Much as the bankster bailout indicated that it was time to move your deposits out of the big banks, QE is the signal that it is time to move your wealth offshore. So long, Bucky.

Not that I disagree with Dagong, but they are viewed as a "rogue rating agency" by the headlines I just saw in google news.

War with China is an impossibility. Your elite have too much invested there. They could be killing your babies with poisonous products and there would still be a massive lobby to keep China as a favored nation. The Clinton's, the Bush's, they all have serious money in China. They have already spoken with their personal wealth and made it a non option for you the American people.

Do you want them to eat those losses? Try to get a tariff, much less a war, and see how far that will get you.


(btw this is how you create peace in the modern world, let the rich people that are in control, intertwine economically)

TMD, you make a solid case. But who will force us to "do the right thing"? Obongo is reliving his childhood fantasies on your dime while Omaha is burning. And on the debt, unless the USD implodes, Ben will just buy any rollover that others won't. If he gets in a jam, he sets the HFT machines to -8% for a few weeks and scares $200 billion into IRX and pushes the USD back up a bit. The man knows how to buy time.

I hope this gets away from him but right now he has figured out how to jiggle all the strings on this puppet show without getting them tangled. The longer the show goes the bigger the disaster for my kids becomes.

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Do you want them to eat those losses? Try to get tarrif, much less a war, and see how far that will get you

btw this is how you create peace in the modern world

It's become a matter of survival now. You can't get two people in the world to agree let alone countries. China is concerned about China just as Canada is concerned about Canada.

Look at history to determine the outcome. Very tough to change human nature.

It's Dagong's way (read between the lines, official PBOC) of saying **** you to the SEC who denied their rating agency application.

All the recent antics aside, looking to an arm of the Chinese politburo for guidance on domestic US policy is not wise. They have one goal, that is China.

It'd be pretty sad if the 2012 mayan prediction comes about due to wall street and banker douchebags passing around bad paper and Bernanke trying to sweep it all under the rug.

Fully admitting that the U.S. is a total ponzi scheme, who is China to comment with their transparent currency and empty cities to goose GDP. I'm not saying they are wrong in content, they are just wrong in commenting.

That said, I am glad that the pot has called the kettle black. I want us to retaliate so we can get on with the trade wars and end this globalization game. Quicker we blow it up, the quicker we can rebuild something that lets me sleep better at night.

When in Rome, do as the Romans do. I wonder what they have Chinese credit rated? I think we are all on a hellbound train, the Chinese included. They monetized about $2 trillion themselves to build empty apartments and cities and finance commodity corners. The whole world is addicted to Ponzi finance.

As far as Bernanke goes, at least on a public basis, he is getting reamed by the rest of the world. Problem is the last President that might have forced him to quit was Ronald Reagan, as Obama believes in the success of the Zimbabwe economy.

There might be some method to Bernankes' madness in that this easing is giving people a chance to liquidate out of assets while there is still time. Corporations are borrowing sizable sums of money. For what? Buy back stocks? Is it the buy it and put it in the closet because it is cheap? It appears to me they are merely changing seats on a sinking ship.

I think it is time we take the cold money out of China and quit buying their crap, that is unless we have to. Maybe going to a pawnshop to buy a tool that has been pawned might beat buying the same Chinese crap retail. China is talking out of both sides its mouth, just as Geithner and Bernanke talk out of both sides of their mouths. If China is so damn worried about the dollar, float their currency. They might find out their credit rating isn't any good either. America needs to quit borrowing money to send to these heathens. It is excessive credit and bubble finance that has created this mess, including building up the most likely opponent in the next world war. John Xenakis of Generational Dynamics says we are on a collision course for a war with China and that the younger leaders in the Army there will begin pushing in that direction because they don't have enough sense and experience with war to realize it needs to be avoided.

The Japanese quit spending, though their government went on a binge. It is the responsibility of the American people to counterbalance the excess of their government and the criminals running the financial system. Once we are well into this disaster Bernanke, Greenspan, Paulson, Rubin and Geithner have lead us into, there will be a lot more people who understand Wall Street is ****ing our brains out and that the government officials are aiding and abetting them. How long the upper management of the country can continue to stuff money in their pockets through financial fraud can only last until the next crisis. One of the idiots out there stated that financial crisis appeared every 5 years or so we had them, as if they were normal. Pregnancy doesn't occur often unless there is excessive screwing and financial crisis is even less rare, as it takes even more screwing to bring it about.

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I pray for tariffs and trade wars every night. It is time to end the fraud that globalization has become.

Wage and environmental tariffs are ++good, especially since we're now a net importer instead of a net exporter during Smoot-Hawley.

I'm also a fan of retaliatory tariffs: if a nation wants to trade with us and have open access to our markets, we should demand the same access to theirs.

(incidentally, I'm a fan of retaliation and revenge in general.)

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They monetized about $2 trillion themselves to build empty apartments and cities...

