle a canoe up Niagara Falls.

Posted by Glenmore 2013-10-08 07:39|| 2013-10-08 07:39|| Front Page Top

#8 The problem for the Chinese is that they read the American MSM not understanding like its former Soviet brethren Isvestia and Pravda, you have to read between the ~~lies~~ line to find out what is really happening. Let'm panic.

If the debt ceiling is not raised debts will be serviced. It's all other spending that will get cut. In other words, the budget becomes a budget again and not a magical money tree for pols to buy votes with even more funny money. Per Powerline -

But there is no threat of default. Constitutionally, the federal government must pay its debts. The Fourteenth Amendment, Section 4, states:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

I believe this provision is universally understood to mean that the federal government must pay its debt obligations, both principal and interest, even if that means prioritizing debt service over other government spending. So the question is, if Congress does not raise the current debt ceiling, will the federal government run out of money needed to pay its existing debts? The answer is clearly No. A reader supplies the math:

On average the federal governments daily expenditures are about $16.7 billion; receipts are about $14 billion, implying an average daily borrowing requirement of about $2.7 billion. So the planned flow of revenues is now about $650 billion less than the planned flow of expensesabout $2.7 billion a [business] day, $650 billion annually.

So the default scenarios are bogus. Interest on the $16 trillion in debt is covered by a factor of about 10x by revenues! That puts the federal government deep into AAA land. Revenues would have to fall by a staggering 90% to jeopardize interest payments.

And, of course, retiring principal by rolling over maturing debt can never require an increase in the debt ceiling, since there is no net increase in the nations debt, even if the money used to repay the original principal is borrowed.

So what will actually happen if Congress doesnt increase the debt ceiling by approximately October 17? The governments debt obligations will be paid, but reductions in other spending will start to become necessary. In effect, leaving the debt ceiling as is would function as a spending cut. This is why the Democrats hate the idea so much. They know there is zero chance of default, but they are horrified at the prospect that voters and taxpayers may find out that there is a relatively simple way to bring about spending reductions that would create, in effect, a balanced budget. Hence the hysteria.

Thus, the Balance Budget. The Tea Partiers/Porkbusters will achieve one of their major objectives. Why should they negotiate when they get what they want by default.

Posted by Procopius2k 2013-10-08 08:15|| 2013-10-08 08:15|| Front Page Top

#9 Our Mandarin masters have spoken.

Posted by Ebbang Uluque6305 2013-10-08 11:30|| 2013-10-08 11:30|| Front Page Top

#10 There is another explanation for this idiocy--O is deliberately tanking the global economy so the new proposed currency can be imposed, all controlled via Supercomputers in Brussels. And if China collects on our debts, it "levels the playing field" on a global scale. He can be hailed a Progressive hero while the Trunks and TPP get blamed for the crisis....

Posted by Anging Hatfield6648 2013-10-08 11:38|| 2013-10-08 11:38|| Front Page Top

#11 China's potemkin economy is least worst.

That's not a hell of an endorsement there.

Posted by Pappy 2013-10-08 14:19|| 2013-10-08 14:19|| Front Page Top

#12 There is no collateral behind US Treasury paper. Federal Reserve Notes are good for "all debts public & private" - at least that's what is printed on them. Chinese investments in the USA are only paper promises. Ben Bernanke can just print FRN's. Only the Lord knows what "shall not be questioned" actually means.

Posted by Anguper Hupomosing9418 2013-10-08 14:29|| 2013-10-08 14:29|| Front Page Top

#13 Chinese investments in the USA are only paper promises.
When you owe the bank a billion dollars, you have a problem; when you own a trillion dollars, the bank has a problem.

Posted by Glenmore 2013-10-08 14:51|| 2013-10-08 14:51|| Front Page Top

#14 This is why the Democrats hate the idea so much. They know there is zero chance of default, but they are horrified at the prospect that voters and taxpayers may find out that there is a relatively simple way to bring about a balanced budget. Hence the hysteria.

When I went to close the WaPo window - I forget why I opened it hours ago - it is chock full of the 'Pubs are in trouble' articles and editorials. I HOPE they are hysterical!

Posted by Bobby 2013-10-08 14:58|| 2013-10-08 14:58|| Front Page Top

#15 This line from "Animal House" is particularly appropriate here.
http://youtu.be/zOXtWxhlsUg

Posted by Anguper Hupomosing9418 2013-10-08 16:03|| 2013-10-08 16:03|| Front Page Top

#16 >That's not a hell of an endorsement there.

Wasn't meant to be!

Posted by Bright Pebbles 2013-10-08 17:02|| 2013-10-08 17:02|| Front Page Top

#17 We may have to downgrade, but will make up for it with volume.

Posted by Capsu78 2013-10-08 17:21|| 2013-10-08 17:21|| Front Page Top

#18 #8 procopius...

Hmm, so if Obama fails to prioritize debt payments in a way that threatens the credit-worthiness of the United States, then Boehner can file articles of impeachment based on violation of the 14th amendment...

Posted by Ptah 2013-10-08 19:10|| 2013-10-08 19:10|| Front Page Top

#19 See also RELATED REUTERS > CHINA TO US: "CLOCK IS TICKING" ON DEAL TO AVOID DEFAULT.

Iff the US goes into [prolonged?] default after October 17, 2013 how will China react to formally or officially recover its $$$ from the US???

and

* TOPIX > [Business Week] OBAMA LOSES FACE + POSSIBLY GROUND IN ASIA.

* BIG NEWS NETWORK > [The Standard] CHINA ENVOY TELLS JAPAN NOT TO CHALLENGE WORLD ORDER.

* SAME > CHINA: JAPAN DEFEATED NOT ONLY BY ATOMIC BOMBS, but also espec by the will + efforts of anti-Fascist Nations.

* GLOBAL TIMES > VOICE ON WHAT CHINA SHOULD DO IFF THE DISPUTE OVER THE DIAOYU ISLANDS IS INCLUDED IN THE GUIDELINES FOR JAPAN-US DEFENSE COPERATION.

Opined that China "MUST MAINTAIN MILITARY PRESSURE TO PROTECT ITS SOVEREIGNTY".

IOW, China must be willing to consider the option of using military force to enforce its will or protect its interests.

Posted by JosephMendiola 2013-10-08 23:52|| 2013-10-08 23:52|| Front Page Top

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