I agree with you that it's a VERY complicated game that's being played by the two parties. All people see are headlines, like 'China is manipulating its currency' or such. What people refuse to understand is that economics is politics and vice versa and that we're in the world of realpolitik. At this particular juncture, as far as my personal knowledge of the situation goes, the Chinese have bought the premise that, RIGHT NOW, their survival is very much dependent on the US, so there's no question yet of them making sudden movements on the USTs. All the rhetoric on both sides is just that. What we can expect further out is a much more difficult question. Clearly, the Chinese see the current situation as an opportunity to, at the very least, secure some of their commodity supply lines using the dire straits that the Russians find themselves in.
With all due respect it is only complicated for those that are unable to visualise the logical conclusion to the sustained issuance of US treasuries to "foreign entities".
Totally disagree, this is a path-dependent process, so looking at it the 'logical conclusion', as you do, is wrong. Game theory might bring you closer to the truth, in my view.
Your quite entitled to maintain your level of awareness, that I'm not disputing. However, as I stated earlier for which I will repeat one more time, how anybody with even a "modicum" of economic understanding can believe that a nation that is dependent upon the issuance of debt to an external source, an external source that maintains an artificial currency valuation, in order to finance expenditure, is in control of "the game", is nearly, but not quite beyond me.
I never did claim that the US is "in control of the game", that was someone else. What is obvious to me from the Chinese GDP figures is that China has most certainly not decoupled. Clearly, and again I emphasize that this is the situation AT THE MOMENT, when the US sneezes, China most definitely catches a cold. So my point to you is that neither party is in control of this game at the moment. They need each other to survive, which, I guess, is a good thing.
Forgive me for my ignorance, but can you define what a US sneeze is, and how China will be unable to cope as a result of this phenomena?
Sneeze: Cold: I had to google these, so apologies if they're not up to the exacting standards of this forum .
Well that is much appreciated. However I was expecting a definition in context to your previous post. Perhaps a little naive on my behalf to anticipate such clarity, I agree.
I am confused. I would be happy to oblige, sire, but I thought I did respond in appropriate context. The point I made earlier was that, currently, the relationship between China and US is characterized by interdependence. I agreed with you that US is dependent on China. I just wanted to make a point that China is dependent on the US, which I what I think I did. Not sure what other posts of mine you're referring to and what you were looking for.