[Ridley's Own]

Originally Posted by Epaphras

If China starting producing things themselves for their own people instead of for us, they would have no reason to keep buying our debt.

Why would we want them to? GM, prior to their bankruptcy, was the single largest car dealer in China. Why on earth would we want 3 billion capitalists who want our stuff to stop buying from us? That's like Apple going around and saying, "Please, oh, please, go buy an Android!"

They buy our debt so they can keep importing stuff at a lower cost. Which is fine, because that money (either by buying debt or by buying stuff) winds its way back into the US economy. Some of this anti-debt stuff is nonsense, and it's like we've taken Dave Ramsey as the head of the WTO. Some debt is good. Too much debt is bad, yes. No debt is worse, because it kills our trade with other countries by making our goods to expensive to import. Trade + nukes = no Great Power war. I'm willing to have some aging commies in Beijing servicing our debt if it means we don't have to sling ICBMs at Shanghai.

[Epaphras]

Originally Posted by Ridley's Own

Why would we want them to? GM, prior to their bankruptcy, was the single largest car dealer in China. Why on earth would we want 3 billion capitalists who want our stuff to stop buying from us? That's like Apple going around and saying, "Please, oh, please, go buy an Android!"

They buy our debt so they can keep importing stuff at a lower cost. Which is fine, because that money (either by buying debt or by buying stuff) winds its way back into the US economy. Some of this anti-debt stuff is nonsense, and it's like we've taken Dave Ramsey as the head of the WTO. Some debt is good. Too much debt is bad, yes. No debt is worse, because it kills our trade with other countries by making our goods to expensive to import. Trade + nukes = no Great Power war. I'm willing to have some aging commies in Beijing servicing our debt if it means we don't have to sling ICBMs at Shanghai.

We don't want them to, no. But China could, in the long run, benefit from producing their own stuff for their own people. Right now they trade their consumer goods for US dollars, which they use a lot of to buy our debt.

If they stopped trading their goods for our dollars (which are only as good as the economy behind them), they could afford for the dollar to collapse because they have a big enough market to produce for themselves.

The problem is that we need them, but they don't necessarily need us. It would be rough for a while for both, but ultimately China has the manufacturing base to pull through and emerge. 70% of GDP is based on consumption, that is not sustainable. As soon as the goods stop coming, we're done-zo.

[Ridley's Own]

Originally Posted by Epaphras

We don't want them to, no. But China could, in the long run, benefit from producing their own stuff for their own people. Right now they trade their consumer goods for US dollars, which they use a lot of to buy our debt.

If they stopped trading their goods for our dollars (which are only as good as the economy behind them), they could afford for the dollar to collapse because they have a big enough market to produce for themselves.

The problem is that we need them, but they don't necessarily need us. It would be rough for a while for both, but ultimately China has the manufacturing base to pull through and emerge. 70% of GDP is based on consumption, that is not sustainable. As soon as the goods stop coming, we're done-zo.

I don't think that's likely.

China is commodities poor. It's why they were buying up all those rare earths a couple of months ago, and why they are effectively dependent (symbiotically, maybe) on the US, East Africa and Brazil/Russia/India for those sorts of things. They, potentially, could import that stuff to make their own, state capitalist version of an iPhone (MaoPhone, maybe?). But they would still need to get basic commodities from overseas.

More to the point, and this goes back to my other post, with the US, BRI, and East Africa supplying not just finished products, but the components to making those products, there's no incentive for the Chinese to buck the system. Likewise, their trading relationships mean they can be the Big Guy on Campus for mainland Asia without the US interfering. They've no incentive to make stuff at home.

[+Donny]

Originally Posted by Ridley's Own

Why would we want them to? GM, prior to their bankruptcy, was the single largest car dealer in China. Why on earth would we want 3 billion capitalists who want our stuff to stop buying from us? That's like Apple going around and saying, "Please, oh, please, go buy an Android!"

They buy our debt so they can keep importing stuff at a lower cost. Which is fine, because that money (either by buying debt or by buying stuff) winds its way back into the US economy. Some of this anti-debt stuff is nonsense, and it's like we've taken Dave Ramsey as the head of the WTO. Some debt is good. Too much debt is bad, yes. No debt is worse, because it kills our trade with other countries by making our goods to expensive to import. Trade + nukes = no Great Power war. I'm willing to have some aging commies in Beijing servicing our debt if it means we don't have to sling ICBMs at Shanghai.

For those ignorant about international finance, can you explain how this works? Why does more debt to China make things cheaper for China?



Also, can anyone recommend a solid book on international finance? I've studied enough economics to know that things get very complicated, but that's as far as I've gotten. Looking up books makes me nervous, too, since a good portion of what I'm finding are very much against the current system of international finance (in the America and its cohort are raping the rest of the world sense), and I don't know enough to know whether the position is legit or not.

[Ridley's Own]

Originally Posted by +Donny

For those ignorant about international finance, can you explain how this works? Why does more debt to China make things cheaper for China?

Witchcraft.

Srsly, I don't claim to understand the mechanics of it, but that's what happens. Debt in country A lowers prices on its goods in Country B that has less debt. It has to do with the way debt changes the strength of County A's currency w/re: to Country B's currency.

[redbaron]

China also does crafty things like selling their debt to their own banks and then wiping it off the books, which is something that in general the U.S. hasn't opted to do.

[JerryLove]

Originally Posted by redbaron

China also does crafty things like selling their debt to their own banks and then wiping it off the books, which is something that in general the U.S. hasn't opted to do.

No. We sell our bank's debt to us and then wipe it off their books.

[Ridley's Own]

Originally Posted by redbaron

China also does crafty things like selling their debt to their own banks and then wiping it off the books, which is something that in general the U.S. hasn't opted to do.

They do walk a very fine line between "growth strategy" and "currency manipulator."

[JerryLove]

Originally Posted by Ridley's Own

They do walk a very fine line between "growth strategy" and "currency manipulator."

Just think of it as a free market with countries instead of companies.

[+Donny]

Originally Posted by Ridley's Own

Witchcraft.

Srsly, I don't claim to understand the mechanics of it, but that's what happens. Debt in country A lowers prices on its goods in Country B that has less debt. It has to do with the way debt changes the strength of County A's currency w/re: to Country B's currency.

Witchcraft. I was afraid of that.

At least it's not alchemy.

[Bryan]

Originally Posted by +Donny

Witchcraft. I was afraid of that.

At least it's not alchemy.

China has a +3 Rod of Power