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  1. #1
    Chinese spy sabang's Avatar
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    US default a greater risk than Evergrande meltdown

    Debt crisis engulfing Chinese real estate giant is distracting market attention from the bigger financial threat emanating from the US


    Brinksmanship over the US debt ceiling is bringing back traumatic memories Beijing would prefer to keep buried. An earlier debt-limit skirmish in August 2011 cost America its AAA rating from Standard & Poor’s. That came as Republican lawmakers pushed the world’s biggest economy to the brink of default.

    The fiasco left China, then the biggest holder of US Treasury debt, cold. At the time, the Chinese government condemned the “short-sighted” wrangling in Washington and urged lawmakers to act more responsibly.

    A 2011 editorial by the official Xinhua news agency said Beijing had “every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets. International supervision over the issue of US dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”

    That plea made then-premier Wen Jiabao seem borderline clairvoyant. Back in 2009, Wen issued a remarkably rare public plea to US officials to be more reliable stewards of Beijing’s vast dollar holdings – and to protect the value of the more than $1 trillion of Chinese state wealth sitting in Treasuries at the time.

    As Wen said back then: “We have made a huge amount of loans to the United States. Of course, we are concerned about the safety of our assets. To be honest, I am a little bit worried.” He urged Washington “to honor its words, stay a credible nation and ensure the safety of Chinese assets.”



    Two years later, S&P rendered a dire judgment on that credibility, yanking away Washington’s AAA status. Now, a decade later, it’s time for Wen’s successor, Li Keqiang, to worry about Beijing’s $1 trillion-plus exposure, as Donald Trump’s party again holds America’s credit ratings hostage.


    America’s debt Armageddon

    Trump wasn’t in the political picture back in 2011. His 2017 to 2021 presidency, though, gave Xi and Li exponentially more reasons to worry about the safety of Chinese savings. Trump’s trade war came on top of his frequent tirades about China “killing” American workers with an undervalued exchange rate.

    By the time he turned the keys over to Joe Biden in January, the US government was on course to a $30 trillion debt burden. That’s twice the size of China’s annual gross domestic product (GDP).

    During his time in office, Trump’s inner circle mulled canceling portions of the debt the US owed Beijing. Trump also considered a dollar-to-yuan devaluation of the kind Vietnam or Argentina might suddenly announce.

    Such considerations were hardly out of the blue. In May 2016, six months before he was elected, Trump, a serial bankruptcy offender as a businessman, floated the idea of reneging on US debt in a CNBC interview.

    “I would borrow, knowing that if the economy crashed, you could make a deal,” Trump said. “And if the economy was good, it was good. So, therefore, you can’t lose.”

    Yet China could indeed lose if the Republican Party over which Trump still holds great sway imperils America’s credit rating anew. Ditto for Japan, which has since topped China as the top holder of US government debt $1.3 trillion to Beijing’s $1.1 trillion.

    Moody’s Analytics economist Mark Zandi speaks for many when he says, “It’s complete craziness to even contemplate the idea of not paying our debt on time. It would be financial Armageddon.”

    US default a greater risk than Evergrande meltdown - Asia Times



    With trumptard republicans on the other side, how looneytoons might this get?
    And why is this farce repeated so often? '11th hour deals'- so far. Ridiculous.

  2. #2
    Thailand Expat tomcat's Avatar
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    ...nonsense: US politicians regularly engage in brinkmanship when budgets are involved particularly when cameras are present. The dust will settle before the US defaults because neither party wants to be blamed for late Social Security checks...

  3. #3
    Chinese spy sabang's Avatar
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    But really- must this circus be repeated every four years or so? I mean we are talking about the worlds largest debt market, the worlds largest economy (still), and the worlds de facto Reserve currency here. It is hardly comforting, and the repubs are just getting more looney.

  4. #4
    Days Work Done! Norton's Avatar
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    For better or worse, it's become standard procedure.

    US default a greater risk than Evergrande meltdown-350px-us_public_debt_ceiling_1981-2010-png

  5. #5
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by sabang View Post
    must this circus be repeated every four years or so?
    ...closer to every 2 years...and yes, few US politicians are willing to give up grandstanding for the media for the sake of government efficiency...they know it, the media knows it and even much of the citizenry knows it: build anxiety until a budget is passed, the debt ceiling is raised and the financial markets are all aflutter...then: quickly pass what is needed in a sudden denouement and then: another round of political flashing, crowing for the cameras, and loads of self-congratulatory messaging for the base...such is US politics no matter who is in office.
    Majestically enthroned amid the vulgar herd

  6. #6
    Days Work Done! Norton's Avatar
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    Ironic the Chinese are so concerned when their debt is 271% of gdp and the US is 127%.

