China threatens 'nuclear option'

[Eric_Boyer]

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.

He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

"China is unlikely to follow suit as long as the yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," he told China Daily.

The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being "held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo".

She said foreign control over 44pc of the US national debt had left America acutely vulnerable.

Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.

"The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles," he said.

A bill drafted by a group of US senators, and backed by the Senate Finance Committee, calls for trade tariffs against Chinese goods as retaliation for alleged currency manipulation.

The yuan has appreciated 9pc against the dollar over the last two years under a crawling peg but it has failed to halt the rise of China's trade surplus, which reached $26.9bn in June.

Henry Paulson, the US Tresury Secretary, said any such sanctions would undermine American authority and "could trigger a global cycle of protectionist legislation".

Mr Paulson is a China expert from his days as head of Goldman Sachs. He has opted for a softer form of diplomacy, but appeared to win few concession from Beijing on a unscheduled trip to China last week aimed at calming the waters.

[BrAinPaiNt]

And we keep going in debt with them at a staggering rate because we can not afford to pay for his war with Iraqi Oil like we were told.

[Eric_Boyer]

And we keep going in debt with them at a staggering rate because we can not afford to pay for his war with Iraqi Oil like we were told.

The number one threat to our country and way of life is our spending and our debt.

I have been on a 6 year crusade trying to explain this - and I don't feel like people care, or understand.

America is doomed if we don't reverse course fast.

[Sasquatch]

The number one threat to our country and way of life is our spending and our debt.

I have been on a 6 year crusade trying to explain this - and I don't feel like people care, or understand.

America is doomed if we don't reverse course fast.

What do you think of Mike Gravel's suggestions that we eliminate all taxes except a sales tax? I believe it's intended to promote savings and transparency in the tax code.

How's the crusade coming along, by the way? :)

[ABQCOWBOY]

Let it happen. The price of building a house will decrease by about 2/3rds and half the chinese will freeze to death come next winter.

This is a bunch of BS if you ask me. China needs us more then we need them. That's the truth of the matter. China can't afford to use a "Nuclear" option with us. That's like bringing a knife to a gun party.

[Mavs Man]

What do you think of Mike Gravel's suggestions that we eliminate all taxes except a sales tax? I believe it's intended to promote savings and transparency in the tax code.

This would be great, even if it was just a one-for-one swap of national sales tax for income tax. That would reward work (instead of taxing work), while also curbing personal spending (more savings). As an added benefit it would, as you said, make the tax code transparent by doing away with tax loopholes and all that other garbage.

Of course, this would also do away with a large chunk of accounting jobs.

[Eric_Boyer]

Let it happen. The price of building a house will decrease by about 2/3rds and half the chinese will freeze to death come next winter.

This is a bunch of BS if you ask me. China needs us more then we need them. That's the truth of the matter. China can't afford to use a "Nuclear" option with us. That's like bringing a knife to a gun party.

This is dead wrong.

China is on pace to be the worlds superpower - it's only a matter of when.

Their economy would certainly take a nose dive from this, but the difference is they are in excellent financial standing and could brace themselves from the fallout. We are a nation of creditors and are up to our eyeballs in government debt and individual debt.

Not only that but we have become so soft that when real poverty sets in and the people can't turn to the government for help, they won't know what to do.

[Eric_Boyer]

What do you think of Mike Gravel's suggestions that we eliminate all taxes except a sales tax? I believe it's intended to promote savings and transparency in the tax code.

How's the crusade coming along, by the way? :)

I would prefer no tax over a consumption tax - but it is an improvement.

[ABQCOWBOY]

This is dead wrong.

China is on pace to be the worlds superpower - it's only a matter of when.

Their economy would certainly take a nose dive from this, but the difference is they are in excellent financial standing and could brace themselves from the fallout. We are a nation of creditors and are up to our eyeballs in government debt and individual debt.

Not only that but we have become so soft that when real poverty sets in and the people can't turn to the government for help, they won't know what to do.

Credits and good standing are all great but when push comes to shove, you gotta feed people. You gotta house people and you gotta provide a certain standard of living. China is nowhere near capable of doing this on there own. There is no country in the world that can provide the raw materials necessary to accomplish this other then the United States. If our economy went down the tubes, the world economy would follow it and that would mean a bunch of starving people in China.

I'm not wrong.

[Eric_Boyer]

Credits and good standing are all great but when push comes to shove, you gotta feed people. You gotta house people and you gotta provide a certain standard of living. China is nowhere near capable of doing this on there own. There is no country in the world that can provide the raw materials necessary to accomplish this other then the United States. If our economy went down the tubes, the world economy would follow it and that would mean a bunch of starving people in China.

I'm not wrong.

This makes no sense. You claim because China imports grains, they can't feed themself?

China's GDP and it's gigantic stash of wealth will guarantee they can feed themselves longer then we could feed ourselves.

