China's State Press Calls For 'Building a De-Americanized World' 634
Hugh Pickens DOT Com writes "Businessweek reports on some not-so-subtle commentary from China's official Xinhua News Agency on the U.S. budget showdown: 'It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.' Key among its proposals: the creation of a new international reserve currency to replace the present reliance on U.S. dollars. 'The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized,' the authors write. 'The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites.' The commentary calls for a greater role for developing-market economies in both the World Bank and the International Monetary Fund, adding 'the authority of the United Nations in handling global hot-spot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate.' The commentary concludes that 'the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.'"
Meanwhile, U.S. Senate Leaders are claiming a deal is close to reopen the federal government until mid-January and defer the debt ceiling debate until mid-February.
DOH. Because China's most likely to get screwed.. (Score:5, Interesting)
The bottom line here is, the US owes-- as my economics professors (Reagan advisers) pointed out 25 years ago-- the one thing it can produce infinitely and with no cost: US dollars.
What happens in a meltdown? Well, if I ran the Fed along the principles my advisers taught me-- I'd pour payments to my allies (Europe, etc.); then I'd devalue the currency-- meaning, the creditors I didn't pay, now are owed much less. That's China, primarily, which, after all, has played quite a currency game with the US, and who's debt is quite arguably overvalued due to cheating on exchange rates.
Would China like the world to adopt the RMB as a default currency? Sure. Obvious. It's in their self-interest, at least. If everyone owes RMB, then they have to accept the global exchange rates.... they can't print or otherwise acquire USD, and pay off debts to China with the new currency.
Guess what? In short: no one's going to trust China as the global standard, as much as they aspire to it. If you're Switzerland, you know, that in a pinch, the US is going to pay off its debts to you-- not to China-- and give you a lot of notice, that it's going to devalue the dollar, so you can take advantage of the opportunity to erase 15% or 20% of your net debt to China, as well.
What's this called? Global political economics. China knows the game; it knows that it played the game to dump cheap labour and goods on the US, and accumulate capital debts (loans); and it knows, if the US reaches debt ceiling, it's China's debts that are going to get radically devalued to balance the sheets.
And good that. Unless, of course, you'd prefer that the Central Party, and not the US Treasury, is the final guarantor of the money you've loaned. A risk, I doubt, many of you (and many Central Banks) wish to take.
Or in short: the US will fulfill its obligations to allies and creditors who've played the game in good faith. To China and others who've gamed the system-- well, that's another story, and in the next days and weeks, we may very well see, what action the US can use, to re-balance the sheets.
They are right, but (Score:5, Interesting)
They are right, the world needs a better currency. Preferably one not regulated by nation states or corporations: maybe bitcoin or a descendant with its flaws fixed. Also certainly the `voracious Wall Street elites have their role in the current crises (plural).
However, the real problem is all of us: run-away consumerism. The masses who took irresponsible mortgages. The `need to replace a perfectly good smartphone every two years. The throw-away society.
The economy is based on debt, and every nation is either involved in the race to the bottom for all the planet's natural resources, or they want to get into the race.
China is _not_ going to be the saviour though, also not Russia, India, Europe, South-America or the USA.
It is time to face the truth: this system cannot be saved, it can only collapse.
The quicker it goes, the better, because every day that goes by the damage caused grows bigger. There is no point in trying to hasten it (like Anonymous does sometimes), all energy should go into prepare for a rebuild.
If there is to be a new world order, whatever shape it might take, it must be build bottom up, by the people.
Capitalist-alike, but without the corporations.
Socialist-like, but not with the top-down planning and represssion.
Open sourced and based on spontaneous collaboration, but without the hippy navel gazing.
Therefore it is essential to keep the Internet free, and running whatever else in the world may go down.
It is the major advantage the world has to prepare for a soft landing, when the world order crashes.
-- a PIrate Party member who wishes to stay anonymous.
Easier said than done... (Score:5, Interesting)
The institutions that emerged (world bank, IMF, UN) were really just codified the result of WWII. The likely reason nothing has emerged to replace it is that we haven't had WWIII yet.
It might be interesting to speculate how all this could change w/o fighting another world war, but it seems unlikely given the inertia of the current institutions.
