Question by linlyons: What's more important? Debt? Credit rating? Tax cuts? Stock market? China indicating it may not buy US bonds? http://finance.yahoo.com/news/China-flays-US-over-credit-rb-3974888722.html?x=0 "China tells U.S. "good old days" of borrowing are over" Interestingly, it's likely that for a short time, with the stock market tanking, US bonds will probably still sell. However, if the market recovers, and people stop looking for somewhere else to stash their money, then the Fed will have to raise the interest rates to attract buyers. And when China stops buying bonds, there may not be enough demand at any reasonable interest rate. The good news is that China depends on the US to buy it's products. What will happen to that? The bad news is that Chinese products will continue to be the cheapest, and American consumers, with the economy in the dumps, will look even more for whatever's cheapest. It would appear that China will just have to sit on the dollars it receives from Walmart and American consumers. < Answer by Barney Frank's pet Gerbil Answer by Sugar Answer by CrotchItchBites Answer by End the GOP Answer by Jonathan A Answer by Zaza Answer by Christopher Jorden Answer by Peace through blinding force Answer by Reverend SSF Tofudebeast Answer by d/dx+d/dy+d/dz
US Bonds haven't sold for months - the FED has to print money out of thin air - and uses that cash to buy the bonds Its the economic equivalent of eating your own tail And Obama is behind it all - Obama has destroyed America
They are equally important at the time they are needed.
They are all related.
It tells us that GROWTH is the only way out of this mess. We can not longer afford to continue with the GOP plan of cutting jobs and giving tax breaks to the rich
Jobs are most important.
What's most important? We need to get rid of all the educated derelicts who currently serve in Washington, and elect people with balls enough to deal with our debt, our deficit, and especially China.
All those are valid points of concern. But the new Double A rating should be a shot across our fiscal bow. I think only replacing Hussein can stop our deterioration economically. But I also fear it may not happen.
As everyone knows, as even some Democrats at last admit, GROWTH is the only way out of this mess. That's WHY 100% of Democrats DEMAND policies already demonstrated to balk growth.
The most important thing is to get the economy growing again. Yes the debt, credit rating, trade imbalance are all part of the problem, but focusing too soon on any one of them isn't going to help. If the price for halting the deficit is to cut spending so much that it floods the job market with laid of government workers, and stalls this delicate recovery, then is it really worth it? I don't think so. We need to look at the big picture and do what it takes to stay both fiscally responsible while also encouraging growth, especially job growth. We've just been through the worst recession since the 1930s. This isn't a problem that will be solved over night. The fact that half of us aren't standing in bread lines is something, at least. And to those who blame Obama, remember that the economy nearly imploded before he was elected. Even if he was an economic genius and had the political climate to do whatever he wanted to, we still weren't going to get out of this without some financial pain.
The US debt problem is a problem created by politicians. 1. Americans have the idea that the country can earn its way in the world by providing financial services rather than by producing goods. The US is running a huge trade deficit as a consequence and the rest of the world is no longer willing to pay the US to print money. Politicians make laws that favor bankers over productive sectors of the economy. Solution: tax banks at a higher rate than industrial companies so that it is more profitable to run an industrial company. 2. The US has trade policies that cater to special interest groups rather than to the national interest. The US has (or could have) most of the resources that it needs and does not need to export jobs in return for cheap consumer goods. The notable exception is energy. The US could be self-sufficient with renewable energy with a fraction of the investment consumed by oil wars, but a continuation of the status quo serves the interests of the oil lobby. Solution: raise tariffs to protect domestic industry. 3. Americans are not paying enough tax to cover their bills. The tax code is too complex and has too many loopholes. The total tax collected needs to rise by 68% to cover current public expenditures. It is up to Americans to decide how to spread the tax increase equitably. Politicians prefer borrowing to raising taxes. 4. Americans are paid more on average than the value they create. A national pay cut is needed to balance pay with value added. Currently pay is more closely correlated with political clout than economic value added. The currency markets will impose an effective pay cut. 5. Americans are spending the wealth created by their fathers rather than saving and investing to create wealth for their children. A stronger work ethic is needed. Personally, I doubt that any of the issues noted will be addressed anytime soon. I expect the debt situation to become more dire.
Breaking News China. Investment Strategist Jerome Nugent-Smith's insights into 2011-12 China Stock Market Crash, YouTube, October 2, 2011 02:39 PM
stocksmarketarticles.blogspot.com Breaking News China: 2012 China Stock Market Crash, October 2, 2011 02:39 PM
(RTTNews.com) - The China stock market has moved higher now in two straight sessions, gathering more than 30 points or 1.3 percent along the way. The Shanghai Composite Index finished just above the 2225-point plateau, and now traders are bracing for ... Shanghai Stock Market May See Soft Start
Stock news has always lured followers, even if you do not hold stocks of any sort, you would be tempted to take a sneak peek into the current updates. The stock markets have far reaching consequences on the world economy and in turn affected by slightest of spark around.
Until recently though, the market figures have attracted tremendous speculations and predictions, looking at the state of the world economy at large, and particularly that of the Eurozone followed by the United States.
Apparently the spiraling euro crisis has triggered the tendency of the stocks to tread water, with investors shedding off the riskier metals and commodities. The current stumble is the steepest one since the fall in September. This renewed encumbrance on the Spanish bonds and like fears that the European crisis was convolving towards recession.
The demise of Greece and subsequently Portugal has led most people to consider that levels of these Spanish Bonds might not sustain themselves to expected levels.
"Spain will be heading to the polls this weekend after a shocker of a week in the bond market.
Recent leadership changes in Italy and Greece have failed to drive the market to a sustainable recovery, suggesting it will take much more than a leadership change to appease investors."The world equity index as per Metals Service Center Institute (MSCI) was down by 0.6% and was recorded falling for the consecutive fourth day. Likewise the European stocks fell by  0.7%.
The newly elected Italian Prime Minister has however promised radical reforms in fiscal policies and that the country will work towards pulling itself from the debt crisis, this indeed gave the Italian bonds some steadfastness later in the day.
This nevertheless did not make investors comfortable enough since countries in the European zone continued to fall back despite several lending requests, clearly marking a seizure of market liquidity.
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