You seem to have this faulty assumption that China relies on world charity to get by, whch is absurd. China is funding our interventionist policy, feeding themselves, and still increasing their wealth. Just because they buy grain from foreign sources doesn't mean they can't feed themselves. They will still be able to buy grain from foreign sources - it would be us without the money or the credit standing to do so.

[BrAinPaiNt]

This makes no sense. You claim because China imports grains, they can't feed themself?

China's GDP and it's gigantic stash of wealth will guarantee they can feed themselves longer then we could feed ourselves.

You seem to have this faulty assumption that China relies on world charity to get by, whch is absurd. China is funding our interventionist policy, feeding themselves, and still increasing their wealth. Just because they buy grain from foreign sources doesn't mean they can't feed themselves. They will still be able to buy grain from foreign sources - it would be us without the money or the credit standing to do so.

I, by no means, am an economic guru.

But I am on your side on this one.

They were more of an isolationist type of country for years and did ok for themselves.

If someone has money, they can find a way to get what they need.

China is not hurting for money....we made sure of that.:mad:

[ABQCOWBOY]

This makes no sense. You claim because China imports grains, they can't feed themself?

China's GDP and it's gigantic stash of wealth will guarantee they can feed themselves longer then we could feed ourselves.

You seem to have this faulty assumption that China relies on world charity to get by, whch is absurd. China is funding our interventionist policy, feeding themselves, and still increasing their wealth. Just because they buy grain from foreign sources doesn't mean they can't feed themselves. They will still be able to buy grain from foreign sources - it would be us without the money or the credit standing to do so.


Yeah, that's pretty much what I claim. Let me just ask you a question here. Why did China come in from out of the cold to begin with? China's Communist Party certainly didn't want to open things up to the West. The were forced to do it because they could no longer support there own population. In addition to this, they couldn't house them or provide sufficiant necessities such as heat etc. China, for many years, was one of the most under developed countries in the world. They still are although, they are getting better. It's not just food. It's raw materials used to develope and build with. Everything from Grain to gravel used to make cement is imported from the West. We have a world market now. Don't you think that if the possability were there for China to produce enough food on there own, they would have already done so? Don't you think that if the opportunity were there for them to purchase enough food from other sources in the world, they would already be buying it for a cheaper price then we are selling it? The reality is that the world does not produce enough food for China to use on there own. There isn't enough out there so while your theory on buying food from another source is a nice concept, it's not very realistic. All that happens if you take America's grain out of the equation is a bidding war between other starving nations. The Price of Grain suddenly jumps way up and China is stuck buying food for much more then they would have from us. We, on the other hand, still have a world market so we simply turn around and sell our grain to whomever lost out now that China is purchasing what used to go to other countries. We produce nearly half of the worlds grain. You don't just remove that from the equation and think that somebody else can fill the void. This is not about money. It's about availability.

Sure, go ahead and do what you can do China. Lets see you eat up all that currancy.

[Crown Royal]

Sometimes you have to wonder if it is going to take a massive market crash/resession, something, for some real improvements to be made with the country. Right now this place just seems so stale.








ATTENTION FBI - Yes, I understand that what I just posted caused your entire system to raise red flags and begin to monitor me. I should let you know that in no way am I endorsing some radical attack on the US or it's holding, I was simply thinking aloud in a purely theoretical manner. Please have a nice day and go make a useless marijuana bust or something.

[Mavs Man]

Question - if this is their "nuclear option", what do they call their, uh, "other" nuclear option?

And no, "nuke-ya-lure option" is not the right answer.

[Crown Royal]

Question - if this is their "nuclear option", what do they call their, uh, "other" nuclear option?

And no, "nuke-ya-lure option" is not the right answer.

Atomic.

[ABQCOWBOY]

Question - if this is their "nuclear option", what do they call their, uh, "other" nuclear option?

And no, "nuke-ya-lure option" is not the right answer.

:laugh2:

[Eric_Boyer]

Yeah, that's pretty much what I claim. Let me just ask you a question here. Why did China come in from out of the cold to begin with? China's Communist Party certainly didn't want to open things up to the West. The were forced to do it because they could no longer support there own population. In addition to this, they couldn't house them or provide sufficiant necessities such as heat etc. China, for many years, was one of the most under developed countries in the world. They still are although, they are getting better. It's not just food. It's raw materials used to develope and build with. Everything from Grain to gravel used to make cement is imported from the West. We have a world market now. Don't you think that if the possability were there for China to produce enough food on there own, they would have already done so? Don't you think that if the opportunity were there for them to purchase enough food from other sources in the world, they would already be buying it for a cheaper price then we are selling it? The reality is that the world does not produce enough food for China to use on there own. There isn't enough out there so while your theory on buying food from another source is a nice concept, it's not very realistic. All that happens if you take America's grain out of the equation is a bidding war between other starving nations. The Price of Grain suddenly jumps way up and China is stuck buying food for much more then they would have from us. We, on the other hand, still have a world market so we simply turn around and sell our grain to whomever lost out now that China is purchasing what used to go to other countries. We produce nearly half of the worlds grain. You don't just remove that from the equation and think that somebody else can fill the void. This is not about money. It's about availability.

