Warren Mosler, Txina eta finantzak

(https://twitter.com/GowerInitiative/status/1178791803094474753)

Gower Initiative for Modern Money Studies@GowerInitiative

https://youtu.be/vW3J5LBVfGc

Are we financial slaves to China?

@wbmosler

Aren’t We Financial Slaves To China?!?!

Warren Mosler on what it means that China buys our debt. China accumulates dollars at their Federal Reserve account because we run a trade deficit with them,…

2019 urr. 1

Warren Mosler: Aren’t We Financial Slaves To China?!?!

(https://www.youtube.com/watch?v=vW3J5LBVfGc&feature=youtu.be)

Warren Mosler on what it means that China buys our debt. China accumulates dollars at their Federal Reserve account because we run a trade deficit with them, so they get dollars when we buy stuff. They could sit on these dollars and do nothing, but they’d prefer to earn interest, so they purchase US Treasury bonds which are essentially savings accounts at the Fed.

These bonds are constantly maturing, and we are constantly paying them back, billions of dollars a week, by transferring the dollars from their savings account back to their reserve account. That’s it. We benefit enormously from this situation: we get real goods and services out of Chinese labor instead of American labor, and they only end up with numbers on an account statement.

If China decided they didn’t want to hold dollar-denominated assets anymore, then they could spend the dollars to buy stuff. If they buy real stuff, then that pushes up American employment. If they buy other currencies, then this could put downward pressure on the dollar’s exchange rate, which would cause our exporters to hire more people.

See the whole video here: https://www.youtube.com/watch?v=t9xjxLm4Zvk&list=PLKvPLZsgEcXSbdqMUTc-4usIO-9f0xBlc