Obama administration's relations with China off to rocky start

Friday 30th January, 02:44 PM JST

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Sarge at 09:43 PM JST - 30th January

"Any decision by Beijing to move its money would deal a dizzying new blow to an already tottering American economy"

Har! China depends on exports to the U.S. for its survival. Any decision to undermine a U.S. economic recovery would be suicidal.
YangYong at 10:11 PM JST - 30th January

Sarge again you expose yourself as at best half-informed. It's embarrassing. Read up. Write when you know... Layman's terms: if, like any bank, all its owed money is called in... bye-bye bank. But as informed posters are writing, the US needs China just as China needs the US. No discord, no rocky road.
Sarge at 10:21 PM JST - 30th January

Yang - "But as informed posters are writing, the USA needs China just as China needs the US."

Those posters have obviously not been informed that the U.S. doesn't need China nearly as much as China needs the U.S. Remember, the customer is always right!
unscrejects at 11:32 PM JST - 30th January

Loan? Did I hear this correctly? What loan are we talking about? China benevolent? China is buying the product for nothing but business! There is nothing more secure than the US financial product period. Move it's money how? How will China collect? Does anybody think the US would honor a request to cash in early? Secondly where would China put the cash if it did get it? Mongolian treasury bonds? Why are we given these crack pot journalists? China buys the product as a way to take the csh away from its companies paid in US dollars in the states. China then pays them in the non-tenderable local currancy...
mushroomcloud at 12:03 AM JST - 31st January

"Those posters have obviously not been informed that the U.S. doesn't need China nearly as much as China needs the U.S. Remember, the customer is always right!"

Even when the customer (US) is essentially bankrupt and badly needs loans from China to bail itself out? I think you are underestimating the sway that China now has over the US economy.
neverknow2 at 01:22 AM JST - 31st January

the USA needs China just as China needs the US

Maybe.... but I still pray every night that China pulls all of it's money out of the US.

Sometimes, the flower at the top, that has been there for such a long time, needs to be changed.
mushroomcloud at 01:31 AM JST - 31st January

"Maybe.... but I still pray every night that China pulls all of it's money out of the US."

Whoa. I pray the opposite. If China does this, the US economy will take a deep dive and bring along the entire world economy along with it.

Not a good idea for anyone, and this includes China.
VOR at 01:32 AM JST - 31st January

Secondly where would China put the cash if it did get it?

Gold.

There is nothing more secure than the US financial product period

that may no longer be the case. With the influx of one to two trillion new dollars, simple supply and demand principles lowers the value of the dollar. low interest rates and stagflation will likely send investors looking for other investment options. if china quits financing US debt and switches to increasing its gold reserves you will see an unprecedented run up on gold at the expense of the dollar.

Obamalamadingdong and crew had better be careful not to piss of the chinese.
mushroomcloud at 01:58 AM JST - 31st January

"Obamalamadingdong and crew had better be careful not to piss of the chinese."

VOR, totally agree with your last post. At this point, the US has options that are few and far between. At the same time, China's investment options with it's huge pool of cash is limited as well.
ca1ic0cat at 02:45 AM JST - 31st January

If you look back at history you'll see (in an oversimplified way) that the problem started with the bursting of the stock market bubble. That caused the financial system to freeze up as everybody tried to figure out who owed what to who. As unemployment soared the politicians looked around for ways to keep jobs in their particular countries. The resulting protectionism put the world economy into a depression until WWII got industry moving again.

It will be really ugly if history repeats itself.
sf2k at 02:47 AM JST - 31st January

under NAFTA, a Buy American only policy is actually illegal and goes against signed agreements with Canada and Mexico. These two will be looking for an exemption, otherwise America's actions will cripple their economies.

China may be USA's largest creditor, but Canada is USA's largest trading partner. Crippling trade is not the answer. Wasn't in the 30s either. We have to learn from history (for once).
MichaelJP at 03:13 AM JST - 31st January

A "Buy American" initiative is not illegal under NAFTA, and they could just as well call it the "don't buy lots of low-quality crap" policy. Encouraging competition based on quality rather than price is a very good thing because it reigns in excessive consumption -- and hence pollution -- and serves to lift the overall value of the production industry.
Good_Jorb at 03:25 AM JST - 31st January

A "Buy American" initiative is not illegal under NAFTA

Since NAFTA is not a law it is techinally not illegal but it would be a breach of contract and invalidates NAFTA. Which would be nice because then Canada would no longer be forced to sell America oil and instead get market price for oil. It's a slippery slope to become a protectionist state when you're a net-importor of energy.
projectaw11 at 07:36 AM JST - 31st January

China is dangerous to Western countries including its faltering neighbour Japan. The world should keep their eyes on China and be very weary as they are potentially the most dangerous to the West at this point in time.
SushiSake3 at 01:53 PM JST - 31st January

Sarge - "Those posters have obviously not been informed that the U.S. doesn't need China nearly as much as China needs the U.S. Remember, the customer is always right!"

Except when the U.S. customer is bankrupt.