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Originally posted by lonewolf10
here is what an economist had to say about china: The US economy is still the biggest in the world by a large margin. The military, which we are not afraid to use, is the most powerful. Until another country holds title to either one of these claims, our reserve currency status will likely remain intact. While it feels as if China will surpass us soon as they maintain their rapid growth, they are still many trillions of dollars in GDP away. Think about this - if the US is the world's largest customer, and China has become richer by selling to us, is China really going to tell us which currency we can spend? Don't we dictate what currency we are willing to give them? Who is truly in charge? If China stops accepting dollars, could we not easily find a group of other nations to do business with? Would us dumping China as a business partner not cause other nations to line up to take China's place? Would any of these other nations refuse to do business with us in US Dollars?
Until China or another country surpasses us as the world's largest economy or strongest military, loss of our reserve currency status is not imminent, as sellers of fear would like you to believe.
Granted, China is growing at roughly 10% a year, and we are only growing at 3%. I get that. Let's do the math though and see if we should worry. If China is a $6 trillion economy, growing at 10%, they grow by $600 billion a year. If we are a $14 trillion economy growing at 3%, we grow by $420 billion a year. In this close to reality example, China is closing the gap at $180 billion a year. At this rate - it will take China 44 years to even match the US in GDP. Can they continue to grow at 10% a year, while their largest customer grows at 3% for 44 straight years? We are a far cry from no longer being the largest economy. The biggest economy in the world should be blessed with the reserve currency.
i dont think we need to worry about an economic collapse any time soon.
seekingalpha.com...edit on 30-9-2012 by lonewolf10 because: fhgh
Originally posted by mobiusmale
So, China is going to pay for Russian oil with Yuan...therefore the U.S. Dollar is going to collapse, our economy is going to tank, and we are all going to die in WWIII.
Hmmm...a few counter points.
1) If demand for the Dollar goes down somewhat because the portion of China's oil imports that come from Russia are paid for in domestic currency...then the value of the Dollar will slide somewhat...making American manufactured goods cheaper on international markets...increasing demand...putting new up-pressure on the value of the Dollar.
2) If China were to do something that created a sudden and steep drop in the U.S. Dollar (let's say it dropped in value 50%)...it would suddenly find that it's manufactured goods are no longer relatively cheap in the U.S. or elsewhere. Its Export economy would collapse overnight...because it has not yet developed a large enough middle-class in China to take up the production losses.
3) Oh, and China would lose about $600 billion in the former value of its U.S. Debt held...not that that would be a huge problem overall.
4) Right now, the Chinese Yuan is pegged to the U.S. Dollar in daily trading (just watch the daily currency charts). If they did not unhook...their currency would dive right along with the U.S currency...which people here are claiming would spell disaster. If they floated their currency away from the U.S. Dollar, and for some reason the Yuan then rose strongly against the Dollar - they would out of business in America (not to mention the rest of the world...see number 2 above).
It will be interesting to see if this new currency agreement on oil trades between China and Russia has any effect on U.S. Dollar values...I rather doubt it personally. But, if it does, I can see nothing but positive things coming to the U.S. economy as a result.
Economic Armageddon? I think not. WWWIII...why exactly again?
Originally posted by lonewolf10
Would us dumping China as a business partner not cause other nations to line up to take China's place? Would any of these other nations refuse to do business with us in US Dollars?
Until China or another country surpasses us as the world's largest economy or strongest military, loss of our reserve currency status is not imminent, as sellers of fear would like you to believe.
Originally posted by buddha
As far as I can see, america is a Old big fat Parasite!
and I hope the rest of the world can escape from it.
and let the flabby thing Die.
help teach the rest of the world a good lesson.
“On Thursday, Sept. 6… just a few days ago, China made the official announcement. China said on that day, our banking system is ready, all of our communication systems are ready, all of the transfer systems are ready, and as of that day, Thursday, Sept. 6, any nation in the world that wishes from this point on, to buy, sell, or trade crude oil, can do using the Chinese currency, not the American dollar. – Interview with Natty Bumpo on the Just Measures Radio network, Sept. 11
Originally posted by lonewolf10
i dont think we need to worry about an economic collapse any time soon.
Its a Time Machine. Posts and Threads go back and forth into the future and past 2012, Nibiru, WWIII etc etc
Originally posted by syrinx high priest
I think I'm in an ATS time warp, didn't this happen last month too ?