On the currency issue, I think most of the people that talk about a non-us-dollar reserve currency are totally unaware of the history of the Bank for International Settlement and the IMF which denominates their reserves in SDRs (special drawing rights) which is a weighted basket of currency (USD, Euro, Yen, and British Pound).
The problem with any kind of currency reserves, is that countries need to be willing to put up significant assets to back up any denomination of wealth (or you might find them being attacked like George Soros once attacked the British Pound). The one thing about the USD that's hard to substitute is that it's really hard to attack it now as there are many greenbacks out there and many contracts are denominated in USD. Any transition to an alternate reserve is likely to be attackable which means it must be very quick or as part of a big movement (perhaps even war-like).
Re:DOH. Because China's most likely to get screwed (Score:5, Interesting)
The unfortunate problem is that China owns all your dollars and doesn't know what to do with them. In fact all they can do is to float the Renminbi which would cause a collapse in the value of the dollar against it and basically crash the US economy.. and the rest of the world too. The US can't really follow your suggestion as the Chinese would kick off and do something once they saw it happening, I'm not sure what, but I could imagine nothing good overall. Probably crash the world economy in some way or another :-)
That they're trying to create something else suggests they're fed up with the US government lurching from crisis to crisis for wholely internal political reasons. And that a new inter-bank currency would allow them to spend all those dollars a little more easily. That's the main reason they want this, I think.
On the other hand, a first step towards a global currency is surely a small step forwards in human social evolution.
Western democracy is at an end (Score:5, Interesting)
The US is hardly alone in its trouble. The Netherlands just had "prinsjesdag" the day that the budget for the next year is presented. And it was immiedialty followed by a not yet ended dance to get enough approval from non-governing parties to get it through both parlements. Because the two coalition parties don't have a majority in both. No it isn't a two party system, we got LOTS and it isn't exactly a deadlock but it does result in a compromise that nobody hates and several government in succession that haven't finished their terms. This government likely won't make it either.
The Belgians recently spend a year without a government because the sub-frenchies and the sub-dutchies hated each others guts. England is being ruled by two parties where one party is withering away because it gets the flack for supporting the other party. What people are going to vote in the next election is anybodies guess. Maybe they will punish the tories again by voting labor.... because voters never ever learn (that is how labor got in to power in the first place, only for blair to upset people so much they voted tory to punish labor).
Germany too has seen the collpase of a coalition with one party not even making the voting treshhold. To Merkel is look for another party to rule with so that party too can lose all their voters... sounds like a good plan right?
Southern Europe mostly votes for whatever guy promises the most and blames all the wrongs on nothern Europe for refusing to subsidize the south after decades of subsidies that were squandered.
Canada hates its leader but refuses to elect anyone else. New Zealand is a puppet state and Australia seems to elect people the people online hate.
The problem might be that elections are simply to simple a tool to decide with how to govern a country.
Take for instance privacy. One privacy issue that Americans often mention is their medical history since an insurance agency might reject you if they know you have ill health. But Obamacare cures that. If an insurance agency can't reject you for your medical history, neither will they want to find out your medical history. Bam! Socialism saves privacy! How is that for a twist? Every privacy freak support Obama!
A bit silly perhaps but this shows that issues don't stand alone yet during elections they are presented like they are and most elections boil down to a handful of issues and then everybody bitching about how party X who promised Y is not doing Y and totally screwing you over on Z as well.
Or maybe democracy is alright and it is just needs a better class of human beings.
But the US is not alone in being screwed up and suffering gridlock. It is just dealing with it in the most immature way possible. But hey, that is Americans for you and we love them for it. Makes for an entertaining way to end the news, first 10 minutes of how your own country is falling apart, then a 1 minute "silly yanks" bit to show that no matter how silly your own leaders, there are sillier people on this planet.
USA, showing the world things can always get sillier!
Re:I'm Sorry, China (Score:5, Interesting)
The idea of a love analogy is good, but in reality it is the rest of the Western world that has opened its eyes to the abusive relationship with the USA it is in.
The once present blind love for everything 'USA' (a lot of clothes sporting American text or imagery were made and worn in the rest of the world) has turned into a palpable disdain for the same. The more apt analogy for the current feelings would be: 'How can we get out of this relationship without that asshole going psycho on us?'