Sure, go ahead and do what you can do China. Lets see you eat up all that currancy.

Importing raw goods isn't a sign of weakness so long as they can afford to import those goods.

You seem to think their move from isolationism to trade shows that they need us more then we need them. Years of Isolationism and poor crop management wreaked havoc on China's ability to self-sustain forcing them to end their isolation - but that isn't the issue. They will be able to maintain a policy of being a net importer of grains, oil, and other raw materials because they will have the financial resources to do so.

Our economy is a paper tiger. We continue to grow GDP by passing easier and easier credit policy - something that immediately dries up if China plays hardball. Home foreclosures would go through the roof. Our economy would bottom out 1,000 times faster then the Chinese (who already expect a much lower living standard anyway).

This attitude of American economic supremacy will be our downfall. Our montary policy has been around since 1971 yet people seem to think we are on some time tested system that can't fail us.

[ABQCOWBOY]

Importing raw goods isn't a sign of weakness so long as they can afford to import those goods.

You seem to think their move from isolationism to trade shows that they need us more then we need them. Years of Isolationism and poor crop management wreaked havoc on China's ability to self-sustain forcing them to end their isolation - but that isn't the issue. They will be able to maintain a policy of being a net importer of grains, oil, and other raw materials because they will have the financial resources to do so.

Our economy is a paper tiger. We continue to grow GDP by passing easier and easier credit policy - something that immediately dries up if China plays hardball. Home foreclosures would go through the roof. Our economy would bottom out 1,000 times faster then the Chinese (who already expect a much lower living standard anyway).

This attitude of American economic supremacy will be our downfall. Our montary policy has been around since 1971 yet people seem to think we are on some time tested system that can't fail us.


Yet you fail to address the simple, yet unavoidable fact, that we still produce the majority of the worlds grain. If China wants to go buy it else where, go ahead. If China wants to go buy raw materials else where, go ahead. The market will still be there for us because somebody is going to need to buy product in order to back fill what is being consumed by China. Supply and Demand.

However, you do deliver a good speech. You could probably get yourself elected in China, assuming they ever hold free elections.

[Mavs Man]

Atomic.

Others . . .

World War III.

Armageddon.

Hell on Earth.

[ABQCOWBOY]

Others . . .

World War III.

Armageddon.

Hell on Earth.


Round my house, that's usually refered to as PMS.

:D

[Mavs Man]

Round my house, that's usually refered to as PMS.

:D

:laugh2:

[Eric_Boyer]

Yet you fail to address the simple, yet unavoidable fact, that we still produce the majority of the worlds grain. If China wants to go buy it else where, go ahead. If China wants to go buy raw materials else where, go ahead. The market will still be there for us because somebody is going to need to buy product in order to back fill what is being consumed by China. Supply and Demand.

However, you do deliver a good speech. You could probably get yourself elected in China, assuming they ever hold free elections.

Your positions are contradictory.

You acknowledge that China was forced to end isolationism and begin buying gran from the global market but claim that America - even with a tanking economy - will pick up isolationism and stop selling grain on the global market.

Your analysis seems to begin and end with "were stronger then everybody else".

[zrinkill]

were stronger then everybody else.

We are.

[Eric_Boyer]

We are.

But it isn't set in stone.

Major cracks are showing in our monetary system that can't be ignored much longer.

[Mavs Man]

We are.

Oh yeah! Well, the Spurs suck!

Wait a minute, wrong thread . . .

:D

[ABQCOWBOY]

Your positions are contradictory.

You acknowledge that China was forced to end isolationism and begin buying gran from the global market but claim that America - even with a tanking economy - will pick up isolationism and stop selling grain on the global market.



Your analysis seems to begin and end with "were stronger then everybody else".


No, that's your position. I simply stated that we are too big a producer of grain to simply be removed from the equation. The World simply can not produce enough grain to off set what the US sells. People are starving. There not shopping around for the better deal on the prices of grain. Our grain will sell elsewhere if China starts buy somebody elses grain. The reality of this is that if China starts buying grain elsewhere, that country will probably be buying our grain and reselling it at a proffit. That's how it will work. Financial standing doesn't mean anything in a closed market. Unless somebody is able to step up and replace our production, which is not realistic, then it really doesn't make all that much difference.

[ABQCOWBOY]

But it isn't set in stone.

Major cracks are showing in our monetary system that can't be ignored much longer.


Zrin is right, we are. Having said that, Countries rise and fall and rise again. That has happened throughout history. So long as we are a nationalisic world society, this is going to happen. The US will eventually fall. However, that time is not today or even in the near future IMO. Baring some cataclysmic event that cripples us, we are going to be the big dog on the block for awhile. There are simply too many things that we have control over. The world economy can not stand if the US economy falls. That is not an over blown opinion of America. That is a simple fact of life. The world can not allow us to fold just as we can not allow countries like Japan or Germany or even China to fold economically.

