Dems to get tough on China? - Page 3 - Mercedes-Benz Forum

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post #21 of 44 (permalink) Old 11-13-2006, 05:10 PM
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Originally Posted by mcbear
As Jakarta said there is plenty of debt. IF it were to cap at ONLY $9Trillion [and it is projected to hit $10T by the time Bush leaves office - I smell legacy] there is still HALF a Trillion Interest piling on per year. Right now China has 13% of our Debt. If China quit buying, Japan will pick up some and Treasury will raise rates to bring other buyers to the table. It will also bring Inflation.

Someone will always buy the bonds. I have never seen an auction have extras at the end. I don’t recall an auction where the price dropped below value to “fire sale” them. I would have to go back and look but I would think I would get excited about something like that.
Well China is going to start diversifying in terms of where they put their money in the future. A new gold ETF just opened in China for the Chinese to buy in to and I expect the Chinese govt. will cut back on buying our bonds to send a signal to washington as to who the big dog on the street is now. Once that happens, yes you are correct, treasury will raise the rates for the bonds to make them attractive and once that happens you can forget about this housing market and as for the ones that over extended themselves when they bought their dream house and the fluctuating interest rates go up, well if I was ever going to come back to the States and join society it would be a great time to show up to buy a house there and pay 100% up front for that sucker, bet you can get a great deal in 1 year to 18 more months when the foreclosures start.
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post #22 of 44 (permalink) Old 11-13-2006, 05:38 PM Thread Starter
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Originally Posted by Jakarta Expat
Well China is going to start diversifying in terms of where they put their money in the future. A new gold ETF just opened in China for the Chinese to buy in to and I expect the Chinese govt. will cut back on buying our bonds to send a signal to washington as to who the big dog on the street is now. Once that happens, yes you are correct, treasury will raise the rates for the bonds to make them attractive and once that happens you can forget about this housing market and as for the ones that over extended themselves when they bought their dream house and the fluctuating interest rates go up, well if I was ever going to come back to the States and join society it would be a great time to show up to buy a house there and pay 100% up front for that sucker, bet you can get a great deal in 1 year to 18 more months when the foreclosures start.
Awesome, that is when I will be in the market for a house

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post #23 of 44 (permalink) Old 11-13-2006, 07:42 PM
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Originally Posted by Jakarta Expat
Well China is going to start diversifying in terms of where they put their money in the future. A new gold ETF just opened in China for the Chinese to buy in to and I expect the Chinese govt. will cut back on buying our bonds to send a signal to washington as to who the big dog on the street is now. Once that happens, yes you are correct, treasury will raise the rates for the bonds to make them attractive and once that happens you can forget about this housing market and as for the ones that over extended themselves when they bought their dream house and the fluctuating interest rates go up, well if I was ever going to come back to the States and join society it would be a great time to show up to buy a house there and pay 100% up front for that sucker, bet you can get a great deal in 1 year to 18 more months when the foreclosures start.
In some markets the foreclosure rate has already gone up. I anticipate there will be a rash of arsons that rampage through some of these new McVillages pretty soon as entire developments start bumping into the "overextended" threshold about the same time.

I kind of like living in my 50 year old house with only 10 years left on a small mortgage. Seems like it was the right thing to do.

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post #24 of 44 (permalink) Old 11-13-2006, 07:45 PM
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Of course when it comes time to pay the Piper with foreclosures and VRM's and a housing market that slows to a stop, there will be folks on the right that will be lining up to blame the Democrats for the "poor economy", selectively forgetting all the nice groundwork that has been laid the past few years.

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post #25 of 44 (permalink) Old 11-13-2006, 08:01 PM
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That is how it works time and again.^
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post #26 of 44 (permalink) Old 11-14-2006, 06:46 AM
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Collecting the debt could pose difficulties.
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post #27 of 44 (permalink) Old 11-14-2006, 07:00 AM
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Collecting the debt could pose difficulties.
Personally I think you are right. This is why I have almost dropped plans to come back and retire back in the States. Our home is bought and paid for, 100%. Her car is 2 1/2 yrs old and mine is brand new, we have no kids and we have no debts. We pay cash for everything and our monthly expenses are i the neighboorhood of the equivelent of USD 650 to 700 a month for electricity, water, cable, internet, phone, gardner (comes in 20 hrs a week) Pool service guy (comes 3 times a week), our house boy (Who does all the laundry, ironing, washing dishes, cleaning house, washing the cars each morning, and virtually everything she and I do not want to do). Outside of that we pay for the food we eat or anything else we want to buy and we have more than enough income coming in on interest and investments to survive, travel and save.

So I see no reason to come back to the States where inflation is going to go berserk soon and we have put up with ot have a life we have grown acustom to here.
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post #28 of 44 (permalink) Old 11-14-2006, 07:50 AM
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Quote:
Originally Posted by Jakarta Expat
Personally I think you are right. This is why I have almost dropped plans to come back and retire back in the States. Our home is bought and paid for, 100%. Her car is 2 1/2 yrs old and mine is brand new, we have no kids and we have no debts. We pay cash for everything and our monthly expenses are i the neighboorhood of the equivelent of USD 650 to 700 a month for electricity, water, cable, internet, phone, gardner (comes in 20 hrs a week) Pool service guy (comes 3 times a week), our house boy (Who does all the laundry, ironing, washing dishes, cleaning house, washing the cars each morning, and virtually everything she and I do not want to do). Outside of that we pay for the food we eat or anything else we want to buy and we have more than enough income coming in on interest and investments to survive, travel and save.

So I see no reason to come back to the States where inflation is going to go berserk soon and we have put up with ot have a life we have grown acustom to here.
You're running a plantation?
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post #29 of 44 (permalink) Old 11-14-2006, 07:58 AM
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You're running a plantation?
Much better than living in an apartment which would be less to take care of with no kids but I truly hate apartment living. I am the only expat I know here that bought an apartment here in Jakarta but I never once lived in it, finally sold it last year. I like living in a house with a yard and having our privacy and having a 400 sqm of house to share with my wife and 600 sqm of backyeard and frontyard to run around naked in if I feel like it.
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post #30 of 44 (permalink) Old 11-14-2006, 08:26 AM
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Originally Posted by Botnst
Collecting the debt could pose difficulties.
You keep putting this post out as if China sends us bills monthly and we decide to pay or not. You obviously know that is not the case.

Payment of debt is BY LAW required to be first out monthly. That means Social Security Checks, Medicare Payments and Treasury dividends. They are, for the most part electronically deposited in accounts of the certificate holder. When the Bond or Note expires, the holder has the option of AUTOMATIC Renewal [no debt collection there]. If the person, institution or country does not renew, Treasury deposits the cash into the account of the holder and sets out to sell a new Bond or Note to pay for it. That occurs the last week of the month.

So, if China decides to liquidate some of the 13% of the National Debt that they own, all they will do is get a cash deposit in their account and Treasury will issue new Bonds or Notes to offset the payout. If there are not enough buyers at the current interest rate, Treasury will just raise the interest rate until buyers show up. Tada.

So we don't have a guy living in a doublewide that will be hanging up the phone on China when they call to get their money. As a nation of laws, and a nation of credit, we are obligated to pay our bills and will borrow as much money as necessary to do so. Just another reason jacking the National Debt is such a problem.

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