1 Topic by bumblebee (edited by bumblebee 2005-04-12 08:13:35)

  • bumblebee
  • bumblebee
  • interdimensional intelligence analyst
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  • From: tau ceti
  • Registered: 2004-10-18

Topic: in yuan we trust

"The dollar’s decline, grim as it seems, has so far had little impact on the everyday lives of most Americans. To be sure, there are new burdens: the price of truffles is up sharply, and the cost of a trip to Paris now rivals that of a semester in college. But inflation and interest rates are still low, the stock market is above where it was three years ago, and Americans have had no trouble slaking their appetite for foreign-made goods. Doomsayers have been predicting for a while that the profligacy will lead to serious trouble. So why hasn’t it?
One answer is that Asia won’t let it. Last year, Asian countries invested almost four hundred billion dollars in the United States, mostly in government bonds. China is effectively taking most of its excess national savings and lending it to the United States. The Japanese, who despite their creaking economy remain flush with savings, bought a quarter trillion dollars of American debt last year, even though the interest is lousy and the assets themselves are losing value."
[...]
"Of course, the Chinese and the Japanese could decide that the costs of the falling dollar are too great, and suddenly stop (or, at least, cut back sharply) their lending to the United States. This would lead to a so-called “hard landing for the U.S. economy: high inflation, punitive interest rates, collapsing stock prices and housing prices. It would also lead to bedlam for China and Japan. Their best customers would effectively be unable to afford their wares. To paraphrase John Paul Getty: If you owe the bank a hundred dollars, you’ve got a problem. If you owe the bank three trillion dollars, the bank’s got a problem."

From:
The New Yorker, In Yuan we trust
by James Surowiecki
Issue of 2005-04-18
http://www.newyorker.com/talk/content/a … surowiecki

the eyes of truth are always watching you

2 Reply by wandering1 (edited by wandering1 2005-04-12 20:48:54)

  • Registered: 2004-04-01

Re: in yuan we trust

bumblebee wrote:

"The dollar’s decline, grim as it seems, has so far had little impact on the everyday lives of most Americans."

I suggest that "so far" is the key phrase here.  China, Japan, and the rest of Asia are very significant.

I'm looking at Fall 2005 as a potential period of big economic change.  It's really a matter of when the change comes and not if it comes.

  • montalk
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  • Registered: 2004-03-24

Re: in yuan we trust

So according to this, economic survival is the lynchpin that holds together peace between US and China. If the global economy falls apart for cataclysmic reasons, or if there were embargos on both sides or freezing of invested assets, then war would be inevitable and probably immediate. China's been stockpiling oil for the past decade in preparation for something like this -- consider the statistic about their oil consumption jumping 40% within the span of one year, which is commonly attributed to more people there owning cars but that seems like plausible deniability.

The Chinese military publications have talked openly about eventual war against America and their refocusing of equipment to increase second-strike nuclear capability shows that "mutually assured destruction" is no deterrent for them. As the world stands now, they have too much too lose --- but if the world degenerates to the point where they have nothing more to lose, then that would signal the turning point.

Acquiring fringe knowledge is like digging for diamonds in a mine field.

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4 Reply by wandering1 (edited by wandering1 2005-04-17 15:42:03)

  • Registered: 2004-04-01

Re: in yuan we trust

montalk wrote:

So according to this, economic survival is the lynchpin that holds together peace between US and China.

Montalk, I can see that you are referring to the article.  If economic survival is all that is holding the peace between the US and China, then I think we are all in big trouble - particularly if you think about the people who might be making claims that certain actions are necessary for "economic survival."

I suggest that an awakening process is occuring in the US, in China, and all over the world.  A war between the US and China is a very grim scenario.  If such a thing were to start, then that would be a clear signal to me that it's time to move whatever transcendence possibilities that are available into high gear.

Of course, there's plenty of horror going on right now, but I think that a US-China war would be particularly devastating.

  • From: Minneapolis, MN
  • Registered: 2005-02-02

Re: in yuan we trust

It's true, the U.S. and China are so heavily invested into each other that a collapse of either currency would have a deep impact on the other, possibly even resulting in the collapse of the other country.

China is indeed a sleeping giant and it's the last country in the world the U.S. would want to face in battle. Also something to consider is the very strong relationship China and Russia have. Russia is China's closest ally in many area's to include the military. If these two countries joined forces (something the pentagon fears and with good reason) the impact of such a conflict is almost too much to imagine. If China tries to annex Taiwan into the republic (a very real threat), it could very well serve as a catalyst for all out war. The U.S. has contracts with Taiwan to defend it in case of trouble.

It does not help matters that the current U.S. administration tries to tell China what to do, not unlike a threatening bully. Our thickheaded administration had better learn some respect (not holding my breathe) cause China (all on it's own) could give the U.S. a black eye if it wanted to and worse.

  • From: terra incognita
  • Registered: 2004-03-25

Re: in yuan we trust

Given this thread, I pulled this off of the MSN homepage, it's a lengthy Newsweek article about--

"Does the Future Belong to China? : A new power is emerging in the East. How America should handle unprecedented new challenges, threats–and opportunities."

http://www.msnbc.msn.com/id/7693580/sit … /?GT1=6542

Today's mighty oak is just yesterday's nut that held its ground.
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Life may not be the party we hoped for, but while we're here we might as well dance.
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If you spin around on your chair really fast, things around here will make a lot more sense.

lol