[Eric_Boyer]

No, that's your position. I simply stated that we are too big a producer of grain to simply be removed from the equation. The World simply can not produce enough grain to off set what the US sells. People are starving. There not shopping around for the better deal on the prices of grain. Our grain will sell elsewhere if China starts buy somebody elses grain. The reality of this is that if China starts buying grain elsewhere, that country will probably be buying our grain and reselling it at a proffit. That's how it will work. Financial standing doesn't mean anything in a closed market. Unless somebody is able to step up and replace our production, which is not realistic, then it really doesn't make all that much difference.

No, that was your position, I just reminded you of it.

I'm curious though, How exactly does the US remain the largest exporter of grain when our dollars inflate so quickly causing oil prices to skyrocket?

How do we continue to subsidize our farm economy when China isn't loaning us the money to do it.

How in the hell would we continue producing the same amount of grain?

You act like we would carry on as is - minus the closing down of all the WalMart's. That isn't what would happen. A global depression would kick in, and the nation's with the highest percentage of debt compared to the new level of GDP would be in the deep deep trouble. China would lose a ton of money dumping our dollars, but they are poised to recover far quicker then we are.

[Eric_Boyer]

Zrin is right, we are. Having said that, Countries rise and fall and rise again. That has happened throughout history. So long as we are a nationalisic world society, this is going to happen. The US will eventually fall. However, that time is not today or even in the near future IMO. Baring some cataclysmic event that cripples us, we are going to be the big dog on the block for awhile. There are simply too many things that we have control over. The world economy can not stand if the US economy falls. That is not an over blown opinion of America. That is a simple fact of life. The world can not allow us to fold just as we can not allow countries like Japan or Germany or even China to fold economically.

He didn't say anything contradictory to what I have said.

So I agree- he is right. :D

[Ben_n_austin]

And we keep going in debt with them at a staggering rate because we can not afford to pay for his war with Iraqi Oil like we were told.


:hammer:

[burmafrd]

Just curous. WHO said we would pay for the war with Iragi Oil? Sounds like an urban legend.

[ABQCOWBOY]

No, that was your position, I just reminded you of it.

I'm curious though, How exactly does the US remain the largest exporter of grain when our dollars inflate so quickly causing oil prices to skyrocket?

How do we continue to subsidize our farm economy when China isn't loaning us the money to do it.

How in the hell would we continue producing the same amount of grain?

You act like we would carry on as is - minus the closing down of all the WalMart's. That isn't what would happen. A global depression would kick in, and the nation's with the highest percentage of debt compared to the new level of GDP would be in the deep deep trouble. China would lose a ton of money dumping our dollars, but they are poised to recover far quicker then we are.


Show me Eric.

[Mavs Man]

Just curous. WHO said we would pay for the war with Iragi Oil? Sounds like an urban legend.

I think the conversation went something like this:

"THAT is not water."

"Black blood of the Earth."

"Whatcha mean? Oil?"

"I mean, black blood of the Earth."

http://www.filminamerica.com/Movies/BigTroubleInLittleChina/trouble10.jpg

[ABQCOWBOY]

No, that was your position, I just reminded you of it.

I'm curious though, How exactly does the US remain the largest exporter of grain when our dollars inflate so quickly causing oil prices to skyrocket?

How do we continue to subsidize our farm economy when China isn't loaning us the money to do it.

How in the hell would we continue producing the same amount of grain?

You act like we would carry on as is - minus the closing down of all the WalMart's. That isn't what would happen. A global depression would kick in, and the nation's with the highest percentage of debt compared to the new level of GDP would be in the deep deep trouble. China would lose a ton of money dumping our dollars, but they are poised to recover far quicker then we are.


Odd how you can continue to miss the point here. First of all, our economy has been far worse. What we have today is not ideal but it is also not crippling. Secondly, food is a necessity. The simple fact of the matter is that the world can not feed themselves. All this BS you are throwing out about inflation and oil prices rising is not relivant. If we collapse, so to does the world. China is not going to recover because the credit rating you are so proud of will not matter if the world banks are bankrupt. If we fall, so to does the world economy. If your China, you tell me how you rebound when you don't have food to feed your people? If we fail, half the worlds grain is gone. How does your credit buy you grain that is not there? How does your credit buy you raw materials to build with if they are not there? How do you survive when the worlds Welfare plan is gone?

Just please stop. You are basing a premise on the fact that if we fell, the world economy would still be intact. It would not. It too would fall. China would be in an even more desperate situation then we would. We can always feed ourselves. The reserves required to continue to produce food is there. Not so for the rest of the world. Very few countries in the world have both the natural resources to produce enough food to feed there own population while at the same time, enough natural fuel resevers to sustain production over a long period of time. None have it in the amounts we do. There is no counter to this simple fact. That is the reality of America and the finality of not being able to feed yourself if you are China.

