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.
I'm Sorry, China (Score:5, Funny)
It isn't you, its me. I'm leaving you for India, as she is so much more able to fulfil my needs. I truly hope that you will find someone new. Let's be friends. - Uncle Sam.
Re:I'm Sorry, China (Score:4, Insightful)
Sorry, but reality called, and Uncle Sam, I found out that China is the bitch, which you fed until she weighed 300lbs, that's now pegging your skinny ass with a 16 inch strapon you had it make.
I heard that India is taking your calls (at a call center no less) but it keeps talking until you tire out and can't manufacture shit.
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:5, Insightful)
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India says she will help me pay you back, and that I won't even notice any difference. She needs me, and I need her. - Uncle Sam.
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The day when China tries to push up the maturation of its US investments will see US companies running for the border. I can't imagine that sort of nonsense would keep them there. Also, I don't think China is that stupid. Going to war wouldn't get them paid, that is for sure.
Also, if US companies move manufacturing to India, why would that affect the payment schedule? And, why would it affect China's need to park their giant pile of liquid assets somewhere? They might slow down their bond purchases, of cour
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Re:I'm Sorry, China (Score:5, Insightful)
The U.S. government couldn't reasonably ask U.S. business to leave China. First, they don't give a rat's ass whether its China or India, and second, U.S. companies don't give a rat's ass about what country the U.S. government thinks deserves their investment. And if the U.S. government tried to do such a thing, they could expect to spend the next 5 years in court litigating the proposal.
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Re:I'm Sorry, China (Score:5, Insightful)
China has no intention of fighting a *military* war. They're just sitting back and letting the U.S. bankrupt itself on a ridiculously over-sized military that it doesn't need, thus winning the *economic* war without firing a shot.
Re:I'm Sorry, China (Score:5, Insightful)
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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."
Re:I'm Sorry, China (Score:5, Insightful)
China is doing a great job of accumulating it's own massive debt. At some point it will probably turn into a race to see who gets there first although I'd give China the edge because I think their economy is not sustainable. For at least a decade some have suggested that China has been exaggerating it's economic growth and from what I know I tend to believe it. Sure things are great, for a very small subset of the population. Meanwhile the majority is exploited in the name of economic success.
Not that China doesn't think ahead. They're currently Africa's largest trading partner. And while America blindly throws far more money at Africa than China does, China is building infrastructure. So the average African is exposed directly to the benefits of a relationship with China while the US, ironically gets little recognition despite the fact that in all other ways they do more. Of course, while China does all that, they're stripping Africa of every resource they can get their hands on.
The US is in the difficult position that they're the world's military. Everyone bitches about a supposedly imperialistic America, but every time something goes wrong somewhere they expect Americans to show up guns blazing. And the European defense industry is only happy to have America as their biggest customer.
Meanwhile, China has been working hard to build their own military might. So while they're currently playing aloof they clearly have other ambitions. Or at least they're hedging their bets. But if I had to guess I'd say their end goal to replace the United States. However, while China has more to gain economically, I'm convinced if their economy took a dump they'd turn to a militaristic approach. There's nothing like a foreign enemy and a cause to distract the people from domestic problems. And their are perfect regional targets that I'm not convinced the US will stand up to defend.
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China has no intention of fighting a *military* war. They're just sitting back and letting the U.S. bankrupt itself on a ridiculously over-sized military that it doesn't need, thus winning the *economic* war without firing a shot.
So what you are saying is that China learned well form the Cold War and how the USSR fell?
Re:I'm Sorry, China (Score:5, Informative)
Not on already bought assets but new bonds are countinuously issued to pay interest and to fund new expenses. An investor can stop buying new bonds and that has the effect of "calling in their loan". Investors can agree that a country has a higher risk and ask for higher interest rates. No country issues new bonds in the blind without contacting the right rates. If it doesn't it won't be able to sell all the bonds it needs because investors will buy from someone else. The world is full of countries issuing bonds. And there are not only bonds.
If a country does that (a selective default) it's going to get a hard time selling bonds to anybody else, at least at the same interest rate. It's a matter of trust.
