Chapter 20 4. Americans do not buy Chinese products

●We Chinese are a nation that lives within our means, and Americans are a nation that absolutely lives within our means. ●I am quite excited about our government's immediate bailout move itself. Then the reduction in consumption will cause the entire GDP to decline, and the shrinking consumer market will also impact my country's exports.I haven't talked about the EU today.What if the EU also consumes less?The impact of this on my country's exports is unimaginable.Now I am quite supportive of our government’s immediate bailout move itself. At least I think the government has taken very fast actions, which is right, and don’t let things get worse.

Not only our government, but also readers, do not want Americans to reduce consumption, because it will hit us too hard, and the U.S. government does not want to see it, because if the U.S. consumption decreases, it will cause a sharp drop in GDP and a large number of U.S. people are unemployed.But the problem is that banks don't want to lend money anymore.That's why Paulson said at the press conference that banks' lending speed for consumer loans is too slow.It's unbearably slow, I wish it could be faster. Let me give readers a simple example. Bank of America lends A $1,000 to A to buy a car, and after the purchase is completed.Sell ​​the $1,000 car debt to the investor and get the dollar back; take the same $1,000 to B to buy a refrigerator, and after buying the refrigerator, sell the debt on the refrigerator to the investor, and the bank will get back the $1,000, and the bank will give it to B. The same dollar is lent to C to buy a computer, and then the $1,000 debt on the computer is sold to the investor to get back $1,000.In other words, the role played by Bank of America is to lend the investor $3,000 to consumers through bank liabilities.

What is the current situation?When the bank lent $1,000 to A to buy a car and got the $1,000 claim, the bank quit.It no longer sells its debt to investors.At the same time, B and C stopped borrowing money from the bank, so the entire consumer market was frozen.