[Eric_Boyer]

Odd how you can continue to miss the point here. First of all, our economy has been far worse. What we have today is not ideal but it is also not crippling. Secondly, food is a necessity. The simple fact of the matter is that the world can not feed themselves. All this BS you are throwing out about inflation and oil prices rising is not relivant. If we collapse, so to does the world. China is not going to recover because the credit rating you are so proud of will not matter if the world banks are bankrupt.

First off - how our economy is today isn't the subject. I haven't brought up the existing economy. We are talking about a hypothetical currency war so I have focused on our debt particularly as it pertains to potential GDP.

I have clearly acknowledged that this would cause a global depression and everyone will get hurt. The question of who gets hurt most is a complex one. I will guess that neither of us - and possibly nobody in existance - can truly fathom the end result. That certainly doesn't stop me from trying. :D

You mentioned that having housing prices slashed by 2/3 would be a great thing for us which I strongly disagree with. This is one of the areas that we are at a major disadvantage in.

Our easy credit policy and housing bubble has been feeding our increased GDP. The amount of Americans that would find them upside down, jobless, and homeless if the Real Estate market collapses is a serious issue.

Perhaps the real argument is in how we are even defining harm. You bring food up alot. I acknowledge that Communist China could easily have a higher casualty count. I doubt their government places such a high premium on this barometer though. They are a nation long used to tryanny and poverty.

What I don't see happening however is us maintaining the same ratio of grain exports. Our real estate market just crashed by 2/3, our aging baby boomers lost everything, and we can't afford to subsidize agriculture.

If we fall, so to does the world economy. If your China, you tell me how you rebound when you don't have food to feed your people?

Considering they are the agents that caused the collapse, they have a head start. They convert our treasury notes to other commodites. They make a run on gold and silver while they watch all the notes of the central bank's across the globe hyper-inflate.

Now GLOBAL GDP has tanked but they are sitting on a ton of assets while we are sitting on a pile of debt. The world is going to suffer as countries slowly pull themselves out of the rubble and what they will find is the same Communist China holding a great deal of wealth. Who knows what kind of government we find ourselves in if such a thing were to happen. Watching the Soldier Field crowd at the debate didn't give me alot of confidence.

Personally, the only question I have is if the current debt amount they hold is enough to cause a total dollar collapse. I hold no illusions that we would make out the best if it were to happen.

[rantanamo]

China was NOT doing ok under isolationism. That's why they aren't doing it anymore. They would feel a serious pinch without their exports. They are already feeling a serious pinch from their wages going higher and cheaper labour being chosen in favor of them. They may be a super power in terms of cumulative wealth, but they are a long way and a lot of problems from becoming what some want them to be.

[BrAinPaiNt]

Just curous. WHO said we would pay for the war with Iragi Oil? Sounds like an urban legend.

Paul Wolfowitz March 2003, At that time the Deputy Secretary of Defense in a meeting with the House Committee on Appropriations.

A Congressman asks how the invasion and occupation the Bush administration has just launched will be paid for. The Deputy Secretary of Defense replies that our “Second Iraq War” won’t be “overly expensive for American taxpayers”: “There’s a lot of money to pay for this that doesn’t have to be U.S. taxpayer money, and it starts with the assets of the Iraqi people… and on a rough recollection, the oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years… We’re dealing with a country that can really finance its own reconstruction, and relatively soon.”

[AtlCB]

Question - if this is their "nuclear option", what do they call their, uh, "other" nuclear option?

And no, "nuke-ya-lure option" is not the right answer.
Just for that:

We don't use the "nuke-ya-lure option" in "Mer-ri-ca"! :lmao2:

[BrAinPaiNt]

I think the conversation went something like this:

"THAT is not water."

"Black blood of the Earth."

"Whatcha mean? Oil?"

"I mean, black blood of the Earth."

http://www.filminamerica.com/Movies/BigTroubleInLittleChina/trouble10.jpg

Nice Big Trouble in Little China reference. One of those cult classic movies.

[Mavs Man]

Nice Big Trouble in Little China reference. One of those cult classic movies.

I try to get one in any chance I've got.

[ABQCOWBOY]

First off - how our economy is today isn't the subject. I haven't brought up the existing economy. We are talking about a hypothetical currency war so I have focused on our debt particularly as it pertains to potential GDP.

I have clearly acknowledged that this would cause a global depression and everyone will get hurt. The question of who gets hurt most is a complex one. I will guess that neither of us - and possibly nobody in existance - can truly fathom the end result. That certainly doesn't stop me from trying. :D

You mentioned that having housing prices slashed by 2/3 would be a great thing for us which I strongly disagree with. This is one of the areas that we are at a major disadvantage in.

Our easy credit policy and housing bubble has been feeding our increased GDP. The amount of Americans that would find them upside down, jobless, and homeless if the Real Estate market collapses is a serious issue.

