Wednesday, February 11, 2009

BIG Cargo!

A Look at China's Cargo Capabilities and What That Means to The American Economy.

See more PHOTOS

LENGTH: 1,302 ft
WIDTH: 207 ft
POWER: 110,000 hp
CRUISE SPEED: 31 knots
CARGO CAPACITY: 15,000 TEU (1 TEU = 20 cubic ft.)
OTHER: Silicone coating to ship bottom reduces water resistance and saves 317,000 gallons of diesel fuel per year.

NOTE: These ships arrive in the US full.  They return to China nearly empty.

That means that China sells us lots of "widgets".  We buy them with "dollars". That means China has dollars. China's economy does not use "dollars" it uses Yuan.  With those "dollars" China has from selling all of those widgets, it enters our bond market and buys US Treasury Securities (bonds, bills, notes) - that's one way that "China Holds Our Debt".

NOTE: According to the US Treasury, the Federal Reserve could write a check and buy all of this debt.  And, so, it should.  I propose that Congress enact a "FEDERAL RESERVE DEBT REPURCHASE ACT".  Congress would require The Federal Reserve to buy back the debt with the same money that it uses when it enters the "Open Market" to implement it's "Policy". Then the Federal Reserve would hold the debt and all of our obligations with China would be paid in full.  Since the Federal Reserve would write the check on itself, the money did not come from the sale of Treasury Securities and therefore would not increase the public debt. Since the money that it used to buy the Treasury Securities comes from a "check written on itself", if they zeroed out that debt, it would not hurt them one single bit - they lost nothing (because they lent nothing - more electronic digits, the stuff of make-believe).  

Panama digs a new addition to the canal.  China builds cargo ships bigger than US aircraft carriers.  The US buys China's stuff and sells very little of our stuff.  Why? Because our debt money system has forced US companies to go overseas and south of the boarder, to increase profits so that they can afford to keep up with their "debt service" requirements and taxes.

By supporting The MINNESOTA TRANSPORTATION ACT, you can help reverse this momentum.  You have to do something besides complain, though.  You have to act.  

Email to find out how you can help: