http://globaleconomicanalysis.blogspot.com/2011/08/idea-china-to-stop-buying-treasuries.html
US Would Welcome China Not Buying US Treasuries
Pettis makes an irrefutable mathematical analysis that shows the idea the US should fear the day foreigners especially China would stop buying US treasuries is silliness.
Let's look at this from another point of view. Congress, the president, Bernanke, and many others all want the RMB (Yaun) to rise.
If the Yuan rises in value vs. the US dollar, the other side of the mathematical equation says the US trade deficit with China will shrink and China's unemployment rate will rise.
China, fearing unrest does not LIKE rising unemployment. Thus, in spite of all the misguided huffing and puffing of numerous analysts, it is China who fears not buying US debt. Otherwise, they would not buy it!
Curse of Global Reserve Currency
The benefit (if one can call it a benefit) to having the world's reserve currency is the ability to finance endless wars and live beyond one's means. The mathematical counterpart is being at the mercy of foreigners on trade wars, outsourcing, and unemployment.
US Would Welcome China Not Buying US Treasuries
Pettis makes an irrefutable mathematical analysis that shows the idea the US should fear the day foreigners especially China would stop buying US treasuries is silliness.
Let's look at this from another point of view. Congress, the president, Bernanke, and many others all want the RMB (Yaun) to rise.
If the Yuan rises in value vs. the US dollar, the other side of the mathematical equation says the US trade deficit with China will shrink and China's unemployment rate will rise.
China, fearing unrest does not LIKE rising unemployment. Thus, in spite of all the misguided huffing and puffing of numerous analysts, it is China who fears not buying US debt. Otherwise, they would not buy it!
Curse of Global Reserve Currency
The benefit (if one can call it a benefit) to having the world's reserve currency is the ability to finance endless wars and live beyond one's means. The mathematical counterpart is being at the mercy of foreigners on trade wars, outsourcing, and unemployment.
No comments:
Post a Comment