Its what I have been saying all along.

[Freiwillige]

From the mouth of a financial genius. He hit the nail on the head.

http://www.youtube.com/watch?v=oe_64UzVn7E&feature=player_embedded

[Buddahaid]

I can't stand that blowhard! He looks like a little whiny cry to Mommy prat you want to bury in the sandbox headfirst rather than look at. :rock:

[Reece]

Same thing here in Australia, 90% of what you buy is made in China, there is virtually nothing made here anymore! and yes it's mostly crap!:nope:

[GoldenRivet]

Fact is, every square inch of the United States of America has been sold up the river by our "leadership"

[Skybird]

Of course a financial, welathy heavyweight like the Chinese would not fire back on the financial markets when the US taxes their products 50%... Yeah, sure, why should they?

And the Chinese manipulating their currency and keeping it low - so does the US, keeping the dollar low (at the costs of europe). Hypocrite! Somehow one has to get rid of those stellar debt levels, if one does not and cannot pay them back right? Why not by marginalising them by inflation? :D

Actually the Chinese can damage the US on the fiscal sector many times more than the US can damage the Chinese.

His image of closing ties with OPEC to heckle China, is naive. Since the oil crisis, america obeys OPEC, like all the West. On the other hand, China buys friends in the third world and the Islamic world, like crazy.

The US is a financially heavily depending and now extremely vulnerable nation - like most Western nations (if not all), but none is so depending and vulnerable than the US. That's the reuslt of spending more than one can afford, and living on tick for decades. the more money you borrow and the more you sell yourself away to foreign powers - the more you are controlled by others and the more you loose freedom of action to do what you want.

Yes, the Chinese are laughing, and very loud. but for different reasons than Trump thinks. Not becasue they bluff and the US is swallowing it, but because they know they have a tight grip of it for sure, not just bluffing.

The US is deceiving itself over it'S financial basis, like Germany is deceiving itself over its industrial power, which is heavily export-oriented. Different to China, Germany has not the means to threaten it'S foreign customers with financial disasters if they top buying German products.

Say, when nations are so heavily depending on the good will and ongoing interest of others that they do not really have under their command - can one say then said nations are economically strong? I don't think of Germany as a strong economic nation, and I do not think of the US as a nation of strong finances.

Currently the two us us only just get away with the status quo. For how long anymore, that is the question. Neither Germany nor the US have a plan B, an alternative to their current survival philosophies. Both merely hope that things will not change, so that they must not change thermselves. Just that.

[UnderseaLcpl]

Trump is a businessman, not an economic expert. The fact that many goods used in the US are now manufactured in China means precisely nothing important from anything other than a strategic standpoint, and even that is dubious. Where goods are manufactured is not nearly as important as who owns the companies that make them, and who is making what for whom.

The amount of Public debt that China holds is of some concern to us. IMO,as the Federal government has long since passed the point of no return when it comes to borrowing from other nations, and even our own nation. There is absolutely no way we will ever pay back what we owe, a prediction evidenced by the US government's particularly terrible record of paying people back. Ever buy a federal bond? I hope not, because the vast majority of bonds, once capital gains tax and inflation are factored in, end up costing people money for the dubious priviledge of lending money to the government.

Obama's own economists have advised against the rampant spending he has been advocating. That's saying something when one considers that they are Keynesians, who believe that massive government spending is necessary to stimulate an capitalist economy from time to time, on the assumption that increased tax revenue from the resultant prospeirty will pay it back. The administration ignores even them, however, and stays the course.

This leads me to one of two conclusions; either the US government is planning to stiff the Chinese nation and the American people in a brilliant financial coup, or they just don't give a crap. Personally, I think the latter is the more likely, as the government has clearly demonstrated an ability to manipulate fiscal policy for the good of anyone in like,......never, but it has demonstrated the ability to screw everything up for political reasons and then pass the cost on to everyone who trusted it on a fairly consistent basis.

What I see as the most probable course of action is that the US will continue to sell debt for as long as it can before it resorts to just printing tons of money and then just defaults on everything and pisses the rest of the world off. It won't be by design, and the result won't be good for anyone but politicians.

Skybird is correct in saying that US debt is being marginalized by inflation. That's been a favorite tactic of governments the world over for the entire span of human history- "I owe you one million units of currency? Very well, let me just cut these five-hundred gold coins in half and arbitrarily assign their former value to them. I'm sure it will hold."

