tag:blogger.com,1999:blog-6399730406480392183.post1434512049127892763..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: The Trigger Point for a United States Debt CrisisA Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger27125tag:blogger.com,1999:blog-6399730406480392183.post-58188747749080888022011-11-07T00:09:32.898-04:002011-11-07T00:09:32.898-04:00This comment has been removed by a blog administrator.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-71053473519104268562011-11-05T07:15:11.069-03:002011-11-05T07:15:11.069-03:00"The fact is - if China cannot afford to allo..."The fact is - if China cannot afford to allow the yuan to rise, "<br /><br />This is true as long as China remains primarily an all-export driven economy.<br /><br />The current turmoils, though, have made chinese leaders way too conscious of the current conundrum they placed their country in, i.e. an almost symbiotical relationship with the USA (and a lot of western countries) that are actually being harmed, in the long run, by it. <br /><br />One way or the other, it is gonna end (defaults of OECD countries, denouncement of WTO treaties, a slump of international commerce... ) and they need to insulate the Chinese economy from these posible outcomes the best way they can. <br /><br />They already started doing so, by pumping the internal market (though, the resulted, state driven, expansion of the immobiliar market somewhat resembles the early days in the making of the Japanese bubble that burst in the 90's), by slowly using theirs americans "paper" assets to buy "solid" assets around the world (mines in Africa, factories in USA and EU...).<br /><br />China can't really expect to keep the Juan down indefinitely. No matter how much it suits the US and Chinese current needs, the rest of the world can't really accept it forever. <br /><br />And could not be in their interest in the future... as time passes, this years seems more and more like a reenactment of the 1929 crisis.<br /><br />One of the secundary consecuences of the Grear Depression was a resurgence of custom taxes and protectionism that reduced international trade by a rough 75%. If the same is going to happen again, which is possible given the amount of rage against "cheap imports that stole our work" in many countires, China could lose much of its reasons to keep down the Yuan. <br /><br />So, future China is going to raise its internal market (already trying, but Chinese really prepare to thrift, preparing for the hard times), dump as much US Dollars reserves as possible (it is trying to, not so simple to achieve without being detected) for solid assets and get ready for a lot less export-friendly world.<br /><br />All of these changes are in the making, and they will take quite some years to produce real results. Pretty much like the capitalist turn of the mid eighties...<br /><br />...but the single good thing about non-democratic China is that a good number of the persons handling issues now know they are going to be still around when the situation will get messy, eventually. <br /><br />And, eventually, twenty years from now, China could be ready ( or, better, forced by the irresistible forces of the economy) to dump the U.S.A. and the dollars and take over. <br /><br />Not that they really want to do it, or the world will like them better than id does the U.S.A. ...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-83093889131014508092011-07-26T12:24:34.161-03:002011-07-26T12:24:34.161-03:00When Bill was getting a BJ,the USA defaulted...When Bill was getting a BJ,the USA defaulted...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-6295435619020830522011-07-25T12:28:23.658-03:002011-07-25T12:28:23.658-03:00The US doesn't force China to buy its debt. Or...The US doesn't force China to buy its debt. Or Japan. Or anyone else.<br /><br />The fact is - if China cannot afford to allow the yuan to rise, they are in no position at all to create a debt crisis in America. <br /><br />Besides, the Fed just bought more US bonds than China and Japan hold together.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-76015059398617190312011-06-27T10:54:04.050-03:002011-06-27T10:54:04.050-03:00It seems to me, that the US government must start ...It seems to me, that the US government must start now spending no more than it is collecting of taxes and other revenues. It means a steep increase in taxes, with the resulting fall in demand in the economy, as the increased revenues must be used to balance the books, in other words: Must not be spent! That will lead to a steep increase in unemployment, if nothing else happens. If this would not be enough, the US as an economy must also balance its books in terms of balance of payments with the outer world. In order to lessen the increase in unemployment, which by itself would lead to a downward spiral, real income of all Americans must be cut drastically. That in it self would lead to less government revenue and a downward spiral. The only option open to the US is some kind of default. I´d say that is already happening. The Fed has been printing more than a trillion dollars during the last 18 months and those dollars have entered the economy (quantitative easing). Sooner or later the outer world will realize, that the US is going to inflate its way out of debt, which is a form of default. This will lead to a loss of confidence in the dollar. Were it not for the problems in Euroland, the Euro would already be overtaking the US dollar as the world currency. Which currency will become the world currency remains to be seen. The writing on the wall says that it will not be the US dollar for much longer.