Where is the money coming from?

China has been lending us trillions of dollars and I'm curious where they get it. Do you know?
Is anyone else even bothering to ask?

Is this solely due to the existence of international trade? The Stock Market?

Trade can only work if both parties have a surplus of something the other needs or wants.

One country may offer assistance to another beyond equal trade with the understanding that the other may return the favor should the situation be reversed, but we are not talking about commodities.
We're talking about china having monetary surplus sufficient to satisfy the monetary deficit of the US.

Have we bought 14 trillion dollars worth of ceramic figurines and lead-laced toys?

We started the whole "Fair trade" thing to help China improve their own economy.

Is this just a case of the student becoming the master?

Category:

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[KylieTasticUK]

3 words "Made in China"

They make and the US and Europe buy it in huge amounts

[corthew]

@KylieTasticUK They should put "Made in China" on their flag. It could be their national slogan.:)

Hell...Its on enough of ours.:)

[dannukesem]

Careful if they know you can think they will start to watch you,,,

[corthew]

@dannukesem Not if I watch them first.:)



[LaMaisondeCasaHouse]

A nation's GNP is the aggregate value of all its goods and services. China's GNP is largely based on production, the goods of which it exports to the west. The USA's GNP is largely based on consumption - imports and credit. The West pays out capital to the East for its goods, which the East then loans back to the West at interest. There are some who say this system can go on forever, but they are what you'd call insane:)

[DonQuixotedeKaw]

For decades, China's labor costs were at slave wage rates, barely enough to keep workers alive, and many hundreds of millions died on the assembly lines that made our cheap crap for us. Which we bought by the mountain. That huge profit drained out of our own pockets, and into theirs, where they wisely diversified into resource development. Which they turned around and sold to us again. Where has China got all of that money from? It was ours, before we refused to buy American made products.

[pamew]

@LaMaisondeCasaHouse So, would you say it's about time for people to run into a blind panic, crack open their neighbour's heads and feast on the delicious goo inside?

(Bonus points for pinpointing what I'm referencing).

Seriously though, the world economy is starting to give me the fear. It's huge, unstable and I completely fail to understand it on any meaningful level. Reminds me of my ex, now I think about it.

[edwardtang1977]

I forgot to say much of their money also came from a massive collection of gold and rare earth materials. China has the most rare earth reserves in the world. So they can print money backed up by these materials without devaluing their money. If they appreciated their money as a free market would. Their GDP would rise 3 folds. But that would destroy the world so they are keeping it low so you can afford their goods. The pain is on the Chinese people .

[edwardtang1977]

further more, they know how to handle money and they have a perfect government for it. It might not be humanitarian but it sure controls how people spend money. For every war they don't get themselves involved they saved hundreds of billions of dollars which they use to buy US debts. A Democracy can't control its budget as efficiently as a dictatorship. But a dictatorship can make people save their tax and money for economic dominance.

[edwardtang1977]

China was in debt 30 years ago. They kept their growth at an average of 10% per year and saved 35% of their earnings. They manufacture for every country in the world. It didn't happen suddenly. It took 30 years of hard labour . 1.3 billion people working with only 4% unemployment . That is a large force. Slowly they had 3 trillion dollar surplus and foreign reserves. Think of the ant and grasshopper story.

[pilgrimpater]

I know you said it's on computer and not physical money but wouldn't it be great if they did lend the U.S. money in notes. What a great way to dilute the unconstitutional "in god we trust".

[n3rdm4n]

People with dollars buy stuff manufactured China. China then has dollars.

The US government spends more than it earns and must borrow the difference. It does so by putting out bonds, which China buys with the dollars it got from selling its manufactures.

That's pretty much it, as I understand it.

[TheStigmadeign]

Noodle sales.

[emperorkang]

hi Corthew. long time, no see. ;-)

[KladionicaCity]

They absorbed the industries that EU and US gave up on.