Perhaps the real argument is in how we are even defining harm. You bring food up alot. I acknowledge that Communist China could easily have a higher casualty count. I doubt their government places such a high premium on this barometer though. They are a nation long used to tryanny and poverty.

What I don't see happening however is us maintaining the same ratio of grain exports. Our real estate market just crashed by 2/3, our aging baby boomers lost everything, and we can't afford to subsidize agriculture.



Considering they are the agents that caused the collapse, they have a head start. They convert our treasury notes to other commodites. They make a run on gold and silver while they watch all the notes of the central bank's across the globe hyper-inflate.

Now GLOBAL GDP has tanked but they are sitting on a ton of assets while we are sitting on a pile of debt. The world is going to suffer as countries slowly pull themselves out of the rubble and what they will find is the same Communist China holding a great deal of wealth. Who knows what kind of government we find ourselves in if such a thing were to happen. Watching the Soldier Field crowd at the debate didn't give me alot of confidence.

Personally, the only question I have is if the current debt amount they hold is enough to cause a total dollar collapse. I hold no illusions that we would make out the best if it were to happen.


Suit yourself. When it's all said and done, it comes back to the same thing. Can a nation take care of it's own people? We can because we have the resources to do so. China can not because they don't. When things go bad, you always come back to nessesaty. Food, water, shelter and the means to sustain these things. I'm not talking the extra SUV in the parking lot or the X360 for the kids. I'm talking about what would be needed to survive in a world devoid of world finanace. That is what we are talking about right? What would happen if China up and quit us. I'm saying that it doesn't matter because we are such a large producer of food that the world can not just forget about it and buy elsewhere. After all the smoke and mirrors, all the redirection, all the other stuff, it comes down to that. If you want it, you have to get it here. You can not get around that single point. However, for the sake of arguement and make no mistake, thats what this is, if world economey collapesed, we would be in much better shape then would China. If housing were cut by 2/3, it would be a big hit for families who have bought in the last few years but it would eventually right itself for the better. The housing market is over inflated as it is. It costs too damn much to buy a decent house for young families. If the cost of housing came back down, eventually, it would help to stablize our economey. It would not hurt it. Long term, that's the better solution. It should not cost 3 to 4 hundred thousand dollars to buy a house you could build for 180, 200K a few years ago. That's not a good thing for anybody. Continue to embrace that and it will eventually turn tail and bit back. It's only a matter of time. I don't believe the world market would fail. I don't believe the rest of the world would just stand idle and let it happen. We are much too big a part of the world economy to allow this. Just don't see it.

[zrinkill]

Oh yeah! Well, the Spurs suck!

Wait a minute, wrong thread . . .

:D

http://images.tsn.ca/images/stories/20070615/1_1388.jpg

;)

[Eric_Boyer]

Suit yourself. When it's all said and done, it comes back to the same thing. Can a nation take care of it's own people? We can because we have the resources to do so. China can not because they don't. When things go bad, you always come back to nessesaty. Food, water, shelter and the means to sustain these things. I'm not talking the extra SUV in the parking lot or the X360 for the kids. I'm talking about what would be needed to survive in a world devoid of world finanace. That is what we are talking about right? What would happen if China up and quit us. I'm saying that it doesn't matter because we are such a large producer of food that the world can not just forget about it and buy elsewhere. After all the smoke and mirrors, all the redirection, all the other stuff, it comes down to that. If you want it, you have to get it here. You can not get around that single point. However, for the sake of arguement and make no mistake, thats what this is, if world economey collapesed, we would be in much better shape then would China. If housing were cut by 2/3, it would be a big hit for families who have bought in the last few years but it would eventually right itself for the better. The housing market is over inflated as it is. It costs too damn much to buy a decent house for young families. If the cost of housing came back down, eventually, it would help to stablize our economey. It would not hurt it. Long term, that's the better solution. It should not cost 3 to 4 hundred thousand dollars to buy a house you could build for 180, 200K a few years ago. That's not a good thing for anybody. Continue to embrace that and it will eventually turn tail and bit back. It's only a matter of time. I don't believe the world market would fail. I don't believe the rest of the world would just stand idle and let it happen. We are much too big a part of the world economy to allow this. Just don't see it.

Actually it comes back to two questions

1 - Why is debt bad

2 - How bad of shape has our current debt put us in.


Reading your views, we can't really do no long term harm and debt isn't a real concern.

[Mavs Man]

http://images.tsn.ca/images/stories/20070615/1_1388.jpg

;)

:p:

At least it stayed in Texas.

[ABQCOWBOY]

Actually it comes back to two questions

1 - Why is debt bad

2 - How bad of shape has our current debt put us in.


Reading your views, we can't really do no long term harm and debt isn't a real concern.


