Dollar dropped

You are also ignoring an important fact. China is pretty much Dependant on the US to sell all of it cheap-ass goods to. As the USD goes down then that means the US won't buy nearly as much as it did before. The US economy is the largest in the world by an extremely wide margin. This will not evaporate overnight and a destabilized US would challenge the entire world. Taking out the worlds largest consumer country economically will have severe consequences on any economy that is a major exporter.

Originally posted by sardion2000
You are also ignoring an important fact. China is pretty much Dependant on the US to sell all of it cheap-ass goods to. As the USD goes down then that means the US won't buy nearly as much as it did before. The US economy is the largest in the world by an extremely wide margin. This will not evaporate overnight and a destabilized US would challenge the entire world. Taking out the worlds largest consumer country economically will have severe consequences on any economy that is a major exporter.

Well thats not entirely true, the US is Chinas largest SINGLE customer purchasing about 20pc of Chinese exports, there still remains 80pc of Chinas trade to the rest of the World !!

They say that China has already lost somewhere like 300 Billion from the US $ devaluation from Bonds/Reserves they own denominated in US.

Im not doubting that a Crashing USD would have serious implications on a world wide scale !

I Find these account deficit numbers quite Scary

Dec. 18 (Bloomberg) -- The U.S. current-account deficit widened to a record $225.6 billion last quarter as the trade gap grew and the country paid more interest to overseas investors.

So, can somebody sum up the outcome of an economic crash?

What would the US have to do to get back on top? Export more US made product, lower the pay scale, etc?

Would a crash of todays current standing, be in comparison to that of the 1920's, or would it surpass that outcome by drastic amounts?

( like my play on words... "Sum" , I got a million of them )

That was an economic collapse which was started by a crash. We've had a crash recently, though it was over a longer stretch of time. Started in 2000 and bottomed in 2001 and 2003. Do u remember the '87 crash(or was it 89 I forget)? Well the recession that followed effected my family large. Thankfully we had locked into a low interest mortgage in '86 so all it effected was luxuries and clothing.

Also, numbercruncher. Since you missed a post above I'll post it again below, it was directed at you.

What are the other countries going to do though? Especially China which exports most of it's goods to the Western world? They may not want a Depression to happen and may step in to limit it to a longer Stagnation(ie a Crash Recovery cycle every 3 years or so for a decade or longer) which happened to Japan in the 90s.

[edit on 20-12-2006 by sardion2000]

Yes im certain the other countries dont want a depression, despite what some people like to have you beleive the US has plenty of Allys, especially economically, that would do all they can.

George Soros the multi-billionaire investor who retains the reputation of being able to move the markets single handed has said that 2007 could see recession.

Recessions and depressions are enevitable imho, Earth is finite it just cant keep growing growing growing forever, things need to go backwards to go forwards ... theres only room for so many people, so much money to go around, so much pollution to deal with etc, there has to come a tipping point, the brakes have to be applied sometime.

Another big question is how is the West going to pay for its ageing population Obligations, some places will have as many retirees as workers in coming decades.

cool, its already cheap to buy porn from the $ to the £, so i take it it's going to be cheaper for me then

Irans plan to weaken the US dollar will fail!

Tehran lacks the freedom and transparency needed for a successful oil exchange.
By Milton Ezrati
JERSEY CITY, N.J. – If, as is widely believed, the original tales of the 1001 Arabian Nights came out of Persia, then Iran, Persia's modern successor, has just given the world yet another great fantasy: the Iranian oil bourse.

Surely Tehran lost touch with reality when it developed its plan to use a new, euro-based oil exchange, on Kish Island in the Persian Gulf, to dethrone the greenback from its position as the world's reigning reserve currency. Such a project is neither likely to attract much business nor to have Tehran's desired effect on the dollar or the United States.