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-4899529260028234482011-06-22T13:29:38.685-03:002011-06-22T13:29:38.685-03:00Most forecasts seem to miss a huge factor...China,...Most forecasts seem to miss a huge factor...China, and other emerging nations.<br /><br />By 2030 the world might have done a fair amount of re-balancing. These economies should be more affluent and provide a large market for exports from all western countries.<br /><br />This would/should provide a huge stimulus for these economies, as is the case for the emerging nations now.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-25560445649338221992011-06-21T03:03:14.637-03:002011-06-21T03:03:14.637-03:00Indeed, the way the United States goes, goes the r...Indeed, the way the United States goes, goes the rest of the world. We consume a whopping 25% of the world's natural resources along with everything else. Imagine if suddenly the United States was forced to stop consuming? We have already seen the effects to a small degree but what if the world suddenly has a complete banking collaspe which is not all that far fetched. What if the entire global economy melts down and we have a global depression of Tsunami proprotions? Perhaps the answer lies in letting it all fall apart to such a degree that the slate is wiped clean and we start all over from scratch. Our government has no intention of ever paying all the money back we have borrowed and spent nor can it. 60+ trillion and getting bigger everyday...who are they trying to kid??? Most of us citizens who follow this very closely know this all too well!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-16781927317408484952011-06-19T09:52:13.060-03:002011-06-19T09:52:13.060-03:00You better hope it doesn't get too bad in the ...You better hope it doesn't get too bad in the States, for it will turn into a good old fashioned "who's got the wealth?" situation and soon our aircraft carriers will be parked off your shores. When people lose everything....they lose it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-44293586804087154902011-06-17T09:56:46.946-03:002011-06-17T09:56:46.946-03:00Buy gold and silver the only real money that exist...Buy gold and silver the only real money that exists. Trust no one. Use your Paper money and buy real money that will never default.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-76440793537639576912011-06-16T21:37:10.534-03:002011-06-16T21:37:10.534-03:00I'm an American and frankly I'm getting ti...I'm an American and frankly I'm getting tired of how the leaders are handling the country. I know alot of people rely on the healthcare and medicaid and other things, but we have to cut spending and raise taxes. China still likes us for our buying power, but that might not be there in a decade or two. I really don't want my country to go down the hole all because some stupid politicians couldn't get over themselves and fix some problems.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-21771338846776298532011-06-09T08:35:37.212-03:002011-06-09T08:35:37.212-03:00A reminder to all claiming US will stand.
The Brit...A reminder to all claiming US will stand.<br />The British Empire was once the strongest and it lost it's way and was manipulated in to dire financial consequences by an up-coming nation with plans to be a world power. The USA. Chinese growth should be seen as the writing on the wall of history.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-33486542453376755842011-04-26T13:22:12.045-03:002011-04-26T13:22:12.045-03:00"The US is doomed. It has tried to dominate c..."The US is doomed. It has tried to dominate countries around the world and exploit their resources. The big bully is going to fall and fall hard" - Steve<br /><br />We can see where your world view stands Steve. <br /><br />Just remember...if the US falls hard, the rest of the countries in the world are going to fall even harder.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-15443680017833773012011-04-26T08:40:43.702-03:002011-04-26T08:40:43.702-03:00Start sheltering your money in anything other than...Start sheltering your money in anything other than the US dollar, why not your political and business leaders have already done so.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-41527148643022917412011-04-18T16:50:26.202-03:002011-04-18T16:50:26.202-03:00People like Angus Cunningham are part of the probl...People like Angus Cunningham are part of the problem, not the solution.