Tilted Forum Project Discussion Community

Tilted Forum Project Discussion Community (https://thetfp.com/tfp/)
-   Tilted Economics (https://thetfp.com/tfp/tilted-economics/)
-   -   Whom do we owe? (https://thetfp.com/tfp/tilted-economics/147060-whom-do-we-owe.html)

Tully Mars 04-22-2009 05:51 AM

Whom do we owe?
 
Found this interesting article this morning...

Quote:

Whom Do We Owe?
Posted Tue Apr 21, 04:03 pm ET
Posted By: Dirk van Dijk, CFA

Recently, the monthly data on who the major holders of treasury debt are was released. Overall, $3.162 Trillion of Treasury debt was held overseas at the end of February 2009, up 37.5% from a year before ($2.226.1 Trillion).

The largest holder and the largest increase in absolute terms is China, which holds $744.2 billion -- a 52.4% increase from $486.9 billion in February of 2008. Japan is the next largest at $661.9 billion, but up only 13.5% from a year ago.

Next is a group that probably hides who the true holders are, the Caribbean Banking Centers. The collectively hold $189.1 billion of Treasury debt, and are up a stunning 82.0% from a year ago. They are followed by the Oil Exporters, at almost the same level, $181.7 billion, but who surprisingly had a much smaller increase, up just 24.0%.

Perhaps most striking about the list are some of the countries towards the bottom of the list. For example, Canada holds only $10.9 billion of our debt, down 51.1% from a year ago. This is less than one third the amount of our debt that Mexico owns ($37.9 billion). Thailand owns more ($39.7 billion) than twice the amount that is held by Israel, France, Italy, Sweden, the Netherlands and Belgium. Brazil holds more ($130.8 B) than those major European countries combined.

This data seems to be more evidence that the world's economic center of gravity is shifting from what we have long termed the "developed" counties (roughly speaking the OECD, but not exactly, since both Mexico and Turkey are members of the OECD) to what we used to think of as the "third world."

Clearly the developing world has taken a big economic hit with the current worldwide slowdown, but they may come out the other side of this in better shape than most people recognize. While many people point to China as America's new bankers, clearly they are not alone, and far-off exotic locals are becoming increasingly important to the government in financing our debt, not just the traditional non-US financial centers like London, Geneva and Frankfort.
Link Here

I knew we owed China and Japan a bunch of money but I had no idea we owed as many countries as we do.

Wonder if the US is ever going to start living within it's means? Wonder if owing all these dollars keeps the US dollar artificially inflated? I mean if we owe a ton of dollars to people it's seems like it's in their best interest to make sure those dollars are worth something. I feel like this is a real balancing act, almost a house of cards. Pull out one card and it all falls down. Personally since I live in a foreign country I find this a little concerning. Right now things are great. The dollar's currently about 13-1 against the peso so things are good. But should the dollar drop suddenly I could find my rent going from a couple hundred to over a grand in a very short time. Not only would my rent go through the roof so would all my living expenses.

Any one with financial experience have any thoughts on your debt? What the dollar value might be in the near future?

Cynosure 04-22-2009 06:55 AM

If the U.S., for some cataclysmic reason, defaulted on its loans, what would China do?

Cynthetiq 04-22-2009 07:09 AM

Hmmm seems to me that again, when the music stops there will not be enough seats for everyone in the game of economy musical chairs.

which reminds me...of that 2007 Visa debit card commercial "Because money shouldn't slow you down!"


If I'm not mistaken cynosure, we hold land and factories in China to tune of almost that same amount. This is like a mutual assured destruction of both if both groups reneged on their obligations.

roachboy 04-22-2009 07:24 AM

well here's yet another of these philosophical problems. in neoliberal land, the economy is understood as a discrete system that floats in the air above everything else, populated by happy rational actors who think only of themselves but manage it in such a way that the rest of us should be grateful, and that floating system is itself thought of as closed and as tending toward equilibrium. so that means the sale of bonds at point a has to correspond to some future situation that will resemble that of point a--not because there's any particular basis for that, but because the way of thinking about the airborne system that is the economy forces you into it. this would not be problematic in itself, because it's always possible for folk to entertain loopy conceptions of things and none of them particularly matter. but neoliberals tend also not to like complexity very much so they tend to assume that there's one and only one way to think about the economy and that they know that one and only one way.

an alternate way of thinking about the economy is as a dynamic, open-ended collection of processes that the state can interact with or direct and that can be kept in motion in such a way that the situation at poin a may not particularly resemble the situation at a future point so that projections forward from point a really don't mean a whole lot--so long as the system continues to operate that is. neoliberals think the economy as a type of thing in any event, so motion is not really in their worldview--activity is, but somehow or another that's different from motion. if it weren't different from motion, you'd be hardpressed to see how this whole equilibrium thing made any sense, and besides it doesn't make sense even for neoliberals because they've against all reason substituted "growth" for "equilibrium" and well just look at the mess THAT created.

anyway, you can see in these conceptions of the future two different ways of basically throwing the dice--one that assumes for aesthetic reasons stasis, even as it likes to blab about growth, and the other that assume motion and/or expansion (they aren't necessarily the same) and debt as an enabling device which underpins the actions of the state, the function of which is (in part) to direct the economic systems toward desirable political and/or social ends. so for neoliberals, debt is scary; for more keynesian types, it's a non-issue.

unless the party stops. but if the party stops, we're all fucked anyway to the extent that we live inside the party.

so i think this is a non-question.

nation-states are emptier and emptier every day emptier and emptier. modern capitalist nation-states are mostly creations of the 20th century in any event, so they haven't been around that long and haven't worked out so well think maybe the same problems as the bourgeois nuclear family. a stupid idea that doesn't work but that does enable a certain illusion of autonomy, most of which is obtained by not thinking real hard about what autonomy might be.

neoliberals typically have an even bigger problem facing the dissolution of the nation-state than they have with the arbitrariness of their positions on the economy, so you can imagine that this transnational bond-holding business is all terribly upsetting to them.

the other structuring fiction for alot of these folk is that they think the state is like a giant individual and that the state's relation to debt is like that of an individual's relation to their credit card. i think that's quaint.