In the end, if you issue bonds it's because you need somebody's else help to pay your bills. You can't piss them off too much or they'll leave you without money once you spent everything they already gave you.
Re:I'm Sorry, China (Score:5, Informative)
Right, but one of the reasons people invest in US bonds is that they feel they are more stable than other investments.
The real questions is do they feel other investments are now better.
Generally speaking, they are not, considering economists are currently predicting that if the USA defaults, the whole global economy grinds to a halt...
so those other investments have a significant exposure.
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I would refer you to the OP, which states China wants a de-Americanized global currency, which they state is because a defaulting US destabilizes the whole world.
and:
Swiss National Bank Chairman Thomas Jordan warned Tuesday that failure to lift the U.S debt ceiling could have damaging international repercussions and he urged lawmakers to make a deal.
"I hope that the U.S. Congress will find a solution before the time limit ... we saw the last time it can really have very negative impacts on international fin
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The US would never cancel a bond. The US enjoys the lowest interest rates by far of any nation on earth precisely because it doesn't play those games. Treasury bonds are boring - you buy one for $99.878667 and in a year they give you $100.
The US doesn't even set the rates - they're sold at auction. A 1-yr bill sells for $99.88 because somebody was willing to pay that, and not enough people were willing to pay a 100,000th of a cent more, apparently. The fact that people are willing to shell out so much o
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:I'm Sorry, China (Score:5, Insightful)
Here's an article with a picture of that billboard:
http://thinkprogress.org/justice/2013/10/09/2760221/mysterious-pro-secession-billboard-appears-in-missouri/ [thinkprogress.org]
Whoever created it obviously hasn't looked at a map lately. Even if you assume that they really meant MS (Mississippi) instead of Michigan (MI), Missouri is only barely contiguous with the other states there, separated by Arkansas, and joined to Oklahoma by a tiny stretch of border. Is there some reason they don't want Arkansas in their new country? Is it just because Clinton came from there? Anyone from the area care to comment?
Also, why'd they leave out Alabama of all states? I would have thought MS and AL would go hand-in-hand. And the northwest portion of FL (the part bordering southern AL) would probably want to go with them.
Anyway, it sounds like a great idea to me. Imagine how well the rest of us will do without those states (and most importantly, their voters) holding us back. Maybe we could even dump ObamaCare and replace it with true universal healthcare like the Europeans have.
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1: If people think the US is in trouble now, wait until the economic repercussions of losing states. This hasn't happened since Yugoslavia, and it would utterly destroy the state fragments, economically.
It's worked out well for the Soviet Union and for Czechoslovakia. Lots of other small countries get along just fine without having to be part of some giant federal republic.
2: There would be no economic prosperity again. Border skirmishes would happen, and inland states would want their access to the ocean,
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:I'm Sorry, China (Score:5, Informative)
India just isn't as successful as China. It tried too hard to skip the whole industrial revolution thing and went straight for services and then cocked it up.
China had it right, go through it's own industrial revolution and become a manufacturing powerhouse, and as you grow that then try and focus more towards services which is what it's attempting now/next.
India just ended up making a complete hash up of services with so many companies now realising what an awful mistake outsourcing software development, call centres, finance and HR and so forth to there actually was.
That's why whilst China has flown into the spot of second largest economy, India is still stuck barely hanging on to it's top 10 spot with Russia and Canada biting at it's heels, all this despite the fact that India has just as much access to natural resources as China, is similarly situated globally, had better relationships with important export destinations, and and has a similar population size at 1.2 billion.
There was a time when people were looking at India as the next big thing alongside, or possibly even ahead of China. Now the world has turned it's attention more to the likes of Brazil alongside China.
India and China aren't that interchangeable, America couldn't just drop China tomorrow and replace it with India, as India has lost many years in failing to optimise itself to the demands of the global economy in the way China did.
