<An Idea: Repeal or Amend the US Gas Guzzler Tax The Oil Drum DrumBeat: May 26, 2009>

158 comments on Book Review: Why Your World Is About to Get a Whole Lot Smaller

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cjkubx on May 25, 2009 - 11:02am Permalink | Subthread | Parent | Comments top

What makes you so certain that China will continue purchasing bonds anyway? All signs point to their halting of net purchases of dollar-denominated assets already.

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Jerry on May 25, 2009 - 11:14am Permalink | Subthread | Parent | Comments top

A good point. To the extent that they do continue to buy bonds, they may maintain some leverage over U.S. policy, though.

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Mamba on May 25, 2009 - 8:43pm Permalink | Subthread | Parent | Comments top

The Chinese are stockpiling hard assets. They have hugely increased iron ore imports, for instance, even though they have stockpiles of the stuff. The penny has dropped: hard assets > fiat money.

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Sci_Comm on May 25, 2009 - 6:25pm Permalink | Subthread | Parent | Comments top

At first glance one would think the Chinese would cease buying US bonds in the case of heavy energy tariffs. But remember, China has billions (some think it's well over a trillion) invested in US debt. The minute they decide to get of the debt buying merry-go-round, the circus lights go out and down comes the final curtain. Why? Because the US dollar would collapse, and what is it the Chinese hold? It's US dollars. Lots of them...

So don't worry about China stopping it purchases of US treasuries, it's not going to happen. It's a bigger problem for them than the US. If the dollar collapses China has nothing, and the US gets out of jail free.

Strange world indeed...

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porge on May 25, 2009 - 6:33pm Permalink | Subthread | Parent | Comments top

China will stop subsidizing the US when they have the ability to run a closed economy.
They have been doing this to build out their infrastructure and all they have to do is start paying the workers a wage that will allow them to purchase the goods that they produce.
This is not going to continue forever.
It is all mute anyway because of the depletion of cheap energy.
The only reason that the US is still in control is because of military superiority and that is it.

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mudduck on May 25, 2009 - 9:22pm Permalink | Subthread | Parent | Comments top

"moot"

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158 comments on Book Review: Why Your World Is About to Get a Whole Lot Smaller

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