How can we solve our problem with China?

[ShAiOnEi]

I don't know how we can resolve such a problem but the first step into doing this is to stop debating and take action if we must. It doesn't seem like much of a problem though since many of our imports come from this nation.

[flamingspinach]

holy

****ing

****

China will never ask its debt to be repaid suddenly, because the debt is in US dollars. Such an announcement would cause the US dollar to devalue to the point of total worthlessness, and they would have gained essentially nothing even if the US paid back every last cent. Furthermore, they would have lost an important bargaining chip and psychological upper ground against the US. So to do so would be total suicide.

Intuition from microeconomics fails here because the debt is not of "fixed worth" in any particular sense. This mitigates much of the risk involved in the case of personal debts. Think of it in terms of a company whose debt is in its own stocks. Nobody will suddenly collect the debt because once they get the stocks, they can't sell them because they've ruined the company whose stocks they just got paid back to them.

The entire reason for people to make loans is because they profit off the interest. Think about it - the only reason a loan shark wants you to pay back a loan is because he knows you're broke (and won't be able to pay him any more interest on his investment), or he wants to re-loan the money to someone else for a higher rate, or something like that. Otherwise, a lender wants you to keep the loan as long as possible so that he will keep getting interest every year/month/whatever.

<s>Then again this forum is full of idiots screaming "gold standard!" so I guess any discussion about economics is futile.</s> CAN'T SHOW THAT IN A CHRISTIAN MANGA!

EDIT: lol i forgot this forum has censors 8)

[devonin]

I'm wracking my brain for the presence of a single reference to the gold standard in this thread. Don't call other users idiots, even if you think they are. Your subjective opinion about their intelligence is worth exactly as much as one might think it is.

[flamingspinach]

There isn't, but the last time I moseyed on down to ffr, the forum was abuzz with ron paul fanatics. I wasn't referring to this thread, but in the interest of "cordiality", I'll rescind that line. Any comment about the rest of my post, perhaps?

By the way, the phrase is "to rack one's brains", not "to wrack one's brains". It's a reference to the medieval torture device.

[devonin]

"wrack" means to ruin; "rack" in this sense means to strain, I'm pretty sure by connotation, either can be used in this context. If you rack your brain to think of something, chances are good you will also wrack your brain.

I wasn't responding to your post as a CT user, I was responding to your post as this forum's moderator.

Regardless of your previous experience, the "Ron Paul Fanatics" had pretty much no presence whatsoever in the CT subforum. They kept their political support for Mr Paul largely confined to Chit-chat and the Garbage bin. It would be appreciated if you treated each thread as being in the vacuum it is intended to exist in, without allowing issues from elsewhere to enter into the discussion.

As for the body of your post, I'm pretty sure that China owns most of its portion of the American Foreign debt in the form of bonds, which have a fixed life until maturity. So I'm not sure you can say that China is happy to let America not pay them back because they can profit off the interest for as long as possible. In fact, they are profitting off the interest for a very specific and precise amount of time.

I think that the internationality of debt among all countries (IE. That while the US owes a huge amount of money internationally, they are also owed a lot of money from other nations, as seems to be the case for most countries [They have debt going both ways]) has a lot more to do with why these debts will never be called. I'm not entirely well versed in the way the American Treasury Bond system operates, but I rather suspect that by the terms of the Bonds, their holder pretty much -has- to wait until the term of maturity comes up to get the money, and so China doesn't even really have a debt to call in the first place.

[flamingspinach]

Fair enough. My bad.

As for the topic of discussion, if it's really in bonds, then there's even less reason (or opportunity) for them to "cash in" whenever they please, you're right. I haven't researched the particular topic, so I'm not sure of the specifics. However my point was just that due to the precarious nature of international relations, similar to the precarious nature of the stock market, sudden shifts in the money market are unlikely at best, as anyone trying to cause an upset would need some really good physical basis for their actions (a fundamental change in the underlying reality behind the market, such as a major political upheaval, disaster, or what have you) otherwise everyone would lose.

[devonin]

Well, and then once you factor in the influence of the IMF and the World Bank, you see even more stagnation in terms of the economic relations between individual countries, because they all have their money tied up in those organizations which serves to make it even more difficult to go and do anything drastic in terms of your fiscal situation.

[legoboy792]

um... what. i dnt get any of that but i do agree that if china does make us pay up then the dollar would crumble. this would in effect kill our economy. INVASION TIME!!!

[nev670]

China has like a HUGE population and if they go to war with any country, they will use all their men from specific ages to go to war. That country will most probably get owned. . .

[Zythus]

Not true. WW2. China had more than 7 times the population against Japan. The ceasefire only came when Nagasaki was smoked by the US. Britain, US, and China the forced the Japanese to surrender.

[legoboy792]

Originally Posted by Zythus

Not true. WW2. China had more than 7 times the population against Japan. The ceasefire only came when Nagasaki was smoked by the US. Britain, US, and China the forced the Japanese to surrender.

who were you talking to?