I wish it were different.
Re:DOH. Because China's most likely to get screwed (Score:5, Interesting)
1) You assume that there is some unified entity called "US" that is able to act in its best interest. Clearly not the case.
2) You assume China's won't learn about the plan and if they learn they will not act.
In fact, very likely some Congresscritter would learn about such plan before it could even be executed, use it to criticize the president in public forum. As a response, China would immediately and quietly start to get rid of US dollars en masse, probably using some sort of derivative schema, which would hide it for some time. This would happen before US could even agree on any sort of plan. As it would become apparent in a couple months that China is dumping US dollars, it would simply dump the rest of them in bulk, causing the dollar to lose all the remaining value. Now all the US allies, those who didn't dump US dollars as well, are left holding useless currency and they lost on all the debt they were owed. They will demand US to repurchase all of the US dollars dumped on market to drive the currency back up. This is not gonna happen. US will be facing a lot of angry countries demanding some sort of reparations. All the US foreign trade will cease immediatelly. The fact that US is not self-sufficient in almost any area and the US dollar being worthless will start draining the country of all its natural resources, because that is the only thing they can use to pay for what they need by now. In another 10 years, US would be a shell of a country. At this point US will use their only remaining option and declare war on China and use their military to shore themselves up economically. But at this point US has no allies and no goodwill at the UN. The result is a war of US against the rest of the world.
So good luck with your brilliant economic plan. Your advisers had to be some brilliant thinkers.
Petrodollars (Score:5, Interesting)
The US has gone to war a number of times (it is claimed) to prevent countries trading oil in currencies other than the Dollar. Some of those claims might border on conspiracy theories, but it remains that the tactics to keep oil trading based on the U.S. Dollar look remarkably like 'force'.
Etymology note: Petroleum is latin for 'Rock Oil' (Petra, rock + Oleum, oil, from the Latin for Olive.). When we created that abbreviation, Petrodollars, dollars for oil, all that was left of the oil was the 'o'. The word looks more like 'Rock 'o Dollars, doesn't it?
Re:Summary says it all (Score:5, Interesting)
The bit where the Chinese are IMHO wrong is that it will need any sort of centralised planning to achieve this replacement of the U.S. as hub of the global economy. That will just happen, inevitably.
Except the new hub will go to somewhere like London, Brussels or even Singapore. Delhi/Mumbai has an outside chance. Pretty much anywhere but China. Beijing simply doesn't have the trust from global businesses, of course they're all happy to take Chinese money, just not Chinese politics/philosophy. Maybe they'll go nowhere, the worlds economies are sufficiently distributed and communication is sufficiently fast that there isn't really a need to centralise it in a single location. Something happens in Bangkok, 30 seconds later Paris, Dubai, Vancouver and Adelaide know all about it.
The US is acting a lot like England of the 1960's and 70's. A waning empire still trying to convince itself of it's importance by talking about the good old days. The really bad part is, unless you change the road you're on you've got your own version of Thacherism to come.
Re:Summary says it all (Score:3, Interesting)
You could start by halving military spending. I'm not a pacifist but it's pointless to have an army big enough to crush a (imaginary) army big enough to crush the second most powerful army in the world. Just being able to crush the second most powerful army in the world is enough.
Re:Summary says it all (Score:5, Interesting)
Thank George W Bush junior for destroying the trust in the US around the world
Actually, you can blame the russians. Before the USSR imploded there was another "power" that was able to keep the USA in check - if only with the threat of nuclear annihilation (though everyone knew there was far too much money at stake for that to ever happen). After that, the USA became far more aggressive and awarded itself the role of "global policeman", which basically meant making everyone fall in line with its view of how thongs (and things) should be.
What we're seeing now is that the policeman has far exceeded his authority and has also turned out to be power-crazed and financially impotent. It would be an easy job to simply ignore it, if it weren't for all those pesky nukes and vastly oversized (for it's own protection - verging on paranoia?) armed forces.
The only problem will be, that when the USA does get sidelined and does a "USSR" of its own, what will happen to the munitions? Being the heart of capitalism: selling to the highest bidder is inevitable.
All empires rise and fall (Score:1, Interesting)
The US economic empire is no different from any of it's predecessors.
