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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (6159)	3/14/2009 9:27:58 AM
From: Road Walker	Read Replies (1) \| Respond to of 86356

We have leverage over China for the first time in my life time, because of our huge debt and their huge investment in our debt. We'd better not squander it. They also have huge leverage over us. If they suddenly dumped our treasuries on the market, our interest rates would skyrocket... at this point in time it would certainly throw us into a deep deep depression. The buying power of the $ would be zilch. Even if they just 'stopped' buying our bonds we would be in a world of hurt. At the same time, either of those actions (and the subsequent dump in the US) would have a very bad effect on China, and unlike us, the masses might rise up... so their political folks know a wrong move could cost them their power (and maybe their lives). It sort of reminds me of the "MAD" (mutually assured destruction) nuke weapons balance. Yes either side can tinker around the edges and do some rhetorical baiting, but neither side can risk real strong action... if the 'big weapons' get used both sides are really screwed. So I think we disagree on this being an opportunity. In fact I think it's very dangerous at this point in time.