China to retaliate with tariffs on 128 U.S. products beginning Monday

[Timsup2nothin]

What else are they going to do with all the dollars they earn from their exports? They can either buy American products or invest in the US. China has strict capital controls regarding foreign investment by their citizens. Treasuries end up being one of the only attractive options.

Invest in other trade partners in the developing world. That's what you do when you have industrialized your own nation as much as the rest of the world can stand. In the US we call it "economic imperialism" and get mad when anyone other than us does it.

 

[Lexicus]

Invest in other trade partners in the developing world. That's what you do when you have industrialized your own nation as much as the rest of the world can stand. In the US we call it "economic imperialism" and get mad when anyone other than us does it.

Like I said...slow shift, can be dealt with.

 

[innonimatu]

People also laughed before he was elected.

 

[FriendlyFire]

It's an accounting identity. @stinkubus is right. It's why there will be no 'run' on US debt by China, it would cripple them far worse than it would impact us. There may be a slow shift away from China purchasing US treasuries for many different reasons but a slow shift is fairly easy to deal with.

What would actually happen ? US treasuries interest would rise to make them more attractive to other countries and private buyers ? Which would lead to more inflation for the US dollar
How badly would China be hurt compared with the US ?
US and China are one and two in terms of economic power

Also someone floated the idea of just inflating the US dollar in order to make all the treasuries bond that China holds worthless, but would that also really screw up the US economy ? Hasnt Japan been also trying to deflate there currency as well and the result of falling to do so has lead to economic stagnation. How viable is this plan ?

 

[FriendlyFire]

People also laughed before he was elected.

People also laughed when G.W.Bush was elected and they laughed even more when he was re-elected.
Those were some hilarious times.

 

[Timsup2nothin]

What would actually happen ? US treasuries interest would rise to make them more attractive to other countries and private buyers ? Which would lead to more inflation for the US dollar

There currently doesn't seem to be any shortage of buyers for US treasuries.If China dropped out entirely I doubt that interest rates would change significantly. Everyone gets all excited about China being the largest foreign buyer, but truth is that almost all the debt issued is being purchased domestically.

 

[Zelig]

People also laughed before he was elected.

Not me. I try pretty hard not to underestimate people's stupidity.

The only people who think Donald is smart are people whose ability to evaluate others' intelligence is critically broken.

edit: I've said it before, Trump has made some good moves. (Getting the TPP canned.) But he's a broken clock, not an atomic one.

 

[stinkubus]

There currently doesn't seem to be any shortage of buyers for US treasuries.If China dropped out entirely I doubt that interest rates would change significantly. Everyone gets all excited about China being the largest foreign buyer, but truth is that almost all the debt issued is being purchased domestically.

So long as oil must be paid for in US dollars there will never be a shortage of treasury buyers.

 

[Lexicus]

What would actually happen ? US treasuries interest would rise to make them more attractive to other countries and private buyers ? Which would lead to more inflation for the US dollar

The interest rates on US bonds are determined by the target rate set by the Fed.

Hasnt Japan been also trying to deflate there currency as well and the result of falling to do so has lead to economic stagnation.

Failing to deflate has led to economic stagnation in Japan? Do I understand you correctly?

 

[stinkubus]

The Bank of Japan was trying to create inflation through most of the 90s-00s to combat stagnation. They can't get their people to stop saving their money even when they can borrow at effective interest rates less than zero. They are probably the best example of the Keynesian liquidity trap that we've seen in our lifetimes.

 

[Lexicus]

People also laughed before he was elected.

Trump isn't smart. Shrewd maybe. He has a tremendous amount of emotional intelligence which he uses to manipulate people and feed his ego.

 

[FriendlyFire]

The interest rates on US bonds are determined by the target rate set by the Fed.
Failing to deflate has led to economic stagnation in Japan? Do I understand you correctly?

Got them mixed up, What I remember is Japans roaring good times, wealth and growth came to a staggering crash/burst and since then Japanese government to get their economy restarted.
From trying to stimulus, slashing interest rates, currency manipulation instead all this just added to their debt which is dragging them down. Its an example of what happens when first world country currency manipulation and then you fail to control it.

Trump isn't smart. Shrewd maybe. He has a tremendous amount of emotional intelligence which he uses to manipulate people and feed his ego.

He is good at manipulating, bullying and lying.
He is excellent at running a con and probably from decades of experience. Just look at all the people he surrounded himself with. They all seem to be of similar mold. Birds of a feature and all that.

 

[Lexicus]

From trying to stimulus, slashing interest rates, currency manipulation instead all this just added to their debt which is dragging them down. Its an example of what happens when first world country currency manipulation and then you fail to control it.

They never stimulated enough. The problem was basically that they were too worried about deficits and debt to spend properly, which of course only caused the government to have to spend more and more.

 

[El_Machinae]

I really like Japan, because most deficit hawks literally don't understand Japan. They're like "Canadian government debt is a problem" and I say "look, your theory says that Japan should have died decades ago, and they didn't. Your theory is incorrect." Japan may have stagnated, but they still do very well. Canadian debt is a problem, but not in the way they understand.

 

[Silurian]

China produces a lot of pork! Don't they? #1 in the world maybe? If you're in China, it's gotta be soooo much cheaper to buy Chinese produced pork compared to imported American pork, which has been produced using American labour & costs according to higher American standards and regulations.

I guess it must be that they can't produce all they need and there isn't cheaper pork being sold anywhere else that they could buy in the required quantity?

Maybe Canadian farmers can benefit from this. We have higher meat standards than both countries so our pork is probably more expensive than American pork. Maybe our farmers are going to get more pork orders from China now, although I still can't wrap my head around it making sense for China to buy such expensive pork. Who can afford that pork back in China? The Chinese 1%? Is it served in high end restaurants only or something?

China will be importing parts of the pig that are not popular in the US not the whole pig.
Things like the head, feat and the squeak.
Canada is over taking the US in this trade.

https://uk.reuters.com/article/us-c...es-to-china-feet-elbows-and-all-idUKKBN18W0GB

 

[Samson]

So this all started really heating up after Shanghai International Energy Exchange started dealing in crude oil contracts denominated in Yuan on Monday 26th March. How much is that to do with getting the republicans in on the action?