The hits just keep on coming.
A U.N. panel is poised to recommend dumping the U.S. Dollar as the world's reserve currency, putting the greenback under serious pressure. As I write this in France, I've watched the dollar fall 10 points against the Euro this week alone.
http://www.reuters.com/article/newsOne/idUSTRE52H…
The mounting pressure comes amid out-of-control deficit spending and an overall waning faith that the American ship will have to ability to right itself.
I'm just sitting here wondering what the Chinese must be thinking right now. They're sitting on a shitload of dollars and the Fed just {poof} created a trillion more. They have to be getting antsy.
Read this article.. http://www.telegraph.co.uk/finance/financetopics/recession/4986287/IMF-…
That will put major pressure on the dollar for sure, but might actually act as a stabilizing force in the long run. I've seen some economic articles that argue that the dollar's status as a reserve currency leads to bubbles in the US as foreign banks hold more dollars than they otherwise would and need someplace to put them. Still, definitely bad news in the short run - fortunate that we basically run the UN and will just ignore the report
well, if this recession continues a weak dollar wouldn't necessarily be a bad thing. It might good.
But as for China, they already have too many treasuries stockpiled. They can't back out now or they'll risk serious depreciation on their assets. They are NOT going to dump dollars. I'm sure everyone has heard this quote but the secretary general of the Chinese banking regulatory comission sums it up so well:
What IS a problem though is that China starts threatening creditor power and starts acting high and mighty (assertive Chinese isn't an impossibility!) towards the US. Starts making us into second rate powers. That is concerning enough...
In order to exert creditor power you need to have authority to act on. Last I heard, t-notes did not give the bearer contractual authority over the US government, and there is no international law covering sovereign debt, so the only obligation the US has to China is as a point of honor
What happens when you borrow 5 grand from Vito and are late paying the vig? A couple guys show up and tune you up.
China may be thinking the same thing on a massive scale. If the U.S. becomes enough of a second-rate nation to just default on the debt, I don't think it's out of the realm of possibility for China to militarily protect their interests.
Never forget, guys, that China's defense spending has grown at double-digit rates year after year for the past decade. They're definitely gearing up for something.
china's D budget is still less than 1/20 that of the US. Aside from the huge nuclear deterant the US has over china, the idea that the worlds second largest economy will throw itself into a war with the worlds largest economy, to protect its own economy?? I don't think you could get this scenario to make sense to the worlds most idiotic human.
We used the debt to purchase carrier battle groups and assemble the greatest military ever known to man. What the fuck are they gonna do about it?
By the way why does this fucking forum require a God damn subject field on every post?
thanks I figured as much. I was using the term very loosely. Just in terms of indirect influence over the US.
pressure will be building on the dollar.
As far as the UN goes, (outside the security council; US has permanent veto power) anything they say is non-binding. The majority of the UN GA and its various committees are made up of such irrelevant shit countries from a global mac prospective, its hard to take what they say seriously, and every country that matters knows it.
Avoiding the collapse of the currency of the worlds largest economy is in everyones interest. Anyone, who suggests otherwise, or recommends something that will lead to it can be written off as probably an idiot.
I hate fucking China apologists. I dare them to bring the heat and start making demands. We would crush them in ways never before thought possible. They pull one stunt that goes just a little too far, and it's ovah for them. 1 billion people will get wrecked with no issue.
Deal with it.
so you guys agree that short term weakening of the dollar will be good for the obvious reasons (make US firms more competitive internationally, help with deficit).
It just needs to go back up (long-term) before too long otherwise foreigners will demand higher return on their treasuries driving up borrowing costs for Americans in general, lowering standard of living, obvious blah, blah
This may start the begining of the slow demise of the US economy. Though I will say, for various reason, that I am not inclined to write the US off just yet... as it structurally has many many advantages over other nations on this world (including China)...
i mean you could have just as easily written off the US economy in the late 70's... and you would have been terribly wrong.
As far as a weaker dollar is good for the economy I am skeptical. Being we are a "consumer" economy... I think short term, the argument can be made just as easily for a stronger dollar... one thing is for sure though Bernanke will continue to print, until he sees us coming out of this mess...
China wouldn't go to war with the US, leaving aside military reasons, but because it wouldn't benefit them. Even if they won, it's highly unlikely any restitution they received would be worth it.
