An effort by China to convert its $1.4 trillion U.S. Treasury holdings
China doesn't have $1.4T in US Treasury holdings, so no such effort could exist.
The mistake that link is making is that it's taking China's total foreign reserves of $1.33T and imagining that they're all US Treasury. They're not even all US dollar. China's estimated US$ holdings are about $0.9T in all forms, of which Treasury holdings are only about half.
Or I suppose it's possible that link is taking the entire $1.44T of US Treasury debt held by all foreigners and somehow confusing "all foreigners" with "Chinese". That would be even weirder, though.
Yes, there is something wrong with those numbers, and there is something wrong with the analysis.
There has been a lot of discussion in the MSM about the US dollar losing its reserve currency status. No doubt, it should lose that status because the US has not behaved responsibly, but it is extremely difficult to shift from one reserve currency to another.
Treasuries throughout the world have US dollars. The US dollar is "legal tender" throughout the world. If the Argentines want to buy oil from Russia, they use US dollars. Russia would like Argentine to use Rubles, but Argentine doesn't have any Rubles to use. They have dollars.
There may be a gradual shift to Euros over time, but there simply are not enough Euros in the world. If the ECB were to print the Euros, they have to ensure that they are exported and remain exported. This is how Petrodollars, and to a great extent, Nikedollars work. The US buys on credit, printing money to pay for oil and cheap asian goods, while exporting the inflation, permanently.
It makes no sense for the Chinese, or any other sovereign wealth fund to "dump" US dollars. What makes far more sense is to go shopping, in the US.
What the Chinese want to buy from the US, more than anything else, is brand names, and patents. They don't like making 5 cents on the dollar making brand name products when they could make 50 cents if they owned the brand. They don't like being unable to make a good car for export, or making car engines under license with a hefty royalty, because they don't have the patents. These are things they are going to go shopping for.
Now is the time to start shopping. Citibank just sold 4.9% of itself at a huge discount (about $20/share) to the Middle East. That's Petrodollars coming back into the US.
The US is currently in a deflationary period. The credit crunch is a massive shrinking of the money supply. All those Petrodollars and Nikedollars can come back into the US without causing massive inflation. It can balance out.
It is important to never forget this one key fact. When a country exports "money," in what ever form, it is making a promise to provide equivalent goods and services some time in the future. Inflation at home is a way to reneg on the promise by devaluating the dollars abroad.
In this case, the US has miscalculated. It has caused a credit crunch at home (and world wide) which is deflationary. A lot of US assets are going to be for sale and those with liquid assets are coming shopping.
What is the full faith and credit standing behind the US dollar? Patents, brands, and if nothing else and I hate to say it, the National Forests and Wildlife Refuges. Its time to pay up.
If the ME can't ship as much oil to the US, then it will ship profits from American business back to the ME. If China can't ship as many running shoes and flat screen TVs to the US, then it will ship back a larger proportion of the profits.
The implications are discomforting. What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?
Don't worry, there are no foreign powers trying to install a revolutionary regime in the USA. Totally unlike Russia in 1917 where foreign backed agents such as Lenin and Trotsky seized the moment.
"What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?"
The folks in the U.S. south are used to it....ask folks from states that have provided the U.S. with the power for the industrial revolution for over a century in the form of coal, but can't afford electric power to their own homes....don't believe it? Go to West Virginia, Eastern Kentucky, Eastern Tennessee or North Alabama....
The poorest states in the land have long provided wood for the paper and lumber mills, grain for the food makers and breweries, coal and natural gas for the power plants (gee, why hasn't the people of Louisiana profited from all of that natural gas?), and iron ore for the skyscrapers of the world.....
This is not a new thing, folks....it's just that the Yankee intellectuals are not used to the thought that it could happen to them....
That is misleading though - it is not the case that there was no way that Britain could retain its empire. It is that the methods that would have been necessary to maintain the empire in terms of oppression were deemed no longer acceptable to the British so they chose instead to dismantle the empire.
It's easy to play it out that because empire is bad (it was) there Britain didn't make the better decision than it otherwise could have - not just in terms of self interest.
RA, I cannot agree with your take on the decline of the British Empire. I have quoted more likely scenarios below with link. At least GB was more realistic about their colonies than France. France attempted to retain Viet Nam and Algeria after WW2 and look what a mess came of those attempts.
