2026 TeoTwawKi ... 2032 Darkest Interregnum Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 375.93

-1.8%

Nov 14 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: carranza2 who wrote (66876)	10/5/2010 11:29:57 PM
From: Hawkmoon	Read Replies (1) of 217789

This is the closest I've yet seen of an analyst referring to what I've been calling for over a year the "Manufacturer Financing" policy by Asian nations, particularly China: China has maintained a cheaper currency to the West, but to protect their economy from overheating from the flood of dollars in exchange for their goods they have been recycling the dollars back into US assets, namely US government securities. By virtue of buying US government debt they are foreign lenders. They are the financiers of the US economy (and West) via the current account. This recycling allows them to artificially stimulate their manufacturing exports even more as the Chinese are helping to stimulate American demand for Chinese goods. How come? The purchasing of US debt supports the dollar, maintaining the undervalued RMB. Meanwhile interest rates have been driven lower than otherwise would have been without their purchases of debt. In addition to this the Chinese bought US mortgage backed and US corporate and agency securities. So US rates have been distorted lower than fundamentals would otherwise assume. This whole relationship has been termed vendor financing and resulted in lower rate, more affordable mortgages. The 2008 and ongoing financial crisis was not caused by excessive mortgage lending to 'ownership' obsessed households in the US (and the rest of World), it was merely the symptom of these global imbalances created by this vendor-financing relationship of the Occident and Orient. This relationship was more instrumental, by far, than the Clinton legislation passed for more affordable rates for less well-off Americans, which some apportion blame to for the subprime mess. 03 I think it was rather obvious to call it that, but it doesn't seem to have gotten much recognition. Hawk

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next