The usa is 23,000,000,000 in debt and keeps adding to it. must be the art of the deal

jbeas176

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dale, dale mis amigos. can a fiat economy survive. this is not based on politics. my quest is to understand if investing in 10 year treasury bonds, in the US system, is a good idea. If they backrupt, you lose the money like investing in argentine bonds
 

Ries

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I would be much more worried about the fact that they pay practically no interest, than worrying about the USA going bankrupt. The chinese, saudis, and russians will not let the USA go bankrupt, they have too much invested there.
 

lamarque

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I would be much more worried about the fact that they pay practically no interest, than worrying about the USA going bankrupt. The chinese, saudis, and russians will not let the USA go bankrupt, they have too much invested there.
That is what many some people thought back in 2001 here. In any case i wouldn't be so sure that china is not going to let it fall, specially given the current market war between china and trump, remember that china play the long game and no one is going to let you borrow money for ever, the interest rate is already near 3% so not so low anymore is the highest in a very long time
 

garryl

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I would be much more worried about the fact that they pay practically no interest, than worrying about the USA going bankrupt. The chinese, saudis, and russians will not let the USA go bankrupt, they have too much invested there.
Chinese incurred more debt than Americans, they are just going to print the hell of RMB to get out of the debt.

At the same time, Macri tries to learn to play Chinese trick, he prints 30% of peso more a year, and trying to manipulate the dollar/peso rate to around 17, and he calls that the control of inflation. What is he thinking ? Who is he trying to fool ? He was successful for a few months to a year, I was really surprised that he was able to do it. But that did not last long, it imploded badly on his ass. Unlike China, Argentina does not have the massive foreign reserve, export capacity, controlled currency, and financial know-how to game the domestic/international market. The only thing that Argentina has the is the repetitive economic disasters and dumb management by its government. The unions in Argentina are monitoring the inflation, and Macri is printing peso at 30%. So many people were defending his him, and claiming he wants the exchange rate to go down, but peso was strong, and that will tame the inflation. inflation rate = new current circulation - GDP growth. If you want to control inflation, halt your printer, not playing with the currency conversion rate!! Conversion rate is the reflection of the inflation, not the cause of it, dumb ass Marcri.
 
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Ries

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There is no comparison between Argentina at the time of the corallito, and the USA today. Chinese companies have invested billions in US plants, real estate, and stocks, as well as trillions in US debt. Russians the same. Everybody, world wide, has been sinking millions and billions and trillions into US real estate. There are entire zip codes in NYC where less than 50% of the apartments are occupied- they are sitting empty, as investments, just to park money. Foreign companies are currently spending around $10 Billion updating US Steel Mills. Regardless of how bad the USA is as a potential investment location, everyplace else is worse. EVERYBODY, from Norwegian pension funds, to Saudi Sovereign funds, to Russian Ogliarchs, to Chinese Billionaires, has been parking literally trillions of dollars in the USA, a lot of it in Real Estate, a lot in buying companies- For instance, the Swedes bought Mack Trucks and White Freightliners. The Chinese just spent $1 Billion on a new Volvo factory in South Carolina. The germans built a $5 billion dollar stainless steel mill in Alabama a few years ago. Half of Trump Tower is owned by Russians.
NO foreign investment in Argentina approaches even 1/1000 of what has been pouring into the USA.
Its considered a safe haven for the wealthy, worldwide. And to protect their investments, they will make sure it stays solvent. Whats a few hundred billion here or there to keep your beach house safe?
 

jbeas176

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clap..clap ..clap garryl and ries. really enjoy this type of exchange. ries i agree US real estate is a haven for forgein money and reits. far more secure than the volatility of equities. because the US debt is in dollars, a fiat economy, can they just print there way out of it? garryl, i agree china is in a way better position to handle a trade war. well diversified. as a fiscal conservitive, its hard to imagine, you can continue to finance the debt as interest rates climb. just searching for answers going forward. protectionism does not work in my mind. my experience in argentina showed me that.
 

Ries

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Currently, 18% or so of the Chinese economy is exports. Most people assume its much more. Of that 18%,about 18% of THAT is sent to the USA. So that means of the chinese GDP, only about 4% is exports to the USA. If the US was completely closed to the outside world by MAGA fans of Trump. China would barely feel it. On the other hand, a huge percentage of US products use some chinese components- zippers, screws, nails, thread, ink, paper, fabric, paint, minerals, solvents- a gigantic amount of small percentages really add up. If the US was cut off from all chinese imports, employment would crash, the economy would tank, and things would cascade downward even faster than in 2008.
So I would totally agree- China will fare much better than the USA in the upcoming trade war.
But individual chinese will continue to buy condos in the USA, send their kids to our colleges, and buy businesses. Because for all its flaws, the US legal system is more protective of private property, the government is less capricious, and they tend not to execute corrupt businessmen and then bill the family for the bullet in the USA.
Even if the USA really takes a dive, it will just mean more foreigners will take advantage of the lower prices to buy houses in Miami and Malibu.

But I still am not buying any Savings Bonds myself right now. Even the thirty year only pays 3%. Obviously, real estate, in either Buenos Aires or Miami, is going to be a much better 30 year investment.
 
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