Yellen's warning about the debt ceiling.

@Khenpal1 Notice what you just said. "internal debt".. Because China has a centralised economy and keeps order by force, they can write that off overnight and no one can stop them and it makes no different to their external trade position. America has been faking their domestic economy for decades with subsidies and printed money..😷

@whowasthatmaskedman The problem for China is that 70% of wealth is located into real-estate and that China buys natural resources in dollars . China has no oil or enough food to exist on its own. Real-estate value is in many places down with 50%.

@Khenpal1 Agreed. And we agree there is a major issue. Its why so many Chinese buy overseas real estate.. But its one the central government can fix with the stroke of a pen..😷

@whowasthatmaskedman I think Chinese would freak out if CCP would use pen to fix it , even for China fixing 50 trillions is not that easy. 😁

@Khenpal1 Of course they will.. But they wont start a rebellion over it.. The Chinese real estate investment thing is its own Ponzi scheme. Half the buildings arent finished. almost none are inhabited. And no one wants to buy a pre owned one. These are all cultural Chinese things. So the investments are junk anyway. Only the "poor" chinese buy them. The rich buy overseas..😷

@whowasthatmaskedman They turning Hong Kong to new Tibet , the value of real-estate is always where demands are growing

@Khenpal1 Hong Kong is chronically crowded , due to a land shortage.. Thats like comparing Manhattan real Estate to Montana...😷

@Khenpal1 If the demand for dollars comes from countries with worse inflation than ours, doesn't it just make us the cleanest dirty shirt in the world?

Basically the whole world devolves into financial paranoia and gets mired in inflation. Inflation masks and distorts market forces, eventually slowing economic growth. The inflation creates seemingly arbitrary winners and losers. People percieve the game as rigged, and polarization worsens. Economic agents fight more and more intensely over a shrinking economic pie. Sound like the 70s?

@irishmolly72 Thats almost correct.. First because America is an established base. Second because its a currency so many currencies are already invested in and thirdly because as you say, so many other countries are in a worse position.. And fourth, because there is a market to sell those $US to trade with a third party nation.. But all that reputation is what is currently sliding off the plate..😷

@whowasthatmaskedman the global "standard" shifted from gold to the dollar decades ago.

a too sudden cut in current inflation with low unemployment, could lead to inflation with high unemployment, the worse case scenario.

One suggestion, to cut expenses, always involves Medicare and social security, both paid for by the workers. Rumor has it, that one "solution" is to raise the minimum age for retirement with social security to 70. That puts the burden on the younger to workers.

@samueltyler2 Addressing the first part. After the Gold standard was abandoned, there came the "petrodollar". A deal with the $US and ther OPEC countries to link the $ to oil. That was good for the Saudis and great for America, to gave a real commodity to prop the $ against. No need to explain if you take one side of a prop away, the other falls over.. And the Saudis are looking at doing that with China, because the Chinese are a more solid trade partner. So remove the oil and the $US falls over..
As to the second part...I really cant think of another developed nation where the tax system is so totally FUBAR as America. The idea of the rich paying so little might have meant something in the days of opening up the West, when gold was the standard and investment was needed everywhere, to the extent that foreign labor like the Chines was shipped in all through the West.. Now the rich invest in share buy backs because there is no new growth in the nation. (Apple, Nike and Tesla all employ Chinese labor in China) And what the rich do spend either drives up real estate prices, or imports foreign luxury items. Meanwhile, subsidies keep inefficient businesses in operation. It is absolute insanity..😷