US Targeting China In New Anti-Piracy Drive 99
oxide7 writes "The United States will make China 'a significant focus' of its beefed-up efforts to fight global piracy and counterfeiting of US goods ranging from CDs to manufactured products, a US official said on Wednesday. The International Intellectual Property Alliance, which represents US copyright industry groups, has estimated lost sales in China at more than $3.5 billion in 2009 due to piracy of US music, movies and software."
Gee, someone else who doesn't understand debt (Score:3, Informative)
National debt is not like loan sharking. You do not loan money for whatever terms you like and then call it due at a convenient time. More properly, it is investing in a nation.
So, in the case of the US you can buy treasury securities of various kinds. They vary from T-bills as short as four weeks to T-Bonds as long as 30 years. In the case of a short bill, it is sold at a discount and then pays face value. So If you bought a $1000 1 year T-bill with a 5% yearly interest, you would pay $950 for that note. At the end of 1 year, the government would pay you the face value of $1000. In the case of longer bonds, the government pays you a fixed percentage of interest every 6 months and then the principal when it matures.
Now there are important things to note about this:
1) There is no mechanism for cashing in early. you can't come to the government and demand your money now. It pays at a set time. The only way to get money early is to sell the security to someone else. This is done frequently, they are traded on the open market like other things. However, you cannot get your full value for such a thing. If you try to tell me a $1000 t-bill, I'm not paying you $1000. I might pay you more than you paid if it is close o maturity, but you are going to take a loss over the value of the note.
2) The securities pay in US dollars. That means that you get paid the stated amount in current US dollars when it matures, not your currency. So if something happens to severely devalue US currency, you get less. The government says it'll pay you X many US dollars. It does not promise they are worth a given amount.
3) These are nothing more than IOUs from the government. In fact you don't even get physical notes anymore, it is all just entries in the US treasury. So while it would have a severe impact on their credit, the US government can simply default, meaning refuse to pay on their securities. There is nothing anyone can do about there, no court they can be taken to to order payment.
4) As I noted, the securities are an INVESTMENT. China has invested in them for many reasons, stability, to help back their currency, etc. To get rid of that investment could have some rather negative consequences.
So please, do yourself a favour and learn a bit more on debt and lending in general, but in particular how it works on a national level. It is not at all a loan shark kinds of arrangement. Acting as though it is is rather silly.