How China could wreck the US economy

Rediff ^ | 6 Oct. 2008 | Rediff

[GOP_Lady]

There was only one GOP candidate who spoke of this, and we should could use him now. It’s such a shame that people in this country vote on “who’s like me” rather than “who is best for this country.” God bless us.

[Dutch Boy]

We don’t need the Chinese to wreck the country. We have the Democrats and RINO’s for that. They have done more damage to this country than any outside force ever could. We are rotting from the inside.

[bpjam]

There are all kinds of conspiracy theories about how China could ‘destroy the US economy’ with currency trading or ‘dumping Treasury notes’ but all these idea ignore a couple of basic downsides.

A US collapse means that Chinese goods don’t get shipped and purchased here. A trade war ensues and Chinas own economy collapses while they are creating hundreds of millions of people somewhere around the middle class.

Also, China puts their money in the US because the US is still the most stable place on the planet. We are the only government who has never defaulted. And since the Chinese currency is essentially pegged to the US$, they don’t lose money. China is also big into the Euro but there is no history on the Euro to know what happens when disasters occur.

America is a safe haven for friends and foes alike. More surprisingly is that China hasn’t been putting their huge cash reserves into more companies and real estate assets here in the US like the Japanese did in the 1980s when they were flush with Yen and we were coming out of a terrible recession (much worse than this one).

Plus, China would like to be a buyer of US oil if we can start producing. Or they would like to be able to step in and buy more oil from Canada and Mexico which are far closer to them than the Arab Gulf (less shipping, less cost).

But more importantly, when somebody owes you money (when you own their debt instruments like T-bills) they are dependent upon you succeed so that you can pay them back. They don’t want you to fail or they lose their money. It’s a no brainer. There is no tactical advantage to losing billions of dollars by the Chinese just to try to hurt us. And the US would really benefit from being able to have an external enemy in this financial crisis instead of a domestic one like Dodd, Frank & Raines.

[raybbr]

ping

[raybbr]

What is indeed intriguing is that a country -- the US -- that prides on being 'independent' of other countries, especially in security affairs, is now caught in a quagmire as it has to be constantly in the good books of the Chinese government if it wants to avoid a sudden shock.

Nothing "intriguing" about it. Several of us on this site have been warning of this for years. Several have been booted off for expressing that very concern.

[Vaquero]

Is there a translation in english for this article...

what the heck is forex?....condoms???

[MyTwoCopperCoins]

Forex = Foreign Exchange.

Definitions of Forex on the Web:

Simultaneously buying one currency and selling another.
www.forextradings.com/Forex-Trading-Education/forex-trading-glossary.htm

Foreign Exchange.
forexsb.com/library/glossary/f.html

Term commonly used when referring to the foreign exchange market.
www.foreigncurrencies.com/resources/glossary.php

[CE2949BB]

A US collapse means that Chinese goods don’t get shipped and purchased here.

It won't be long until the Chinese don't need us as a market.

Maybe that point has already arrived.

[spetznaz]

Some day people will look back at the election that is about to take place a little over 2 weeks from now, and they shall shake their heads. However, they will be shaking their heads primarily due to the decisions that were taken during the primaries, with the outcome of the Nov 4 election being a result of many tiny decisions that were taken during the primaries.

Now, depending on the outcome, one might surmise that the people 'shaking their heads' will either be Democrats (wondering if they should HAVE gone with Hillary) or Republicans (wondering if they should NOT have gone with McCain), but personally I believe it is a moot point. The reason is that the country is current facing a situation where it has to choose between a side-winder and a timber rattlesnake! Both a vipers, but one (the latter, i.e. Obama) just happens to be a larger, more aggressive threat with greater potency venom. However, both of them are cut from similar scaled-cloth. Right now we need to elect McCain ....for the simple person that having a Dem president, House and Senate would be ....well ....anathema to everything Conservatives stand for! There is no room for debate on who needs to be voted for come November.

However, heads WILL shake nonetheless, and in all parties. Even ours. Even if McCain does win, because he is as Liberal as any Democrat one millimeter right from Obama. (Actually an interesting exercise would be to compare current Republicans with Democrats from the 70s and before ....the then Democrats, were they here today, would be FAR RIGHT compared to the current Republicans. People talk about RINOs, when the fact is that there is not such thing anymore. RINOs became so many that they are now the majority, both in terms of elected officials as well as the Republican voting majority. The proper name should be CINOs, conservatives in name only, because the Republican party stopped being conservative a while ago. Someone like George W Bush, based on actual policies, spending and a large number of decisions, is actually to the left of Clinton when viewed from a non-biased perspective! A country like N.Korea even got a better deal from him.)

Anyways, we need to win this election. However, if we manage to get McCain in then people need to be strategic. In the mid-terms, ensure that in every election you guys have a conservative running, and then vote for him/her. Start advocacy movements that try to make the politicians realize that there will be no tolerance for CINOs. This election must mark the last point where people compromise ....where people vote for a 'lesser evil' (the lesser of two evils is still evil).

