I disagree. Once again, China is under no delusion that its debt with us will ever be repayed, IMO.
They know that investment is a loss. But...think about it this way...
In the late 70s/early 80s, if you had told the American government that for the low price of $1 trillion dollars, you could expedite the collapse of the Soviet Union, do you think they would do it?
I certainly do. Its my opinion that this is exactly China's position. They have us throughly by the balls financially, the next step is to have us engage one of their proxies. If we react to North Korea without them ever having actually attacked US interests, then China can play up their fake intolerance of "American aggression" in their area of the world and play the trump card of calling in our debt.
Which would ruin our economy over night, thus greatly reducing our ability to militarily engage North Korea (who is no doubt propped financially and logistically by China). Any action North Korea took against the United States would be permissable under China's blessing, even dropping a nuke on American forces.
Point is, China aint doing right now. If I were them, I'd be too busy laughing my ass off that the greatest power the world has ever known was so incredibly easy to manipulate. The Americans greatest downfall was vanity. They just couldnt envision a lifestyle that didnt rely on easy credit and prolonged, low interest rate debt.
On the flip side, America's best course of action right now is inaction.
If North Korea were dumb enough to drop a bomb on American interests (ROK, Japan, Hawaii, a navy ship, etc), then we'd bring the hammer down and China would just have to STFU about it.
If, on the other hand, we proceed the way most seem to think on this board by -smacking lil' Kim preemptively....well, that would be one of the largest mistakes this country has ever made. Maybe even ever.
Not true. Every dollar they loan us will be repaid, in full, with interest. It will be repaid with new borrowings as our government continues the practice of paying off one credit card with another. The day people start thinking the US government is going to default on the debt is the day the global economy comes to a stop.
The way I see it, Kim Jon-Il has a massive short-man complex. NK knows that if it WERE to start something with us, it really COULD be blown off the map. NK, in no way, can really threaten the US. It could take out a city or something, but then our retribution would be so swift it would be like the Angels of Death themselves.
This is big mouth Saddam version 2.0... I'm more concerned with China than these guys.
Just "printing more money" only works domestically.
Internationally, China would not accept the paper we gave them.
So, no, China wont receive one red cent because they would refuse it. Thats why they recently asked our debt to them be converted to Yuan...you know, a currency thats worth something more than a promise.
It's not printing more money. It's borrowing money from Peter to pay back the money we borrowed from Paul. Then borrowing from Mary to pay back Peter. And so on, and so on.
Great. ...and exactly who is Peter so we can rob him to pay Paul (China)?
See my point. China was the last one left, thats why we went to them in the first place.
Who are we going to borrow from...Britain?! Take a look at the minority party's agenda when it comes to fiscal responsibility and realize, its never going to happen.
France doesnt have the money, period. Nor does any other nation besides maybe Germany.
China was it. They were and are our only semi-equal on the economic scale (soon to surpass, btw).
For example, when a mom and pop business goes to get a loan, they can go anywhere for it. The local credit union or super-large Megabank.
When the #1 Fortune 500 company needs a loan, they have a very limited pool of banks. All being Super Megabank 2.0.
Translate that to international terms and America could only borrow what we needed from like, 4 countries tops. 3 of which will not do it, 1 of which is playing us like a fiddle.
I gotcha. I didn't fully understand where you were headed at first. My mind is in nba draft mode, not world events mode right now.
Our GDP is still double that of China's. I think ours is around 13 trillion... there's is like 6.5T or something.
There's might be growing in leaps and bounds... but I wouldn't go as far as to say they will overtake us soon.
You do know that China's Yuan is undervalued by a very wide margin, yes?
If their currency was at its actual value, their GDP would increase nearly 1/3 overnight. They are far, far closer than GDP would indicate.
Then I stand corrected.
Consider that they hold $1 trillion of our debt, that their currency is purposely and extremely undervalued and that theyre a growing nation of over 1 billion people.
Now, factor in our economic decline, our insurmountable debt (now at $13 trillion without factoring in Medicare/MedicAid and Social Security promises) and the complete lack of a realistic view of the entire situation from President to citizen and I would argue that the scales are as balanced as they have ever been.
Something could tip those scales.
China is going to screw themselves over... Just like they have every time they have approached their potential something drastic will happen. My guess is the shoddy construction of the Three Rivers dam will fail in an earthquake. Or their ty social and political structure will collapse under the weight of an educated middle class, which will get either the political structure destroyed, or the middle class crushed.
Of course, if they do keep their course, and nothing bad happens, then they will dominate the world politically and economically.
Hope I didnt come off sounding like a prick, btw, with that "do you?" thing.
I happen to agree with you immensely. But the problem lies not in what tragedy could/maybe befall them as it is the problem that we Americans do not have control of the world like we're used to.
Our economy depends on world economic domination. In large part, the world's economy is based on our dominance as well. If we fall, a lot of others fall with us.
But there is a sleeping giant waiting to fill that vacuum.
Absolutely agree with that. Its stupid and shortsighted how many countries have tied there economy to ours to the extent that they have, and how much our economy has been predicated on having those countries...
meh... I don't take anything personal on a forum. If I'm wrong on something or if my justification for saying something is wrong then I'd rather be corrected than to keep on going believing a falsity.
I knew the Yuan was undervalued but not to what extent.
Some countries had no choice. By requesting loans from the IMF and/or World Bank, they're required to keep a backing for their currency in US dollars, among other requests. Their debt is also normally calculated in US dollars.
Just in case it isnt readily apparent, my entire position on this subject is only an opinion. It is my belief we are being ing played by China but our national credit addiction prevents us from doing anything about it.
The worst kind of Catch22 there is.
Theres always a choice. I have little pity for countries and people that screw themselves over by living (and ruling) outside their means.
Yep. Just stupid. Eternally stupid for the US. Brilliant for China...
so, some of you think the IMF and World Bank only get involved if a host country request funds?
I'll cut our leaders some slack and only say they were not alone in living way outside their means. One could argue government should be more responsible than its people (my opinion), but then one could point to simple human nature and realize thats just a pipe dream you tell kids so they respect authority.
Absolutely. Nevermind North Korea or even current climate politics for the moment and gaze 20-30 years into the future (maybe sooner, idk). If this goes the worst possible way imaginable for America, that is its utter collapse taking a large portion of the world with it, but goes exactly right for China (waiting for the pieces to fall where they may so they can buy up whats left of the world's debris with an undervalued currency, check the balance of Yuan to Whatever-the- -is-leftover at the end of the day and quite literally go from rural hole to Most Dominant Economic Power our world has ever seen)...Brilliant for China...
Our grandchildren will be reading about probably the quickest, most subversive
Cold War that ended with the obliteration of an opponent. It will be studied and analyzed and admired by anyone not a US citizen.
Germany doesnt much like reading or teaching about WW2 much, either. Theyre not delusional, just prideful. Same would go here. Outfoxed....handily.
Ummm, no. Not even close.
For example, in my line of work (automotive) there are certain entry criteria one must have if they want to do business.
The lowest formalized version is called ISO. Thats the lowest entry level qualification required. The hierarchy goes way up from there (2207, TS, etc, etc).
The World Bank and IMF work the same way, in effect.
"Oh, you want to sell you whats-its in the US? You do know we deal only with other Club Members, dont you? Yeah, yeah its cool. Youre just going to have to go ahead and get with the World Bank and have them look you over, make sure all is right with you, then we'll talk."
The rest is history.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote