>Your history here of US UK monetary relations leaves a lot >to be desired.

Says who?

>If you want a better sense of how it really worked go back >to Keynes vs. Harry White at Bretton Woods, or before that >with Lend Lease, or before THAT to the defaulted/forgiven UK >Great War debt and the modified gold standard of the 1920s.

Honestly, I don't see a connection here. I read both Keynes and Hayek.

>Bluntly, you seem to pick and choose facts that support your >view of unsustainable debt and impending doom. Neither is >the case. We have China "by the balls" as much as they have >us. I see your "gold" link in your profile. That explains >your POV nicely I think.

You see, we're this far in your posts, no arguments yet from your side... dude tell me where I'm wrong and how already.

>Edit: Also it seems like you're confusing interest rates at >the Fed discount window with yields paid in US debt >auctions.

Here we go again. I'm the one who made money in 2007/08 because I saw obvious things than others (who probably read too much Keynes and watched too much CNBC) didn't, so quit it already.

>First, what on EARTH do you mean when you say "Treasuries >are at an all time high?" Bonds have a face value and a >yield. The yield is currently at possibly an all-time low. >So maybe I'm missing something, would be great for you to >explain because this sounds like whole cloth to me, like >you're repeating something you heard somewhere.

Compared to other bonds traded internationally for one.
Compared to gold for two.
Interest rates at all time low don't help your case too.

>Moreover, every seller needs a counter-party. How exactly do >you think the market works?

If you have an "assets" that's a hot potato the market works this way that your price has to be low enough to find a buyer. Ever heard of supply and demand ? LOL

> Sell it below face value? That hurts China, not us.

No. They have all the production in the world, so long-term they are fine, we're screwed. Economically may not make sense to sell, politically may make perfect sense to sell. Loose $1.4 trillion to hurt the US long-term while they get just a short-term pain? Might be absolutely acceptable in the right political environment.

> But of course the Yuan is pegged to the USD (via a "basket" > where USD is predominant). So Chinas own currency would > > sink as well.

Two options:
1. Let it sink (cheap export, remember they are the production engine of the world). Very tempting, I think.
2. Peg it to gold. Would make Yuan world reserve currency right away. Who wants USD that's just sinking like crazy when you can get money backed by gold, biggest creditor in the world (vs. US biggest debtor in the world), and biggest producer in the world (vs. US biggest consumer in the world made possible thanks to the foreign credit, just a function of the USD being world reserve currency, and you know it).

>But OK, so they dump their USD for what? Euro? So it drives >up the value of the Euro. Guess who doesn't want that? >ANYBODY IN THE EUROZONE. Do you think Germany -- who exports >nearly as much as China every year -- wants the cost of >their goods to skyrocket in the US? No. So simple, the >Eurozone prints more money and buys the USD from the >chinese. In the grand scheme of things, Chinese holdings of >USD aren't nearly enough, not NEARLY enough, to really >disrupt global forex without nearly universal global >cooperation.

Of course they will dump it for gold or silver or both to have the world reserve currency backed by hard assets making it more attractive than USD backed by debt. It's easy: China calls US, says: you want our 8% of debt to be written off? We want X amount of gold for this.

>In the grand scheme of things, Chinese holdings of USD >aren't nearly enough, not NEARLY enough, to really disrupt >global forex without nearly universal global cooperation.

Yeah, and the amount of houses under the line in 2007 wasn't nearly enough to cause global recession. There are too many factors involved for you or me to know. Again, The Treasuries are hot potato. If China sells, this will be the trigger for others. I'm sure Russians would sell too, and than probably everybody else.

According to Jim Rogers the US is currently the biggest debtor in the history of the world. Jim Rogers has been business partner of Soros in 1970s in the Quantum Fund. I think he knows what he's saying. BTW, he immigrated to Singapore in '05 saying depression is coming. So probably he wouldn't lie regarding the US debt.

Now think about it. Who wants to keep bonds of a country that's a biggest debtor in the history of the world. Nobody. That's the point. If China sells, their holding are big enough for others to start selling. It's a bubble. Like housing in 2007. One guy probably started selling like crazy, and here we go, somehow everybody and their uncle starts seeing now that the king is naked. Will be the same with the Treasuries bubble.

>Look, I'm done with this thread, you can go ahead and have >the last word. But I really feel like if you're interested >in these things, you should actually study the macro >economics you're trying to discuss. I trained as an >economist before becoming a software engineer 15 years ago >and most of what I'm talking about can be learned in a 100->level Macro class.

I really don't like your tone. It's like I'm smart and you're stupid. Because I heard something in academia and CNBC and I think you didn't. You know what? How much money you made in 2008/2008? I bought oil options when oil was trading in $30s. I bought gold options when gold was in $700s. And I had macro course done too. Master's in business. Don't assume your discussant is stupid just because owns a gold website.