'There are several reasons for the decline of the British Empire (fall sounds so sudden and dramatic, it was neither). They include a rise in Nationalism in the colonies of all the European powers after World War II. They saw their former masters weakened and bankrupt by the war and took the opportunity to agitate for independence. The ease in which India achieved it in 1947 encouraged the others. GB's industrial weakness after 1945 meant that financing the pre-war Empire was no longer possible, so the more important colonies were granted swift independence on favourable terms to ensure they remained friendly relations with their former Imperial masters.
Another theory is that after the war GB saw her future in Europe and took steps to divest herself of her Imperial responsibilities.
Another more controversial theory is that the undoubted world superpower after 1945, the USA, secretly encouraged the European colonies to demand their freedom so that the USA could develop new spheres of anti-Communism in Africa and Asia that she, and not GB, could control, believing GB to no longer have the strength to counter the spread of Communism.'
Riiiight, you realize Christmas is in 27 days? What will be your excuse when it doesn't happen? you realize every time you make a wrong prediction you lose credibility right?
If you are able to forecast bouts of depression several weeks in advance you might want to get yourself to a doctor for a prescription of anti-depressants. They take a few weeks to kick in.
It could be argued deflation is already a global issue, not just limited to the U.S. The U.S., as always, just wants to be the biggest and the best so it’s going to run up the highest possible cliff, get to the top before anyone else gets to the top of their respective cliffs, and that way they can have the dubious honour of enjoying the longest ride down with the hardest sudden stop at the bottom. Won’t be a soft landing, despite the what Ben says.
The credit crunch is a massive shrinking of the money supply.
The money supply is currently relatively constant. The credit crunch is exactly what it says on the tin. Currently credit is contracting but money supply is remaining relatively constant (see Is the U.S. printing money like mad?).
Credit disappears in only one of two ways, it’s either paid off or written off. Right now, written off is accelerating and paid of is grinding to a halt.
hmm - the way i understood it - from the whole notion of fractional reserve banking, reduced credit and the repayment of credit DOES reduce the money supply...
Credit is not money. Money is money. The supply of money is not altered by the expansion or contraction of credit. Hence why in deflationary periods “cash is king”. Some measures of money supply, such as M2 and M3 for example, include credit transactions. But credit is not money. For a far better explanation than I could ever provide, see Is the U.S. printing money like mad?, and Money Supply and Recessions.
but there simply are not enough Euros in the world.
There’s a much bigger problem with the Euro than that, none of the Euro countries have relinquished their sovereignty to the EU. Not to mention one of the Euro eligible countries has decided to retain the Pound Sterling and its citizens would revolt if they were forced to adopt the Euro. The Euro is not the currency of a single sovereign nation, but is the currency of a collective. The members of this collective do have ways of leaving the Euro and there are growing factions in France and Germany that would very much like to see that happen. No one in their right mind is going to put their hopes in the currency of a non-sovereign entity as a reserve currency. What happens if one or two members of that collective decided they’ve had enough and return to the their national currencies?
The Euro will never be a reserve currency until the European Union is a sovereign nation ruled in Brussels. That will happen around the same time either Hell freezes over or the Second Coming has become obvious.
Unless there is political union between Canada, Mexico, and the U.S., there will be no Amero. Since there will be no such political union, there will be no Amero.
There has been scuttlebutt about a two tier currency system for the U.S., with one currency for domestic use and another for international use. I can’t imagine that gaining much traction either.
There’s an awful lot of firepower in the hands of U.S. citizens. I can imagine any attempt to implement that above will see those weapons spending a lot less time in the gun cabinet.
Political union, and the "consent" of the masses, can be reached through economic shock treatments. You take the power out of the public's hands by inducing shock.
Just like many public systems were privatized in New Orleans after Hurricane Katrina.
Just like personal freedoms were curtailed after 9/11.
Canada is not the U.S. Mexico has suffered unending shock for decades, so most Mexicans wouldn't even notice.
If you actually believe political union for North America could be achieved by destroying its underlying economic structure, then I would have to disagree.
There would be little point in ruining that structure because it will take an awful lot of economic output to keep the masses in line, no matter how great the shock.
One thing we might want to keep in perspective is the sheer number of people we’re talking about here. “Fascism” in the 30s required far fewer inputs to fuel itself and had far fewer people to keep under control.
