$ for C is dead now we have $ for electrical applanices

[wildstoats]

Dont be so naive, when the dollar falls as the world standard, China will be left holding nothing but worthless paper. Its a good way to get one's self into a war.

Or what happens when China does not want to purchase any more of our growing debt?

Well China not buying more of our debt and calling for payment on existing debts are two different issues. The reason China won't call for repayment (at least not right now) is that China is one of the top holders of USD. They can't afford to let the dollar tank until they are out of it. This is actually what they are doing right now. The Chinese are stocking up on all kinds of raw materials and they are using USD to buy them. It's basically win-win for them. They get into a more stable store of wealth and unload shaky dollars.

What happens when China doesn't want any more of our debt? Well I think that's pretty obvious. The country implodes under the weight of it's own debt. That's not news to anyone.

[Vedubin01]

you did raise prices...... or for a short time you did due to the Dollar falling against the Canadian dollar.

If it becomes more to produce and sell the product than what the product is worth, then the Chinese will quit supplying or the US will quit buying. The Chinese are doing what they can to protect their interest but if they are losing revenue due to selling in the US market they will start to pull out or cash in their debt before they are left holding paper.

[Massive Lee]

Just like you LEE, when the Dollar fell against the Canadian Dollar you raised your prices on your kits.

Started Massive with a US$ at 1.35cdn. It went down to 1 to 1 two years ago. Now it is $1.10cdn. What do I do? Raise prices and risk loosing business. Or hold it as long as I can? Chinese will probably prefer to make 1% profit rather than making no profit and loosing a market. Even if they make 0% profit with the US, at least they have that market to help them run the same factories than produce parts for Europe where they can make profit. They can use the volume from the US to subsidize the European production.

[kishg]

this is nothing new. these types of rebates for energy efficient appliances have been around for along time. I remember we got one when we bought our new LG washer/dryer set a few years ago. this seems to have been added under the stimulus bill. no need to get that excited about it. however i think i will look into buying a new stainless steel refrigerator :)

[Vedubin01]

The US probably holds China by the ballz too, as a huge importer of Chinese products.

Im sure as the US dollar falls, the Chinese will second guess selling products to the US. Just like you LEE, when the Dollar fell against the Canadian Dollar you raised your prices on your kits. Soon America will not be able to afford Walmart due to the collapse of the US currency!

[Turf1600]

Lessons learned from the great depression. Govt spending stimulates the economy. The only difference is the govt had money back then.

[Massive Lee]

The US probably holds China by the ballz too, as a huge importer of Chinese products. If China starts playing shit games with the US, there will be economic retaliations. If US stop buying Chinese, then grapefruit faces won't be smiling anymore... The 6 month old crisis has put many Chinese factory workers out of work. They have no money, they can't pay the new appartments they just purchased. The whole Chinese banking and economy colapse... Well, this is déjà vu, right?

[Vedubin01]

Thanks for the translation. That won't be happening any time soon though.

Dont be so naive, when the dollar falls as the world standard, China will be left holding nothing but worthless paper. Its a good way to get one's self into a war.

Or what happens when China does not want to purchase any more of our growing debt?

Enjoy this!

http://usdebtclock.org/

[wildstoats]

When China calls their loans in!

Thanks for the translation. That won't be happening any time soon though.

[Vedubin01]

Wat?

When China calls their loans in!

[wildstoats]

What till China comes asking for their marker.

Wat?

[Aptyp]

Who makes those General Electric appliances? American workers maybe? So, when an appliance is sold, it creates jobs. Benefit #1. Would you rather support unemployed workers by givng them a bi-weekly check for seating on their unproductive behind?

What about that old fridge of yours that keeps on pumping freon endlessly? Isn't a new one more efficient? Requiring less energy, and therefore making the US less power dependent? Less pollution too. Benefits #2 and #3.

So what is there not to understand? Unless it is the usual partisan mumbling...

Those appliances may be assembled in US by 10 monkeys with tools, but there's no way in hell anything inside of those machines is made in US.

[M-technik-3]

What till China comes asking for their marker.

[wildstoats]

Not necessarely. There's a cascade effect to money circulation. Much more dynamic that money kept at the bank. You know that.

C4C produces new goods. People work, get paid, spend the money, pay taxes. Money spent creates more job for workers who spend more money, and pay more taxes. I am not an economist, but I would be curious to see how much tax is brought back into the government's piggy bank as it collects taxes everytime money is spent this cascade, and much welfare/unemployement is being saved.

Guys at the top of the chain food won't make much money if the small guys at the bottom don't buy...

The problem with plans like C4C is that they are essentially a band-aid on a shotgun wound. While they do provide a short term bump that I'm sure all the politicians will be patting themselves on the back over it completely fails to address the reason the plan was needed in the first place. C4C creates no jobs and neither does the Reinvestment Act. Sure they keep some people employed but when the money runs out (and it will eventually) those jobs will be lost. With the U6 over 16%, assuming you can even trust the government's numbers, I think there needs to be more discussion about long term objectives for putting people back to work. It seems the current administration's approach is to just keep blowing money on stimulus until the economy magically picks back up. Which is all fine and good if the economy picks back up soon but if it doesn't pick back up before they run out of (our) money it is game over. I personally don't think things will ever quite go back to the way they were, at least not in the next 15-20 years. The U.S. consumer that makes up so much of our GDP just isn't spending because they have too much debt and no more available credit.

Not to mention less and less people are actually spending money. I give you the Personal Savings Rate statistics:

[M-technik-3]

Better gives some incentives to the tweens the make up a good healthy bit of our economy.

It's just moving inventory at the moment.