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evildeadashAug 6, 2011
I'm sorry to be wearing the tin foil hat today but does anyone else think that all this mess could be some roundabout way to force us to change currency? They have been floating the ridiculous idea of the Amero for a while now. IDK, this all seems kinda "coincidental" to me.
pleiadianagendaAug 7, 2011
No sir, you are 100 percent spot on. Let's look at the history of globalization. The Rockefellars were integral to creating the United Nations, and the consolidation of nations and enterprise.
David Rockefellar said in his 90's memoir that "Chinese communism was our most successful experiment", meaning the global elites.
Almost every business venture has headed to China in the last few decades, leaving America an empty husk.
China then surpasses us, and we are in massive debt to them. But in debt to whom? The Chinese? No, the BANKER FAMILIES controlling China.
This entire move is nothing more than another power grab and consolidation of wealth, gold, resources, power and property by banks and family dynasties.
Not to mention that the Chinese people have even less rights than most people, and this will become the new social model for the world, if these bankers are not stopped.
It is no different than the Medici family controlling Europe in the Renaissance period.
People can laugh and call it conspiracy all they want, but the numbers do not lie.
xophermvAug 6, 2011
China manipulates its currency to keep it artificially low against the dollar. That is why Chinese goods are so inexpensive compared to American goods. That's also why so many American jobs are now either in China or headed to China.
How does China manipulate its currency? It buys dollars with yuan in the Chinese market. The Chinese government can print all the yuan it wants, so it gets as many dollars as it wants. China then uses those dollars to buy US Treasury bonds. This decreases the price of the yuan and increases the price of the dollar.
The net effect of a large player like the Chinese government buying US Treasuries is that it's extremely cheap for the US to borrow money. That makes our interest rates so low that its almost zero. That encourages our government to borrow even more money than we need since it costs almost nothing. Further, that makes all debt in the US cheaper, which encourages our people to go out and use their credit cards to buy goods... which are usually Chinese.
China is our biggest creditor because that helps China screw us over. We owe as much debt as we do partially because of their actions. As much as they complain, they're not to stop buying Treasury bonds. Why? If China did stop buying those bonds, it would actually help the US and hurt China.
http://www.youtube.com/watch?v=m5xu4r0szaA
wulfgar3dAug 6, 2011
I think you have it backwards, China is the one with all the savings, and manufacturing. They hold all the cards, if they decouple the Yuan from the dollar that would be very bad for the US and very good for China.Comment is buried, click here to see the rest.
GodlessInfidelsAug 7, 2011
The two markets have become "Co-Dependant". Any dramatic change to the current status quo will result in negative implications for both the Chinese and the American economies.
wulfgar3dAug 7, 2011
Yes they have been dependent on American consumers buying China made products. But we are a small market compared to the rising middle class in China. They have the savings to retool their manufacturing to make goods for the Chinese middle class.
xophermvAug 7, 2011
No, I meant exactly what I wrote. By buying our debt, China devalues its currency, which hurts US business and US jobs. Watch the video I previously posted before commenting again.
As economist Dean Baker stated, "China has an unloaded water pistol pointed at our heads."
And further, as Nobel winner Paul Krugman responded, "Actually, it’s even better: China can, if it chooses, throw some cold water on us — but it’s a hot day, and we would actually enjoy it."
http://krugman.blogs.nytimes.com/2010/03/15/chinas-water-pistol/
wulfgar3dAug 7, 2011
Yes we have become dependent on China buying our debt. Interest rates on treasuries will go way up when China stops buying. And they are not the only ones manipulating currency, we already had 2 rounds of QE from the FED and will soon have a 3rd round.
I would not be quoting Paul Krugman as he is pretty clueless and gets a lot of things wrong when it comes to economics.
China is moving away from the dollar those ending our spending spree.
xophermvAug 7, 2011
No, we are not dependent on China buying our debt. If you actually believe that, then I definitely question the rest of your assertions.
Krugman clueless? Hardly. He has a Nobel Prize in economics. That doesn't mean he's infallible. But, that certainly means he's not clueless. Besides that, the man has a proven track record of getting things right far more often than right-wing economists.
And sorry, increasing the supply of our own currency is not "currency manipulation". Our currency is free-floating. We do not peg it to the value of any other currency, unlike China who actively manipulates the market on a near daily basis in order to peg its currency to an artificially low value of the dollar.
dsmeek36Aug 6, 2011
true -- we did it to ourselves. now, are the children done? can we get the adults back into the room now?
rocannonAug 6, 2011
WE have the government we want - don't forget that WE elected every one of those folks in Washington. And we will keep getting more of the same unless / until WE elect into office the people who have the courage to make the hard fiscal choices for the long term security of this nation.
If WE re-elect the current crop of politicians, then we darn well deserve whatever happens to this nation as we devolve into "has been" status. As Pogo said: "We have met the enemy, and he is us!"
aylawardAug 6, 2011
A lot of us Americans will be angry to hear that China is criticizing us, but we really do deserve it. I mean, come on. Is anything they said not true?
ae2198Aug 6, 2011
Regardless of the validity of their statements...they can go FI_Ick themselves.