See here for an illustration of the problem:
http://en.wikipedia.org/wiki/File:China_india_gdp.jpg [wikipedia.org]
The fact is that China is just more successful than India. China got it right. If America switches it's focus to India, it wont be China that loses out because India has neither the manufacturing capacity nor infrastructure to support it to meet US demand that China has built up precisely because of India's premature misadventure into services (even in Finance where for a while India was pipped to be a top 3 financial centre it's fallen far for example: http://en.wikipedia.org/wiki/Global_Financial_Centres_Index [wikipedia.org]). That means the US will be unable to acquire the products it demands whilst everyone else gladly takes them off China's hands.
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Re:Summary says it all (Score:5, Insightful)
Thank George W Bush junior for destroying the trust in the US around the world. Thank the Tea Party for making it look like the US is having a civil war of words over obamacare reminiscent of the slavery abolition talks during the actual civil war. At the end of the day Obamacare isn't going away, The Tea Party will be the losers, along with most of congress. The American people will win by finally having healthcare and being competitive with foreign nations who do. However the by the time it's in full force, the healthcare, welfare/disability fraud will probably have sunk the budget worse.
The US is on the road to ruin and all the gerrymandering possible is not going to save the republican party.
Re:Summary says it all (Score:5, Insightful)
$16.7 trillion is not a partisan issue. Toss the lot of them for not knowing the difference between deficit and debt. The deficit could be zero and we'd still be screwed. We need 50 years of surpluses.
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The deficit could be zero and we'd still be screwed. We need 50 years of surpluses.
Not after you consider inflation. We can refi and choose our rate. ;)
Re:Summary says it all (Score:5, Informative)
We need 50 years of surpluses.
People really have short memories. In the late '90s, there was concern by economists and financial analysts that the projected budget surpluses (surpluses) would result in the public debt being paid off by 2012. Paid off, zero, gone. The concern was that it wouldn't allow enough time for the markets to adapt to the end of the US Treasury Bond as the ultimate safe harbour. People were throwing ideas around for alternatives, in a world where the US would have no debt.
Then you guys elected GWB. Problem solved.
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.
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No it isn't.
Much of the middle ages were defined by the following process:
* Stable economy and chance brings a few years of agricultural plenty which means more surviving children.
* Population expands to fill the available food and chance brings a year of less than agricultural plenty.
* What do you do if you have a hungry population and lots of them? Easy! Declare war and seize some resources/kill off your excess population - two problems solved at once.
In more recent - and directly applicable - look at Napoleonic Euro
Re:Summary says it all (Score:5, Insightful)
This is a problem that has been decades in the making. The Teapers and Bush II were the pointy end of a very, very long needle that goes all the way back to the founding of the country.
The problem is that Americans don't trust each other, and they never have. The battle lines here aren't all that different from the ones over which we fought a civil war. It was only an act of tremendous courage and foresight that let us even be a single country in the first place; the first draft essentially left us as a collection of weak, separate countries less closely bound than the EU.
America managed to prosper despite the fact that the country folk and the city folk seem to despise each other. They achieved it largely by ignoring each other, going on about their business and doing it very well, selecting their friends and associates. But as a world leader, we're required to work together, and our self-reliance turns into a weakness: we can't even be civil with each other.
The world can't rely on us, not as we are now. We've had better periods, when we established programs to look after each other, while keeping each other at arm's length by doing it through the federal government. These programs are the ones most under attack: national-scale programs are expensive and cause the deepest resentment. We end up fighting about them and hating each other all the more for it.
I don't know if any country can replace us. Our individualism has crafted the innovations that put us in this position. A de-Americanized world would advance a lot more slowly unless other countries can figure out how to do what we've done. But they may find that it comes at the same cost we pay of self-reliance becoming self-centeredness.
Re:Summary says it all (Score:5, Insightful)
Working together is un-American. The American Dream (TM) is that anyone can make it, but the assumption is for one person to get rich others must remain poor. Business owners are expected to maximize profits for themselves while keeping wages as low as possible, for example. Anything that might push wages up or interfere with someone getting rich, like unionising, is strongly discouraged.
It's just not in the nature of American society to work together and support each other, beyond small local communities. Almost every debate comes down to "why should I pay for someone else?" or "if it doesn't directly benefit me it shouldn't be funded".
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Thank George W Bush junior for destroying the trust in the US around the world.
Thank Obama for building on that, rather than working hard to roll it back.
