China makes goods very inexpensively and ships them to countries around the world. China therefore receives "cash" for those goods. Then China buys US bonds with that cash. The US takes that cash from sell of its US bonds and does what with it?
2007-02-06 03:51:59 · 6 answers · asked by Charles R 1 in Social Science ➔ Economics
Simply complete the last leg of your story. The cash is used to buy more goods and services from the China's of the world who then invests those dollars in US bonds who then uses the cash to buy goods and services from the China's of the world..... etc., etc..
America has been blessed with her financial strength of years gone by. We used to produce for the world and earned the worlds dollars. Today, we import because it is cheaper and pay the world with our inflated dollars. China and the world has so far accepted this imbalance of trade. Sooner or later, we will have to pay the world in something other than dollars. It will be our day of reckoning, and chances are it will not be pretty for America.
2007-02-06 07:20:02 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Well, it uses that cash to buy all kinds of goods, such as oil, iron ore, copper, gold, tin, and goods from China. Some of these go into making such things like Intel chips, Boeing planes, IBM mainframes which it sells to other countries such as China. But it buys more than it sells year after year, that's why the US is in debt to trillions of dollars. These are the bonds held by China and other countries which must one day be paid back.
2007-02-06 04:04:42 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The US then takes the money from the sale of bonds and pays for the Iraq war, or one of the myriad other things in the national budget.
Much of the money the US spends is returned to the general US economy. Some of the money in the economy goes back to the workers in China.
And so on.
2007-02-06 04:03:15 · answer #3 · answered by thefinancepirate 2 · 0⤊ 0⤋
with the proceeds from the saleof bonds, the united states then uses that money for social/ military/economic/ and foreign spending.
2007-02-06 04:04:08 · answer #4 · answered by shak2043 2 · 0⤊ 0⤋
well, where is the money for Iraq coming from? (and then proposed tax cuts (probably for those that don't need them)
2007-02-06 03:58:59 · answer #5 · answered by bilko_ca 5 · 0⤊ 0⤋
nice to know abt these information
2007-02-06 03:57:47 · answer #6 · answered by kavithag 2 · 0⤊ 0⤋