Which brings me back to my side-winder vs Timber Rattler analogy. Sure, we 'have no choice' this time ....again! However, this has to be the last time people use that excuse.

The reason is, if you do not, the progressive shunt from right to left will continue, and before you know it the Republican party will just be another branch of the Democrat party (which it is ....think of the spending run amok, greater spending than that of any Democrat president, economic capacity shift abroad, bailouts, oh ...a good one ...amnesty for illegals). That is what happens when people are complacent ....before you know it, your party becomes a 'Bud Light' version of the other party, and Bud Light SUCKS!

After the elections, we need to ensure that true Conservatism comes back. If it does not, then look over to Britain to see what will happen to you (continuous decay ....even their soldiers get kidnapped by Iranians in inflatables, and they are thinking of voting away their Trident nuclear submarines). Great countries fall all the time, and the only way a great country can fall is due to decay from within. Not because of attacks from Al Queda, or because of Manchurian candidates (they need a willing populace to take over), but due to rot from within. The Republican party is rotting, and while there is no real choice this time (sitting at home, or voting for a 3rd party candidate, is a vote for Obama), after the elections people need to seriously take over the party. Reagan is not some messiah who will miraculously come alive and lead us to the promised land, he was a man who simply knew what was great for the country and stood up to be counted when the time required it. Every single person has that potential ...when Lech Wallesa stood up in Poland during the times of Soviet oppression, he was simply a 'normal' man. Goodness, Reagan was a two-bit actor before he Stood Up and went on the political trail, and he failed many times before he became Governor, and it was not smooth sailing before he became President. However, he did ....and it was good.

It is your decision ...not mine even. I am good, I am not even an American, and thus my 'vote' doesn't count (I don't even have one, although maybe I should contact Acorn and see what they can do for me. The fact that my country of birth is Kenya should probably accelerate the processing of my 'voter's card').

This is it ...this election is either the beginning of the end of America (NO MATTER WHO WINS ...ONE CANDIDATE MEANS IMMEDIATE GEHENNA, THE OTHER MEANS A MORE DRAWN-OUT PROCESS), or it is the beginning of the re-awakening of the Republican party. Some of you are going out to buy guns ...that is ok (guns are cool, LOL). However, if the Government turns 'dark,' those guns will not be much help. A sustained resistance against a Government military in a locus like the US, where many people live in sub-urbs and need constant food/gas/water supplies from outside, and cannot fend for themselves more than 10 miles from the nearest WalMart, is an exercise in futility. Buy the guns if you so desire, but know the only way to change things is by ensuring that you vote for true conservatives during the mid-terms, and that you stop going for luke-warm.

I wonder what the Bible says about Luke Warm ...something about being spat out of the mouth of God if I remember correctly.

[spetznaz]

both a vipers = both are vipers.

We need an edit function.

[WilliamofCarmichael]

So China is going to do something that will crash their U.S. market, throw tens of millions more Chinese out of work, and spark a revolution?!

Sounds good to me.

[PapaBear3625]

Looking at oil-price.net

We see the price of oil rising from about $75/bbl a year ago, to $145 over the summer, and then back down. Coincidentally, the US economy started experiencing trouble shortly after oil peaked. The US imports about 22M bbls/day. The price rise to $145 caused us to be hemorrhaging $97B per month out of our economy to pay for oil, and in my opinion may have been the trigger for our current issues -- right in time for it to be most advantageous for the election of Obama

[MyTwoCopperCoins]

Not is. But could.

[org.whodat]

Don’t be positing common sense, it confuses conspirator’s.

[flamefront]

And with all the lauding of Obama by Gadhafi (see WND) coincidentally in June as someone Arabs are supporting with campaign donations we see here many aspects of foreign influence on the US, both economically and politically.

Strange no one is raising much concern like they did during the Chinagate illegal donations to Clinton years ago. Too politically incorrect -- don't want to upset our loan holders. Therefore all leadership has been neutered. You did notice the absence of leadership, right?

Little circumspection this time.

[flamefront]

Remember the phrase CONNECT THE DOTS?

[Cronos]

Forex is a pretty commonly used term along with things like the Footsie (FTSE), Caceron, DAX, NASDAQ, NYSE, S&P, Hang Seng, SSX, S&P ASX, Sensex, Nifty, CDOs,Repo,Reverse Repo, F&O etc.

[Vaquero]

Forex is a pretty commonly used term along with things like the Footsie

sorry. not in my universe.

[silverleaf]

several congressmen interviewed during “bail out” discussions alluded to Chinese role in the urgency of the recent crisis

No one came out and explained it

thanks for this artcle

imho, this crisis accelerated so sharply and quickly as an act of war by a foreign interest, and the US government has not and is not being honest with we the people