Re:Western democracy is at an end (Score:4, Interesting)
Just a quick word from a canadian living in Germany...
The issue with Canada is not that the citizen do not vote for other parties or politicien. The issue is that, due to the electoral system, a party can get the majority of the seats with less than 40% of the popular vote. So in fact, Canadian chose to vote for someone else, and, quite ironically, because of this popular decision, the conservatives were promoted from a minortiy government to a majority government.
In Germany, the politcal and electoral system is quite different. But your assessment that a coalition colapsed is quite far from what is going on here. Yes, one of the coalition parties was trown out. The conservatives (which is quite a relative word when compared to the canadian conservatives or, *gasp*, the american conservatives) were already quite strong after the last election and could build a coalition with one of the smaller parties, the liberals, which allowed them to achieve the majority in the Bundestag. Since the last election, the liberals had been acting like assholes and showed themself as lobyist mor than liberals. They also failed to pass their only real electoral promess of reducing taxes, which was the only reason why people voted for them in the first place. All thing considered, it shouldn't surprise anyone they got thrown out. Even the conservatives told their electorate to give their two votes (in germany, you vote for a direct mandate - someone representing your county - and a seconde vote, where you vote for a party. The liberals only got seats through this seconde popular vote) to them. Basically, the the coaliation leader campaign against their coaliation partner.
So saying that the coaliation collapsed is a bit strange in this context. The conservatives got almost all everything back what the liberals lost and ended just under the majority. Of course, they lost this hand and now must either build a coaliation or a minortiy government (which is unusual).
But I would say that democracy is very healthy here compared in a lot of places in the west. Of course, the economy, infrastructures and the social structure are in very good shape in Germany, what helps for stability.
Re:Summary says it all (Score:5, Interesting)
I recommend we shave a little off of the golden calf, AKA the military.
Do we really need to have troops stationed in as many places as we do?
Ohh and in case you were thinking of calling me unpatriotic or anything, I served and deployed.
If the US was smart they'd back this... (Score:5, Interesting)
I've been saying for awhile that the smartest thing the US could do would be to get behind a world government NOW, while it still has the clout. It's been obvious for a decade now that the US's time in the spotlight is up. History tells us it couldn't go on forever. If you're thinking 'too big to fail', look at the Roman Empire. THAT was too big to fail. Or the British one.
If the US were as smart as they like to believe, they'd see the writing on the wall now and get behind providing more authority to the world bodies which work to ensure that countries treat each other in a civilized manner, because the US is REALLY going to wish they had down the road, when we're all talking about the ______ian/ise/etc Empire.
Min
Re:Summary says it all (Score:4, Interesting)
I don't know if that's true or not but it doesn't change the fact that it could be done with half the resources the USA currently dedicates to military matters.
Imagine if all the money wasted in Iraq/Afghanistan had been dedicated to energy research instead. They could have solved the energy crisis and got the rest of the world dependent on American tech to run their systems. A revolt of the "priests" in charge of the fusion reactors is at least as much a threat as a big military.
Re:Everything they say is true. (Score:3, Interesting)
Careful, the last person to challenge [guardian.co.uk] the U.S. dollar found himself in a U.S. jail on a trumped-up rape charge just a few months later.
Re:I'm Sorry, China (Score:5, Interesting)
Except that there's plenty of political forces in the US that want a catastrophic systemic failure due to either economic ludditism (crash fiat currency, return to gold standard) or outright madness (wanting an end-of-the-world scenario for religious reasons). So while the option would be off the table in a sane country, it's not so in the US - and that is why I find myself agreeing with China's state press in this matter.
Re:Summary says it all (Score:5, Interesting)
I live in a very gerrrymandered "safe" Republican district. My town is a liberal blue dot swimming in a sea of conservatives in the rural areas. Our state districts literally slice our town in half to cut our influence in elections in half. Our federal districts have us cut off cleanly from the nearest fellow blue metro area. Our voices are silence - our representative is nothing like anyone in our city. He's also batshit insane.
Census of 2010 (Score:5, Interesting)
It's amazing how nobody in the media was talking about the problem of Gerrymandering 2007-2009...I wonder why?