Tehran's plan of attack has the virtue of economic logic at least. Iran's planners recognize that the heavy use of the dollar in international trade sustains its foreign exchange value by forcing people to hold greater dollar balances than they otherwise would. The dollar's consequent strength encourages its use in other transactions, which requires still greater dollar holdings in a dollar-boosting cycle. Iran's planners hope that their euro-based exchange will disrupt this pattern. By forcing oil traders to hold euro balances instead of dollar balances, Tehran expects the oil bourse to induce dollar selling and consequently force a drop in value. Those foreign exchange losses will draw still more trading away from the dollar, further weakening it, until, ultimately, it loses its world-leading position. Iran's planners expect to do the US great harm in this way.

This economic logic, though reasonable from a theoretical standpoint, misses some very practical hurdles to success. Tehran's exchange simply is not attractive compared with the exchanges in London and New York, where dealers and traders are prospering amid their well-developed networks. On distant Kish Island, they would: (1) lack trained locals to work in their operations, (2) have to deal with a notoriously corrupt bureaucracy, (3) lose contact with a transparent financial, regulatory, or banking system, (4) lack the necessary technological infrastructure, and (5) sever most links to the globe's electronic commercial structures on which trading relies.

Because Iran is not even a member of the World Trade Organization, dealers who move to Kish Island would also miss the kind of legal structures on which they rely to facilitate trading and secure the contracts that support it. Furthermore, a firm's move to Kish would subject any staff assigned there to Islamic sharia law. Western oil company employees tolerate that burden because they must go where the oil is. The same is not true of futures traders.

Against this list of drawbacks, it is difficult to see how such an exchange could even get started. Tehran is unconvincing with its argument that proximity to the Middle East oil fields can overcome other reservations, especially in today's electronic, information-laden world. Neither can Tehran use its oil production, as it has hinted, to force traders and dealers to its exchange. As long as Iran sells its oil onto world markets, it has no control over where it gets traded. And Iran, whatever its political agenda, simply does not have the economic and financial wherewithal to hold back its oil altogether. Petroleum amounts to 80 percent of all Iranian exports, 45 percent of the country's GDP, and 60 percent of the government's revenues. With the economy there already rickety, any shortfall in oil sales would tempt financial, economic, and consequently political suicide for Iran's current regime.

Iran's proposed bourse would also face serious diplomatic and religious problems. To work, the exchange would require a free flow of funds and oil, but Iran's membership in OPEC subjects it to strict production and sales quotas. It is not at all clear how Tehran plans to reconcile one requirement with the other. Most fundamental of all, at least for many Iranians, is the likely violation of Islamic law. The Koran forbids either paying or receiving interest; futures contracts always carry an implicit interest for the time value of money. On this basis, the bourse could pose more of a problem for relations between Iran's government and its people than for the dollar.

Even if by some miracle of legal maneuvering and commercial seduction, Tehran established its euro-based oil bourse, trading there would likely fail to move the dollar from its dominant position. Even a wildly successful Iranian exchange would have only a short-lived currency effect. Once traders and dealers had adjusted their transactions balances to accommodate the euro-based trading, they would have no reason for further dollar sales or euro purchases. Currency values would then stabilize at a new level.

Clearly, Tehran has failed to think through its bourse project thoroughly. For the time being then, such talk of dollar destruction from Tehran resembles hopes and dreams more than practice and probability. To steal a phrase from that inspired Middle Eastern thinker, Fouad Ajami, the Iranian oil bourse would seem then to fit best with the many other Middle Eastern "dream palaces."

current international economics...

China needs America, America needs China.

it will be a decade before China starts the economic pressure on the US economy.

Originally posted by infinite
China needs America, America needs China.

I disagree, often i read on ATS about the pending war between the US and China, but what people fail to realise is ‘America’s' is dependence on China (not the other way round).

America owes most of its debt to china and if 'war' ever did happen between both nations (or ties are no longer strong), china have the ability to cripple the US economy just like that *clicks fingers*.

See everything from watch straps to shoes have a little thing on it saying 'Made In China' i live in Britian and i see that, so China are not entirely dependent on the US, European country’s have the ’EU’ in which trade takes place between European Union nations (we can survive without China or America).