I doubt the US will default on its debt, but recent events certainly make me believe Congress would back hyperinflation as a way of paying back debt.
We can look to the Weimar Republic for a little precedent for both of these issues if you like.
(1) who said anything about a military invasion. that's too ridiculous to even debunk. (2) hyperinflation? WEIMAR level hyperinflation? thats just barely short of being too ridiculous to talk about. the US will increase taxes and secure loans from a consortium of nations before resorting to printing money to the effect of producing HYPERinflation. We aren't a third world country- our citizens have assets and our government has powerful international relations.
I had to jump in. Increase taxes and secure loans? So you are saying that while we are in a recession, maybe even depression, Obama will risk his approval rating and main street following to tax people who are already suffering? And by taxing us, that means less money is being spent or saved, which means less production, which means less GDP, which means inflation. And loans from other nations? With the dollar dying, I'm sure they are eager to jump right in. I mean we already owe hundreds of billions of dollars, why not borrow more. And those interest payments won't kill us even if we did get money, right? Lastly, China, our greatest creditor, has found something that will be a little more steady than USD. COPPER. Go look at their recent purchase of it. Just by themselves turned a global Copper surplus into a deficit. They are already publicly disapproving of our crazy spending.
P.S. -- Resort to those things before printing money? Have you heard anything Bernanke said this past week? That's all the Fed has been doing.
quote=Philosopher who said anything about a military invasion. that's too ridiculous to even debunk. (2) hyperinflation? WEIMAR level hyperinflation? thats just barely short of being too ridiculous to talk about. the US will increase taxes and secure loans from a consortium of nations before resorting to printing money to the effect of producing HYPERinflation. We aren't a third world country- our citizens have assets and our government has powerful international relations.[/quote]
Doesn't philosophy mean "love of knowledge?" Try gaining a little before you try spitting it. Question though, who did say anything about a military invasion? If you'd read, I discussed war, never mentioned invasion - look at the armed forces of the two countries and no way are they fighting a land war. And it was in response to thoughts such as:
And as for hyperinflation, you already got one good response, but seriously man, do you pay any attention to what our government is doing?
NANO
NANO
NANO
...for those who see the forest of the chess board,
hidden amongst the checker trees of today...
That would be a tasty alternative...
More talks of dumping the dollar as the world's reserve currency.
http://www.reuters.com/article/idINLJ93633020090319
Not looking pretty.
And hey. Fuck all you assholes talking about China challenging us militarily. Are you fucking serious? If this country is good at anything, it is war. We fucking go to war all the time and crush everybody. Anything even resembling a conventional force would be destroyed within a week.
Ok lets pretend for a moment that the U.S. is actually defeated by China. What the fuck are they gonna do about 3000 nukes headed their way?
Let's pretend again that China somehow occupies the United States with its huge arsenal of weaponry and ex-military everywhere. Could you imagine the fucking carnage? Could you imagine how many Chinese would be killed? It would be in the millions. Every fucking guy they send over here would get fucking killed.
Spoken like someone who has never faced the business end of a weapon. When you get to your sophomore year in high school, you'll learn that the last occupying force to invade the U.S. burnt the White House to the ground and sent the President scurrying into the woods with his tail between his legs.
Of course, that was about 180 years before the assault weapons ban, when the populace was still well-armed. It took bribing a band of French pirates to stop the English from taking over what was arguably the most critical American port at the time.
By all means, kid, keep watching American Idol. That history shit isn't important anyway.
And you have? It doesn't matter. Mutually assured destruction. Nukes did not exist when the British torched the White House. You can look at history all you want bottom line is if the homeland gets invaded by a foreign army that army will quickly run out of supplies when a few nuclear submarines pop up 50 miles off the coast and launch hundreds of nukes into China.
Get a fucking grip on reality. This war with China shit is utter bullshit and would hurt both countries. The world is now so intertwined that we are truly dependent on each other to live in prosperity.
By all means asshole, keep living in your fucking fantasy land.
YOU FUCKING IDIOTS. (You, DREXELALUM and others) I capitalized the HYPER in HYPERinflation. Of course shitheads- every government is going to print money first. But the US WILL engage in other methods before resorting to printing so much money as to cause hyperinflation. If you knew shit about economic history you would know that hyperinflation is probably the worst economic condition and a last-resort situation to be avoided at all costs. The thought of predicting weimar level hyperinflation IS LAUGHABLE.
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