Monday, July 25, 2011

$1.18 Trillion of Worthless Paper

Because what? A generation of Justin Beiber sociology majors is going to produce the wealth required to pay these guys back?

I'm just glad the debt crisis is finally starting to pay nice dividends on my foreign currency plays. Though I do feel sorry for the Chinese for investing so heavily into US assets.

How does one say, "Enjoy the Decline?" in Cantonese?

6 comments:

Anonymous said...

Alcoholic?

Anonymous said...

Looks like China is starting to smell the coffee. The real US debt level is in the $100 trillion area. These dollars will never be paid back.

Meanwhile back in Washington, these guys will not make a single spending cut. The so-called cuts are just future "projections", that slow the growth of government. These elected officials are living in a dream world.

Empires and countries throughout history have gone broke.I guess Americans feel these hard money lessons need not apply to the USA.
The "not worth a Continental" saying, has long since been forgotten in the USA.
It looks like gold and silver money may be coming back into style.

R. G. Harvie said...

Just a thought.

Suppose the Republicans took the position of, on this day, accepting the most recent position of the President and said:

Nancy Pelosi suggests that we are abandoning 98% of the population to protect the interests of 2%.

She is simply wrong. Higher taxes will not translate into an improved economy - but, the truth is that the pain of a stalled economy will be felt most accutely by average Americans - the people we are fighting for and have been fighting for all along.

But on this day, we will succumb to the stubborn refusal of the Democratic President to concede that higher taxes will continue a stalled economy.

We will put down our swords - and sadly, await the inevitable - that the economy will continue to stall - and we will simply ask that the American public consider that reality and send a message to the President and all Democrats come election time.

Anonymous said...

Find a way to publish the names and locations of the bankers without getting sent to jail. We will do the rest.

Dalrock said...

Looks like China is starting to smell the coffee. The real US debt level is in the $100 trillion area. These dollars will never be paid back.

China's problem is they don't have a viable alternative. They have built their economy on exports to the first world. In order to sell more to a nation than they sell to you, you have to buy assets denominated in their currency. Otherwise the currency markets will adjust and at the end of the day exports will equal imports. This is the same reason the Saudis hold so many assets in dollar form, and the reason the Japanese bought everything in sight in the US before their economy tanked.

China has to either hold US dollars, or assets denominated in US dollars. Otherwise they (and we) would have to learn how to live in a world with balanced trade. Perish the thought.

Dalrock said...

Good point R.G. Harvie. There is a real risk that Republicans could overplay their hands here. The other risk I see is that they capitulate while declaring victory. Your solution seems like the best one to me.