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Treasury Blames China for Global Economic Crisis

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Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 04:26
yellowdog View Drop Down
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     Yesterday in a press confrence Henry Paulson bamed the global economic crisis on China!  He said they are to blame because the have been saving money over the years instead of spending it.   I guess in his eyes: saving money bad, spending money good, spending money you don't have even better!   Yea!!!!!!! that's what we need, more debt! teach your kids to spend all they can and to never save a dime! Come on America, jump aboard the money train!
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 07:50
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Well it's a change from blaming G.W.Bush.
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 07:56
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Originally posted by yellowdog yellowdog wrote:

     Yesterday in a press confrence Henry Paulson bamed the global economic crisis on China!  He said they are to blame because the have been saving money over the years instead of spending it.   I guess in his eyes: saving money bad, spending money good, spending money you don't have even better!   Yea!!!!!!! that's what we need, more debt! teach your kids to spend all they can and to never save a dime! Come on America, jump aboard the money train!
 
UMM Yeah!! How else do you think they can buy the USA. The more the USA gets loned the better off  (China) is.Soon or later they will want there (bonds) money back and the USA is going to be screwed even more than we are now.
 
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 11:03
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Well, economically speaking massive savings IS a huge drain on an economy..... when it is not re-invested in the system.  That seems to be like arguing advantages and disadvantages of different exit routes when the room you are in is in flames.   It doesn't make much sense to worry about seeing a carpenter ant when you are about to be trampled by elephants.  Therefore I move on with my comments to a related example.....
 
Now here is the funny thing about money........let me use an extreme example.
 
Two guys live in the same neighborhood.  Let's call them Ed and Pyro.
 
Ed Pirate
Ed is shrewd and cheap.  He lives with his Mom, doesn't own a home, and saves his pennies.  He owns a car with no financing, and $500,000 in CDs at the local bank.
 
PyroDirty Harry
Pyro isn't quite as responsible.  Pyro owns a house he paid $500,000 for with a loan of $500,000 from that same local bank.  He is behind in payments and has recently discovered that his house is only worth $400,000.  Pyro has $30,000 of credit card debt from buying lingire for his "special friend" last Christmas.
 
Some time later, China decides to "Demand" repayment for the massive debt of the USA.  Suddenly the value of the dollar plummets.  It not longer costs $10 for a sack of potatoes, it now costs $100,000 for that same sack of spuds.  So what happens in the life of Ed and Pyro?
 
Ed Pirate
Owns a car and still lives with his Mom, but his $500,000 CD at the local bank is pretty much WORTHLESS.
 
PyroDirty Harry
Pyro is sitting pretty good for the moment, maybe.  Pyro owns a house.  The local bank holds a mortgage of $500,000 that is pretty much worthless.  The credit card company folds since all the consumer debt, including Pyro's $30,000, is ALSO worthless.  Pyro's "special friend" probably wants more lingerie.
 
Now two things about this...
1. Once everything settles down Ed pretty much has to start over, he better have a source of income after the crash.  Pyro, asssuming the government survives and he can claim property rights to his house, will have to find a source of income... but AT LEAST he pretty much owns his house free and clear.
 
2. Unfortunately things generally DON'T deteriorate that fast.  These things drag out a longer time periods.  What happens is the economy starts to spin downward, Pyro misses a payment, the bank takes the house, and Pyro is in the same situation as Ed after everything collapses.  Note in that scenarion the bank ends up owning Pyro's house.
 
3. Owning stocks and other tangible assets like a house with no mortgage might help, but if the government collapses.... who SAYS you really do own your house?  Well, the governemnt that just collapsed.  What if the next governemnt says.... uh, let's start over.  You don't own anything, bow down to the STATE.
 
4. When such a significant amoutn of SHTF like that what becomes MORE important is access to water, food, clothing, fuel, and shelter.  I suspect our farmers that own their own land with no debt will be sitting in the power position.
 
OK, so that was MORE than two things.  So shoot me.
 
I did have access to a thread one time that was pretty neat.  It was written by a guy that went through this kind of thing in Argentina or something.


Edited by Ick - January/22/2009 at 11:13
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 11:10
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Here ya go, a guy wrote about the 2001 collapse in Argentina....
 
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 11:17
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  I honestly look for China to have some MAJOR internal problems before too long. Their people have about had enough.
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 12:05
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ICK, Ed's BOY

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Yeah, I agree.
 
Separately: I bet there will be war with China in the next 15 years or so.  Might be another "cold war" of some kind, but I bet it happens.
 
Question is, what will our country do if there are disruptions in the supply chain of manufactured goods from China and Taiwan?  It could be from civil unrest, civil war within China, or collapse of the Chinese economy?
 
What are the long-term ripple effects of a Chinese manufacturing disrution like that?


Edited by Ick - January/22/2009 at 12:07
Post Options Post Options   Thanks (0) Thanks(0)     Back to Top Direct Link To This Post Posted: January/22/2009 at 12:21
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one day when i grow up i want a $500000 house but for now the ole single wide will have to doBucky
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