Probably because 2010 was the last census, after which the districts were required to be re-drawn, so this is all recent history and therefore gets reported on. Because the Republicans had just swept into power after the 2010 elections, they were able to draw districts favorably for themselves. This doesn't mean Democrats wouldn't/haven't done it, just that the most recent use of gerrymandering has been just a couple years ago by Republicans.
Ultimately, I'm wondering if we can't push for an open source algorithm for computing districts based on population centers? This way, it cannot be political, it is open source and verifyable.
Re:I'm Sorry, China (Score:4, Interesting)
Except the only reason China knows how to build a stereo is because we showed it. America invents the technology, then shows the Chinese robot race how to assemble it like drones. The best they can do is steal it.
That's how it started but lately they have been coming up with the new products. We haven't done much product design in the US for the past 2 decades. Most of the people trained to do that are old now and we haven't been training replacements because there are no jobs here for them.
Re:I'm Sorry, China (Score:4, Interesting)
Caution: This is my assessment, and I'm not an expert, and don't even follow the news carefully. But I think it's a good model of what's happening.
China is following a very different strategy. In the US vs. the USSR both sides were spending all they could afford, and a bit more. Sort of like a potlatch with threats. But when the US won, because the USSR went broke, the US didn't stop potlatching.
China was never a part of that particular contest, and never saw a reason to join it. It would have been starting with a real handicap, and there was no real benefit in playing.
So China is winning the economic contest because the US is fighting with the last wars strategies. It was always a silly strategy, and the US won only by bluffing (or possibly by lying to it's citizens). We could never have built "Star Wars" as a defensive shield...though we could have built enough of it to make a dandy first strike weapon. Russia couldn't match our spending, so it couldn't put one up of it's own. What it could have done was destroy it shortly before it was complete. But that would have been a blatant act of war, which they didn't want, not being quite as crazy as the US leaders.
So. WRT everyone on the planet the US already has a first strike weapon....if all you want to end up with is a sterliized planet. (That's the ICBMs.) There's no advantage in having more of them. They can't be intercepted, because air bursts can be just as deadly as ground bursts. And winning that way is as bad as losing, or perhaps worse, as you get to experience the long dying. The crazy thing is we don't know what the minimum exchange required for a dead planet is. It could be that a nuclear war between India and Pakistan could do it. (Well, it's pretty sure that that wouldn't kill off everything, but it's not sure that it wouldn't kill off all mammals. That's estimated as very unlikely, not impossible.)
So China looked at that and said to itself "Why should I play that game?" All it needs is ICBMs enough to hit anywhere in the world, and a minimal nuclear weapon capability. And that only needs to actually work if their goal is to kill everyone. (Actually, their military capabilities are sufficiently spread that a first strike against them, even if they didn't bother to retaliate, would probably leave everyone dead. So why go an extra mile.)
Now as for fancy military weapons that are usable, again, China sees no particular value in having them. China has LOTS of people, and those things are mainly useful in minimizing the number of people you need to commit. So China saves money by not bothering. I suspect that they're going all out on developing drones, however. Those things have so many uses that not developing them would be foolish. I'm not at all sure that it's pushing weaponizing them. (It certainly could.) Japan iand Korea are more likely to be pushing weaponizing drones. They have much more limited populations. All of them, however, are pushing work with drones. (As is the US.)
Think about robots: China isn't working hard at developoing robots, though it's quite willing to use those that others develop. Robots mainly give advantage to those with limited and expensive populations. But some factories in China are as roboticized as any elsewhere. But the robots weren't developed in China...except possibly on contract for someone else.
Also, note that China isn't really centrally controlled. SOME things are centrally controlled, or there is a strong attempt at central control. Other things are much looser. I don't always approve of this, because it includes things like enforcement of environmental regulations, though there are signs that China is starting to take these more seriously. (And I can't go into details, because I neither know them, nor have a good model of them. But remember that much of this is my mental model.)
P.S.: If you disagree, that's fine. All I really know about China is based on news reports, and they are nortorious for lying. If you know someone from China, trust what they say more than anything you get on the news, and still remember that everyone has a biased viewpoint.
Re:I'm Sorry, China (Score:4, Interesting)
My sister's company does business in China. While in China, one of their partners said to my sister's face: "All this new Chinese capitalism has one purpose -- to suck all the wealth out of the West. When that's done, it will end."