Revolts would happen all over the continent, overwhelming TPTB. Oaxaca would happen again under such a scenario and succeed simply because there would be more of the same throughout Mexico, in particular southern Mexico. There just wouldn’t be enough Federales to prevent it. The cartels would simply consolidate their holdings, particularly in the north.
There have been Canadian factions demanding independence for decades. What a wonderful opportunity to press ahead.
I, frankly, don’t believe North American political union is possible. Not now. Not ever. If it was, the EU would by now be a sovereign state. It is not. Neither will North America be.
The EURO is only a temporarily way point in currency juggling.
The EU (as is already evident) may have significant fallout from the Subprime USA problem, but also housing and credit bubbles of their own making.
However, the Yuan may be in an even worse position with even the BIS stating that they are in the exact position as the US before the Great Depression (see inflation, uncontrolled credit, massive expansion).
No Currency is a shoe in for the next petro-currency....hmmm...maybe Swiss Francs. Nah.
The Euro will never be a reserve currency until the European Union is a sovereign nation ruled in Brussels. That will happen around the same time either Hell freezes over or the Second Coming has become obvious.
That's got nothing to do with. What really counts is what exporters are willing to accept as a currency for goods they sell. A lot of exporters already accept Euros (as well as other currencies) for payment. The currency that is most used for international trade is currency becomes the world's reserve currency.
If the US continues on its path, more and more exporters will accept payment in other currencies, eventually one currency will win over the rest and eventually become the worlds reserve currency. It could be the Euro, the Yuan or even the Canadian Loonie ("In Duck we trust!").
but there simply are not enough Euros in the world.
That's also got nothing to do with it. When demand for a currency rises, the value of the currency rises (the prices of goods exchange fall in price). More currency can be printed if desired. This is what is already happening to the Euro, as more countries are willing to accept Euros for payment, is value versus other currencies will continue to strenghten.
FWIW: Over the long term, the Euro probably doesn't fair any better than the USD. Most of the EU has embraised expensive socialistic programs and has low natural resources. I can't say whether or not the Euro or any other currency has a good chance of become the next reserve currency. All I can say that if the US does not change fiscal and monitary policies soon, the dollar risks losing its status as the worlds economy. Their may be a period where dollar is officially considered the reserve currency, but exporters decline USD over the of the major currencies. Already several OPEC members not accept payment in other currencies. This will like continue in the future and more exporters will also adopt this strategy.
As it stands, most exporters now have dollar surpluses that they must hold onto rather than use them to support their own economic development. In the past it was in the exporters interests to fix their own currency to the dollar (aka dollar peg) so they could increase exports in built up their economy. Now it no longer makes sense because holding dollars is retarding economic development as the prices of imports are rising, but the value of exports declines with the declining value of the dollar. No economy can afford to export goods if their input costs exceed the value of their exports.
I think the only way that the US can reverse the trend is to start raising interest rates and adopt fiscally responsible policies. Personally I don't see this happening until after a crisis. The FED still thinks that cutting rates is the answer to the credit crunch, but in fact cutting rates is making it worse because foriegn investors (with available capital) are losing faith in the dollar. FED rate cuts are not going to bring back Subprime lending nor is it going to restore lost jobs in real estate, auto, travel, etc. Banks and investors will continue to tighen their lending as the risks of lending continue to rise, even if the FED drops rates to Zero. If you believe the borrow has a significant chance of defaulting, or the value of the asset is going to fall, your simply not going to lend your money. What is likely to happen is that investors (both domestic and foriegn) will look outside of the US were the risks are lower.
The implications are discomforting. What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?
Ask a New Zealander. A combination of stock market crash and fire-sale liquidation of state assets in the 1980s brought about exactly that result.
Yes, I've driven past your "shaved" hills. Even so, NZ is the most beautiful place I've been, overall. Incredible land. That's saying a lot coming from a Canadian.
Yes, I believe NZ has been used a few times as an experimental country that other developed countries have watched - economic experiments, GST, etc.
Time we started buying back the land here. I have just acquired a reasonable sum of money and it is going straight into land... and not the over-priced city cubical stuff.
What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?
You need to look no further than the coal rich areas of Appalachia. In the 19th century coal reps went into the hills and bought up most of the mineral rights for pennies an acre. What resulted is that one of the most productive (albeit dirty) energy rich areas of the world became mired in endemic poverty.
There was recently a photo slideshow sort of thing on the net, I think I found it through Reddit or lifeaftertheoilcrash or someplace, the people don't have ANY medical care.