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-9450959292686137312011-04-13T16:28:21.935-03:002011-04-13T16:28:21.935-03:00Seems to me this line of thought is missing one ke...Seems to me this line of thought is missing one key element, which is the intent of other nations. China has no need or desire to force a U.S. debt crisis at the moment. Indeed, almost no one in the world does, and those that might (North Korea, possibly Iran, Cuba) have no ability. In 20 years as the world's power structure and relative fortunes change, that might not be the case. That is, at some point, it might be politically expedient for a China or other major power to force or engineer such a financial crisis. The closer the U.S. is to that tipping point, the more vulnerable it is to such manipulation.Devon Brooksnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-1389421673997241462011-04-12T10:42:32.217-03:002011-04-12T10:42:32.217-03:00Thank you for your analysis, Mr. Barnard, and for ...Thank you for your analysis, Mr. Barnard, and for your observations thereon, Commenters. I got here from reading a comment by Mr. Barnard on an Economist article relating to the Portuguese sovereign debt crisis.<br /><br />This is an interdependent world. Like it or not, recognize it or not, ignore it or not, know how to deal with this veracity or not, this is an interdependent world.<br /><br />As a coach to entrepreneurs and executives, I usually find that failure to adapt to this truth is at the root of my clients' economic problems. Systemically-speaking, I see no instance where the failure to adapt to this is more marked than in the multi-faceted relationships that occur between the financial and real sectors of the econonomy. The sectioning of the actor-principals in any economy into these two is, of course, arbitrary, which is to say that we think the two are sectionable. They can be from the perspective of analysts, but from the perspective of all of us alive today, "we are all in this together". <br /><br />Nice to say, warm to feel, but hard to live because what does this mean?<br /><br />I think that it means we must regain our sense of the difference between speculation and investment. These terms are often used interchangeably, especially by financial professionals. That conflation of words very much disturbs me as a Wharton Finance Major MBA who primarily but not exclusively interacts with non-financial entrepreneurs and executives. So I have written a paper on the subject. If anyone has the time to read its 10 pages, I would be very pleased. I would be even more pleased if you were able to write me a comment.<br /><br />The paper is at:<br /><br />http://www.authentixcoaches.com/ACdsFCF-1.html<br /><br />Thank you for your attention.Angus Cunninghamhttp://www.authentixcoaches.com/ACJTSplashPage.htmlnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-19945767920479938602011-04-11T11:09:59.705-03:002011-04-11T11:09:59.705-03:00the people having great fun at demiose of US shoul...the people having great fun at demiose of US should possibly taken a closer look at what will happen with all of us if US as predicted collapses or at least is not able to support world economy and send troops to stop slaughter of civilians everywhere. I can see at least Sourth Korea and Japan getting a bit worried in a process. <br />I also think that while indeed China could do some damage to US by requesting repays it would damage itself too. <br />As a side observration - US has a very high level of finance 'industry' in general economy which is part of the problem - instead of producing or providing service they do funny thing with money. There seems to be a limit to what country even so big as US can do if whole world is using its currency as global money.<br />And final remark: it has been predicted many times that US will collapse and they had quite some troubles in the past yet were able to recover - I wonder why cannot it happen again?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-43551628021445637492011-04-10T11:08:16.345-03:002011-04-10T11:08:16.345-03:00This is very worth thinking about, but it's al...This is very worth thinking about, but it's also worth pointing out that the valuation of debt is always in relation to all other possibilities for investment. Greece and Portugal's debt is regarded as poor because there are better alternatives: that of stronger countries, most particularly the U.S. If there isn't even stronger debt by comparison with which ours would suffer in a U.S. debt crisis, issued by an economy which isn't likely to be seriously weakened by an American economic crisis (and none comes to mind), I'm not sure that this analysis is useful, at least without adjustment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-63639126695965875042011-04-09T08:16:13.615-03:002011-04-09T08:16:13.615-03:00No one forecasts well out that far. Hundreds of di...No one forecasts well out that far. Hundreds of different