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The Chinese sell a lot of merchandise in the United States and, in the process, accumulate a lot of dollars. They then loan many of those dollars back to the United States in exchange for all manner of American i.o.u.'s, including Treasury bonds, federal agency bonds, and private-sector debt.America's indebtedness to China, as a result, is staggeringly high, although the Bush administration - which needs foreign loans to help finance the budget deficit - seems unfazed. But there is reason for pause. The Wall Street Journal reported this week that China's holdings of foreign currency and securities would soon top $1 trillion, a fivefold increase since 2000. Roughly 70 percent of that is believed to be in dollars or dollar-based assets.For several years, China's loans have helped to keep prices and interest rates low in the United States, and to finance big tax cuts. so why dont they pay there debt so the world's largest army can finally modernize

2007-12-24 16:39:11 · 5 answers · asked by Anonymous in Social Science Economics

5 answers

They'll never pay China back. Stupid American capitalists.

2007-12-24 16:42:29 · answer #1 · answered by Jancy 3 · 1 1

Why bother paying when you can roll over? In 2007, you sell a 30-year bond due in 2037. In 2037, you can sell another 30-year bond due in 2067. As long as you can afford the interest, you should be able to sell the paper... So who owns the bonds (be it Bank of China, British Rail pension fund, or Granny Smith) is irrelevant; the important issue is how many of those bonds are out there...

As to modernizing the army, there are more important things out there than that. The U.S. primary and secondary education repeatedly ranks among the worst in the developed world; the U.S. is the only advanced nation that still doesn't have universal health insurance. These, not modernizing the army, are the real priorities...

2007-12-24 18:01:17 · answer #2 · answered by NC 7 · 2 0

I think you had a question in there somewhere, and the answer is that each and every piece of the debt will be repaid when each bond matures, which varies from a few weeks from now to 30 years from now.

But also, Chinese holders of such debt will sometimes sell the bonds on the market, which is the same as "repaying" the Chinese, since that particular debt shifts to someone else.

Now along the way, the Chinese may or may not buy additional U.S. securities, but that's beside the specific point of your question.

2007-12-25 18:08:53 · answer #3 · answered by KevinStud99 6 · 0 0

Get rich quick schemes in the capitalist business world, (buyouts, IPOs, conglomerates, acquisitions, mergers, and the stock market), do not actually work. Remaining solvent does not actually exist within false economics capitalism.

Profit existing in the capitalist business world, or millionaires existing within capitalism, is pathological deception committed by the 21 organizations spying on the population with plain clothes agents, (with covert fake names and fake backgrounds).

Actual economics is the persons paying the monthly business loan payments of companies voting at work in order to control the property they are paying for.

Capitalism is the psychology of imaginary parents, false economics, and the criminal deception of employees that are paying the bills (including the stocks and bonds, or shares) of companies.

Anti-democracy republicanism is the psychology of imaginary parents, and false government.

2007-12-24 21:23:10 · answer #4 · answered by Anonymous · 0 0

America will pay when the Chinese come to collect. I hope you can learn to speak Chinese so you can deal with the new overlords.

2007-12-24 16:47:21 · answer #5 · answered by Anonymous · 2 0

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