In so far as it effects our current way of life, it does. In a status quo financial world, it does effect us in a negative way. In a senario in which the worlds financial structure collapses, no, it doesn't. In that situations, good credit, bad credit, any credit is irrelivant. The same rules are not applicable because those rules only work if the current financial structure is in place.

Don't get me wrong Eric. I'm not saying it's a good thing. I'm just saying that if it ever got to that point, it wouldn't matter. The complete collapse of Americas economy is not something I'm concerned with. As I said before, the world can not afford to have this happen, just as we can not afford to allow other major economic powers collapse. This is why we go around proping up countries in financial straights all the time.

[Eric_Boyer]

In so far as it effects our current way of life, it does. In a status quo financial world, it does effect us in a negative way. In a senario in which the worlds financial structure collapses, no, it doesn't. In that situations, good credit, bad credit, any credit is irrelivant. The same rules are not applicable because those rules only work if the current financial structure is in place.

Don't get me wrong Eric. I'm not saying it's a good thing. I'm just saying that if it ever got to that point, it wouldn't matter. The complete collapse of Americas economy is not something I'm concerned with. As I said before, the world can not afford to have this happen, just as we can not afford to allow other major economic powers collapse. This is why we go around proping up countries in financial straights all the time.

Your attitude is incredibly dangerous.

You have this false sense of security that we will always be a super power because of our existing economy. To not be concerned with our spending and our softening populace is incredibly naive.

Our ideas of rugged individualism and personal responsibility made us a super power and we have been turning our back on those views for nearly 100 years.

[ABQCOWBOY]

Your attitude is incredibly dangerous.

You have this false sense of security that we will always be a super power because of our existing economy. To not be concerned with our spending and our softening populace is incredibly naive.

Our ideas of rugged individualism and personal responsibility made us a super power and we have been turning our back on those views for nearly 100 years.


Eric, if it makes you feel better to believe this about me, very well. Please do that.

I'm all about making you feel better about this whole thing.

[ConcordCowboy]

Paul Wolfowitz March 2003, At that time the Deputy Secretary of Defense in a meeting with the House Committee on Appropriations.

A Congressman asks how the invasion and occupation the Bush administration has just launched will be paid for. The Deputy Secretary of Defense replies that our “Second Iraq War” won’t be “overly expensive for American taxpayers”: “There’s a lot of money to pay for this that doesn’t have to be U.S. taxpayer money, and it starts with the assets of the Iraqi people… and on a rough recollection, the oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three years… We’re dealing with a country that can really finance its own reconstruction, and relatively soon.”

That goes along with Cheney's incredibly stupid quote...

'We Will, In Fact, Be Greeted As Liberators'

http://www.informationclearinghouse.info/article5145.htm

.

'We Will, In Fact, Be Greeted As Liberators' - Cheney

From Meet the Press, March 16 2003

Vice President Cheney: Now, I think things have gotten so bad inside Iraq, from the standpoint of the Iraqi people, my belief is we will, in fact, be greeted as liberators. And the president's made it very clear that our purpose there is, if we are forced to do this, will in fact be to stand up a government that's representative of the Iraqi people, hopefully democratic due respect for human rights, and it, obviously, involves a major commitment by the United States, but we think it's a commitment worth making. And we don't have the option anymore of simply laying back and hoping that events in Iraq will not constitute a threat to the U.S. Clearly, 12 years after the Gulf War, we're back in a situation where he does constitute a threat.

Mr. Russert: If your analysis is not correct, and we're not treated as liberators, but as conquerors, and the Iraqis begin to resist, particularly in Baghdad, do you think the American people are prepared for a long, costly, and bloody battle with significant American casualties?

Vice President Cheney: Well, I don't think it's likely to unfold that way, Tim, because I really do believe that we will be greeted as liberators. I've talked with a lot of Iraqis in the last several months myself, had them to the White House. The president and I have met with them, various groups and individuals, people who have devoted their lives from the outside to trying to change things inside Iraq. And like Kanan Makiya who's a professor at Brandeis, but an Iraqi, he's written great books about the subject, knows the country intimately, and is a part of the democratic opposition and resistance. The read we get on the people of Iraq is there is no question but what they want to the get rid of Saddam Hussein and they will welcome as liberators the United States when we come to do that.

[Eric_Boyer]

Eric, if it makes you feel better to believe this about me, very well. Please do that.

I'm all about making you feel better about this whole thing.

Hey, if you don't want to counter my points, fine.

No skin off of my teeth.

[BrAinPaiNt]

That goes along with Cheney's incredibly stupid quote...

'We Will, In Fact, Be Greeted As Liberators'

http://www.informationclearinghouse.info/article5145.htm

.

