To those who are fear-mongering, ask yourself this: How does one screw the US over by investing money in the US (especially when one is abstaining from investor voting privileges)? With their investments here, would they not have a stake in our financial well-being?
I'm not saying that China is going to destroy the US or its economy. But it will be controlling much of it, at this rate. And you will see China's standards of living rise (those of the elite, anyway) while that of the US will start to fall. It's just a matter of who is becoming richer and who is becoming poorer. I don't see any problem with that per se, but China is using unacceptable methods to fast-track its way there.
Which is to say, that you have no understanding of even the most basic economic concepts. The Chinese government investing money here instead of at home, obviously strengthens OUR economy rather than theirs. In fact, one of the reason the Chinese economy grew so fast is because we invested heavily in China. The second part of this quote is even ore bizarre. How the hell is China supposed to "own" us when we actually own them? Do you have any idea what percentage of China's industrial and economic base is foreign-owned and what slice of that pie belong to US investors?
So ... in your sequence of events ... is the Chinese government "buying up US economic clout" with the yuan or the dollar? How does one "buy up US economic clout"?
Also, in the first paragraph you characterized the act of China revaluating the yuan against the dollar as a grave threat that China is planning, but then on the second paragraph you characterized China not revaluating the yuan against the dollar as a grave treat as well. Is there any possible course of action that China can take that doesn't result you qualifying the act as a "grave threat"? (BTW, in the unlikely scenario that China dumps its dollars into the Mariana Trench, such an action would decrease the supply of the dollar thus boosting its valuation, making the yuan and associated Chinese goods cheaper, and fitting one of your definitions of belligerence.)
You are clearly not thinking out of your own box. The Chinese government wouldn't the one directly buying up the US. The Chinese companies and the people are the ones who will do it. When the yuan is revalued, the Chinese yuan holders will suddenly become richer vis a vis the American dollar holders. And guess where they can get an almost infinite supply of dollars to use? Sure, if all of them suddenly convert their yuan to dollars and start buying up American companies/real estate rapidly, they might depress the value of the dollar too much. So what the Chinese government would do is to release its supply of dollars more gradually. Moreover, the government can control the value of the yuan by using its dollars to buy up excess yuan, thereby ensuring that the yuan remains stronger and the Chinese yuan holders can continue buying up a cheap USA.
It's not as much a problem between me and boxes as it is a complete misunderstanding between you, basic economics, and elementary game theory. Let me teach you a lesson each in micro and macro economics:
1. Microeconomics: Currency speculation (swapping capital between different currencies in order to gain a profit) out of the blue will not result in profit. This is a lot more pronounced when the amount of money is high (and especially true when it is a significant percentage of either currency's money supply). When you begin to exchange such large sums of money from currency A to currency B, demand drives the value of currency B upwards, forcing you to pay more and more of currency A for each unit of currency B. After you've exchanged all your money from currency A to currency B, the market will begin to correct itself towards the previous equilibrium point (it may never really reach there if the amount of money you exchanged is large enough). At a later time when you exchange your currency B back to currency A, you would have to use more of currency B to obtain each subsequent unit of currency A, resulting overall in a huge percentage loss of your original holdings of currency A. The Chinese government right now is losing enormous sums of yuan every time the yuan rises, as every percentage point the yuan goes up with respect to the dollar, their 10E12 USD holdings depreciate by 10E10 USD. I don't know why you are complaining if you hate the prospect of the Chinese becoming wealthy so much.
2. Macroeconomics: Do you even know why governments keep foreign currency reserves in the first place at all? There are three mains reasons-
A. To hedge against short term volatility (which is why almost all of Chinese government's USD is invested in T-Bills and other US-government backed securities, they need very large amounts of money to become solvent in a moment's notice).
B. To depress their own currency to feed their exports (this is basically to the Chinese government putting money in American pockets to buy Chinese goods).
C. In the case of the USD, it is the currency where most of the world's petroleum is traded in, so if they want to make sure that the oil keeps flowing, they need to have a steady supply of USD.
Note that all three of these macroeconomic objectives will be threatened if they ever decide to liquidate the dollars on their hands en masse. Not to mention that their central will suffer a huge drop in terms of prestige and credibility because it speculated. Not to mention that an overwhelming percentage of their domestic industrial base is going to screwed over, inciting riots all over.
In conclusion, it's not really a failure of imagination on my part because, you see, I can actually model your scenario as if it actually plays out in reality, and gauge its consequences. You on the other hand, have nothing to offer beyond a bunch of outlandish claims that contradict each other in a most childish manner.
The situation is already problematic for the US because China already has a large reserve of dollars due to the BOP surplus. But revaluing the yuan now is clearly better than later.
For whom may I ask? And do you have justifications for your reasoning beyond fairy tales?
