News China Unocal and the U.S Treasury Department

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I was reading an article in this mornings paper about the China-Unocal purchase. It at first appeared that a little known Government department known as the: Committee on Foreign Investment in The united States, would nix the deal. But as I read on I was dismayed to see the paragraph below.

"The Treasury Department is responsible for funding the U.S. budget deficit, and it relies on China to purchase billions of dollars in U.S. debt each year. This makes it reluctant to risk alienating China by blocking a government-backed takeover bid, these critics contend."

http://www.chicagotribune.com/services/site/premium/access-registered.intercept [Broken]

Has it really come to this. "Say it isn't so Joe" :frown:
 
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Art

From what I've read the major push to allow the deal to go through is coming from the US energy leaders who fear retaliation with China blocking US investment in Chinese industries.

By the end of the week, however, energy sector analysts like Fadel Gheit of Oppenheimer & Co. were putting better than 50-50 odds on the success of the CNOOC bid -- in part because energy sector leaders were coming out strongly against interference in the deal from Washington, D.C.

"I am beginning to see a lot of industry officials, led by Exxon Mobil (XOM, news, msgs) Chairman and Chief Executive Lee Raymond, criticizing any government effort to block this deal," says Gheit. He says Amerada Hess (AHC, news, msgs) chief John Hess has also expressed similar views to him privately.

The biggest fear: If the United States makes it hard for China to invest in a U.S. energy company, U.S. companies may start to see similar resistance if they try to make investments abroad. But if energy sector leaders convince Washington to tread lightly on the CNOOC offer, that could speed up the time line and increase the chances that a CNOOC-Unocal deal gets done.
http://moneycentral.msn.com/content/P121749.asp[URL]
 

Pengwuino

Gold Member
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Hey! I actually watched that hearing on C-SPAN!!!

I feel hella informed
 
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I am more concerned about the fact that China is Carrying billions of dollars of our debt than I am about the Unocal deal. This is going to leave us with an untenable position as far as Chinese expansion into the global market place.

First it was the Saudi's carrying a large portion of our debt and we have had to kiss up to them for last twenty years.

Now we are funding the war in Iraq with the Chinese carrying the debt at the same time we are worried about the Chinese military.
We had tax cuts for the wealthy then sold the debt to China. My God they own us.

I see this as a solid sign that the American economy will collapse upon itself in a few years. It is Enron on a much grander scale.
 
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Art said:
From what I've read the major push to allow the deal to go through is coming from the US energy leaders who fear retaliation with China blocking US investment in Chinese industry.
There is nothing to stop them from blocking the U.S. from investing in China anyway. They have us by the tail either way.
 

SOS2008

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edward said:
I am more concerned about the fact that China is Carrying billions of dollars of our debt than I am about the Unocal deal. This is going to leave us with an untenable position as far as Chinese expansion into the global market place.

First it was the Saudi's carrying a large portion of our debt and we have had to kiss up to them for last twenty years.

Now we are funding the war in Iraq with the Chinese carrying the debt at the same time we are worried about the Chinese military.
We had tax cuts for the wealthy then sold the debt to China. My God they own us.

I see this as a solid sign that the American economy will collapse upon itself in a few years. It is Enron on a much grander scale.
You have summarized it well. The U.S. was going into recession the summer prior to 9-11. Then with 9-11 the economy tanked even further. Unemployment and bankruptcy soared to record levels, thanks in part to out-sourcing, various trade agreements, etc. Add to that Bush's tax breaks and the wars, particularly the war in Iraq. Who in their right mind would pursue such things during an economic downturn?

We've debated the economic health of the U.S., and conservatives insist that all is well. Aside from increasing cost of homes, and now fuel, anyone who disregards the record deficits (and oh I know, we are ahead of schedule to reduce it :rolleyes: ) can hardly claim our economy is stable and healthy. But per the OP, the biggest concern is national security. Our dependence on other nations in such ways should never be supported, but this administration will do what ever big business wants it to do.
 

