utenzi

Sure. It's the holidays and you're feeling ebullient. You want to feel good and spend freely. You buy a lot of stuff you don't have money for and it's okay 'cause you got this loan at a really great rate. Of course you won't have the money to pay it off when it comes due--and there's no telling what the new interest rate will be, but that's far off in the future so why worry now? Let's spend! Does that sound like Christmas for a lot of people? Probably. Unfortunately it's also the relationship between the USA and China. We in the US are buying Chinese toys and durables in quantities that boggle the mind and this trade inbalance is funded by US consumers with the Chinese government using the profits to buy up US dept in the form of Treasury bonds. This keeps the ebullient feelings going by keeping interest rates low. However should China stop buying bonds, then the interest rates will quickly pop up to more realistic levels. Talk about coal in the...