World leaders confer on debt crises this weekend

World leaders confer on debt crises this weekend

www.reuters.com

China -- the United States' biggest creditor -- said Washington only had itself to blame for its plight and called for a new stable global reserve currency.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.

(visit the link for the full news article)

I'm surprised this came out so quickly. China was looking for this to h appen, it appears. And it looks as if now China is ready to call our bluff. Reading into the article they say the US should decrease military and social security expenditures... almost as if they would love to see the states fall into total chaos.

Not to mention the idea of a new global currency to weigh against the dollar that is proposed in the article.

Something we should all keep an eye on.

www.reuters.com
(visit the link for the full news article)

Bye bye USA. Every empire has a beginning and an end. The time of the US empire, just like the British empire before it, is going down fast. It is now time for China to shine.

I have a suspicion that for years they have been our credit card without any complaint because they knew this day would come and they could shut down our borrowing from them which would mean we either cut or collapse. Either way it would result in enormous social chaos. The US could only go to war all these times, cut taxes so many times, and spend like we have because we have the global reserve currency and borrowed like a chain gambler from China. Now that our downgrade has occurred and we are up against the wall, they can hit us with this.

What happens then? Well the US goes tumbling down a long road of harsh austerity, retreat from the international scene, and a free-fall of the American standard of living. But it is not just us; it is Europe as well, our buddies in crime. Now that our Western economies are in the tank China can pull the rug out from under us. If you think the Chinese were stupid this whole time lending to us, then you are stupid, this was a plan designed by them for their benefit.

Where else will the world turn when the Dollar, Euro, and Pound sink into oblivion with China remaining comparatively strong with a robust manufacturing sector and almost no debt. This is their time to shine and they know it. There is no reason for them to confront anyone militarily when they know we have an addiction to debt, we show up at their door, “umm hey man… I like umm really need some more money, I know I already owe you but you know I am good for it right *sniff*. Come on man I got like a family to feed and umm…”

reply to post by Misoir


Agreed.

Unlike the United States, China has a long, well-documented history. They see things not in the short term alone, but also in the long term. They are wise, and like some well noted Marxists have said before it would not take a war to bring the West to it's knees, it would only take them to drown in excess and laziness for the capitalist way of life to burn out.

Unfortunately our 'leaders' see things in 4 to six year cycles, depending on the election year

reply to post by Dreine


I dont believe they want to create a new currency to compete against the dollar (eg the EURO). It will be something along the lines of en.wikipedia.org...

I think its inevitable. The question is will a heavily armed politically fractured USA take the 20 years of heavy austerity? Or will it see some form of major upheaval, e.g. secession, rioting, martial law etc, rise of a christian fascist demagogue etc etc.

Thats the real worry.

reply to post by wavemaker


I don't see China's re-emergence as an empire, but rather a corporate powerhouse. Cheap labor, lax pollution, environmental and safety policies.

Plus all those worthless bonds they now have. It will bite them in the butt before too long as well.

We’ve seen it time and again throughout history. The leaders of these countries will only see one way out of it and that is through war. Best get ready.

reply to post by Misoir


Chinas debt to GDP is around 17%.

Second I think China purposely went on a campaign to have the dollar devalued, as well as attempting to replace it with the Euro. I think China was in the process of dumping us for their new girlfriend - Europe.

I think China miscalculated though, not taking into account the debt levels in Europe. The currency they were trying to replace the dollar with is almost as bad as the dollar is now.

Also, While yes china has robust manufacturing sectors, they still dont have the ability for domestic sales of those items to replace lost markets in the US or Eurozone.

Also, Moodys reported about 3 weeks ago that they caught China covering up debt. In that case they discovered China failed to report their local governments are in debt to the tune of half a trillion dollars.

China may look solid and stable, but im thinking its a house of cards that is going to come crumbling down fairly soon.

