Why does China and Japan lend us the money to buy their products?

[hogdriver]

I don't understand why you guys keep on loaning YOUR money to us to buy YOUR products from you. Do you like working for your own money back or something?

Just ONE of our broke and homeless people is still 10 trillion dollar richer than the entire United States right now. Why do you continue to lend us YOUR money to pay YOU with...knowing we are that far in debt, and have no collateral to secure the loan with?

I like building houses ok....but I would be damned if I would lend you the money to pay ME with.

You guys are real buds..gotta say that. Can't believe we ever had any beef you.

Could you send our government a bigger loan next time though so they can cut me a stimulas check to allow me to afford a new CBR?

You guys ROCK!

 

[Aurura]

Excuse me.. where exactly do you think you're writing this post in? There is noone here on JRef for who deserves to be directly aimed at with these kind of topics. Is someone here supposed to be a member of the Chinese/Japanese government?
This is not the Flame Fest Forum. Please do not continue to post things in this manner, Sir, or you will be reported.

 

[hogdriver]

Sorry about that, I am new here...I was jus wondering how you guys built such a powerful and successful economy and industrial infastructure like that....we need to follow your example because it seems to work really well.

I retract the stupid question....do I need to have the topic deleted?

 

[FrustratedDave]

I don't understand why you guys keep on loaning YOUR money to us to buy YOUR products from you. Do you like working for your own money back or something?
Just ONE of our broke and homeless people is still 10 trillion dollar richer than the entire United States right now. Why do you continue to lend us YOUR money to pay YOU with...knowing we are that far in debt, and have no collateral to secure the loan with?
I like building houses ok....but I would be damned if I would lend you the money to pay ME with.
You guys are real buds..gotta say that. Can't believe we ever had any beef you.
Could you send our government a bigger loan next time though so they can cut me a stimulas check to allow me to afford a new CBR?
You guys ROCK!

Pure and simple, Macroeconomics my friend Macroeconomics.

 

[hogdriver]

How much for lessons? We need to send our Prez and Congress for some...but they will probably have to borrow the money from YOU to pay YOU..as we are now beyond broke, and cannot afford to send them to school anymore.

I think I am going to try working for free.

 

[FrustratedDave]

How much for lessons? We need to send our Prez and Congress for some...but they will probably have to borrow the money from YOU to pay YOU..as we are now beyond broke, and cannot afford to send them to school anymore.
I think I am going to try working for free.

Yes , you guys are in a world of hurt right now and it doesn't look like it is going to get better any time soon. And if the big three fail things are going to get worse(however it could be better for you guys in the long run).

 

[Mikawa Ossan]

Generally speaking, though, loans eventually must be paid back. You pay back the loan with your own money, so I think in the long run it makes sense, except that the entire U.S. economy has been entirely been supported by credit and lots of it for the past decade.

 

[hogdriver]

I cannot believe you guys give us credit with no collateral, knowing our very most broke citizens are still 10 trillion dollars richer than our entire nation right now.

Why would you do this for us after the horrible things, and terrible fights we had with you and your people in WWII?


Are we really THAT tight and dependant on one another now?

How can we ever repay you and be your equal again after such sacrificial treatment and caring on your part?

Bless you guys though...we sure need ya right now more than ever to help us rebuild and preserve our shattered economy and way of life.

Did we already prove we would gladly do the same for you if the tables were turned or something?

I am glad our forefathers proved that to you after WWII...cause you guys could mop us up real easy right now in our condition if you wanted to.

Thanks bros.

 

[hogdriver]

Yes , you guys are in a world of hurt right now and it doesn't look like it is going to get better any time soon. And if the big three fail things are going to get worse(however it could be better for you guys in the long run).

How so? Is Toyota planning to bail out their big three defeated competion now?

That would be a great blessing for the big three, but also a serious insult and dishonor at the same time.

When you rely on your biggest rival and closest competitor to save your neck and give you handouts...so you can live to fight another day...you also admit defeat by taking it.

How can one save face in that position?

Is fighting to the death really bravery and courage, if you do so out of desperality instead and really have no other choice?

Can someone educate me more on this issue the Japanese way?

 

[Chaostic Pen]

Japanese people they love Western people so much much, and we Vietnamese, korean, Taiwanese, Manderine and maybe the Chinese too ( ). We know what is the right things to do and what is wrong to do, we love white people because the yare well mannered, acceptant towards other races, peaceful culture and I love English.

I love my honest White male friend named Christ, I love my White teacher Decumer, and I love how peaceful the Western is and we love how powerful and rich you guys used to be and still always being acceptant and friendly to other ethnics.