'We Will, In Fact, Be Greeted As Liberators' - Cheney

From Meet the Press, March 16 2003

Vice President Cheney: Now, I think things have gotten so bad inside Iraq, from the standpoint of the Iraqi people, my belief is we will, in fact, be greeted as liberators. And the president's made it very clear that our purpose there is, if we are forced to do this, will in fact be to stand up a government that's representative of the Iraqi people, hopefully democratic due respect for human rights, and it, obviously, involves a major commitment by the United States, but we think it's a commitment worth making. And we don't have the option anymore of simply laying back and hoping that events in Iraq will not constitute a threat to the U.S. Clearly, 12 years after the Gulf War, we're back in a situation where he does constitute a threat.

Mr. Russert: If your analysis is not correct, and we're not treated as liberators, but as conquerors, and the Iraqis begin to resist, particularly in Baghdad, do you think the American people are prepared for a long, costly, and bloody battle with significant American casualties?

Vice President Cheney: Well, I don't think it's likely to unfold that way, Tim, because I really do believe that we will be greeted as liberators. I've talked with a lot of Iraqis in the last several months myself, had them to the White House. The president and I have met with them, various groups and individuals, people who have devoted their lives from the outside to trying to change things inside Iraq. And like Kanan Makiya who's a professor at Brandeis, but an Iraqi, he's written great books about the subject, knows the country intimately, and is a part of the democratic opposition and resistance. The read we get on the people of Iraq is there is no question but what they want to the get rid of Saddam Hussein and they will welcome as liberators the United States when we come to do that.

In fairness...he was partially correct. Some did greet the troops as liberators and some do still like the troops being there. Nowhere as many that liked them from before.

[ABQCOWBOY]

Hey, if you don't want to counter my points, fine.

No skin off of my teeth.

Skin off your teeth? You got that? OK then.

What part would you like me to counter there Big Guy? The part where you say we should be concerned with our spending? Well, I've already said that this is something to be concerned about. The part where you say I believe we will always be a superpower because of our economy? Well, I've already said that countries rise and fall. It is inevitable. Our time is now and eventually, it will pass. That's how it works. Your rugged individualistic views of us? Sorry, I guess I'm not comfortable with commenting on that. Perhaps its your opinion of me. Incredibly dangerous ideas. Well, that's probably where you lost all opportunity to discuss this issue with me.

There comes a point of saturation. I have reached it. Your opinion is your own. I don't agree with it. If you choose to spin it in such a way as to paint me as unwilling to point, counter point with you, fine. It's really not worth my time when you spin in in this way.

Besides, I'm sure my time will be better served making ready for the impending doom of China calling our credit due.

[ConcordCowboy]

In fairness...he was partially correct. Some did greet the troops as liberators and some do still like the troops being there. Nowhere as many that liked them from before.


I'm sure that Wolfowitz was partially correct. Some Oil money has seen it's way to the U.S....probably...maybe...hopefully.

But not as much as they would have liked...or nowhere near enough to pay for the War:rolleyes:

[Eric_Boyer]

Skin off your teeth? You got that? OK then.

What part would you like me to counter there Big Guy? The part where you say we should be concerned with our spending? Well, I've already said that this is something to be concerned about. The part where you say I believe we will always be a superpower because of our economy? Well, I've already said that countries rise and fall. It is inevitable. Our time is now and eventually, it will pass. That's how it works.

Reasons exist for a nations to fall. It is ridiculous to use this as your defense position.

Let's not do anything about our border or the threat of terrorists. Nations fall don't cha know. :bang2:

[ABQCOWBOY]

Reasons exist for a nations to fall. It is ridiculous to use this as your defense position.

Let's not do anything about our border or the threat of terrorists. Nations fall don't cha know. :bang2:


I agree. Lets also not do anything about radical alarmist or short sided individuals who get there feelings bent when everybody doesn't agree with them. See how easy that is?

Glad to see we are both on the same page. I think were done here Eric.

[Eric_Boyer]

I agree. Lets also not do anything about radical alarmist or short sided individuals who get there feelings bent when everybody doesn't agree with them. See how easy that is?

Glad to see we are both on the same page. I think were done here Eric.

you never really started IMO.

[ABQCOWBOY]

you never really started IMO.


Let me just say this again so that your clear. This discussion for you and I, is over. I don't agree with you and you clearly don't agree with me. End it now or I will end it for you. Agreed?

[Eric_Boyer]

Let me just say this again so that your clear. This discussion for you and I, is over. I don't agree with you and you clearly don't agree with me. End it now or I will end it for you. Agreed?

what a frigging joke.

you know when a conversation is over? When you stop conversing. Then it's over.

[Sasquatch]

I'm no economist, so if my opinions seem woefully ignorant, please feel free to correct me ... gently. :D

I would think that the "nuclear" option would only be exercised if China was already in dire straits. The global economy is so interdependent these days that a crisis in any one area is bound to negatively impact the others. If China were to decide arbitrarily to call in its debt, that would throw the entire global economy into a tailspin, which would not be in its own interests. That's why I think China would only do this if we were already in the midst of an economic catastrophe.

I do think that public and private debt are major concerns, however, and that balancing the budget (not by borrowing money from the SS trust like Clinton did) should be a priority.