Someone like Doctors Without Borders or something went in there with medical vans, and took care of the people's problems, as much as they could during the time they were there.
Mainly the people needed eyeglasses so they could see, so they could work at a job. Or they needed dental work so they'd not be in constant pain and be able to work again. Or stuff like tumors sticking out of their back, horrible complications from pregnancy etc., your basic 3rd world stuff.
I think the title of this was "first world country, third world medical care".
I wonder who will be the Maxim Gorky of this new and frightening land?
Then there's the elusive "Discuss New Features" discussion board on Ebay. I could tell you the URL, but then I'd have to kill you. If you can find it, there's some good help there.
I was the seller - the buyer has +2100 feedback and apparently lost or molested my piece of equipment. I have a civil suit started against him, Paypal account is drained, bank accounts disconnected, I closed 'em for good measure, and I'm going to cancel the associated credit card tomorrow. It was a nicety for me but if its going to support thievery and make judgments based on transaction volume rather than right and wrong ... well ... I think my lil' country judge can reach right into the Paypal sandbox and make it right.
Are you saying your paypal account is closed, or the guy that bought the gear and did not pay. Rule one, never ship until they pay. I still have the car and the other guy is out 800 bucks.
I keep a separate account for paypal. A free checking account that receives and sends money and does not keep a balance. Only money that needs to paid is put in. and when its sent, out it comes.
Ebay is losing its niche. They are not being aggressive enough to shut down and stop the scams and people using paypal to access accounts. They don't really twist arms to get your money, and that is why people are not using them anymore, plus the rates and fees, are not very good. costs 100 bucks basically to sell a car for any price and then you have to pay the commission fees, and fees for pay pal. They have adopted the US Bank model, which is you make your money by hitting the customer with more and more fee's. before I left a fortune 500 bank, most of their income was fee based.
Use a free checking account and never ship without payment.
He paid, I shipped, and then he appears to have either lost or molested the piece of equipment, and then he applied for a refund.
I complained, Paypal gave me the money back, and I drained the account. Today I killed the bank account Paypal had access to and tomorrow morning I'll whack the backing credit card as well. They would appear to have no procedural recourse and based on the facts of the matter it seems sure I'll get a judgment against the guy even if he bothers to show up.
Oh, and U.S. Bank is where I closed the accounts. I had idled them ... because they were feeing me to death :-)
Small town banks, so much nicer - I went in today to withdraw money to pay for the court filing and the same woman who took the deposit for the first cow I raised and sold in the early 1970s helped me.
There isn't squat to do here, but we sure are nice to each other :-)
It makes no sense for the Chinese, or any other sovereign wealth fund to "dump" US dollars. What makes far more sense is to go shopping, in the US.
Most likely China will convert its dollars into commodities it can use, such as oil, natural gas, and raw materials, like copper, iron, etc. They do this until the exporters call uncle (ie refuse to accept dollars) or until they exhaust their dollar reserves. I would bet that dollar will fall before China manages to exhausts its dollar reserves.
China can't really go on a US buying spree because Congress will block them from purchasing anything significant. Remember Unocal and when Dubia tried to purchase US ports?
It has caused a credit crunch at home (and world wide) which is deflationary. A lot of US assets are going to be for sale and those with liquid assets are coming shopping.
We don't have deflation because the fed keeps cutting rates sending the dollar lower. Why the US economy will contract, and unemployment will rise, the dollar will continue to fall as the world economy shifts away from the US. Its likely that the original article is correct, that the ships leaving the strait of Hormuz will be heading towards Asia and the the US.
We have a Fed and a treasury that doesn't see the risks of the US Dollar losing its world reserve currency status. Without the USD as the world reserves its in deep do-do since the US economy is dependent on imports (especially energy) and imports more than 2 billion in capital per day.
For deflation to take hold the US would need to begi
China doesn't have $1.4T in US Treasury holdings, so no such effort could exist.
The mistake that link is making is that it's taking China's total foreign reserves of $1.33T and imagining that they're all US Treasury. They're not even all US dollar. China's estimated US$ holdings are about $0.9T in all forms, of which Treasury holdings are only about half.
Or I suppose it's possible that link is taking the entire $1.44T of US Treasury debt held by all foreigners and somehow confusing "all foreigners" with "Chinese". That would be even weirder, though.
Yes, there is something wrong with those numbers, and there is something wrong with the analysis.
