mrbill

China Is Now in Firm Control of U.S. Debt Markets

Yet another deflation = armageddon post.

"My folks bought a color TV in 1965 for 600 dollars ,that same size color tv can be bought at wal mart for 199"

That's not deflation, that's a technological improvement. Nevertheless, that $600 TV will have lasted 30 years, whereas the $199 wally special will last about five.

"My first baseball glove was 29 dollars and my daughter got hers 38 years later for 9 dollars"

And that $9 baseball glove will have to be replaced sooner than the $29 glove. Cheaper products do not necessarily equal a greater value.

If we used honest money, things would get cheaper over time thanks to technology. Over the last few centuries we have been able to produce a lot more for a lot less work, and what do governments do? Print the difference and then some.


On May 28 02:19 PM dividendmachine wrote:

> Thios is hardly news but the author did a great job
>
> However my "theory" is the following. We both agree that the "golden
> rule" is he who has the gold makes the rules"
>
> Invariably China is concerned about the "socialist" government that
> Obama is proposing. It is in everyones best interest worldwide that
> the US has a strong economy and perhaps they sent Obama a message
> by pulling out of treasuries
>
> The only way that can happen is with lower interest rates and a healthy
> stock market
>
> Consumer confidence jumped from March to April
>
> and that is in spite of the unemployment rate rising.
>
> FACT is more than half this country and those who control over 90%
> of the assets own stocks.
>
> In January and February Obama "needed" to sell doom and gloom to
> get through his stimulus
>
> The fact is China DECIDES America's fate now. Bernanke and Obama
> and Geintner are merely figureheads with little control
>
> China needs America not only as the only people on Earth stupid enough
> to buy all the useless shit produced but there is another reason
> as well
>
> America is a conveinent "bogeyman" for teh rest of the world. In
> fact China would have that role if the US was to collapse
>
> Those in power in China have "no choice" but to keep financing their
> debt.Where else can you put a trillion dollars?
>
> Truth is that America has had inflation for 60+ years since WW2 ,and
> gradual inflation is a LOT better than deflation
>
> Each industry has been effected differently
>
> What we are not taking into consideration is how much the price of
> many goods we buy has gone down in price
>
> My folks bought a color TV in 1965 for 600 dollars ,that same size
> color tv can be bought at wal mart for 199
>
> My first baseball glove was 29 dollars and my daughter got hers 38
> years later for 9 dollars
>
> 28 years ago a quarter pounder with cheese was 1.15 and now its about
> double
>
> Gas when i was a senior in hi scholl was 2.09 30 years later its
> now 2.35 .when you add the large increase in fed and state tax the
> oil company is getting Less money for the barrell of oil
>
> Levis now cost less than they did 30 years ago
>
> Now somethings like concert tickets have ballooned
>
> 28 years ago i saw the rolling stones for 15$ ,23 years later the
> same ticket was 225 dollars
>
> Cadillac because of the UAW and managements greed has increased in
> the past 30 years by more than 400%
>
> 2 large pizzas are almost the same as they were 30 years ago
>
> In my hometown a house that sold for 52 ,000 dollars 27 years ago
> just sold for 68,000 but 3 years ago the same house was 120,000<br/>
>
> My point is despite the inflation that has happened in the past 30
> years,Each industry has varied in how it has changed

China Is Now in Firm Control of U.S. Debt Markets

I should have mentioned, the oversupply is due to new capacity. Not so much lower demand.

China Is Now in Firm Control of U.S. Debt Markets

"I also find it quite funny to see everybody calling to buy gold. Look, there is no inflation right now. There is just speculation about the eventual weakness in the USD. This is driving gold and oil higher because they are paper and speculative markets."

Gas prices have been going up. Is that deflation?

"To verify my theory just check out the price of Nat Gas, which in my view is a much better indication of commodity inflation. It keeps on deflating."

Your theory stinks. The reason natural gas is down is because of a massive oversupply. But thanks to quantitative easing, it's now forming a bottom. See UNG.

On May 26 07:05 AM jeandit75 wrote:

> China being the largest creditor of the U.S. Government, they can't
> afford to have a collaps in the USD cause it would wipe out their
> investment. The other reason why China must keep a strong dollar
> currency is the Yuan's undervaluation is working as a natural subsidiary
> to their exports, a natural competitive advantage they surely want
> to keep. I therefore can't see why China would shoot themselves in
> the foot in having a dollar collaps. That's that simple.
>
> I also find it quite funny to see everybody calling to buy gold.
> Look, there is no inflation right now. There is just speculation
> about the eventual weakness in the USD. This is driving gold and
> oil higher because they are paper and speculative markets.
>
> To verify my theory just check out the price of Nat Gas, which in
> my view is a much better indication of commodity inflation. It keeps
> on deflating. It is impacting the Utilities' profitability and is
> a proof that this current recession is driven by delevraging and
> deflation.

Chinese Are Likely to Halt Purchases of U.S. Treasury Debt

Sounds to me like this is a good way for China to buy treasuries on the cheap. With the herd mentality, investors will begin dumping treasuries and dive into/drive up stocks gold and oil. China will then buy more and say, “I hate you!”. Then smile. Mean while politicians in the US are happy because the stock market is going up, and so is confidence. “Yes we can!” Woohoo. Keep in mind, the demand for treasuries has been better than expected. Eventually, when demand dries up, Hillary will call Mr. Wen and say, “for a BJ please buy mo' treasuries, mi love you long time”. At which point, the Chinese begin singing “Yankee Doodle Dandy” (“we don't want too, we HATE you, but... we must buy more”). Around the same time expect a new “uncertainty” developing in the market and the herd will dump their stocks and rush right back into treasuries. This processes will repeat until all this “sideline” wealth is extracted.