Art

edward said:
There is nothing to stop them from blocking the U.S. from investing in China anyway. They have us by the tail either way.
Yes that is true and especially so as there is a move by oil producing countries to change their oil denomination currency to the euro. This article is an excellent appraisal of the ramifications. http://www.feasta.org/documents/review2/nunan.htm In summary if the trend was to become widespread it would be devastating for the US.
The first country to actually make the switch was a very important oil exporter indeed: Iraq, in November 2000. Before the war in Iraq began, some observers, myself included, argued that this might well be a major reason for the US desire to invade and the strong Franco-German opposition to the invasion
 
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Pengwuino

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Yah, record employment rates and record GDP's really hurt my pockets.
 

selfAdjoint

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Pengwuino said:
Yah, record employment rates and record GDP's really hurt my pockets.

Squint your eyes and it sure looks good. Look a little closer, at manufacturing or the social results of soaring productivity, and maybe those broad scale statistics don't capture everything that needs to be considered.
 

SOS2008

Gold Member
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Let's stay on topic, specifically economic indicators of deficits, with China holding the majority of that debt, and the rising cost of fuel and our dependence on the Middle East, and how that all plays in the Unocal purchase and national security.
 

solutions in a box

Hmmm now let me see if I have this straight.

We send our industrial base to China. Then we borrow money from China to fight a war. Then we decide we can pay China back with the money saved by giving the wealthy a tax cut so that they can invest the extra cash in China, providing even more jobs in China.

Meanwhile back at home many of the jobs left invovle service sector jobs in high tech, which we are being rapidly out sourced to India.

We can't manage to produce 1,000 armored Humvees in a year and a half, but in the first year of WWII we cranked out 9,000 Sherman tanks. ??? Of course this is all because we have to try to balance a budget with the president we have not the president wish we had.
 
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Solutions

You left out the interest on the debt which is currently $322 billion per year. We borrow half of that amount from the Saudi's so that we can pay China. Then we Borrow the other half from China so that we can pay the Saudi's. Then we deduct the interest that American's pay on their credit cards and add what we might have had if we hadn't started a phoney war.

The budget will be balance in no time.

China will get Unocal, then we can buy oil from them on credit and ship it to Iraq because there is little oil production there currently.
 
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The U.S.-China Dependancy Act

I can't believe that so few people are interested in the fact that the holder of $200 billion of U.S. debt is a communist country! On the other hand, the facts are the facts, and the truth leaves little room for debate.


http://www.iht.com/articles/2005/03/17/opinion/edfried.html

Excerpts form the link

The excessive tax cuts for the rich, combined with a total lack of discipline on spending, have helped China become the second-largest holder of U.S. debt, with a little under $200 billion. No, I don't think China will start dumping its T-bills on a whim. But don't tell me that as China buys up more and more American debt - and that is the only way we can finance the tax holiday the Bush team wants to make permanent - it won't limit our room to maneuver with Beijing, should it take aggressive steps toward Taiwan.

Indeed, if the Bush policies were wrapped into a single legislative bill it could be called "The U.S.-China Dependency Act."

What China might do with all its U.S. T-bills in the event of a clash over Taiwan is a total wild card that we have put in Beijing's hands.

National security is about so much more than just military deployments. It is also about tax, energy and competitiveness policies. And if you look at all these areas, the Bush team has not only been steadily eroding America's leverage and room for maneuver vis-à-vis its biggest long-term competitor - China - but it has actually been making us more dependent than ever on Beijing. Indeed, if the Bush policies were wrapped into a single legislative bill it could be called "The U.S.-China Dependency Act."

Finally, on competition policy, the Bush team and Congress cut the budget of the National Science Foundation for this fiscal year by $105 million. I could not put it better than Congressman Vernon Ehlers of Michigan, one of the few dissenting Republicans, who said: "This decision shows dangerous disregard for our nation's future at a time when other nations continue to surpass our students in math and science and consistently increase their funding of basic research. We cannot hope to fight jobs lost to international competition without a well-trained and educated work force."

:confused:
 
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Pengwuino

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Well they just announced that UNOCAL is being bought by Chevron instead so this thread goes down the toilet :P. Or well, doors arent closed for China to get it but UNOCAL said Chevron's deal is a positive move for its share holders.
 