Not so funny now that it may become a reality. When this ad first came out people ridiculed it laughing that it would never happen. Never say never.

why do they think we have to go through long periods of austerity all we have to do is cut wasteful defense spending ie spending piles of money on research projects that will never amount to anything like darpas research into generational starships . that woll go along way to balancing the budget. scrap obama care it was a piss poor program to begin with. tell china they can go blank themselves we as a nation need to quit buying manufactured goods from china we need to tell corporations if they want to sell goods here they need to make them HERE the global corporations crap has got to go . when government started letting our manufacturing base move to china was basically cutting our countries throat. if we did these things we would not have to go and mess with social security programs.

reply to post by SpaDe_


I disagree... China is the one who helped the US dollar to get to this point. As I said I dont think they intended for the Us to lose a credit crating of AAA. I dont think they saw Europe going down the same debt road. China has been buying up Euros left and right in an attempt to stablize that currency.

China and Russia announced they would not longer use the US dollar for trade between their countries.

I really do think China has bit off more than it can chew, and are going to be paying the price. I will be surprised if their government is still standing when their bubble pops.

China does not comply with the WTO and monetary standards. China also does not completely report all of ther expenses, especially in their military arena.

China is playing a bluff and I dont see it working out.

Originally posted by proteus33
why do they think we have to go through long periods of austerity all we have to do is cut wasteful defense spending ie spending piles of money on research projects that will never amount to anything like darpas research into generational starships . that woll go along way to balancing the budget. scrap obama care it was a piss poor program to begin with. tell china they can go blank themselves we as a nation need to quit buying manufactured goods from china we need to tell corporations if they want to sell goods here they need to make them HERE the global corporations crap has got to go . when government started letting our manufacturing base move to china was basically cutting our countries throat. if we did these things we would not have to go and mess with social security programs.

See this is where we really screwed ourselves. If we cut spending in a certain sector that will equate now to layoffs in that sector which will force more people onto unemployment and welfare which puts the burden right back on the system again. It's a vicious cycle that the has been created, and there is now no easy answers left.

china is not the US biggest creditor, the US is it's biggest creditor.
and well, go look up the credit rating of china!!

reply to post by Xcathdra


I understand that China has not played "fair" in this whole thing, but the US doesn't have clean hands either. I think the whole thing is going to have negative effects for all involved. China however has us on 2 fronts, 1 we need their cheap money, 2 we need their cheap goods. How many Americans would be devastated to show up at Wal-mart tomorrow morning to find out they no longer have cheap Chinese goods on their shelves, and they now have to fork over nearly double the normal cost for some quality American made products?
They have us over a barrel and they know it.

But China will be doomed because without the US markets then they too will also experience civil unrest

you get to that point in life ware your parents cut you of and you learn to take care of yourself its time for the usa to grow up and spend wisely or get kicked out of are house so to say,

Dead easy: Level the trade imbalance between China and the USA and let the Chinese government burn.

Originally posted by SpaDe_

Originally posted by proteus33
why do they think we have to go through long periods of austerity all we have to do is cut wasteful defense spending ie spending piles of money on research projects that will never amount to anything like darpas research into generational starships . that woll go along way to balancing the budget. scrap obama care it was a piss poor program to begin with. tell china they can go blank themselves we as a nation need to quit buying manufactured goods from china we need to tell corporations if they want to sell goods here they need to make them HERE the global corporations crap has got to go . when government started letting our manufacturing base move to china was basically cutting our countries throat. if we did these things we would not have to go and mess with social security programs.

See this is where we really screwed ourselves. If we cut spending in a certain sector that will equate now to layoffs in that sector which will force more people onto unemployment and welfare which puts the burden right back on the system again. It's a vicious cycle that the has been created, and there is now no easy answers left.

Kudos to you for realising the true conundrum. Much of what remains of the taxpaying middle class is employed directly or indirectly in defence. If the USA brings all the troops home and cuts defence spending the unemployed will boom because there is no longer a non defence manufacturing economy to absorb them.

If all you make are weapons then the government has to keep buying weapons or find those weapons used against it by the hungry armed and angry.

reply to post by starwarsisreal

china has a huge untapped market, it's called the chinese!! they'll just start paying their people enough so that they can buy their own products...

and well, wait for big corps to figure out what is going on and take their manufacturing to the cheap slave labor of africa!!!