The US is different though, America is entirely dependent on china (trade), whereas China's goods is Distributed all around the world, so your comment above I disagree with I’m afraid

Originally posted by Sepiroth

America owes most of its debt to china and if 'war' ever did happen between both nations (or ties are no longer strong), china have the ability to cripple the US economy just like that *clicks fingers*.

In the highly UNlikely scenario that there was War between the US and China, China could not destroy the US economy because the Trillion Dollar debt would become worthless to the Chinese as America would refuse to honor a debt to a country it was at War at.

Well i cant speak for the US but i certainly wouldnt pay any "debts" to a country i was at war with, would you ?

Does China really need us?...That's news to me. I can't get into all of the reasons right now, but they definitely don't need the US, er... us I mean. The new China of today is pretty much self sufficient. Except for that huge population problem they now have.

They are a sup...supr...super...po...pow...power...dang, hard to get that out. But, they do need to feed all those people don't they, not to mention all of the OIL they currently need/use.

In the not too distant future there will be a HUGE move in an alliance with other "interested parties" for "control" (read rights) of the majority of ALL oil reserves, taking care of what they think will be a tiny little problem, constantly blamed for ALL of the problems in the Middle East, in return for exclusive rights to the black gold. But,... They will be in for the SHOCK of their lives when they do try that.

So in summary, the only deterrent is...thinking...thinking...thinking...ah-so!...I have it...mutually assured destruction. But wait,... that means death over the face of all the Earth doesn't it. Rats... you can't do that, no one will be left to care about those petty little things anymore, except for the heads of nations who will be living in their own nicely equipped little holes. See ya in 50 years dudes.

So what else is left...conventional army/conventional warfare....And just how big is Chinas army, something like around 3 million, best guess (reserves included) and I'm sure they are just about up to par in the high tech weapons dept.

Just who am I to predict this? Well, I have learned to think outside the envelope, and an old book/prophecy actually predicts this same scenario currently unfolding....That book is called the Bible...something in there for ALL who wish to find ALL of the ultimate answers to ALL of lifes ultimate questions.

Originally posted by NumberCruncher
In the highly UNlikely scenario that there was War between the US and China, China could not destroy the US economy because the Trillion Dollar debt would become worthless to the Chinese as America would refuse to honor a debt to a country it was at War at.

well honestly i feel the debt is already worthless, to pay it off the US may have to give up numerous resources (and daft as it seems) this flag could be very well on the 'Stars and Stripes' (just like the British 'Union Jack' is on many others):-

www.blogography.com...

so IMO if the US fails to pay back its debt (or agreements cannot be made), war could very well happen:-

summary - 3 options

1) war - victory or loss the US is doomed, china will still function.

2) no war - but america fails to pay back debt, china will still function but america will be doomed - who else is going to be stupid enough to have anything to do with a nation who is untrustworthy?

3) unlikely the US manages to 'somehow' pay it's debts or come to some agreement.

as said lose/lose situation for america IMO, china have america at the palm of it's hand and have the ablity to clench a fist at their discretion.

[edit on 20-12-2006 by Sepiroth]

Originally posted by Sepiroth

as said lose/lose situation for america IMO, china have america at the palm of it's hand and have the ablity to clench a fist at their discretion.

LOL i like the Chinese but i tell you your dreaming ......

China is pretty much trusted fully by no body, at the end of the day they are a Communist nation with a shocking record of Human Rights abuses, who is going to trust this record as apposed to say the US whom has a vast array of Military and non Military treatys and alliances across the globe and close friendships with dozens and dozens of countrys.

Im not ignoring or dismissing the power that China does have, but its nothing like you beleive.

If push ever came to Shove, who is Chinas true friends? i Dont believe China has any! (yet)

well actually it all depends on how this hypothetical war starts if the US doesnt mind their p's and q's, US could find them selves all alone. and with this current administrations running record that seems likely.

the world would unite against the US if it became very obvious that the US is just a war mongering country. they would team up just to remove the poison, instead of haveing to face a lifetime of war after war.

it take very little for the world to see whos in the right and whos in the wrong. the real question would be whos going to use propaganda?