  7. #7
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    No surprise here. Just more Sabang whataboutism. The debt ceiling will always get raised in the end, as neither party would want to be blamed for causing a default.

    Evergrande is on the other hand the tip of an iceberg. The Chinese economy is a house of cards built on real estate speculation. The building has to stop at some point, and then what?

  8. #8
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by bsnub View Post
    Evergrande is on the other hand the tip of an iceberg.
    ...and that, I believe, is why Emperor Xi is unwilling to leave the country to attend conferences: daggers at the ready behind the throne...

  9. #9
    Thailand Expat harrybarracuda's Avatar
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    More chinky propaganda shit.

    Same old.

  10. #10
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    Quote Originally Posted by Norton View Post
    Ironic the Chinese are so concerned when their debt is 271% of gdp and the US is 127%.
    Where are your numbers from?

    This is from:

    • United States - National debt in relation to gross domestic product (GDP) 2026 | Statista

    National debt in the United States in relation to gross domestic product (GDP) from 2016 to 2026*


    US default a greater risk than Evergrande meltdown-usa-full-jpg


    This is from:

    • China: national debt to GDP 2026 | Statista

    National debt in relation to gross domestic product (GDP) in China from 2009 to 2019 with forecasts until 2026


    US default a greater risk than Evergrande meltdown-cina-full-jpg

    Figures marked with *, 2020 to 2026, are estimates.

    The top graph, USA, indicates 127.11 (% National Debt to GDP) for 2020. (It probably does not include the current bill for USA infrastructure yet to be passed.)

    The bottom graph, CHINA, indicates 66.83 (% National Debt to GDP) for 2020.

    Who are Statista:

    "Within just a few years, Statista managed to establish itself as a leading provider of market and consumer data. Over 1,000 visionaries, experts and doers continuously reinvent Statista, thereby constantly developing successful new products and business models.

    Hamburg – International Pure Player Surrounded by Art Deco

    Some 800 employees (of more than 1,000 in total) from over 57 nations work at our headquarters located at the Brahms Kontor, a splendid Art Deco building with an extraordinary atmosphere.

    All key departments such as Sales, R&A, Content, IT and Corporate Services are based there.

    The office space is located in Hamburg’s beautiful city center directly opposite of the Laeiszhalle concert hall and the Planten un Blomen park. Numerous coffee shops and restaurants are located in the immediate neighborhood. Many large and small shops can be found on Mönckebergstraße, Hamburg’s main shopping street, which is just a stone’s throw from Brahms Kontor. Both subway and bus stops are located directly in front of the building."


    https://cdn.statcdn.com/static/pdf/aboutUs/Statista_Info_Factsheet_OnePager_en.pdf

    There is also anothe table:
    National debt of important industrial and emerging countries in 2020 in relation to gross domestic product (GDP)

    here:

    • National debt of selected countries in relation to gross domestic product (GDP) 2020 | Statista

    Last edited by OhOh; 18-10-2021 at 11:55 PM.
    A tray full of GOLD is not worth a moment in time.

  11. #11
    Thailand Expat harrybarracuda's Avatar
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    Stop fumbling around for irrelevant data and post some meaningful information hoohoo.

    Mr. Shithole is an incompetent buffoon.

    China's debt problem

    China’s debt has risen dramatically in the past decade, largely the result of credit fed to state-owned enterprises in the wake of the global financial crisis. To some, the debt mountain represents a threat to China’s stability and even the world’s economic health, while others argue such fears are overdone as most of the country’s debt is state owned and therefore, they say, manageable.

    How bad is it?

    China’s debt is more than 250 percent of GDP, higher than the United States. It remains lower than Japan, the world’s most indebted leading economy, but some experts say the concern is that China’s debt has surged at the sort of pace that usually leads to a financial bust and economic slump.
    China's debt problem

  12. #12
    Chinese spy sabang's Avatar
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    Reports of Chinas economic demise are, as always, premature. This is no financial meltdown, but I do believe the ripple effect will slow overall GDP growth- because the property sector has been a significant driver of domestic growth. So the good news Haters is that China may not yet be the worlds largest economy by the end of this decade.

    Unless of course the US government defaults on it's debt obligations, in which case we're all in the shit.

  13. #13
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    Quote Originally Posted by sabang View Post
    I do believe the ripple effect will slow overall GDP growth- because the property sector has been a significant driver of domestic growth.
    That's the understatement of the century.

