Posted on 10/01/2010 4:26:39 AM PDT by ilovesarah2012
The US supremacy as the top world economy will end sooner than many people believe, so gold is a better investment than the dollar despite it hitting a new record, Tom Winnifrith, CEO at financial services firm Rivington Street Holdings, told CNBC.com Monday.
The US trade deficit and debt continue to grow and the authorities are reluctant to address the problem, preferring to print money, Winnifrith said.
"America is practically owned by China," he said.
He reminded of the fact that in 1900, sterling was the world's reserve currency but by 1948, that was no longer the case as the British Empire collapsed.
"America is doing what Britain did," Winnifrith said. "America spends much more than it can afford and it's not addressing the issue."
In 1832, China and India were the world's two largest economies and by 2032, they will regain that status, he predicted.
(Excerpt) Read more at cnbc.com ...
Moa!
;-)
“”America is doing what Britain did,” Winnifrith said. “America spends much more than it can afford and it’s not addressing the issue.” “
Not the problem. The problem is free trade with countries that manipulate their currencies and protect their industries while the leadership in both parties simply, well, party.
China is like parasite living off the American people. A parasite cannot grow bigger then its host and if it does, both die.
China should keep this in mind.
I think you over look a lot of other biological models and the relation described is flawed.
Symbiotic organisms exist in many forms that thrive. Coral is one where an animal species and a plant species living together build a reef. Clown fish and anemones function together quite well with one providing help to the other. Several species of birds live among wildebeasts and thrive.
The dollar is collapsing because of colossal debt and domestic spending - and because Obama is aggressively devaluing the currency by wishing more money into existence. He doesn’t even use a printing press any more.
China has nothing to do with it. If any country owed the equivalent of 13 Trillion dollars in debt, its currency would be trashed.
They produce stuff cheaply which Americans buy.
That's a symbiotic relationship.
Mexico is the country that has a parasitic relationship to the US.
“China is like parasite living off the American people.
They produce stuff cheaply which Americans buy.
That’s a symbiotic relationship.
Mexico is the country that has a parasitic relationship to the US. “
China is raising the standard of living so that it is producing it’s own market for it’s own products. Somewhere I read something like Walmart is growing more in China than here.
Mexico would collapse if we stopped using drugs ;-)
So we didn’t really need to borrow money from China after all?
...doesn’t seem all that practical to me...
America needs to borrow money only because of colossal domestic spending.
China (and others) have been there to buy American debt.
But the US is the one selling debt - no-one is forcing Obama to bail out the banks and unions (and General Electric, and Fannie Mae, etc)
Do not fall into the error of blaming other countries for buying American debt. If America doesn’t want foreigners to buy its debt, then the solution is simple. Don’t sell it.
You know, I forgot about the drugs. I was thinking about Mexico’s dependence on wired money from illegal immigrants.
I’m not blaming other countries. I am blaming Obama. He wants to make America a third-world country and he is well on his way to doing so.
I’m sorry for misconstruing your words.
Yes, Obama is certainly is driving the US to poverty: as part of the classic Stalinist strategy of “stripping all the feathers off the people so they will cling to the Government for warmth”
I nearly forgot: the short-term solution to Obama’s attack on the middle class is to buy Gold and other hard assets before everybody realizes just how screwed most fiat currencies have become.
Its true - if by China you mean “Hong Kong”.
In the heyday of the British Empire Hong Kong and India were tremendous engines of wealth. In something like the same way that Rhodesia was the breadbasket of Africa.
Hong Kong never lost its powerhouse status, and India is coming out from under the shadow of post-colonial socialism: I think both entities will do extremely well in the next few decades.
Not necessarily the case. There are many parasites that have more than one host (called intermediate hosts), where it uses one host for one stage of its life before moving onto another host. In some cases, like a parasite called the Liver Fluke, it can have TWO intermediate hosts (i.e. the first is a snail, the second a fish, then a human eats the fish and the acid in the human's gut causes the cyst stage to finalize and then voila ...every single second the darn thing is releasing eggs, and your liver ends up getting hammered!!!!)
Thus, take China. The US could very easily be an intermediate stage, and once China is strong enough then bam! It doesn't need to rely on the US as much.
