Okay I know the bobble-head simple anwer that news media gives you, but please read question again please?

Question

WHY DOES U.S. (who built much of the third world in past 60+ years, who gave away huge amounts of loan money to third world countries , like china, and even much military equipment to places like Soviet Union) OWE EVERYTHING TO CHINA?!

DOES THAT MAKE SENSE?! ????!!!

Please erase, delete crap from news explanation and tell me what really happened here? Was it some kind of a bank transfer?
Companies and Manufacturers from U.S. move everything over there? What is logical answer. and this stuff about trade deficits, whatever. I am talking about how the primary victor of WWII who built much of the 3rd word up in past 60 years is now the biggest debtor to CHINA?? Please help me understand this!

Answer 1

please help me understand your question

Answer 2

US did not build 3rd world over the past 60 years! My gosh man.

Second, did you not just hear that Britian finally paid off its
WWII obligations in the past month, and Russia recently
paid off all its IMF loans because of the recent higher oil prices.
International finance is a somewhat complicated universe.

The reason US owes China is because China and other countries like Japan, buy US treasury bonds! The income from the sale of these bonds then goes to the general US treasury to finance the american economy!!! Plain and simple. Do some research on the structure of the current 8.4 trillion dollar US debt.

Answer 3

China, like Japan before it, manufactures and exports on a massive scale (particularly to the US), but doesn't import and consume itself on anything like the same scale. The result is, in the US and also Britain, individuals (credit card debt and huge borrowings against inflated house prices), the Government (spending more than it receives in tax revenue), balance of trade deficit (caused by importing far more than they are exporting). In order to allow this spending to continue, China and others have loaned huge amounts of money to their customers (the Governments and the citizens of the US and Britain).

In summary, Britain and the US have become consumers and spendaholics writ large, but China are having to lend them the money to continue buying their goods. It can't go on forever, house prices will collapse at some point.

Answer 4

Quit panicking, take a breath, get ahold of yourself, and read this to be enlightened.

The US federal government, just like every other government in the world, tends to spend more on budget outlays than it collects in tax revenue. So where does the US government get this extra spending money? It holds public auctions to sell debt instruments called Treasury bonds, bills, and notes. They are all just bonds of varying maturities. To a lesser degree, US Savings Bonds are also sold for this purpose.

Now, if you think this is a stupid practice, understand that the federal government has the most secure credit rating in the world, and so gets very low interest rates on this debt. Better rates than you and I can get ourselves. And since the alternative to selling these Treasury bonds is to tax you and me more, the government debt may not be such a terrible idea -- it leaves us with more of our own money and shifts society's total debt burden more toward the entity that gets the best rates, the federal government. (Almost a good idea, eh?)

Anyway, as I said these Treasury debt auctions are open to the public. Anyone can buy these bonds. You even can yourself. Certainly, US corporations invest much of their cash into these instruments, as they are essentially a risk-free way to earn a small return on cash, until you have some other need of that money. The big players don't stick their money in weaselly savings accounts. Then you can sell the bond on the secondary market -- there is a large and vital trade of US Treasuries.

Now, not only do US corporations buy these bonds, but foreign corporations and mutual funds are free to buy them also. Including Chinese corporations. Now, when Chinese corporations sell their wares to America, they often get paid in US dollars, not Chinese money.

So, companies and banks in China wind up with a lot of US Dollars in hand simply because of International trade. These companies need to invest their corporate cash just as US companies do, and they often like to buy US Treasury Bonds. Since they have US dollars on hand, it's easy for them to do so. Because Chinese entities have bought up a certain amount of these bonds, you can say they "we" owe China money.

Big deal. Lot's of foreigners buy these bonds, they do so because they are good secure investments, and last I checked the UK owns far more US debt than China.

And whatever in your fevered imagination concerns you, it's not a problem. They gave us their wealth, real money. We gave them a piece of paper. Who comes out ahead in that deal? They have absolutely no power, lever, or claim on that debt, other than receiving the bond's regular interest and eventual redemption refund. Who comes out ahead in that deal? We do.

Answer 5

1st america didnt build the world
2nd the weapons is because its cheaper to buy new ones than ship old ones back
3rd america owes every 1st world country

Answer 6

You must have a more inside track to the real truth than me, pal - dumb me, I believe what CNN and the economic experts say.

Answer 7

sounds like we bought more useless crap from China than they bought from us