  14. #14
    Days Work Done! Norton's Avatar
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    Quote Originally Posted by sabang View Post
    Reports of Chinas economic demise are, as always, premature
    As are those of the US but none the less some folks here seem to relish posting doom and gloom. Suppose it gives them some sort of pleasure running down the nation they dislike to make the nation they favor appear superior. Stuff most intelligent folks grow out of around the age of 10.
    Whenever you find yourself on the side of the majority, it is time to pause and reflect.

  15. #15
    Thailand Expat Saint Willy's Avatar
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    Quote Originally Posted by Norton View Post
    Stuff most intelligent folks grow out of around the age of 10.
    Sabang has grown into it. As he has grown older he has grown more senile. And his love for the CCP unashamedly grows.

  16. #16
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    Quote Originally Posted by harrybarracuda View Post
    irrelevant data
    That's your function.

    Ancient history, try 64 AD next time, oh NaGastan didn't have any bankers then.

    It's not 2017 now 'arry

    Quote Originally Posted by sabang View Post
    So the good news Haters is that China may not yet be the worlds largest economy by the end of this decade.



    US default a greater risk than Evergrande meltdown-c-v-u-gdp-ppp-jpg


    China GDP per capita PPP | 2021 Data | 2022 Forecast | 1990-2020 Historical | Chart

  17. #17
    Thailand Expat panama hat's Avatar
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    Jinping’s China stops with a grinding halt


    China has come to a grinding halt. The rusty red engine of Communism has broken down. The coaches behind are beginning to derail. The Chinese economy has started unwinding. And the worst is yet to come. The China bulls have a lot to answer, and so do those who did not shift their production and manufacturing facilities out of the Communist nation when the time was ripe last year. As the Covid-19 pandemic took grip over the whole world and manufacturers sought to dissociate from China, there were some who shied away from doing the same. Now, the sinking Chinese ship is taking down these China doves as well, and the unwinding of the Chinese economy is having a global impact.
    Aluminium Prices Go Over the Roof

    China is reeling under an intense power crisis. Industries are not being allowed to function in the Communist nation, as the CCP regime resorts to unprecedented industrial power rationing. So, China – which is a major global exporter of Aluminium, finds itself in the unique position of not manufacturing any Aluminium. This is creating a supply deficit of the base metal around the world, leading to a price spike which was last seen only during the 2008 recession.
    Jinping’s China stops with a grinding halt

  18. #18
    Thailand Expat harrybarracuda's Avatar
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    Thank fuck they've got all that Aussie coal they're "boycotting"....

    *snigger*

  19. #19
    Thailand Expat panama hat's Avatar
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    Quote Originally Posted by OhOh View Post
    . . . blah blah. . . .
    Just out of interest, where is Trading Economics located?

  20. #20
    still dealing with idioms
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    When everyone starts selling off USD I'll start worrying. The fact is very few currencies are worth the paper they're written on. The USD will always hold sway over other currencies such as the RMB whilst it remains the preferred international currency of the world.

  21. #21
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by Hugh Cow View Post
    The fact is very few currencies are worth the paper they're written on
    ...as long as fiat currencies are viewed as stores of value and are necessary for financial/trading transactions, they are worth the paper they're written on...if that sentiment should change, you wind up with the Zimbabwean currency or the Venezuelan Bolivar...

  22. #22
    Chinese spy sabang's Avatar
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    The plain fact is, whenever a financial crisis of any magnitude erupts- even if it involves the USA!- the USD goes up. It's called a 'flight to quality' in the investment biz.
    Also, by definition, the safest bond investment in the world is the good old US Treasury bond- backed by the "full faith and credit" of the US government.
    Which is all the more reason why I find this repetitive circus and partisan brinkmanship every time the US increases it's debt limit a bit tiresome.
    It's true- the cornerstone of international trades and settlements is the USD and the financial system set up, or sponsored by the US. Don't play with fire.
    No doubt, an "11th hour deal" will be arrived at as always. But yawwwn. And it only adds impetus to those parties that want to set up a competing international monetary system- which is absolutely not in the USA's best interest if it values hegemony. But it may just be in the worlds best interest.

  23. #23
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by sabang View Post
    And it only adds impetus to those parties that want to set up a competing international monetary system
    ...the only potential I see for an international currency replacing the USD is Bitcoin (et al.) and similar digital currencies once they are subject to government regulations...the Chinese, of course, don't want anything to do with a currency they can't (yet) clandestinely manipulate...so, we're back to the USD...

  24. #24
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    Dollar days are here again....nothing to see here...good ships all around...

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