A little about myself - I spent the last couple of years as a fund manager in frontier/emerging funds (now I am doing Private Equity for a certain organization), and I was quite enlightened. For instance, in sub-Saharan Africa, over 80 million households now earn at least US$ 5,000 per year. That seems quite small, until one realizes two things - that is an 80% increase in just 8 years (lots of eights), and also 5K is the part where spending turns discretionary. The consumption base has exploded, and a lot of companies (mostly Indian and chinese, as well as a lot of African ones ...I've done very well here) have been targeting this and making money hand over fist. Companies like Safaricom (a large telcom) and Equity bank (an award winning bank) have made revenues in the billions simply due to this. Now, look at China. A huge population base, and if that base has its level of discretionary spend double (again, we are not talking US or EU standards - simply a doubling of their level of discretionary spend), suddenly China gets a huge boost in its domestic demand. A similar story in India, which has an even better domestic demand than China.
Now, on the intermediate parasitic stage. China three decades ago (circa 1980) was known mostly for three things: a) communism, b) jokes about Mao and little red books, c) Kung Fu and d) cities filled with people with bicycles. Three decades later suddenly China has an economy that is growing at a prodigiously frenetic pace, is about to become the number one car market in the world, has a space program, and an industry base that is developing in leaps and spades. It needs the US right now for financing that growth, as well as for technological know-how. But then again, look at how far it has come. In military terms for instance, they already have good 4th generation fighter jets (e.g. the Chengdu J-10, as well as working on a 5th generation fighter), destroyers that have phased array radar roughly analogous to early AEGIS, work on a GPS-esque system, etc. Economically they are already spreading far beyond the US, eg. in Latin America and many African nations (particularly locking up resource bases, and developing infrastructure which, aside from endearing the population and lining the pockets of the leaders, also unlocks potential and economic growth, boosting the level of discretionary spend, and suddenly Chinese goods are being bought from Kinshasa to Ougadougou - even as China sucks up oil from Sudan, copper from Zambia, and locks up the rare-earths not already found in China that may be in the Congo).
Right now China needs the US, but if it develops in the next 30 years in the same manner that it has in the last 30 (going from a nation associated with bicycles to one that makes some people stir in a restless fashion) ....questions need to be raised.
Note: I do not believe China will 'own' the US, and I am not advocating the article above. My main reason for posting was (from a biological perspective) there are many parasites with intermediate hosts and wouldn't care if one or even two passed for them to arrive at the final host; and (from a China-specific initiative) that nation has developed very quickly (even evolving a unique system that has a centrally-controlled core, but with a free-market capitalist body ...closer to fascism than communism) and it would not be prudent for one to assume that the relationship between the US and China will always be master to servant.
Again, the article is a bit alarmist, but it is based on something that should make the-powers-that-be in the US really wake up and take note. I know the UK is doing that (in 2007 I was in a leadership conference for young Africans with leadership potential, and I was told it was simply due to China and the strive of the UK to try and get the next-generation's mind-space ...which I fear might be too little too late). I don't know about the US, but if the attitudes are the same as that of a FReeper who said 'Africa is only good for beetle-dung,' then I fear by the time such attitudes change China will be very well embedded from Sao Paulo to Juba!
A key metric for people to look at is not how much the US owes China, but rather the diversification China is doing to loci that are not US-specific. In particular, not just where they are now, but rather the probable future growth and untapped-potential therein.
Another thing - the world will not be ruled by China. It will most likely be multi-polar, with strong China, a softer US, a changed EU, a firmer India, and various regional entities (Brazil, Russia, SK/JP), with significant resource constraints (not because they do not exist, but rather because nations have locked them up via contracts and agreements - e.g. China with various African nations that are now better-off enough to tell the West to shove their 'aid,' which is anything but, and selling themselves to China).
You are obviously much more knowledgeable than I am. My take is that as long as we keep sending manufacturing jobs to China and other countries, our economy will be weakened. Add to that borrowing money from China and other countries, and I don’t see our economic future looking too bright. I don’t completely understand the influence of our trade deficit with China, but I know it keeps growing.
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