Neither will have a 'legacy' that I would want.
Re:Summary says it all (Score:4, Insightful)
And this, kids, is an exact example of the problem.
Instead of pointing to the entrenched elites of BOTH parties (who are far more like each other than they are like either of the unwashed outside-the-beltway masses of either party), this AC poster blames:
- George W Bush: certainly one of our least-competent presidents, in terms of foreign policy he worked with near-crystal clarity; I doubt he broke anyone's trust or betrayed them. This could be contrasted with Cold War presidents who worked to undermine elected governments around the world (Mossadegh, Allende, etc)...that might have a little more to do with 'destroying trust in the US'.
- The Tea Party: contrary to the media-industry's tendentious portrayal of the Tea Party, as far as I can tell the Tea Party was formed to protest the ridiculous and ongoing government spending beyond its means. Its offense (aside from lining itself against the President, which automatically means they are painted as whatever fringe right-wing cause they can get to stick) is essentially being obstructionist - if there is nobody willing to start to be obstructionist when we cross $15 trillion in debt, then when?
The United States has outcompeted the rest of the first world with it's ostensibly-atrocious medical system for 50+ years...it doesn't seem like that's much of a problem in that context.
Re Gerrymandering - you know that this practice isn't limited to the US, but has been a part of American politics since about 1790? Really, that seems to the be the "talking point" for the media the last 45 days, it's one of those points that probably sounds very objective, but what the poster is doing is really attacking the House of Representatives. It's much like a fat white racist complaining about "the decline of the neighborhood" only when a black family moves next door.
Of course the House happens to be
a) the most democratically-elected branch of the US government, and
b) controlled by the Republican party this cycle.
It's amazing how nobody in the media was talking about the problem of Gerrymandering 2007-2009...I wonder why?
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.
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The Slashdot summary already nicely shows why the Chinese do have a point of sorts
Sure, they have a point "of sorts," but what sort is it? The pithy, throw away sort. Their money coming in is mostly US dollars. Switching to the Euro, they'd lose money. They certainly can't push their own currency as the reserve, not while refusing to let its value float. And some new currency, who would support it that has so much more trust than the US, both in their financial honesty and ability to run the system, and also in their ability to defend themselves and their system? There is no such sponso
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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.
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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.
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The problem with that is that at least 50% of Americans are PROUD to be the jocks of the world.
Cutting the military budget is an open invitation for the Republicans/Conservatives to take power, and that would be a disaster.
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:Summary says it all (Score:5, Insightful)
The real problem is that pinheads like you want to keep pretending that the USA has a revenue problem instead of a spending problem. It's still possible to prevent the USA from having a Soviet-style collapse, but to do that we'd have to immediately cut government spending to less than it collects in tax revenues.
There are both problems. The US Government spends like a bored trophy wife, meanwhile, incredible sums of taxes are not collected from higher wealth citizens because of loopholes and offshore accounting.
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If you really study the problem its pretty clearly a spending one. People moan all day about the corporate taxes not collected but they fail to realize that its that if not for the off shoring of assets and other tax avoiding loops holes we'd have some of the highest corporate tax rates in the world. The big internationals would simple leave for greener pastures.
As far as wealthy individuals dodging taxes you really are talking tiny sums of money compared to federal spending.
The big revenue gains if there
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.
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I recommend we shave a little off of the golden calf, AKA the military.
\meetoo.
Except (a) shave off more than a little, and (b) do it incrementally over time, to avoid subjecting the economy to a big shock.
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Correct the thing is we keep cutting revenues to try and boost the economy and have been doing so steadily for 13 years and it isn't working.
People like to think this only started in 2008, the reality is 2008 only happened because of policies put in place with the DOT Bomb. You can't cut revenue and increase spending the way republicans want to do.
I knew 2005 we where headed toward a finicial collapse because the only thing moving forward was housing. everything else was stagant. Right now we are headed
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Re:Summary says it all (Score:5, Informative)
Massive government cuts are what drag economies down. Japan tried it in the 90s, Britain is trying it right now. You get 10 years of a sunken economy bumping along the bottom before it can even get back to where it was before the crash, while everyone else recovered a long time ago.