There has been a lot of discussion in the MSM about the US dollar losing its reserve currency status. No doubt, it should lose that status because the US has not behaved responsibly, but it is extremely difficult to shift from one reserve currency to another.
Treasuries throughout the world have US dollars. The US dollar is "legal tender" throughout the world. If the Argentines want to buy oil from Russia, they use US dollars. Russia would like Argentine to use Rubles, but Argentine doesn't have any Rubles to use. They have dollars.
There may be a gradual shift to Euros over time, but there simply are not enough Euros in the world. If the ECB were to print the Euros, they have to ensure that they are exported and remain exported. This is how Petrodollars, and to a great extent, Nikedollars work. The US buys on credit, printing money to pay for oil and cheap asian goods, while exporting the inflation, permanently.
It makes no sense for the Chinese, or any other sovereign wealth fund to "dump" US dollars. What makes far more sense is to go shopping, in the US.
What the Chinese want to buy from the US, more than anything else, is brand names, and patents. They don't like making 5 cents on the dollar making brand name products when they could make 50 cents if they owned the brand. They don't like being unable to make a good car for export, or making car engines under license with a hefty royalty, because they don't have the patents. These are things they are going to go shopping for.
Now is the time to start shopping. Citibank just sold 4.9% of itself at a huge discount (about $20/share) to the Middle East. That's Petrodollars coming back into the US.
The US is currently in a deflationary period. The credit crunch is a massive shrinking of the money supply. All those Petrodollars and Nikedollars can come back into the US without causing massive inflation. It can balance out.
It is important to never forget this one key fact. When a country exports "money," in what ever form, it is making a promise to provide equivalent goods and services some time in the future. Inflation at home is a way to reneg on the promise by devaluating the dollars abroad.
In this case, the US has miscalculated. It has caused a credit crunch at home (and world wide) which is deflationary. A lot of US assets are going to be for sale and those with liquid assets are coming shopping.
What is the full faith and credit standing behind the US dollar? Patents, brands, and if nothing else and I hate to say it, the National Forests and Wildlife Refuges. Its time to pay up.
If the ME can't ship as much oil to the US, then it will ship profits from American business back to the ME. If China can't ship as many running shoes and flat screen TVs to the US, then it will ship back a larger proportion of the profits.
The implications are discomforting. What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?
Possibly like a landless peasant in Tsar Nicholas's Russia?
Oooooh. Nasty implications there.
;)
Hi Mcgo,
Could you tell me what is meant in that article by this: - they have 43% direct/indirect of US treasuries
Don't worry, there are no foreign powers trying to install a revolutionary regime in the USA. Totally unlike Russia in 1917 where foreign backed agents such as Lenin and Trotsky seized the moment.
You're not counting Multinational corps, right?
Oh, wait, they're already in charge, I forgot.
"What does it feel like to live in a land where you don't own the means of production, and the profit is shipped overseas?"
The folks in the U.S. south are used to it....ask folks from states that have provided the U.S. with the power for the industrial revolution for over a century in the form of coal, but can't afford electric power to their own homes....don't believe it? Go to West Virginia, Eastern Kentucky, Eastern Tennessee or North Alabama....
The poorest states in the land have long provided wood for the paper and lumber mills, grain for the food makers and breweries, coal and natural gas for the power plants (gee, why hasn't the people of Louisiana profited from all of that natural gas?), and iron ore for the skyscrapers of the world.....
This is not a new thing, folks....it's just that the Yankee intellectuals are not used to the thought that it could happen to them....
RC
"...because the US has not behaved responsibly, but it is extremely difficult to shift from one reserve currency to another."
See the British Empire for details.
Scotland, Six Counties of Ireland, Wales and a
bunch of the Queen's "Tax Free Pirate" Islands scattered about the planet
are all that's left.
When it does balance out, the US will have paid all of it's
debts.
Or fractured. We have absolutely no intention of paying our debts.
We're all subprime now.
Depression by Christmas.
That is misleading though - it is not the case that there was no way that Britain could retain its empire. It is that the methods that would have been necessary to maintain the empire in terms of oppression were deemed no longer acceptable to the British so they chose instead to dismantle the empire.
It's easy to play it out that because empire is bad (it was) there Britain didn't make the better decision than it otherwise could have - not just in terms of self interest.