[devonin]

um... what. i dnt get any of that but i do agree that if china does make us pay up then the dollar would crumble. this would in effect kill our economy. INVASION TIME!!!

Yes, you clearly didn't get any of the previous several posts, or you'd see that what they were saying is that China -can't- ask them to "pay up" and that they woudln't even if they could, so your entire scenario is irellevant.

China has like a HUGE population and if they go to war with any country, they will use all their men from specific ages to go to war. That country will most probably get owned. . .

Assuming that country is directly adjacent to China by land only. China has nowhere near the infrastructure to move that kind of manpower across any body of water, and absolutely not an ocean. If they tried to invade anybody but a country they share a land border with, it would go very very badly. Also, numerical superiority is certainly handy, but Russia proved that if you haven't got the equipment to back it up, All you usually get with big numbers is a lot of dead people.

[nev670]

Yea, not quantity but quality as in weapon technology and firepower.

[legoboy792]

Originally Posted by devonin

Yes, you clearly didn't get any of the previous several posts, or you'd see that what they were saying is that China -can't- ask them to "pay up" and that they woudln't even if they could, so your entire scenario is irellevant.

Assuming that country is directly adjacent to China by land only. China has nowhere near the infrastructure to move that kind of manpower across any body of water, and absolutely not an ocean. If they tried to invade anybody but a country they share a land border with, it would go very very badly. Also, numerical superiority is certainly handy, but Russia proved that if you haven't got the equipment to back it up, All you usually get with big numbers is a lot of dead people.

so you say that china can easily conquer the land it borders. so you could say that it could conquer asia if it wanted to. correct me if im wrong at this too.

[nev670]

well, just for the fun of it
http://youtube.com/watch?v=6HIavxnUHls&feature=related

[devonin]

so you say that china can easily conquer the land it borders. so you could say that it could conquer asia if it wanted to. correct me if im wrong at this too.

Okay. I'm saying that China only has the military capability to carry out a land war with any reasonable hope of success. I don't think there are any countries they could invade that wouldn't bring the wrath of most of the western world down on them however.

My point was "There is no way China could invade the US" not "China -could- invade some other country" because I don't think the Chinese government is moronic enough to try attacking anybody regardless.

[legoboy792]

well think of it this way. if we have no economy. then our infrastructure will fall. we will be in huge debt. so we will owe China one. then as the economy gets even worse then they invade. I'm saying they will strike when we are weak.

[devonin]

Are you reading what we are saying? The economy will only "fail" if the country is driven bankrupt by being forced to repay loans to China. But China -can't- force them to repay bonds because that's not how bonds work, and they woudln't even if they could, thus, no collapse, thus no invasion.

[esupin]

Originally Posted by legoboy792

well think of it this way. if we have no economy. then our infrastructure will fall. we will be in huge debt. so we will owe China one. then as the economy gets even worse then they invade. I'm saying they will strike when we are weak.

Please stop thinking of real life as some sort of video game. China is not going to invade the US. Let's assume they did for some insane reason. 1: Forget the infrastructure - America's nuclear weapons are still there, and they are ready to fire. 2: How are they possibly going to occupy and control 300+ million people? 3: The rest of the Western world is just going to watch this happen? 4: Hmmm. There's the Pacific Ocean... they're going to need a lot of boats...



The "problem" with China is that they're going to overtake the US economically very soon. The country just has to adjust properly when that time comes. It's going to be tough.

[JonXia]

Originally Posted by legoboy792

well think of it this way. if we have no economy. then our infrastructure will fall. we will be in huge debt. so we will owe China one. then as the economy gets even worse then they invade. I'm saying they will strike when we are weak.

Dude, straight up you aren't making any new points. Lesee, Devonin is doing an amazing job disprocing any point you make without you trying to reasonably argue with him, or me for that matter, which is why I didn't post much in this.

F.Y.I. Zythus was talking to nev670 about WW2 and how China's population has very little to do with actual firepower. For instance, the Romans have won battles with less soldiers than the enemy and in some battles the death ratio roman/enemy was 1/10 where it took 10 enemies to die before 1 Roman did which prove that superior tactics and firepower defeat numbers. Research it, it's true.

Originally Posted by legoboy792

um... what. i dnt get any of that but i do agree that if china does make us pay up then the dollar would crumble. this would in effect kill our economy. INVASION TIME!!!

1) China tries to make the US pay up. US declares they cannot make the payment, they won't pay. They cant pay. nothing happens.

2) YOUR ECONOMY WILL NOT DIE, the US will then start outsourcing to different countries and China will loose jobs, trading opportunities and then it's economy will fail.


That's it, unless something new and fresh happens or people start readign posts, I'm out.

Devonin says: I've removed a few lines of your post, watch the insults please.

Thanks Devonin my bad