At what point would China decide to call-in?

#4 | Posted by redlightrobot

-last week

Unmentioned so far: the selloff is global
BTW:
the only reason China et al has been able to buy our bonds is because of their trade surplus, which also enables them to buy our land.

Bears repeating:
Trade Deficits are financed with Debt and Equity Sales

"the only reason China et al has been able to buy our bonds is because of their trade surplus, which also enables them to buy our land."

Gee, if only Republicans hadn't reset our fiscal sights from surpluses to deficits, we wouldn't have that problem, would we?

#10 | Posted by Danforth

I'm not sure what your point is, because the China situation has developed across multiple administrations.
Please see these CFR sites for clarification, and notice that the China Holdings of U.S. Agency Bonds tracks exactly the China's trade surplus :

^^BOTH parties sold us out re: trade imbalance. Please refer to the CFR charts linked previously. China and others are still going to have a surplus, if given our recent historic state of indifference to trade imbalance, and they are going to continue to buy American equities and land with that surplus, regardless of how much we punish ourself with taxes.
Are you suggesting that we could tax our way out of a trade deficit? Tax apples to offset oranges?
"here, tap our consumer market for all you can, and we'll make up the difference out of our own pocket, and still you will be able to own our equities and land because of all the money we let you make here"

Other countries have been playing US for suckers via trade, and internal dissidents such as Danfort are helping them. THEY know what they're doing, but many of us don't, particularly those of us wearing political blinders that limit our field of view to targeting our fellow Americans, while THEY rob us.

I will point out that per the CFR charts, Both China's trade surplus and their US portfolio holdings peaked 2012-2016, retracted from 2017-2019, then increased again in 2020. This phenomenon is completely independent of US internal taxation; It's based solely on trade imbalance.

But has ItchyMyStrap thought about what happens if the trade deficit balance is 0?
#18 | Posted by oneironaut

-Then trade balance would be achieved. All trade partners get to sell their products; everyone makes money; no one abuses another's market.

without the trade deficit, government spending can't go on unabated.

Please explain, because this makes zero sense, also why is "unabated" gov't spending a good thing?

Inflation: If inflation is running rampant in a country, the price to produce a unit of a product may be higher than the price in a lower-inflation country. This would impact exports, thus affecting the trade balance.
Which Factors Can Influence a Country's Balance of Trade?
Investopedia
https://www.investopedia.com ... Macroeconomics

Inflation may affect trade balance, but trade balance affect inflation? I don't think so.
Please explain, if you can, onenut.

For danfort et al who champion raising tax rates:

-Taxes raised via tariffs
"they will just pass along the cost to consumers"
Fair enough, but tariffs will also serve to balance trade.

-Tax rates increased
"they will just pass along the cost to consumers"
Plus finished goods cost will increase, leading to greater trade deficit.

Who owns the most U.S. debt abroad?

Japan: $1.125 trillion.
China: $784 billion.
United Kingdom: $750 billion.
Cayman Islands: $418 billion.
Luxembourg: $413 billion.
Canada: $406 billion.
Belgium: $395 billion.
France: $354 billion.

The US would be hit with inflation levels the Depression would envy.
proudly posted by onenut

During the Depression, inflation was negative.
What are you trying to say, other than incorrectly asserting that trade balance leads inflation?
Do you even know what you mean?

1930 -6.40% Contraction (-8.5%)
1931 -9.30% Contraction (-6.4%)
1932 -10.30% Contraction (-12.9%)
1933 0.80% Contraction ended in March (-1.2%)

The US government could prevent foreign ownership of our land by passing a bill. Many other countries have already curbed such foreign investment. Why don't the Republicans do that?

#25 | Posted by Whatsleft at 2025-05-24 04:25 PM | Reply | Flag:*superbump

Also, Why didn't the Democrats do that?

Also, Why didn't the Democrats do that?

Posted by itchyp at 2025-05-24 06:56 PM | Reply
They play for the same team and we're not on their team.

#27 | Posted by LauraMohr at 2025-05-24 10:14 PM | Reply | Flag *superbump for you too!

#28 | Posted by oneironaut

Maybe the easily-printed increasingly worthless fiat currency is the problem, not a balanced trade.
Also, in the balanced trade scenario, we would export actual products instead of playing a shell game with play money.
What then, about the trade surplus countries buying up our tangible assets? How does that cycle culminate?

Americans so ethnocentric.

#29 | Posted by oneironaut

So what's your plan, abandon Capitalism?

#32 | Posted by snoofy

-NO, Not at all!
A plan would be to balance trade and control spending.