Will The US Government Bailout the Chinese Banks on Sub Prime?
Bad economic policy by the US Government, corporate cronyism, comprehensive financial incompetence, and 30 years of disastrous interior and trade policies of Reaganomics will force you and I to bailout the Chinese Banks for about $ 300 billion. Impossible? On August 23rd the major Chinese Banks announced their exposure to US Sub Prime mortgages. The Chinese banks are in to the US homeowner for about $300 billion. That is more than any group of US based banks.
The banks immediately explained, “Standard & Poors, the US debt-rating agency, rated these loans within our statute parameters."
This sounds like a threat for future legal action to procure retribution. China also owns a great portion of US governmental debt. China has threatened to sell their holdings of both US currency and Governmental paper over much less important things. The US economy only produces 18% of consumption. A trade war would result in public panic, hoarding and empty store shelves.
The US cannot allow the Chinese to get upset about their loss. The politicians may determine they are less scared of the US voter than the Chinese government and intervene directly. It seems more likely that the US government will act more covertly. Today the Federal Reserve weakened its requirements even further. The FED is now allowing banks to provide “commercial paper” as guarantees and significantly increased the amount of money these banks can borrow.
Yesterday, it seems, the FED bailed out Countrywide Financial. Today it started financing the repurchase of Chinese owned Sub Prime debt. Nice to know that our government is using our tax dollars to take care of the US citizen instead of protecting greedy financial operators from losses. Justification for the FEDs action came so ingenuously truthful from a primary economic analyst.
“What did you want the FED to do, allow the country to enter a prolonged period of depression that will make the 1930s seem like an economic boom?”
The financial, economic and internal production situation in the US is precarious at best. Our Government must stop playing games and come clean with the American people so we can take on these problems. We are not talking about protecting America from a few terrorists who want to blow us up. We are talking about protecting America from the destruction of our economy that will leave hundreds of thousands dying of hunger. Come to think of it this may be Bush’s legacy. The only President except Hoover to reduce America’s waist size.
Tags: Government Politics China Corporate America Finance Economy Reaganomics
The banks immediately explained, “Standard & Poors, the US debt-rating agency, rated these loans within our statute parameters."
This sounds like a threat for future legal action to procure retribution. China also owns a great portion of US governmental debt. China has threatened to sell their holdings of both US currency and Governmental paper over much less important things. The US economy only produces 18% of consumption. A trade war would result in public panic, hoarding and empty store shelves.
The US cannot allow the Chinese to get upset about their loss. The politicians may determine they are less scared of the US voter than the Chinese government and intervene directly. It seems more likely that the US government will act more covertly. Today the Federal Reserve weakened its requirements even further. The FED is now allowing banks to provide “commercial paper” as guarantees and significantly increased the amount of money these banks can borrow.
Yesterday, it seems, the FED bailed out Countrywide Financial. Today it started financing the repurchase of Chinese owned Sub Prime debt. Nice to know that our government is using our tax dollars to take care of the US citizen instead of protecting greedy financial operators from losses. Justification for the FEDs action came so ingenuously truthful from a primary economic analyst.
“What did you want the FED to do, allow the country to enter a prolonged period of depression that will make the 1930s seem like an economic boom?”
The financial, economic and internal production situation in the US is precarious at best. Our Government must stop playing games and come clean with the American people so we can take on these problems. We are not talking about protecting America from a few terrorists who want to blow us up. We are talking about protecting America from the destruction of our economy that will leave hundreds of thousands dying of hunger. Come to think of it this may be Bush’s legacy. The only President except Hoover to reduce America’s waist size.
Tags: Government Politics China Corporate America Finance Economy Reaganomics
Labels: China, Economy, Financial Institutions, Foreign Exchange, Homeland Security, Lying Politicians, Public Debt, Reaganomics, US Poverty
posted by Small Business USA at 2:19 PM
2 Comments:
I have to admit this is a subject beyond my grasp but very interesting.
There are many questions regarding the possible repercussions of bad economic policy, the machinations of interdependence of national economies, and whether a repeat of the 1930's is likely considering the hindsight of policies that led to the great depression. We are definitely living in interesting times and the news that I access seems to be avoiding these questions.
Lexcen Not only the news you access. We seem to be playing with our heads in the sand. The mentality appears to be "If we say everything is fine then everything is fine..." Those who talk about the difficulties we need to be facing are neigh sayer's and just trying to create panic. I have been called "too negative" by those closest to me even though they now seem to be more inline with my line of thought.
Unfortunately the last week has shown us how the US economic market influences the rest of the world. Many countries found themselves fighting a financial crisis they had nothing to do with.
What will happen as the US starts controlling its borders and ports and enforcing safety product laws?
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