China:
"Thank you American shoppers for buying all the cheap crap we could make these past few years. "Buy American" was just sooooo outdated anyway, wouldn't you say? And you didn't really like your jobs anyway, did you?"
"Oh, and your mortgage payment is overdue. You do intend to pay those loans back, don't you, silly Americans? Don't you?"
China's foreign currency reserves surpass US$1 trillion
BEIJING: China's foreign exchange reserves, already the world's largest, have passed US$1 trillion, the government announced Monday, amid debate over how the country should use its newfound wealth.
The central bank said its reserves stood at US$1.0663 trillion at the end of December, up more than 30 percent from one year earlier, making this the first country officially to top the US$1 trillion mark
January 16, 2007
FLASH: China's reserves hit $1 Trillion US$. US: Booowww! Bow Wow Boww Wow Bow Bowww!
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21 comments:
How to redeem $1T in USD denominated IOUs- boy that's a tough one:
1) Buy the rest of Congress
2) Triple China's strategic oil reserve
3) Buy remaining U.S. tech companies
4) Fix & enlarge the Panama Canal
Wow, that still leaves five or six hundred billion dollars to spend on military toys...
Buy the Chinese Yuan!
Ha Ha Ha America
If you haven't seen this video, you have to watch it:
http://www.atomfilms.com/film/haha_america.jsp
or http://tinyurl.com/yaeab6
So good it should get its own posting!
A very smart business colleague of mine told me that China owes the USA 5 trillion from before (Truman), and that we have not forgiven the debt, but have not called it in either.
I can not verify the story.
Euro displaces dollar in bond markets
By David Oakley and Gillian Tett in London
Published: January 14 2007 22:08 | Last updated: January 14 2007 22:08
The euro has displaced the US dollar as the world’s pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.
The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.
Outstanding euro-denominated debt accounts for 45 per cent of the global market, compared with 37 per cent for the dollar. New issuance last year accounted for 49 per cent of the global total.
That represents a startling turnabout from the pattern seen in recent decades, when the US bond market dwarfed its European rival: as recently as 2002, outstanding euro-denominated issuance represented just 27 per cent of the global pie, compared with 51 per cent for the dollar.
The rising role of the euro comes amid growing issuance by debt-laden European governments. However, the main factor is a rise in euro-denominated issuance by companies and financial institutions.
One factor driving this is that European companies are moving away from their traditional reliance on bank loans – and embracing the capital markets to a greater degree.
Another is that the creation of the single currency in 1999 has permitted development of a deeper and more liquid market, consolidated by a growing eurozone.
This has made it more attractive for issuers around the world to raise funds in the euro market. And, more recently, the trend among some Asian and Middle Eastern countries to diversify their assets away from the dollar has further boosted this trend.
René Karsenti, executive president of ICMA, said: “It is the stable interest rates in Europe that have helped and the fact that [the euro] has strengthened and shown resilience.”
Since the start of 2003, the European Central Bank’s main interest rate has fluctuated only 1.5 percentage points, ranging from a low of 2 per cent in the middle of that year to 3.5 per cent, its rate today.
In comparison, the Fed funds rate, the main US interest rate, has fluctuated 4.25 percentage points, ranging from 1 per cent in the middle of 2003 to 5.25 per cent, its level today. The euro has also risen to trade around $1.30 against the dollar, from around parity three years ago. Sterling issuance has grown in the past three years, reinforcing its attraction as a niche currency among some investors. The yen, in comparison, has fallen out of favour.
Overall, international capital markets have doubled in size in terms of bond issuance during the past six years.
www.ft.com
Copyright The Financial Times Limited 2007
remember the famous saying: "in the long run, china will win."
i think it's true. they are winning and we are losing.
I am amazed that the Chinese haven't been over here in the U.S. on a massive buying binge?
Or maybe they already have been?
Or maybe they are waiting for the collapse so they can buy the country for pennies on the dollar?
Dear Amelica
you owe us 1 trirrion dorra, please make payment quickest
thank you
China
I heard the Chinese are going to start buying up condo property in Florida.
I say that we start increasing our military presence in Japan And Taiwan, this will scare the shit out of them. They are extremely paranoid and this will cause them to start aggravating our administration. Then we will tell them to take their cheap Chinese crap and shove it up their ass.
20 years ago the same was said of Japan. Remember how they were going to take over?
Relax.
Don’t like doing business with China? Do you have a problem with America bleeding jobs overseas? Are you uncomfortable with the notion that we are enabling a country, which is NOT a friend of America, to build up its military prowess?
Good - you are awake, and that iss a start! What can you do? Here’s the answer: Stop buying crap made in China! Buy “made in America,” buy used, or do without.
If you are thinking, “but everything is made in China, so I can’t boycott them,” then you have already lost the battle.
-Mammoth
The next step in capitalization is for China to have labor unions. This will run up the wages, create bankrupt companies and overpriced goods that Americans won't be able to afford. Sounds kind of familiar.
Anonymous said...