Tully Mars 04-22-2009 09:58 AM

Quote:

Originally Posted by Cynosure (Post 2627148)
If the U.S., for some cataclysmic reason, defaulted on its loans, what would China do?

Foreclose and own us or more like US. Either that or just start having the US citizens make clothes for them at .04 an hour.

Baraka_Guru 04-22-2009 10:44 AM

Quote:

Originally Posted by Cynosure (Post 2627148)
If the U.S., for some cataclysmic reason, defaulted on its loans, what would China do?

In short, the American bond market would collapse and America would have to cut much of the military budget just to make ends meet.

Tully Mars 04-22-2009 02:32 PM

Quote:

Originally Posted by Baraka_Guru (Post 2627234)
In short, the American bond market would collapse and America would have to cut much of the military budget just to make ends meet.

You don't understand the states at all. The US government would cut every program other then the military.

tisonlyi 04-23-2009 05:08 AM

Quote:

Originally Posted by Tully Mars (Post 2627351)
You don't understand the states at all. The US government would cut every program other then the military.

Oh, I think there'd be total carnage in the US if way over $1tn of 'entitlement' or 'pacification' programs were cut.

The military maintains the international pre-eminence, the pacification programs are the bare minimum to keep the domestic populace in line.

Not just the poorest, either... Generally the middle classes of every nation are the largest nibbler on governmental knockers(breasts). Direct and indirect.

Tully Mars 04-23-2009 07:34 AM

Oh you scare enough people that "they" are coming to kill you and you'll have them sending in their entitlement checks and planting victory gardens.

tisonlyi 04-23-2009 09:33 AM

You can't feed a family entirely on a victory garden, particularly in an urban block. ;)

You can, however, cause chaos.

Willravel 04-23-2009 09:56 AM

Quote:

Originally Posted by Tully Mars (Post 2627113)
Wonder if the US is ever going to start living within it's means?

This is going to depend a great deal on the next year or so. Clearly it's become a lot more difficult to live in denial, but does that mean that we can change to a more responsible national lifestyle? I honestly wish I knew, but at this point it could go either way.
Quote:

Originally Posted by Tully Mars (Post 2627113)
Any one with financial experience have any thoughts on your debt? What the dollar value might be in the near future?

When you say "your debt" you mean the national debt and not personal debt, right?

If you mean the national debt, assuming things continue on their current course there will be a breaking point where it's no longer prudent to invest in the US and things start to free-fall. This free fall will be the great American bubble burst. Future generations will use this as their prime example of economic failure in a modern society for generations the way we might use Russia.

As far as personal debt, I don't really have any. I bought my house from a family member and was able to pay it off quickly enough, I own my car, furniture, electronics, etc. Sure, I have small credit card debt, but I pay it off completely every month. Right now I think there's a $30 dinner charge from Aquis (great restaurant, if you're ever in San Jose you should stop by) on my Visa and I'll pay that off when my next payment is due. That's it. I'd be a massive hypocrite if I had a lot of debt, considering how often I speak out against the debt system. I don't think debt and credit should exist at all. If I remember correctly, the size of the Credit Default Swaps market is about $64t and the GDP of the entire planet is about $56t. If that's not an indication that there's a big problem, I don't know what is. I understand that people are raised in an economic reality that includes debt and credit as necessities, but they enable the kind of insane economic problems that we're seeing right now so effectively. So long as people—and governments—have the option of spending money they don't have, they will do so. It's not even a matter of people not being responsible, because you can only expect your average person or government to be so responsible before giving into having seemingly free money. It's too much temptation, and when you combine that with really stupid economic theory, the theory that RB so eloquently outlined in the second sentence of his post above, it can only result in massive wealth inequality and instability... and substantial debt.

Edit: here's the link for the GDP vs. CDS market statistic.

Tully Mars 04-23-2009 09:57 AM

Quote:

Originally Posted by tisonlyi (Post 2627654)
You can't feed a family entirely on a victory garden, particularly in an urban block. ;)

Tell that to the Cubans. But I get your point. I just think you underestimate the amount of pull the military industrial complex has in the states. The lengths they'll go to keep the cash cow alive is stunning, IMHO.

Willravel 04-23-2009 10:02 AM

Quote:

Originally Posted by Tully Mars (Post 2627662)
Tell that to the Cubans.

Actually, now we can tell the Cubans! To their faces! In their own country!

I can't wait to get my hands on a legal and verifiable Cuban cigar...

Skitto 05-02-2009 04:06 PM

Ah, to live under Cuba. What a wonderful subterra world.

Skitto 05-05-2009 08:32 AM

Oh, and, funny that you said there are actually COUNTRIES. lol, world shadow leaders.

Cynosure 05-05-2009 03:16 PM

Quote:

Originally Posted by Cynthetiq (Post 2627152)
which reminds me...of that 2007 Visa debit card commercial "Because money shouldn't slow you down!

Ha-ha-haaa! That video is so-ooo indicative of the Big Problem, which involves the U.S. economy and the dependent lifestyle of its people. And what's really ironic and sadly funny is that Visa is so arrogant and so insensitive to the problem (at least, they were back in 2007), that they would actually create a commercial like that.


All times are GMT -8. The time now is 04:27 AM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2024, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0 PL2
© 2002-2012 Tilted Forum Project


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360