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View Full Version : China, Japan, and Obama's stimulus



phirang
12-28-08, 04:25 PM
Q: Why would China and Japan lend the US money for free when the US consumer will be a saver/debt deflator for the next year or so?

If this is the case, we are looking at a T-market dislocation and Obama's stimulus will be DOA.

metalman
12-28-08, 04:35 PM
Q: Why would China and Japan lend the US money for free when the US consumer will be a saver/debt deflator for the next year or so?

If this is the case, we are looking at a T-market dislocation and Obama's stimulus will be DOA.

but they are not lending for free. they are forcing the usa to borrow in foreign currencies.

c1ue
12-29-08, 10:41 AM
Metalman,

You're missing the crux of phirang's point: if the trade deficit drops significantly, so too does China's and Japan's reason to buy Treasuries in order to sterilize the incoming dollars.

Phirang,

Does this mean you're coming back from the Chicago school.NWO/dark side economic view of our present situation? :)