20 years ago the same was said of Japan. Remember how they were going to take over?
Relax.
Tuesday, January 16, 2007 7:27:48 PM
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China is about TEN times the size of Japan, has nuclear weapons, and is not a US satellite state, dude.
dont forget the 1 child law. many households only have a son. know what that means, 1 billion horny guys looking for some "booty", talk about a sausage party.
anyway i digress, this will be HUGE (insert "joke" here) where will they find women? invade India or Korea of Japn for the "booty". hmmm.
could this be the first homo majority nation, with no women, will all these chineese turn gay?
will they buy our women? our resources?
Mammoth,
Or maybe I'll keep buying Chinese goods and get the same good for 1/5 the cost that a union made "AMERICUN" product would cost. Same quality (poor) but lower price.
I can't wait until the Chinese start exporting cars, putting the final nail in the UAW.
Eventually we will get back to a system where unions are obsolete and an uneducated unskilled auto worker isn't paid more than a doctor. Then, prices of "AMERICUN" made good will compete with Chinese goods then I'll start buying "AMERICUN" again.
Anonymous said...
dont forget the 1 child law. many households only have a son. know what that means, 1 billion horny guys looking for some "booty", talk about a sausage party.
anyway i digress, this will be HUGE (insert "joke" here) where will they find women? invade India or Korea of Japn for the "booty". hmmm.
could this be the first homo majority nation, with no women, will all these chineese turn gay?
will they buy our women? our resources?
Tuesday, January 16, 2007 10:25:04 PM
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Once they've really turned the tables on us economically (which, on our present collision-with-the-iceberg course is sooner than you think) they'll be getting mail order brides from the US. They'll be importing Amerikan blondes and bleach blondes.
Also, a country with 300 million surplus men will tend to have a pretty aggressive foreign policy. I could easily see the Chinese muscling in on Southeast Asia since many of those countries were tributary states to the Chinese empire at various points in the past.
China has its own problems but at least they aren't up to their eyeballs in debt. I read an article recently (sorry, no url, can't remember where) that said China would achieve military parity with us in less than ten years. Now China and Russia have largely patched up their differences and China is currently going balls to the wall negotiating for natural resources in all the places we can't or won't for various reasons (think Iran, North Africa, etc.) Hell, the Chinese are even planning on getting oil out of the Gulf near Florida by "assisting" Cuba with drilling and development. China is the future lone superpower and there is not a damn thing we can do about it anymore. We gave it all away.
JAFO
"Then we will tell them to take their cheap Chinese crap and shove it up their ass."
THAT'S WHAT WAS SAID ABOUT MADE IN JAPAN CRAPS 25 YEARS AGO.
REMEMBER THE SYLVANIA TV TRASHES SONY TV AD. WHERE IS SYLVANIA & RCA TODAY?
AMERICANS ALSO LAUGHED AT THE TOYOTA, DATSUN, HONDA CALLING THEM JUNKS & FAG TRUCKS CHAMPIONED BY LEE IOCOCCA! GUESS WHO HAS THE LAST LAUGH!
what is the difference between chinese and americans?
the chinese SAVES more and SPENDS less. americans SAVES less and SPENDS more. in fact (americans) spends more than what they earn. go figure.
ALERT!!!! There is a WIDESPREAD misunderstanding WRT Chinese reserves, the trade imbalance, etc.
(1) Chinese US$ reserves have soared b/c US supranational firms have deposited billions of US$ in Chinese banks to fund their MASSIVE investment in Chinese production. That the Yuan is not covertible means that US firms require that the BOC hold US$ reserves against US firms' deposits. In effect, it is not "the Chinese" who hold US Treasuries and agency paper as reserves, it is indirectly US firms who own the US debt instruments. This same phenomenon occurred from the early '60s when US firms increased their Eurodollar deposits over time, prompting the Europeans to demand gold for US$'s, which in turn resulted in the US$ going off gold. When US firms need to repatriate deposits from China for various reasons, they merely swap Yuan deposits for Treasuries held as book entries with the member Chinese dealer banks via the BOC.
(2) The US trade imbalance with China is overwhelmingly the result of US firms investing $1 in Chinese production to get $8 of "exports" from China that return to the US as "imports". Adjusted for the "imports" from US subsidiaries in China, and taking out oil, the US trade deficit is barely 1-2% of GDP; negligible. With oil, the imbalance is 3-4%; however, 1% of that total is related to "imports" from production by large US oil companies abroad.
Then, account for the trade-weighted capital account surplus the US currently maintains, and there effectively IS NOT A US TRADE IMBALANCE.
(3) Chinese producers are required to purchase imported oil in US$. Part of the reserves held by the BOC is for the purpose of US$'s to buy oil and derivatives.
Apparently, few if any media pundits are smart enough to uncover and report these easily attainable facts. Or, the largest corporations who are the source of the perceived trade imbalance and soaring US$ reserves do not want the facts to be known for fear that that the public will demand policy changes to bring investment and employment back from the rest of their imperial/colonial client states.
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