We have sacrificed alot of lifes in every wars we gone through but the most important things is peaces that we could obtain in the near future. We are the most noble races out there and beside white people we could be considered the smartest people in the world, we could completely take over this planet a long time ago if it weren't for the existant of White people. So for what reason do you guys think we would bow our head down and respect a white person? what do we get from it so far?

How so? Is Toyota planning to bail out their big three defeated competion now?

That would be a great blessing for the big three, but also a serious insult and dishonor at the same time.

When you rely on your biggest rival and closest competitor to save your neck and give you handouts...so you can live to fight another day...you also admit defeat by taking it.

How can one save face in that position?

Is fighting to the death really bravery and courage, if you do so out of desperality instead and really have no other choice?

Can someone educate me more on this issue the Japanese way?
-----------------

Every pieces of quotes is a believe and the more you say it the more people will believe it. It's common because human are made to learn this way so why don't we make positive comments to make people believe?

I thk i should be banned by now, so later all before i write another silly thing.

 

[Dogen Z]

Great Unraveling

International economics and household economics are not quite so easily comparable. Both China and Japan have accumulated vast reserves of U.S. T-Bills and Notes worth billions and billion of U.S.$. If either party suddenly stopped buying U.S. debt, the dollar would crash and their foreign reserve would sharply fall in value. They don't want that to happen. Also, the U.S. is still the biggest economy in the world and the only one with a financial market big enough and liquid enough to accomodate such huge financial trading.

With the present credit crisis, countries are trying to resolve this conundrum, but everyone wants it to happen slowly and orderly. There should be a slow contraction of U.S. consumption to make this happen. So don't buy that CBR or whatever.

 

[Putrefaction]

I think that if the US were to default on payments, nothing would happen. China's GDP would probably go down severely as we are their primary consumer, and in fact the US would have to work within its own boundaries to get back what they lost from China. For the first few years or so, the US would be limping, but in all honesty I think if China called in its debts it'd be one of the best things for the US.

 

[Dogen Z]

U.S. Gold Reserve

According to my calculations, the U.S. Treasury is sitting on $14.5 Trillion in gold reserves at current market prices. So it could easily repay its debt unless I'm missing something.

Gold Reserve 4,603 tons
Oz per short ton 3,200
Today's U.S.$/Oz gold spot price $987

So I doubt the U.S. will go bankrupt soon.

But if it did, the impact would worst than Lehman's Bros. bankruptcy, which froze worldwide credit markets thus expanding the crises from the U.S. to the rest of the world. We should all pray that this does not happen. It would make the current crisis look like a minor preview.

 

[Putrefaction]

If I'm not mistaken, the US currency isn't on any Gold system. It can theoretically print out paper and go, "Well, this is worth x amount. : D". I still maintain that we would default if China called in the debts, and then the world would die too.

 

[Mike Cash]

According to my calculations, the U.S. Treasury is sitting on $14.5 Trillion in gold reserves at current market prices. So it could easily repay its debt unless I'm missing something.

Gold Reserve 4,603 tons
Oz per short ton 3,200
Today's U.S.$/Oz gold spot price $987

I think what you're missing is that the price wouldn't remain at $987 if the market got a sudden infusion of 4,603 tons. Supply, demand, and all that rubbish, you know.

 

[aardwolf]

If I'm not mistaken, the US currency isn't on any Gold system. It can theoretically print out paper and go, "Well, this is worth x amount. : D". I still maintain that we would default if China called in the debts, and then the world would die too.

You are by no means mistaken.

But it doesnt mean that you US government does not have gold, but the US government isnt connected to their "money" (flimsy pieces of paper/cotton or whatever its made of) anymore, its all made and controlled by the IRS.

 

[Dogen Z]

If I'm not mistaken, the US currency isn't on any Gold system. It can theoretically print out paper and go, "Well, this is worth x amount. : D". I still maintain that we would default if China called in the debts, and then the world would die too.

The U.S. wisely got out of the gold standard after France demanded gold at $32/oz for all the paper it had accumulated back in the 70s. Now, no country can demand gold from each other to settle their currency accounts. And this is why China is worried. If the U.S. keeps printing money for all the stimulus packages, it would bring on inflation and devalue the $. The T-bills and bonds owned by China and Japan would be worth less vis a vis their and other currencies.

 

[Dogen Z]

I think what you're missing is that the price wouldn't remain at $987 if the market got a sudden infusion of 4,603 tons. Supply, demand, and all that rubbish, you know.

Theoretically, if the U.S. were to make a payoff in gold, it would be a direct transfer at an agreed upon price and not involve the gold market. Even if the gold were sold a steep discount from market prices, there's still enough to pay off China's and Japan's claims.