RA, I cannot agree with your take on the decline of the British Empire. I have quoted more likely scenarios below with link. At least GB was more realistic about their colonies than France. France attempted to retain Viet Nam and Algeria after WW2 and look what a mess came of those attempts.
http://en.allexperts.com/q/British-History-3243/British-empire.htm
'There are several reasons for the decline of the British Empire (fall sounds so sudden and dramatic, it was neither). They include a rise in Nationalism in the colonies of all the European powers after World War II. They saw their former masters weakened and bankrupt by the war and took the opportunity to agitate for independence. The ease in which India achieved it in 1947 encouraged the others. GB's industrial weakness after 1945 meant that financing the pre-war Empire was no longer possible, so the more important colonies were granted swift independence on favourable terms to ensure they remained friendly relations with their former Imperial masters.
Another theory is that after the war GB saw her future in Europe and took steps to divest herself of her Imperial responsibilities.
Another more controversial theory is that the undoubted world superpower after 1945, the USA, secretly encouraged the European colonies to demand their freedom so that the USA could develop new spheres of anti-Communism in Africa and Asia that she, and not GB, could control, believing GB to no longer have the strength to counter the spread of Communism.'
Riiiight, you realize Christmas is in 27 days? What will be your excuse when it doesn't happen? you realize every time you make a wrong prediction you lose credibility right?
Depression by Christmas.
Many people find the 'Christmas season' depressing.
So why would this statement be wrong?
you lose credibility
A topic you know all about by living it?
If you are able to forecast bouts of depression several weeks in advance you might want to get yourself to a doctor for a prescription of anti-depressants. They take a few weeks to kick in.
It could be argued deflation is already a global issue, not just limited to the U.S. The U.S., as always, just wants to be the biggest and the best so it’s going to run up the highest possible cliff, get to the top before anyone else gets to the top of their respective cliffs, and that way they can have the dubious honour of enjoying the longest ride down with the hardest sudden stop at the bottom. Won’t be a soft landing, despite the what Ben says.
The money supply is currently relatively constant. The credit crunch is exactly what it says on the tin. Currently credit is contracting but money supply is remaining relatively constant (see Is the U.S. printing money like mad?).
Credit disappears in only one of two ways, it’s either paid off or written off. Right now, written off is accelerating and paid of is grinding to a halt.
hmm - the way i understood it - from the whole notion of fractional reserve banking, reduced credit and the repayment of credit DOES reduce the money supply...
Credit is not money. Money is money. The supply of money is not altered by the expansion or contraction of credit. Hence why in deflationary periods “cash is king”. Some measures of money supply, such as M2 and M3 for example, include credit transactions. But credit is not money. For a far better explanation than I could ever provide, see Is the U.S. printing money like mad?, and Money Supply and Recessions.
There’s a much bigger problem with the Euro than that, none of the Euro countries have relinquished their sovereignty to the EU. Not to mention one of the Euro eligible countries has decided to retain the Pound Sterling and its citizens would revolt if they were forced to adopt the Euro. The Euro is not the currency of a single sovereign nation, but is the currency of a collective. The members of this collective do have ways of leaving the Euro and there are growing factions in France and Germany that would very much like to see that happen. No one in their right mind is going to put their hopes in the currency of a non-sovereign entity as a reserve currency. What happens if one or two members of that collective decided they’ve had enough and return to the their national currencies?
The Euro will never be a reserve currency until the European Union is a sovereign nation ruled in Brussels. That will happen around the same time either Hell freezes over or the Second Coming has become obvious.
Great Post Goritas, I was trying to think of a way to explain this to some friends of mine, but this is a great way to do it, thanks.
You should be explaining the Amero to your buds.
Unless there is political union between Canada, Mexico, and the U.S., there will be no Amero. Since there will be no such political union, there will be no Amero.
There has been scuttlebutt about a two tier currency system for the U.S., with one currency for domestic use and another for international use. I can’t imagine that gaining much traction either.
There’s an awful lot of firepower in the hands of U.S. citizens. I can imagine any attempt to implement that above will see those weapons spending a lot less time in the gun cabinet.
I agree. The only way the Amero would gain any traction would be if there were first a complete collapse of the dollar.
Oh, wait...
Political union, and the "consent" of the masses, can be reached through economic shock treatments. You take the power out of the public's hands by inducing shock.
Just like many public systems were privatized in New Orleans after Hurricane Katrina.
Just like personal freedoms were curtailed after 9/11.