changes can take place in that time period to alter the forecast...Thanks...BuyMePrivate.comhttp://www.buymeprivate.comnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-33461333606789088692011-04-08T02:50:16.680-03:002011-04-08T02:50:16.680-03:00Personally I do think immigration policy should be...Personally I do think immigration policy should be changed immediately to relieve national debt or economic recession---that is to bring people who have both money and knowledge for immigration. <br /><br />Therefore, certain types of family-based immigrants should be cut to avoid chain immigration for job competitions or driving wages down such as siblings' immigration but ONLY allow spouse and kids to immigrate within a family. Then people who have both money and knowledge are welcomed to immigrate to set up companies to create job opportunities in hiring one to five persons for rescuing economic depression. Example is to allow rich (those who are from a family having over one million US cash or assets) foreign US advanced graduates in Science & Medicine to immigrate. It is because this type of immigrants are wealthy enough to set up companies in US to hire people if they can't find a job. Also, this type of immigrants bring inflow of money and knowledge for immigration which uplift both economy (such as buying houses, cars, computers and all kinds of household appliances) and scientific innovations.<br /><br />Moreover, this type of immigrants will invite both relatives and friends to visit US and travel visa fees will add monetary income. Also, the sales of airline tickets, hotel reservations, restaurant reservations and all kinds of retail business will be uplifted. These will indirectly create more job opportunities and make the economy booming up.<br /><br />Therefore, granting green cards to rich (those who are from a family having over one million US cash or assets) foreign US advanced graduates in Science & Medicine is a good idea for both economy and immigration policy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-22226029325395315282011-04-07T18:56:53.647-03:002011-04-07T18:56:53.647-03:00Let me think about that one.Let me think about that one.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-55705318779614585252011-04-07T15:59:53.238-03:002011-04-07T15:59:53.238-03:00Modern Monetary Theorists claim that governments a...Modern Monetary Theorists claim that governments are special. Their core asset is their taxing power. A government's solvency constraint ultimately lies in its political capacity to levy and enforce the payment of taxes.<br />I wonder if the strength of a government's political capacity is related in any way to the percentage of the current budget which taxes support.<br />I understand that in the current budget, we borrow 43 cents for every dollar spent. Thus, taxes support 57% of the budget.<br />Is there some point, say when taxes support 30% of the budget, in which the political capacity is neutralized and the full faith and credit of the Government is significantly compromised?<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-10317227833100665732011-04-07T14:26:29.869-03:002011-04-07T14:26:29.869-03:00No one forecasts well out that far. Hundreds of d...No one forecasts well out that far. Hundreds of different changes can take place in that time period to alter the forecast. All you can say is that if current conditions hold, and the assumptions are met, this is the likely outcome. And even that is predicated on a careful analysis.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-43591401893107834512011-04-07T13:24:16.839-03:002011-04-07T13:24:16.839-03:00The sad fact is that most representatives of Congr...The sad fact is that most representatives of Congress from both parties don't seem to see this as an actual "today" problem!!<br /><br />It's almost as if they think that the USA can get itself out of this mess because they still see their country as #1 in all aspects.... Sorry guys but the wake-up call is coming and the financial crisis it will create is hell-bound!!<br /><br />P.S. When you start hearing that the US greenback may be changed from being the recognized world currency, you need to start to question why that is... Not just tell yourself it's going to be "ok"...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-74491170582679292372011-04-07T11:13:00.250-03:002011-04-07T11:13:00.250-03:00China could throw the US into a debt crisis any ti...China could throw the US into a debt crisis any time they want. The US has to continually sell new debt instruments as the existing ones reach maturity. All that would need to happen would be for China to stop buying US debt. This would almost certainly result in the US being unable to roll over existing debt. Even if no new debt was being incurred, this would likely result in the US having no choice but to either default on the debt or print large amounts of money creating massive inflation.sailbumhttps://www.blogger.com/profile/01872593650454337498noreply@blogger.com