GB,
I agree we care, but there are a few things I like to add on to the base assumption that we don't want to piss off China by ripping them off. Some game theory stuff.
A few years back, someone and I can't remember who, said why would China want to sell those? What would the reason be? Certainly not because they are worried about their, "value". Their real value is in NOT selling them, ever. They are the stick that hangs overs the USA always.
And as for the value of those holdings, China wrote them down the day they bought them. We know what they got in exchange which were jobs, infrastructure, and economic growth of Big Gulp size.
China will play games at the margin with those holdings. Send a message by simply not buying any more or by selling a mere 2%. China loves those reserves and really doesn't give a damn what they are truly worth.
It is you and me that suffer the results of these big games. The governments don't give a shit if they write up or write down or inflate or debase. To them, it is all created money anyway. But to you and me, nibbling off our microscopic crumb of 1% of 1% of 1% of 1%, we give a damn.
Last, we will do what is best for us first, as self-interest is always paramount and besides, our guys sell that bullshit that we are still the consumption engine, yada yada. Trouble is, we know that 8 cylinder is now a 4 cylinder and soon may be an electric motor with just a half dozen batteries <G>
GT
TH |