It will be preferable to living in a tent city in the USA.

jal

Correct Otis

As of now we do not have the same access in places like S Korea and China. They wont let us sell cars in certain areas and in the ones they do they charges us high tariffs. Autos is just one example of many where we give them access and they dont give us the same...

There is an interesting chain of thought here. First of all, if the Fed was staving off bond market collapse, the interest rate on treasuries wouldn't be anywhere near 3%. The demand for short term money to get out would go through the roof, as you have to sell what you have for what you have to get out of treasuries.

TMD mentioned the cuts that have to be made. I few years ago I read about the hospitals being built in Thailand. Hip replacements are $5000 over there. The CT scan is $5000 here. They are supposed to have a better procedure the FDA won't approve. Bypasses are affordable for people that aren't poor. I am sure this business is coming to the Caribbean or Mexico and people will get wise and quit allowing the government sponsored organized crime industry called medicine to loot us. Of course, the US government attempts to prohibit the purchase of pharmaceuticals across the border.

When the Fed does what they do, they acquire goods and services out of the economy and create the exchange. Only if they are clearing money for the government directly does this result in new money in accounts. Fed money is a non-interest bearing asset on a bank balance sheet. We are paying for it in one way or another. Where the Fed is missing the boat is this money isn't working its way up through the system from the bottom, but going to finance speculation and to a great extent, downsize, not increase employment. There isn't enough demand for anything, except ponzi assets like commodities and stocks. Ponzi has to pass the bag. The typical bag holders are out of money.

KD pointed out one thing, financials are weak. Many stocks and commodities have that blow off top showing up. The entire sewer system is about to hit the fan.

Otis, since you are a fan of retaliation, I am a fan of yours!

The U.S. needs to get its house in order and get ready to compete with the ROW again. It will hurt, but soon it should hurt the emerging markets more.

Jal, those apartments are empty. Has it ever entered anyones mind that Chinese already had a place to live? Has it ever entered anyones mind that $5000 incomes don't have the excess to buy $100K apartments? Has it entered anyones mind that the elite of China hold all of this stuff, not the peons and that they have an endless supply of labor to screw their workers with and that incomes and demand aren't going up much in China? 65% of their economy is building stuff not for international resale. How much excess capacity can one finance before they have to stop? When they stop, 65% of their domestic economy is gone overnight.

China should start building empty cities where humans can breath the air and survive. Maybe that's the answer: They are gonna have to vacate some current cities because of pollution. They might view cities like tampons, make em, pollute em, and move on.

That won't buff out so easily.

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When they stop, 65% of their domestic economy is gone overnight.

Tiananmen v2.0?

The ChiCom Politburo will grind as many people into meat as they have to in order to stave that off. The American consumer is currently surviving off of that symbiotic/leechlike relationship. Of course, the longer it goes on, the uglier the uppance shall come.

The guy who said the way to create peace is to let the rich intertwine economically obviously hasn't read European History from 1400-1900 when the rich ****ed each other and inter-married and still fought wars with each other.

@Jake: how about WWI, where all the eurasian powers were literally linked by blood to Queen Victoria?

KD,

given Bernanke and Fed have now committed to the QE2 plus maintenance of Fed balance sheet...I believe they are now obligated to carry through.

No chance for the Fed to stop and reasses prior to the end of '11 Q2? I suppose they could run reverse repo's simultaneously to "sterilize" if they saw the QE2 action was truly destroying the economy?

Given the ramping inputs and major pain soon to be delivered to corps who can't pass it all on to consumers and consumers (esp. those with the least ability to deal with it) unable to "pay up"...without increasing wages, w/out HELOC's, w/out EZ credit, w/out more stimulus, both spouses already work, interest rates can only go up, taxes can only go up ---- the politics of this is really bad and this is the kind of move that kills political parties. Suprised the big O would allow this because it's all going to come down on his head. Either he's dumber than I thought or the next shoe is soon to drop? In no world is it good to***** off your base!!!

Perhaps the plan is to offer up a massive jobs program or direct stimulus knowing the Repub's won't go for it so as to play the blame game?

@Otiswild

The minute that the Chinese think we aren't going to pay them back is the minute they take ownership of US assets in China. The other factor is, there are no US assets in China. Just partnerships. Partnerships the Chinese can dissolve at anytime they fell it is in their ineterest.

I think its safe to say the Chinese will no longer be buying US Treasuries. By downgrading the US they are saying that they want higher interest rates for the Bonds. The Fed is now the Bond market and will do what it has to to keep the rates low and the Chinese will no longer participate.

I found it odd the dollar rallied today on the news. It may have already been baked into the cake but one can, as Photopro notes, conclude that China isn't going to be buying much US debt. The Fed is the big buyer, and that could mean QE III --> XXX are inevitable. Wouldn't think that too bullish for the Dollar.

Or perhaps it was just another another example of things are worse elsewhere (Europe), so head for the Dollar as a safe haven.