Billy_JackAug 6, 2011
This is classic Chinese propaganda..I'm quite sure that they would like to change the world currency...Let me guess, to the Yuan, I think not, China is a third world country...LOL...As for the S&P rating, its all semantics, buying US dept is still a sure bet, Our rating will go up again anyway, as for our dysfunctional politicians, well, they are right about that, but then we certainly didn't need the Chinese to tell us that, we already know, they figured they'd jump on the bandwagon and throw their two cents in the pot...
dalexandruzAug 6, 2011
China needs to stfu, without U.S economy China is dead. We the U.S can always re-start our manufacturing. Earth rare metals are not only in china but Australia and other parts of world including here in the U.S.
pdjkeelanAug 6, 2011
China owns more US debt than any other country in the world, which means their investment in the US economy is sizeable and they make a valid point about using common sense. The US Republican/Democrat argument last week was silly and de-stabilised the worlds markets, the US politicians shouldn't have that type of power over the world, they should only have power over the US economy.
You also make very bad points about 'metals' and manufacturing. Western manufacturing costs between 5-100x more in the West than in China and India, their 'materials' are meaningless as they import a lot of material which is used so their materials market means little to the world. It's the manufacturing potential which means a lot and the USA can NOT replicate this manufacturing power. The US needs China just as much as China needs the US, don't underestimate China's industrial strength or their impact on the US market.
xophermvAug 7, 2011
Despite all the lost jobs, the US is still the largest manufacturer in the world. Just two decades ago, we made nearly every consumer good we required. The cost advantage of producing in China is actually quite small once you figure in the additional costs from shipping and American productivity, which is the highest in the world.
We do not need China. In fact, they are the ones who need us. It is our businesses and our former jobs which have fueled their economic rise. Without us, they would be nowhere. The fact that they own so much of our debt is a direct result of their currency manipulation to hold the value of the yuan down in comparison to the dollar. Without that currency manipulation, China would be economically dead just like they were thirty years ago.
pdjkeelanAug 7, 2011
The US manufactures mostly electronics, cars and military equipment. It's manufacturing of textiles and lower-end equipment has dropped substantially and has even begun to drop in general computing equipment. The cost of shipping to America will still mean most items are cheaper from China especially as freight prices have been dropping dramatically. In the UK an import of shoes from China->UK is approximately 1/10th the cost of buying in the UK and most of that cost is materials not labour or freight (although labour is increasing fortunately).
The economic rise in China has come from the world, not just America, many exports from China go to Europe, the United States is a powerful economy but it does retain much of it's manufacturing internally which means it doesn't have as much impact on other countries as many choose to believe.
I have to say mentioning the economic manipulation by China is quite weak since America has done this itself in the past. China has made a clear, blunt statement about the way the US is handling it's debt and to be quite frank I doubt many Americans will be willing to deny that China is correct. It may seem like they're 'butting in', but China makes a point and so do the creditors which have highlighted that the US was within 1 day of defaulting and in-turn caused the stock markets to panic, it didn't help that the US Republicans/Democrats did this at the same time as the Eurozone countries are struggling to stave off the collapse of the Euro.
All countries are guilty in it's handling of debt, But at the moment many US politicians seem to be in denial that anything is wrong; particularly the Republicans refusing to increase taxes and especially funny that they've tried to blame the President when it's them who continued to block the debt increase/plan-of-action.
xophermvAug 7, 2011
Freight prices have been dropping? What planet are you living on? Have you not seen the price of oil recently? What do you think cargo ships run on? The price of freight has been going up. And with the demand for oil ever increasing and the supply ever decreasing, the price for it will remain high and only go up.
China has been winning business from America over the past 20 years by manipulating the price of its currency to be artificially low against the dollar. Yes, they also get business from the rest of the world too. But again, that is because their goods are cheap. And why are they cheap? The currency manipulation of the yuan against the dollar.
The arguments that the US is manipulating its currency are weak. China takes dollars out of the Chinese market by printing and exchanging yuan at a predetermined peg. China then uses those dollars to buy US treasuries. That lowers the interest rate, which encourages us to borrow more money. Further, the low interest rates lowers the price of credit for all Americans, which encourages all Americans to spend that credit buying goods... cheap Chinese goods. China does this buying and selling every day in order to maintain that predetermined peg. As for the US, the US government maintains a free-floating currency. The US does not peg its currency to anything, unlike China.
As for the debt, the US has no debt crisis. We have a jobs crisis. There is no demand for goods. Hence, there is no demand for workers to make those goods. Businesses aren't spending. Consumers aren't spending. That leaves the government to spend. At this point in the economic cycle, we should be spending massive amounts of money to put people to work. Other countries should be doing the exact same thing. You pay down debt when you have a strong, healthy economy.
Historically speaking, our massive government spending during World War 2 created demand for goods, demand for jobs, put everyone to work, and got us out of the Great Depression. We didn't worry about the debt we ran up. We paid off that debt after the war when the economy was booming.
