> China didn't give the US money, they saved US dollars by sending them good's and services, they purchased treasuries that the FED NOT CONGRESS offered for sale.
The fed did this as a monetary tool.
Whilst I agree, it is worthwhile pointing out that much of the Chinese holding of UST is because of the Chinese policy of "fixing" the RMB to the USD.
To do this they create vast amounts of RMB, which is then used to purchase USD, which is then parked in UST.
Quote some time ago in this forum I posted a graph showing the RMB money supply growth versus the USD - the chinese are far far bigger debaser's of their own currency, however in the long run it's likely to have quite a positive impact on the average standard of living in china due to the constant devaluation of their currency hence creation of employment opportunities from world trade.
So simply printing money by itself isn't necessarily the demon here.
In the case of the states, it's the use of (scare resources) for non productive uses - the average public wage is twice that of the average private wage in the states. (that has to be lunacy?!?). And to fund these public wages they monetise treasuries (i.e. devalue all USD to pay their bills)
In the case of Australia, the use of our scare resources directed at housing means we become more and more uncompetitive which means our standard of living will improve at a slower rate then the countries using their resources in a productive manner.
/rant
:)
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