But the point I wanted to make was that the U.S. is not yet up against the wall regarding its debts. It still has time to fix things, but it does need to show that it is seriously trying to do that or the $ will fall faster than everyone wants. In the meantime, the U.S.$ is still the only game in town for international trade.

 

[Sukotto]

Japan & China have simply used their historic and geo-political positions and been able to apply them to the model the US espouses to. Keep in mind Japan has subsidized certain industries (as has South Korea and others) in the post WW2 period. I believe MITI is the relevant government agency the is in charge of this. It has been noted the Pentagon does pretty much the same thing. But US politicians have chosen a dead end industry - war.

Others have had their governments overthrown (by the US using the CIA) doing such for certain industries because they did not have the same history or geo-political positioning. Latin America comes to mind.

 

[Pachipro]

According to my calculations, the U.S. Treasury is sitting on $14.5 Trillion in gold reserves at current market prices. So it could easily repay its debt unless I'm missing something.

Gold Reserve 4,603 tons
Oz per short ton 3,200
Today's U.S.$/Oz gold spot price $987

So I doubt the U.S. will go bankrupt soon.

If I'm not mistaken, the US currency isn't on any Gold system. It can theoretically print out paper and go, "Well, this is worth x amount. : D". I still maintain that we would default if China called in the debts, and then the world would die too.

Roosevelt took us off the gold standard in the 1930's and Nixon secured the deal on August 13, 1973 (or 1972) and the US dollar has been backed by nothing save for our word which isn't worth much these days.

To say that the US is sitting on $14.5 trillion worth of gold is a joke as no one has made an inventory in more than 30 years and, the truth be told, no one knows just how much gold the US does have. Some even believe Fort Knox is empty, but no one has been allowed in to inventory it.

Still, for arguments sake, lets say that the US does have $14.5 trillion in gold. That will still NOT BE ENOUGH TO PAY OFF OUR DEBTS as the total American debt is said to be at least $55 Trillion to $75 Trillion to an even more astounding amount of $125 Trillion! An amount that cannot ever be repaid. The US will go bankrupt first as is the plan and China, or a basket of currencies that will include China, will be the new reserve currency.

Also it was announced last week that the totral TARP (Troubled Asset Relief Program) totals about $24 Trillion so far! Much more than we are being led to believe. Therefore, what cannot be paid, WILL NOT be repaid.

According to an entry in Adask's Law:

"The danger in all paper debt instruments is the looming and apparently unpayable total American debt. According to John Williams (Shadowstats.com), USA Today (April, A.D. 2008) and John Walker (former U.S Comptroller under the G.W. Bush administration), the total national debt owed by our federal government is now at least $55 trillion. Add in the debts owed by state and local governments and private parties (mortgages, auto, credit cards, etc.), the total American debt is believed to be at least $75 trillion. (Some estimated that total American debt may even be over $125 trillion).

If we divide that $75 trillion debt by our population (300 million), we find that each American's ﾂ"fair shareﾂ" of the total debt is $250,000 for every man, woman and child. For example, the ﾂ"fair shareﾂ" of the total American debt for a family of four would be about $1 million. It seems virtually impossible that the average American has $250,000 in assets, or that the average family of four has $1 million in assets. Instead, I'd guesstimate that that the average American has, perhaps, $50,000 in assets.

If you owe $250,000 but have only $50,000 in assets, how can you pay the remaining $200,000? Assuming those figures are roughly correct, it appears impossible to ever repay the total American debt. Instead, those figures suggest that at least 80% of the existing American debt can't be paid and therefore won't be paid."

Therefore, one is just delusional and/or ignorant of the facts, in believing that, even if the US does have $14.5 Trillion in Gold, that it can repay its debt. The truth is, it can never repay it's debts and probably never will.

Also, if the US defaults on its payments, China and Japan will own a large part of the US as US Treasuries, if not backed up by gold, are then backed up by the real assets (ie real estate and "real assets" like mortgages and such) of the US. Look it up. Either way it is a win-win situation for China and Japan and a lose-lose situation for the US and I'll bet the US loses in the long run (within the next 3 years) on this.

 

[Dogen Z]

Bet you a dollar

I'll bet you a dollar that the U.S. has the resources to take care of this problem. It'll just take some time. So don't worry, everything will be alright.

But if you want to worry, the Russian KGB has predicted the U.S. will have its 2nd Civil War because of economic problems and will split into 6 separate regions. California and the West Coast will then belong to China, Hawaii will belong to Japan, Russia will take over Alaska, Texas will revert to Mexico, Canada will get some of the northern states, the East Coast will go to Europe, etc.