Obama did the right thing by stimulating the economy. You get out of recession first, and then when times are good again pay down the deficit. Cutting during the recession is suicide. A recession is caused by people not spending money and business drying up, so what do you think will happen if one of the biggest and most reliable spenders (the government) makes huge cuts?
Re:Summary says it all (Score:4)
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.
Re:DOH. Because China's most likely to get screwed (Score:5, Insightful)
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.
I'm not seeing any evidence to support that. Going by recent history, the US seems perfectly happy to trample over its allies to secure its putative interests.
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.
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If they floated the renminbi US manufacturing stocks would go through the roof even while Wallyworld was liquidating. The value of the dollar would go up.
If the world economy crashed or not, or how badly, would all depend on the amount of warning.
There is no evidence of them trying to create something else; all there is evidence of is strongly worded newspaper editorials. We have those, too.
Comment removed (Score:5, Insightful)
Re: (Score:3)
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.
Re: (Score:2)
I love a late-night splash of Realpolitik!
The only thing I disagree with is that it would be in China's interest if everybody switched to the RMB. In 15 years, maybe. Once their domestic economy is strong enough to fill those ghost cities, they'll be in a position where it would help them. Right now, they'd lose the farm; the RMB would rise until it hit market value, their manufacturing would crash, then people would start trading it for Dollars and Euros, and they'd be powerless to keep control of it.
I don
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Yeah, just ask the UK. Oh, wait.
If you mean the B-list "allies," yeah. They should have tried harder.
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.
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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.
Okay, I'll bite (because I might learn something).
What are the flaws that need to be fixed in bitcoin, and given the world adopted democracy, Microsoft windows, and Keynesian economics despite their flaws, what makes you think bitcoin won't be accepted despite its flaws?
No real reserver currency alternatives (Score:5, Insightful)
Re: No real reserver currency alternatives (Score:4, Informative)
Google "special drawing rights" or "SDR" to learn about how, who and why.
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).
Sigh (Score:2)
These attempts of China to flex their metaphorical muscle is just more fuel for the US conservatives to keep justifying the idiotic defense budget and the "World Cop" ideology.
It's starting (Score:5, Informative)
China still has substantial currency controls on the renminbi. It's difficult to move renminbi to other currencies. There's a "State Administration of Foreign Exchange" which issues permits to do that. Businesses and individuals in China can buy goods with renminbi from other countries, but exchanging renminbi for dollars or euros or doing other cross-currency financial transactions is heavily controlled.
(Lately, there's been a surge in Bitcoin transactions in China. This provides a way to get around exchange controls. This activity will probably provoke some government action if it gets big.)
Because of those exchange controls, the renminbi has not been a major international currency. That was the deliberate policy of the People's Bank of China for years, because they didn't want their internal economy yanked around by external events. That policy changed in July 2013 [wsj.com]. China now has a big enough economy internally to outweigh external holders.
Retail controls are loosening. HSBC and Standard Chartered Bank will now let you open a bank account outside China denominated in yuan. But it's not freely exchangeable yet.
Here's a summary of "Circular Concerning the Simplification of Cross-Border RMB Procedures and Improvement of Relevant Policies" [china-briefing.com] from the People's Bank of China. The changes are slow and cautious, but are happening.
I honestly can't blame them for making a 'plan B' (Score:2)
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: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.
Not just calling for in press (Score:4, Informative)
i would go along with it except (Score:3)
And who might we thank? (Score:3, Funny)
A justified argument (Score:4, Funny)
Because letting the global economy get taken hostage by a bunch of illiterate yahoos who hate healthcare is fucking stupid.
Re: (Score:3)
(Addendum: Not that having China as the world's economic leader would be any better. That'd be the old Trains Running On Time argument.)
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
Independent World Interchange Currency (Score:4, Funny)
It is a great idea to have a "world currency" as global interchange currency. Therefore, no country would be able to just print money to buy new resources. However, this is only going to work when the average of countries join such system. However, the USA is not going to commit themselves to it, as they are primarily the profiteer of the present model, where everyone else must buy resources in a foreign currency, but the USA (not totally true, as some trade are made in Euro and Yuan).