Trump, however, is completely wrong in assuming that the US is the stupid one when it comes to the US-China relationship. China doesn't know it yet, but they're just buying an illusion of wealth that will eventually vanish. I have no idea what kind of long-range plans (if any) that the US government has, but one way or another, China is going to get stiffed. We've seen this so many times before. It just amazes me that nobody who matters has learned (or cares about) the lesson yet.

No matter what the intention is, the US is on the fast track to financial ruin, and China and a lot of the rest of the world is clinging to a sinking ship. Federal Reserve Notes mean nothing without a strong market to back them up, and Obama's administration seems hell-bent on destroying everything that makes a strong market work.

Unless the Republicans come back in the 2010 and 2012 elections with a strong plan for fiscal reform that they actually carry out for once, the US is on a steep slope to massive economic failure that will probably last for at least a decade, and likely even longer. My advice is to trade against the dollar but avoid currencies whose nations are heavily dependant upon exports to the US.

[Platapus]

The amount of Public debt that China holds is of some concern to us. IMO,as the Federal government has long since passed the point of no return when it comes to borrowing from other nations, and even our own nation. There is absolutely no way we will ever pay back what we owe, a prediction evidenced by the US government's particularly terrible record of paying people back. Ever buy a federal bond? I hope not, because the vast majority of bonds, once capital gains tax and inflation are factored in, end up costing people money for the dubious priviledge of lending money to the government.

The "debt to China" is due to their purchasing what is known as Treasury Bonds. Up until very recently, China was the single largest foreign holder of Treasury Bonds, but still represented a small fraction of the foreign holdings of Treasury Bonds.

Please give a citation on the last time the United States defaulted on a Treasury Bond?

I will make it easier. Please give a citation for the FIRST time the United States has defaulted on a Treasury Bond?

"Ever buy a federal bond? "

Yes, all the time. Been doing it for almost 30 years. I wish I could afford Treasury Bonds :D. Even cashed some in. I had to pay taxes on the interest just like any other investment. But the taxes were still only a fraction of the interest and was only federal tax, no state taxes.

Yes we have a lot of taxes in this country. But don't confuse paying taxes with a government bond defaulting. Yes, government bonds don't pay a lot of interest. The reason? Very Very low risk. But government bonds are like any other investment. If you earn interest, you have to pay taxes.

There are pundits who are predicting dire times when the US government defaults on its Treasury Bonds. Some of these pundits are old and have been predicting the same things for years and years.

[UnderseaLcpl]

I will make it easier. Please give a citation for the FIRST time the United States has defaulted on a Treasury Bond?
Defaulted on a Treasury bond? In the most technical sense, never. But the Federal government has, on many occassions, borrowed more money to pay back what it owed. Just because a technical default hasn't occurred yet does not mean that it won't.


"Ever buy a federal bond? "

Yes, all the time. Been doing it for almost 30 years. I wish I could afford Treasury Bonds :D. Even cashed some in. I had to pay taxes on the interest just like any other investment. But the taxes were still only a fraction of the interest and was only federal tax, no state taxes.

But how much did you actually make when you adjusted for inflation and tax? There have been times when bond-buyers managed to make money, but that certainly hasn't always been the case, and it isn't likely going to be in the forseeable future.

Of course, you don't have to take my word for it. Celebrated economists like Friedman and Hayek have explained how bonds are a poor investment in the past. There's part of a chapter in Friedman's book, Free To Choose that I can look up and recite if you'd like.

Yes we have a lot of taxes in this country. But don't confuse paying taxes with a government bond defaulting. Yes, government bonds don't pay a lot of interest. The reason? Very Very low risk. But government bonds are like any other investment. If you earn interest, you have to pay taxes.

I'm aware of all that, but thanks for explaining. The problem comes when taxation actually begins to harm the economy and ultimately can't pay the debt. In short, when expenditures outpace income. Governments can manage that for a while, but ultimately they will collapse and default. The US may not have defaulted on treasury bonds, yet, but other nations certainly have.

There are pundits who are predicting dire times when the US government defaults on its Treasury Bonds. Some of these pundits are old and have been predicting the same things for years and years.

True, and there are pundits who predict doom for just about everything all the time. As I said before, I don't know what plan Washington has to deal with this, but the MBO itself has acknowledged that the nation is financially insoluble. If something is not done, there will be worldwide financial repurcussions as the market makes a major adjustment for the void left by the US. Currency markets will likely be hit first, followed by stocks and finally commodities. We've already seen what kind of tremendous influence the US economy has on worldwide markets many times before. If the nation itself becomes insoluble, it's going to be that much worse.