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Q: Is China the banker of the United States these days?
The Chinese governments holds trillions of dollars in United States debt. China routinely lends huge amounts of money to the United States to prop up its economy. Never in history has the United States been so in hock financially to one particular nation. Thus in your opinion, has China become the banker of the United States?
12 years 15 weeks ago in Money & Banking - China
You could say that again. The United States does owe China trillions of dollars up to 14 trillion. The multi-billionaire Warren Buffet just signed a check to the US to bring down the overall debt. So in my opinion China has become the banker since we are borrowing from China all the time. That is sort of how a bank works afterall.
nevermind:
"We" he says. Ha, you don't even know how this works, do you? For instance, considering that all total foreign debt ownership of the US is 4.5 trillion.... it's not possible the the US "owes" China 14 trillion, is it? This is from wiki, but whatever.... the numbers are sound
"As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion.[46] The largest holders were the central banks of China, Japan, the United Kingdom and Brazil.[48] The share held by foreign governments has grown over time, rising from 13% of the public debt in 1988[49] to 25% in 2007.[50]
MrTibbles:
Mattaya, this is so completely wrong. The United States does not owe China ANYTHING. I'll explain in a post below.
Why does it matter who the banker off a said country is,it is how the said contry uses its loans,and the USA is a FREE COUNTRY which uses anymeans it needs too further its FREE peoples ambitions and hopes,so a banker is always a banker unless you change the second letter of the alphabet,then you get wan//er
beaufortninja:
Free people, huh? That's why our kids get groped by TSA agents at the airports and we have to threaten to rebel to stop the internet from being censored?
Ha, no. It's such a myth that the US "Owes" money to China. China has willfully bought a SMALL amount of foreign debt the US allows to be sold as an investment.
And it's even less now. However, China may do to stop asking for handouts in the form of foreign aide, seeing as how it's so wealthy these days.....
No. Actually, the banker of the United States are its own citizens. Most consider it an investment, where they have the right to peaceably assemble and redress the government for real and percieved wrongs.
In other words, they can have a say, whether through petition or protest, to determine where a large amount of that money goes. In America, officals are elected through a democratic process, thus insuring some degree of accountability.
Usualy the bankers are US citizens... maybe in the past, The US is in deeper s- -t than many want to actknowlage. Yes they owe China trillions and also to some other countries. They landed in this due to try to rulle other countries and attacting others.
Obama was sure in my eyes the wrong choice, now the USA had 2 wrong leaders in a row...
Patriots of the USA, its oke attact me for saying this, but its my opinion and its the truth, my information doesnt come from only the USA, but is globall.
paulmartin:
America stands for freedom,it tries its best by different means and if it as to its willing to fight,the world is a better place with them,and im not even an American
Fritze:
I dont say Americans are bad..... i personally dont agree with some actions and decitions made by the goverment. Specially "helping" countries with conflict... i see they only do this to countries who had somting they need (e.g. oil) why cant they do something for Zimbabwe? are they afraid of Mugabe or is there just nothing they want from that country? Zimbabwe is only one e.g. Americans like to "brag" hoe good and bright they are, so if they are so bright why dont they vote better next time and get the USA again in a better position.. as for now the US is sliding... Better leadership will sure make the US again the BEST
981977405:
Fritze, good comment about better leadership in the United States but I truly don't see that on the horizon soon at all. The United States is quickly becoming the new Argentina -- a once very rich nation that squandered all of its resources, became mired in wars and corruption, went bankrupt, destroyed its middle class, pandered to the extreme right wing until it became a paraNazi military state, heavily involved the Church in all of its dirty doings, while the oligarchy (in this case Wall Street) pulled the strings from behind the scenes.
Fritze:
981977405, I thank you for seeing it in this way, I was attaced every time by pro Americans when i gave my opinion. Yes i do see the worse they way its going on in the USA, but didnt want to be so frank.
981977405:
Fritze, I understand why you write about being "attacked". Yes, sometimes here I have also noticed that there is a "mob mentality". In America, they call it a"lynch mob" meaning all the big tough guys go after one person. Just ignore the "mob mentality" around here. Please continue with your good posts and in my opinion your accurate posts. Be not afraid of the mob here. Just ignore them and ignore their comments. They are nothing and nobody to you and nothing and nobody to me. That is the best advice that I can give you.
