How China's slowdown could crimp our bailout plans - BloggingStocks: "Why should you care what's going on in China? It makes many of the products we buy -- particularly the ones sold at Wal-Mart Stores (NYSE: WMT). And it has been recycling the profits it makes due to its relatively low labor costs into buying American debt. In fact, without its willingness to purchase our Treasury bonds, we would probably not be able to afford the $8.2 trillion worth of bailout plans that we've created so far -- or the additional $20 trillion we might need in the future."Twitter is making me much smarter!
Wednesday, November 26, 2008
How China's slowdown could crimp our bailout plans - BloggingStocks
But, there seems to be some factual errors. The bailout is at $4-trillion. Not $8.2 T, nor $20T. (yet) The economy in China has been at 10-12% growth per quarter for the last few years.
China's GDP growth can not include the "construction of houses." Housing, okay. But, a while ago China outlawed the building of any new single-family houses. That isn't happening. Perhaps the building of apartment buildings is another matter.
The cutting of one steel plant's production by 15% does not mean that global suppliers fo commodies -- such as iron ore, copper and cement -- around the world are suffering. That's a stretch, to say the least.
It is hard to see so many goofs in the first part of the article and then assume that the conclusion about US debt is valid.
I agree that the decline is scary. I agree that the solvency of the nation is at the brink. But, this mess of a bailout with the US markets and Fed was created by the US politicians. The US is hooked to China. Fine. But, let's fix ourselves first and fix blame within the halls of our governmental offices.