Art

Pengwuino said:
Well they just announced that UNOCAL is being bought by Chevron instead so this thread goes down the toilet :P. Or well, doors arent closed for China to get it but UNOCAL said Chevron's deal is a positive move for its share holders.
There is nothing new in that, UNOCAL have being saying that all along. BTW generally the directors of companies being taken over recommend the deal that is best for them personally.
The US debt to China also remains whoever ends up getting UNOCAL.
 
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edward said:
Solutions

You left out the interest on the debt which is currently $322 billion per year. We borrow half of that amount from the Saudi's so that we can pay China. Then we Borrow the other half from China so that we can pay the Saudi's. Then we deduct the interest that American's pay on their credit cards and add what we might have had if we hadn't started a phoney war.

The budget will be balance in no time.

China will get Unocal, then we can buy oil from them on credit and ship it to Iraq because there is little oil production there currently.
solution ? another war.
 

Pengwuino

Gold Member
4,854
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Art said:
There is nothing new in that, UNOCAL have being saying that all along. BTW generally the directors of companies being taken over recommend the deal that is best for them personally.
The US debt to China also remains whoever ends up getting UNOCAL.
Well i saw it on the news and saw this thread so i just threw it on. But whatever.
 

Art

stoned said:
solution ? another war.
To do that they'd have to borrow the money from China to finance it and if they went to war with China it would be a little like blowing up your own bank. :biggrin:
 
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Pengwuino said:
Well they just announced that UNOCAL is being bought by Chevron instead so this thread goes down the toilet :P. Or well, doors arent closed for China to get it but UNOCAL said Chevron's deal is a positive move for its share holders.
The main thrust of this thread is about the fact that the USA is selling its debt to a China! Currently over $200 billion!
What part of that don't you understand?
 
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solutions in a box

INCREDIBLE but true

Over !00,000 young Americans died and another 300,000+ were wounded fighting communism.
Now the Chinese communists are buying our national debt and no one really cares.
 
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1. "Communist China" is a joke these days.
2. Americans never fought 'communism'. Communism is an ideology, Americans fought foreign business competition.
3. Where'd you get that figure from?
 
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edward said:
This main thrust of this thread is about the fact that the USA is selling its debt to a China!
What part of that don't you understand?

I
Pengwuino said:
Well i saw it on the news and saw this thread so i just threw it on. But whatever.
If you're gonna be aggressive and insulting at least be smart about it. He's already answered that.
 
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Smurf said:
If you're gonna be aggressive and insulting at least be smart about it. He's already answered that.
Originally Posted by Pengwuino
"Well they just announced that UNOCAL is being bought by Chevron instead so this thread goes down the toilet :P. Or well, doors arent closed for China to get it but UNOCAL said Chevron's deal is a positive move for its share holders."

My reply was:

"The main thrust of this thread is about the fact that the USA is selling its debt to a China! Currently over $200 billion!
What part of that don't you understand?"

Does, "What part of that don't you understand?" = aggressive and insulting
here now? I have seen much worse than that. If it bothers anyone you have my apologies.

BTW: As to being smart about it: " Well I saw it on the news and saw this thread so i just threw it on. But whatever." This was Penguino's reply to Art not to me. :wink: :confused:
 
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solutions in a box

Smurf said:
1.
2. Americans never fought 'communism'. Communism is an ideology, Americans fought foreign business competition.
North Korea and Vietnam weren't giving us any "foreign business competion."

Perhaps you should go to a local chapter of a: DAV, VFW, Or VVA. And enlighten them.

Better yet go to a local Nam Jam (if you know what it is.) My buddies will enlighten you.

The causualities number comes from: Korean war+ Vietnam+ those lost in overflights of Russia+ those lost in covert missions you know nothing about.

As far as what will happen with China, it all depends on how we deal with them. When one doesn't learn from history it tends to repeat itself.

In 1990 China was the sleeping giant that the USA was in 1940. China is no longer sleeping. And China has a large surplus of U.S. Dollars.
 

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