Fritze:
Thank you, im not afraid of them, and love the freedom of speach.. they cant accept the reality... Soon they will wake up and see where theire USD is.. for now its protected by the RMB and some Arab money... cause some afraid they will loose a lot..
OK first off, China's currency, the RMB, is not an international currency. Outside of China, it is worth NOTHING.
China's currency value is entirely dependent on how much USD China holds.
China isn't "lending" the US money. China is buying treasury bonds as an investment because A.) They are valued in USD, therefore give actual global recognition as "money" and B.) They are still the safest investment with a return. Basically, bonds work like this: If you give me $1 million today, I will give you $1.5 million in a few years (this is not the actual figure, just an example.)
So while the US is in debt AND there is a promise to return on investment, just like any other investment, there is NO GUARANTEE on making a profit and/or even getting your money back. If you invest in MrTibbles Co. and it goes under, guess what? You lose your investment! Now US Treasury Bonds have a great track record of being safe, secure, and almost guaranteed investments, which is why a lot of countries buy them.
A majority of US "debt" is held by American citizens and China holds about 8% of that. While it is the highest number ever held by a foreign country, it's still 8%. If you "owned" 8% of a company, you wouldn't even get a vote on the board of directors in many cases - you'd be a shareholder. That's it.
So, the US "owes" China nothing. China has invested in the US of it's own free will and as the US economy has needed assistance, they have offered more Treasury Bonds to be issued, which China buys up like a kid in a candy store after getting his allowance.
Traveler:
MrTibbles: You seem fairly clued up on this stuff, so I'm just curious what you think. If the US were to put a trade embargo, sanctions, or something similar on China, could they freeze China's access to the US Treasury bonds indefinitely?
MrTibbles:
My understanding is that they could prevent further purchases of bonds, but would still be responsible for the return on investment. Of course, this would never happen, simply because China could simply dump all of their bonds on the market and dump their currency reserves which would basically devalue the dollar by quite a bit and cause a stock market panic. Neither scenario is beneficial to either country, both would end up screwing each other at the same time. China and the US are kind of locked into the current situation unless the US buys back the bonds early and China gets rid of it's stockpiles of USD by making the RMB an international traded currency. That won't happen anytime either because it would wreck the Chinese economy. It's a catch-22 situation.
The USA pays China about 150 Billion US dollar or 1 Trillion RMB in interest payments each year for the debt. This is enough to completely fund a US style retirement pension system for free for all Chinese retired. Chinese aren't stupid 
"China...........economy." Wrong!!!!!! Of course, Chine-aaaaaaaaahhhhhhh isn't the banker of the U.S.A. or anybody else? What an assinine question!!!!!!!!!!!!! :(
I don't know about that but at least i know where my underwear came from...............China for sure...........LOL
LAR:
I DO know about that. F*** your underwear. * Read the comments by nevermind,gladrosich and Mr. Tibbles. So MANY of you Chinese,etc. are under an ILLUSION that the United States owes China money!!!!!!! ^^ TOO FUNNY!!!!!!!!!!!!! :( lol lol. Puto!!
Createach:
i didn't understand anything you just said.if it is good then thank you..if it is bad then i really have no comment
Banker? Not exactly. But main supplier for sure. And growing buyer... properties, etc.
It reminds me, when some foreigners came to new land, buying land from locals, paying good (for locals) price (that meant nothing for foreigners).
What was next? Foreigners owned the land.
History repeats itself?
Btw. "only" 8%? What would happend if the value of USD would change of 8% (only! 8%) in short time?
mattsm84:
Well, we have. The rate of inflation on the USD over the course of the last 40 years has been around 7%. While economic growth during that period has been almost constant. If the value of the US dollar changed by 8% over night, however, the value of most other currencies would change with it. Given that the USD is the worlds reserve currency, most world currencies are actually pegged to the US dollar. And China is no exception. Further, If the value of the US dollar were to drop, trade between nearly every other country on the planet would become difficult as the bulk of international trade occurs in USD, and economic growth would stall. Countries would then collect less revenue in taxes, duties and tariffs. Deficits would rise, debt would increase, and the value of other currencies would fluctuate with the USD as they attempt to monetize their debts.