I love these (Score:3)
You know, reading Chinese state media is always funny to me. They're always so friendly when they talk about changing the way the monetary system works, and they do the same thing on other topics.
Re: (Score:3, Insightful)
Well other countries (UK, Japan, China, Australia et al.) apparently don't believe they should "live with the consequences" of importing the USA's inflation, so they devalue their own currencies in an attempt to help their exports. Unfortunately this race to the bottom erodes the faith in the US dollar, and BRICS countries (Brazil, Russia, China, South Africa) are dissatisfied with the status quo and always call for a replacement of the US dollar at their annual meetings. BRICS are already drawing up thei
Re: (Score:3, Informative)
Re: (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: Everything they say is true. (Score:5, Insightful)
No they don't, Europe gets a lot of its energy from Russia. You don't have the monopoly you think you do.
There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.
Re: Everything they say is true. (Score:5, Insightful)
There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.
Historically not. This is because it was widely known that Russia would screw you over hard.
With the recent revelations about NSA it is pretty clear that the US us following the same fucked up realpolitik and that you have to think of dealing with US in the same way as you think about dealing with Russia.
While both nations have a lot of wealth it is generally more beneficial to deal with other more idealistic nations.
It may seem like it is naive to be "soft" and kind hearted but in the long run people learn that they can trust you. I have seen this a lot in the business sector. Companies that makes sure that everyone involved benefits form the deals makes it in the long run.
Those who screws people over only lasts until word gets around. They do great for a decade or two until everyone else realizes that there is more money in working with other people.
Re: (Score:2)
the creation of a new international reserve currency to replace the present reliance on U.S. dollars
Wow! Didn't see that coming, how about everyone else in the world??
.. quickly! Hand power over to the UN, they can be the martial law for the whole world AND control all of the money. Anyone who thinks that this wasn't contrived is kidding themselves.
OMGoshness, US debt crisis constructed by US officials
Dont worry, I think your entire post is extremely contrived.
Re: (Score:2)
You're either not an American, or don't have many toys. A lot of it says "Made in Taiwan."
Re:Everyone open your firewalls (Score:4, Insightful)
Re: (Score:3, Funny)
I came here expecting a lot of dumb comments calling Americans 'Murricans' and other ignorant crap. I was not disapointed either.
Re:Everyone open your firewalls (Score:5, Funny)
I came here for the punch and pie. Sadly, I *was* disappointed.
Re: Everyone open your firewalls (Score:5, Insightful)
Let's hope so.
I don't mean they should hand the world to the Chinese, but change is definitely needed. Big change, not Obama-sized "change".
OTOH I don't see where that change could possibly come from. The people don't look like they're going to revolt anytime soon, and the NSA is busy making revolt ever more difficult.
Re: (Score:3)
Engineers. The Snowden leaks have been a wakeup call to the security and networking communities. Sure, we always "knew" that stuff wasn't really secure, but when something is shown to be actively being exploited, people tend to sit up and take notice.
Nascent and floundering security and privacy projects have been galvanised by the realisation, and work seems now underway apace, to rebuild erstwhile accepted habits on solid cryptographic ground.
The
Re: Everyone open your firewalls (Score:4, Insightful)
Better crypto tech is all fine and well, but that's not going to bring any kind of change to the US government; it's still in the hands of the voters, who aren't going to use that crypto tech because "they have nothing to hide" and because they're generally Fox News or MSNBC-watching idiots.
I can see other nations, including China, acting together, bringing much more change to the global state of politics, and consequently to the US. They have the power to do so (especially if they act together), and if the world's reserve currency switches from the USD to something else, that's going to cause massive changes for everyday Americans.
Re: (Score:3)
The idea of the US military shooting at fellow Americans seems pretty silly. Moreover, most people in the military probably come from the "red states" themselves, so they'd not only be fighting their own countrymen, but people from their own regions and hometowns. It's not like all the jarheads in the Army grew up in NYC and San Francisco.
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: (Score:3)
Don't forget the international drug and arms markets.