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  • The Differences Between Chinese and U.S. Economic Recoveries [View article]
    This falls at the crux of the issue: China's stimulus is funded with cash, whereas ours uses debt financing. It's time to take serious note of two things:

    1) China's exports are declining rapidly, and
    2) The Chinese government is heavily investing its reserves in domestic relief programs

    Both of these facts mean they will have diminishing cash to buy USD and US debt. This comes as the Treasury prepares to launch its biggest ever issue of bonds! Don't be surprised when yields climb and USD suffers...


    On Feb 15 11:34 AM Universal Huckleberry wrote:

    > I'm just a simple man, I can't offer any fancy charts or graphs.
    >
    >
    > But from a common sense viewpoint I'd have to say that the biggest
    > difference, with regards to stimulus spending, between the US and
    > Chinese "economic recoveries" is that we are financing our $787 billion
    > expenditure with DEBT while the Chinese are paying for their $600
    > billion with CASH- a good chunk of which is from our interest payments
    > to them.
    >
    > When you just step back and think about that for a moment, squinting
    > at the correlation between some squiggly lines on a chart seems rather
    > insignificant, doesn't it?
    Feb 15 20:39 pm |Rating: +1 0 |Link to Comment
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