Read "The Shock Doctrine" by Naomi Klein.
Canada is not the U.S. Mexico has suffered unending shock for decades, so most Mexicans wouldn't even notice.
If you actually believe political union for North America could be achieved by destroying its underlying economic structure, then I would have to disagree.
There would be little point in ruining that structure because it will take an awful lot of economic output to keep the masses in line, no matter how great the shock.
One thing we might want to keep in perspective is the sheer number of people we’re talking about here. “Fascism” in the 30s required far fewer inputs to fuel itself and had far fewer people to keep under control.
Revolts would happen all over the continent, overwhelming TPTB. Oaxaca would happen again under such a scenario and succeed simply because there would be more of the same throughout Mexico, in particular southern Mexico. There just wouldn’t be enough Federales to prevent it. The cartels would simply consolidate their holdings, particularly in the north.
There have been Canadian factions demanding independence for decades. What a wonderful opportunity to press ahead.
I, frankly, don’t believe North American political union is possible. Not now. Not ever. If it was, the EU would by now be a sovereign state. It is not. Neither will North America be.
Definitely agree.
The EURO is only a temporarily way point in currency juggling.
The EU (as is already evident) may have significant fallout from the Subprime USA problem, but also housing and credit bubbles of their own making.
However, the Yuan may be in an even worse position with even the BIS stating that they are in the exact position as the US before the Great Depression (see inflation, uncontrolled credit, massive expansion).
No Currency is a shoe in for the next petro-currency....hmmm...maybe Swiss Francs. Nah.
Guessing that we will be dropping down to a more (back to the) earthy economy. I would suggest the Dung as a future currency designation after TSHTF.
That's got nothing to do with. What really counts is what exporters are willing to accept as a currency for goods they sell. A lot of exporters already accept Euros (as well as other currencies) for payment. The currency that is most used for international trade is currency becomes the world's reserve currency.
If the US continues on its path, more and more exporters will accept payment in other currencies, eventually one currency will win over the rest and eventually become the worlds reserve currency. It could be the Euro, the Yuan or even the Canadian Loonie ("In Duck we trust!").
That's also got nothing to do with it. When demand for a currency rises, the value of the currency rises (the prices of goods exchange fall in price). More currency can be printed if desired. This is what is already happening to the Euro, as more countries are willing to accept Euros for payment, is value versus other currencies will continue to strenghten.
FWIW: Over the long term, the Euro probably doesn't fair any better than the USD. Most of the EU has embraised expensive socialistic programs and has low natural resources. I can't say whether or not the Euro or any other currency has a good chance of become the next reserve currency. All I can say that if the US does not change fiscal and monitary policies soon, the dollar risks losing its status as the worlds economy. Their may be a period where dollar is officially considered the reserve currency, but exporters decline USD over the of the major currencies. Already several OPEC members not accept payment in other currencies. This will like continue in the future and more exporters will also adopt this strategy.
As it stands, most exporters now have dollar surpluses that they must hold onto rather than use them to support their own economic development. In the past it was in the exporters interests to fix their own currency to the dollar (aka dollar peg) so they could increase exports in built up their economy. Now it no longer makes sense because holding dollars is retarding economic development as the prices of imports are rising, but the value of exports declines with the declining value of the dollar. No economy can afford to export goods if their input costs exceed the value of their exports.
I think the only way that the US can reverse the trend is to start raising interest rates and adopt fiscally responsible policies. Personally I don't see this happening until after a crisis. The FED still thinks that cutting rates is the answer to the credit crunch, but in fact cutting rates is making it worse because foriegn investors (with available capital) are losing faith in the dollar. FED rate cuts are not going to bring back Subprime lending nor is it going to restore lost jobs in real estate, auto, travel, etc. Banks and investors will continue to tighen their lending as the risks of lending continue to rise, even if the FED drops rates to Zero. If you believe the borrow has a significant chance of defaulting, or the value of the asset is going to fall, your simply not going to lend your money. What is likely to happen is that investors (both domestic and foriegn) will look outside of the US were the risks are lower.
Well, here's a different perspective for you. Needless to say, I totally disagree with your position.
Eurozone Dilemma
The credit crunch could crush the euro
Ask a New Zealander. A combination of stock market crash and fire-sale liquidation of state assets in the 1980s brought about exactly that result.