Complaining about the debt is counter-productive. Austerity now will make our economy shrink. That does real damage and will make it take far longer for us to recover. THAT is likely why the Chinese are making these arguments. They want China to be the biggest economic powerhouse on the planet. They want us to go under. That's what they've wanted all along. So, they make these arguments which they know people will agree with and which would ultimately hurt us if we followed them.
pdjkeelanAug 7, 2011
No debt crisis? $14trillion and rising would say differently. Your point about World War 2 is valid, but at the same time if we have World War 3 which is the only way in theory to do what you've suggested then we won't be here debating this for very long...
The US government in the past 10+ years has spent more than ever under the Bush administration, if 10 years+ can't stimulate your economy how do you expect even more debt to do so? Eventually the debt will grow to insane levels and you will be forced to default because you need the world markets to pick-up, not just your own. With the Eurozone in meltdown and several Middle East countries switching leadership then the worldwide economic recovery will be slow, maybe even 1-2 generations. This is unavoidable.
You've mentioned that austerity doesn't work, yet for the UK which has made some taken some very harsh austerity measures it seems to be working, they didn't allow themselves to fall into so much debt that it was unmanageable, and they taking steps to reorganise and pay off large sums of debt while making best attempts to not borrow anymore. The US however is doing the opposite and refusing to increase revenues which are required to pay off it's debt, the Republican motto of not increasing taxes is a dire situation and creditors are beginning to see this e.g. S&P, I have to wonder how long it will take Moody's and Fitch to do the same.
xophermvAug 7, 2011
One goal of stimulus spending under Keynes is to put people to work. Despite all the stimulus spending during the Bush years there was still high levels of unemployment, particularly earlier in the decade right after the tech bust. As a stimulus, the Bush spending was not good.
And yes, again I write our real crisis is a lack of jobs rather than our debt. Further, many prominent economists have written the exact same thing. I'm certainly not alone in this assertion. Putting everyone to work at this time would most certainly fix the economy and make it easier to pay off the debt.
As for the UK, its austerity program has been a disaster. How much growth have you seen in the UK economy? Near zero and possibly less. Contractionary fiscal policy is contractionary. When spending is cut, the economic activity goes down, not up.
johnnysoftwareAug 7, 2011
More like three decades ago.
DrKyawwwinAug 6, 2011
China also urged the United States to apply "common sense" to "cure its addiction to debts" by cutting military and social welfare expenditure.
humanitAug 6, 2011
When I first heard about this, I thought that to be clever way of making sure that US _will_ be bancrupt: tell US that they should cut military spending -> makes sure that does not happen -> US bancrupt and China can even say "we told you". All so called imperiums have been destroyed from inside by greed etc. becoming acceptable social norm, read eg. "The Conspiracy of Catiline" by Sallust to see what happened in Rome.. same is going on in US, the military industrial complex is based on greed, not to real patriotism, imho..
pdjkeelanAug 6, 2011
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures Considering the US spends approximately 6x more than anybody else in the world on it's military it could easily half it's military expense and still be a military superpower.
martin92003Aug 7, 2011
Thanks to conservatives/tea party idiots..maybe they are trying to kill the US economy, and the middle class (which they have been very successful at so far!)
lojackAug 7, 2011
Yeah, China is to blame for all our problems. But we owe 'em $1.2 trillions. What to do...?
Hey, why don't we borrow some more, no .. a lot more from 'em, then f*cking carpet bomb them. Then we'll be debt free .. still #1! And they won't be around to criticize us.
theroadwarrior14Aug 7, 2011
Blame us all you want, but you Chinese douchebags certainly didn't help.
theroadwarrior14Aug 7, 2011
Blame us all you want, but you Chinese douchebags certainly didn't help.
theroadwarrior14Aug 7, 2011
Blame us all you want, but you Chinese douchebags certainly didn't help.
rmad1949Aug 6, 2011
China is building aircraft carriers with our debt... and bitching?
alienmushroomAug 6, 2011
With our debt? You mean China builds its aircraft carrier while its money is in our possession? Am I the only one who can't make any sense out of your comment?
rmad1949Aug 7, 2011
Not really.... China will be able to build anything they want with the interest we will be giving them on the trillions loan.
UtaalkAug 8, 2011
I agree, America has too many rich greedy people.
rocannonAug 7, 2011
I find it ironic that WE, the electorate, point fingers, spew insulting labels, and place blame as good as or better than the folks up in Washington. Those tactics don't work there, so why do WE use them too? If you consider our elected officials to be representative of the national will, then what you see them doing is what WE are doing. Everyone is too busy placing blame and fault, and ignoring the opportunities to actually DO something.
We have the government we want, and that's a shame on us.
johnnysoftwareAug 7, 2011
More like an addiction to war.
cactus1erAug 7, 2011
US is to blame, yes it's true. However, China should be a little more careful about its opinion. China isn't paradise yet and India is getting closer as a major key player in the world. (And its a democratic nation, not communist)
keltickalAug 7, 2011
China seems so powerful and unstoppable but in actuality, they are a train wreck waiting to happen. The economy is still centrally planned and there are severe strains as a result. The Chinese have built cities that are empty and inflation continues to be a problem just to name two serious issues. Of course when China goes down the tubes, it will be too bad for the rest of the world.
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