Originally posted by NumberCruncher

LOL i like the Chinese but i tell you your dreaming ......

China is pretty much trusted fully by no body, at the end of the day they are a Communist nation with a shocking record of Human Rights abuses, who is going to trust this record as apposed to say the US whom has a vast array of Military and non Military treatys and alliances across the globe and close friendships with dozens and dozens of countrys.

Im not ignoring or dismissing the power that China does have, but its nothing like you beleive.

If push ever came to Shove, who is Chinas true friends? i Dont believe China has any! (yet)

your missing the point, the world is 'dependent' on china (america even more so), ive gave my reasons in my first post in one key word 'trade'.

i wouldn't count on your 'friendships' either - i feel america only has one true friendship and that is tony blair (not britain) blair is stepping down from power though in 5 months so it will be interesting to see which side the next prime minister leens to most (EU/US), but due to all criticism blair as had with his close alliance with america it won't be 'as close' as it was previously i feel.

but that's one of my points, britain as these options (eu) - what's americas options if relations with china fall apart? the north american union (maybe)?

we've all heard canadians and americans views on that but mainly all we keep hearing about with this 'north american union' is the US interests and ONLY AMERICA will decide if/when its going to happen people forget though theres several nations involved should it happen and would their citizens and governance want it?, from what i read on ats, no... also is it wise for these nations to sit on a sinking ship, you tell me?

just because an 'alliance' is formed, debt doesn't get wiped away - in some ways member states of the 'north american union' will share this debt with the US....just like the EU, we are not one nation but the EU operates as one nation.

[edit on 20-12-2006 by Sepiroth]

Originally posted by NumberCruncher


Well thats not entirely true, the US is Chinas largest SINGLE customer purchasing about 20pc of Chinese exports, there still remains 80pc of Chinas trade to the rest of the World !!

Thats not entirely true either. The EU is China's largest trading partner at around 16% of total Foreign trade. The US is second.

Originally posted by Sepiroth

your missing the point, the world is 'dependent' on china (america even more so), ive gave my reasons in my first post in one key word 'trade'.

[edit on 20-12-2006 by Sepiroth]

I see it as interdependance, the World has become dependant on China to supply cheap manufactored goods, but China is Absolutely dependant on the rest of the World to supply it with the raw Material to allow it to manufactor these goods and build her country up.

Does everyone forget that there is a little thing called NATO? Any act of war against any of its member nations is a war against all member nations, per the charter.

And China has America on their knees? How rediculous is this crap? China and the US are the fastes builders in the world, except the American quality is superior and more efficient. If China cuts their manufacturing trade with us, thats their problem. We could have a large manufactucturing base up and runnign at home or in another country within 6 months. The only thing coming from China is toys, cheap tools, clothees, and consumer electronics. Our food is here at home. Our hygenic products are produced here on this continent. Most of our transportation is also produced here.

And militarily, the only thing we have to do is destroy their entire East coast manufacturing base and their economy is totally #ed. They have no hope of making it across the Pacific. We are already on their doorstep, and two allies right next door that would not like to be under Chinese occupation. Now of course in such a hasteful move, our economy suffers. But we will not suffer alone, because those foolish actions will have already affected the world.

But in any case, I will remain an avid advocate of peace, dialogue, and hope for the best but plan for the worst.

Originally posted by NumberCruncher
China is Absolutely dependant on the rest of the World to supply it with the raw Material to allow it to manufactor these goods and build her country up.

that's the point i'm getting at :/ china have back-up plans if relations between the US break-down (the rest of the world).

europe have options excluding china/america (EU)

what's americas options?





[edit on 20-12-2006 by Sepiroth]

Originally posted by DYepes
Does everyone forget that there is a little thing called NATO? Any act of war against any of its member nations is a war against all member nations, per the charter.

Wouldn't rely on that, matey. We got completely ignored by NATO when the Falklands were invaded..... In fact, those damned French sold missiles to the Argies while we were fighting them....