Yes, I've driven past your "shaved" hills. Even so, NZ is the most beautiful place I've been, overall. Incredible land. That's saying a lot coming from a Canadian.
Yes, I believe NZ has been used a few times as an experimental country that other developed countries have watched - economic experiments, GST, etc.
Time we started buying back the land here. I have just acquired a reasonable sum of money and it is going straight into land... and not the over-priced city cubical stuff.
:)
You need to look no further than the coal rich areas of Appalachia. In the 19th century coal reps went into the hills and bought up most of the mineral rights for pennies an acre. What resulted is that one of the most productive (albeit dirty) energy rich areas of the world became mired in endemic poverty.
No kidding.
There was recently a photo slideshow sort of thing on the net, I think I found it through Reddit or lifeaftertheoilcrash or someplace, the people don't have ANY medical care.
Someone like Doctors Without Borders or something went in there with medical vans, and took care of the people's problems, as much as they could during the time they were there.
Mainly the people needed eyeglasses so they could see, so they could work at a job. Or they needed dental work so they'd not be in constant pain and be able to work again. Or stuff like tumors sticking out of their back, horrible complications from pregnancy etc., your basic 3rd world stuff.
I think the title of this was "first world country, third world medical care".
I wonder who will be the Maxim Gorky of this new and frightening land?
fleam - I have a Paypal behavior problem I'm dealing with and could use some expert advise - please email me gwbush at dumbfuck dot org ...
-SCT
I've never signed up for PayPal.
If you can't figure out by now that PayPal is an utter scam, there's nothing I could do even if I had climbed into bed with those scammers.
www.powersellersunite.com may have some ideas, and maybe now.
Then there's the elusive "Discuss New Features" discussion board on Ebay. I could tell you the URL, but then I'd have to kill you. If you can find it, there's some good help there.
Remember Pay Pal is Ebay.
If you used Pay Pal as your method of payment, and he used pay pal ebay will honor what few rules they have.
If you did not use ebay and the guy does not pay, tough luck all around.
I found out by selling a car. When the guy did not pay the balance which was not pay pal, they didn't do a thing.
I was the seller - the buyer has +2100 feedback and apparently lost or molested my piece of equipment. I have a civil suit started against him, Paypal account is drained, bank accounts disconnected, I closed 'em for good measure, and I'm going to cancel the associated credit card tomorrow. It was a nicety for me but if its going to support thievery and make judgments based on transaction volume rather than right and wrong ... well ... I think my lil' country judge can reach right into the Paypal sandbox and make it right.
Are you saying your paypal account is closed, or the guy that bought the gear and did not pay. Rule one, never ship until they pay. I still have the car and the other guy is out 800 bucks.
I keep a separate account for paypal. A free checking account that receives and sends money and does not keep a balance. Only money that needs to paid is put in. and when its sent, out it comes.
Ebay is losing its niche. They are not being aggressive enough to shut down and stop the scams and people using paypal to access accounts. They don't really twist arms to get your money, and that is why people are not using them anymore, plus the rates and fees, are not very good. costs 100 bucks basically to sell a car for any price and then you have to pay the commission fees, and fees for pay pal. They have adopted the US Bank model, which is you make your money by hitting the customer with more and more fee's. before I left a fortune 500 bank, most of their income was fee based.
Use a free checking account and never ship without payment.
He paid, I shipped, and then he appears to have either lost or molested the piece of equipment, and then he applied for a refund.
I complained, Paypal gave me the money back, and I drained the account. Today I killed the bank account Paypal had access to and tomorrow morning I'll whack the backing credit card as well. They would appear to have no procedural recourse and based on the facts of the matter it seems sure I'll get a judgment against the guy even if he bothers to show up.
Oh, and U.S. Bank is where I closed the accounts. I had idled them ... because they were feeing me to death :-)
Small town banks, so much nicer - I went in today to withdraw money to pay for the court filing and the same woman who took the deposit for the first cow I raised and sold in the early 1970s helped me.
There isn't squat to do here, but we sure are nice to each other :-)
Most likely China will convert its dollars into commodities it can use, such as oil, natural gas, and raw materials, like copper, iron, etc. They do this until the exporters call uncle (ie refuse to accept dollars) or until they exhaust their dollar reserves. I would bet that dollar will fall before China manages to exhausts its dollar reserves.
China can't really go on a US buying spree because Congress will block them from purchasing anything significant. Remember Unocal and when Dubia tried to purchase US ports?