POLITICS: China set to dump dollar reserves

In furthering the discussion with regards to equating the economy of China vs. US at 1/7, I would assume that this is based upon the short capitalist economic history of China. They are still a economic force to be reckoned with in due time.

This also has a seditative effect on the temperment of the military structure in China as the war is better than the easy life. Americans are spoiled with their little do dads and things. Bad economic policy in US could result in civil unrest and the masses become restless when they do not get what they want in times of economic downturn. Any thoughts. Are Americans so socially composed that this would not happen? Just some thoughts.Cordially, LEGALCATALYST

Ok...

follow my logic the chinese economy grows at supposedly(though these are possibly doctored "upwardly" figures) 9%, the US economy at 2.3%. China has a population 5X that of the US and it's GDP is 1/7th that of the US, that means the chinese economy would have grow 3500% more than the US to even equal our position in the world. At it's current(likely unsustainable) growth rate it is gainining on the US at 6.7%/yr so it would take 522 years to catchup, right?

Not much of a threat there as the US is still in a lull from it's great strides after WWII(temporary).

The best is yet to come!

The idea of China rising above the US at this point is laughable at best.








[edit on 1/8/2006 by bodebliss]

Originally posted by bodebliss
Ok...

follow my logic the chinese economy grows at supposedly(though these are possibly doctored "upwardly" figures) 9%, the US economy at 2.3%. China has a population 5X that of the US and it's GDP is 1/7th that of the US, that means the chinese economy would have grow 3500% more than the US to even equal our position in the world. At it's current(likely unsustainable) growth rate it is gainining on the US at 6.7%/yr so it would take 522 years to catchup, right?

Not much of a threat there as the US is still in a lull from it's great strides after WWII(temporary).

The best is yet to come!

The idea of China rising above the US at this point is laughable at best.

[edit on 1/8/2006 by bodebliss]

Isn't GDP measured in dollars? If so, what would a devalued dollar to apparent size of GDP? In that, for example, the US GDP is (roughly) $11 trillion/annum. But if the dollar lost half it's value, then the GDP would instantly lose half it's "value", as those dollars that everyone has suddenly buy bugger all compared to what they do now. In comparison, a de-valued dollar would make everyone elses GDP, when measured in dollars, jump by half (not taking into account the hit they would take from a slumped US economy)

On the flip side, 10% of Chinas economy is not the same as 10% of the US economy, so you can only compare growth rates when put into context with actual size of the GDP. The US economy may grow at only 2%, but they start from a bigger base, meaning that 2% of $11 trillion is the same in money terms as 10% of $2 trillion.

Using that as an example, you could say that China would never catch the US. But as stated, pulling the rug out from beneath the dollar would make those $11 trillion US dollars at home worth alot less.

To get a better picture, it would make sense to view both China and the US GDP in Euro's (or any other "3rd party" currency). That way, you could see how they were relatively, rather than in the context of US dollars as that is misleading when you may have a devalued US dollar, as we are discussing here. For example, if the dollar, for arguments sake, lost 50% of it's value, the US GDP, measured in dollars, would still be $11 trillion, but those dollars would be worth less.

In comparison, even taking into account the hit China would take as well, their GDP, relatively speaking, would bounce up when compared to the US, as the dollar would be less.

A good analogy would be if you had ten oranges and I had 2 apples. You have more fruit than I do. Now, what if all of a sudden, those oranges became inedible. You would still have 10 oranges, but they would be 10 useless oranges, whereas whatever made your oranges go bad could only ruin one of my apples, I may only have one apple, but it is one more piece of edible fruit than you do.

I hope I am clear in what I am trying to say. I have this idea in my head, but getting it out into words is tricky.....

[edit on 8/1/06 by stumason]

Originally posted by subz
The picture you paint Muaddib is exactly what the United States has always done.

That was back in the days of the cold war, when Russia was "openly" our enemy, and when China and Russia couldn't see eye to eye, and saw enemies on each other. Now the situation has changed. Supposedly China and Russia are our friends, or at least neutral. But now both are making military plans together, with some other nations who also call themselves "allies of the U.S"

China has made it's plans about Taiwan known to the whole world. They are not going to allow Taiwan to have a constitution, hence formally declaring themselves, and rightly so, independent. Chinese officials have said quite clearly that they will nuke U.S. cities if the U.S. intervenes on Taiwan, which in itself is telling us that the Chinese are serious about not letting Taiwan declare itself independent. In fact, they are so serious that the Chinese government passed a law to make the formal declaration of Independence of Taiwan illegal, and this law makes it legal, in the eyes of the CCP, to make war against Taiwan and anyone who helps them to be independent.

Originally posted by subz
Are you telling me that spending big militarily is an indicator of how nefarious a nation is? You can see where I am going with that one.

When that nation is declaring to the world that it will not allow another "nation" to be "officially declared as independent" and that they will go to nuclear war against anyone who opposses the Chinese plan and this same nation is building up it's military like never before?.... Yes, it is quite nefarious.

Subz...the U.S. has slowed down in military expending, and even intelligence. We have closed bases, our military is undermanned, even in the 90s when I was in the military we were badly undermanned.

Originally posted by subz
You also view buying gold as predicate to war? Then I think every other nation on the planet is guilty of warmongering. Finally the Chinese have as much right to protect their global interests as the United States. The United States has publically voiced its intentions to safeguard American interests over any other consideration. This you view as a pragmatic and completely understandable policy yet when the Chinese admit to the same you cry foul and drum up scenes of a yellow terror.

The Chinese has a large part of the U.S. debt in it's hands and can play with it as it likes.

In the book "Unresticted Warfare", written in 1999 by Liang, Qiao and Wang Xiangsui, PLA Literature and Arts Publishing House, Feb 1999. 6119; the Chinese officials state:

the aggressor nation “must adjust its own financial strategy, use currency revaluation or devaluation as primary weapons, and combine means such as getting the upper hand in public opinion and changing the rules sufficiently to make financial turbulence and economic crisis appear in the targeted country or area, weakening its overall power, including its military strength. Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military..."

Excerpted from.
news.goldseek.com...

The Chinese government is still playing chess with the U.S. and seems to have all it's pieces already layed out and ready for the final move.

Originally posted by subz
Is it these actions you have a problem with or simply because the Chinese are doing it? You're on record here of how you loath the Chinese. Is there anything else you can add to your argument aside from your apparent hatred for all things CCP?

Actually subz what i question and am puzzled about is that you, for whatever reasons, are one of the defenders of the CCP and at every post that you submit you always try to blame the U.S. about everything even if it is an exageration and a lie.

Is there anything that you would like to add appart from your apparent hatred to all things U.S. and your love and understanding towards all things CCP no matter what they are?

[edit on 8-1-2006 by Muaddib]

Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military..."

Thats interesting......

Has anyone considered the possibility of China using "Terrorists" as a proxy to de-stabalize the US. Reading the above exerpt from this book seems to indicate everything is going exactly as they have foreseen, or, as I like to say, going all Palpatine.....

I also find it interesting if it's true that a book by the Chinese mentions bombing the world trade center and bin laden all together back in 1999 two years before 9/11 happened. If true, that might make me wonder if there is a secret war in the works and getting ready to get a lot nastier.

I was wondering why the Chinese might be willing to give up 500 billion dollars overnight for a cause since if they hold $1 trillion in dollars and that decreases in half overnight or over a short span, the value of what they still hold plummits as well. The more they try to sell, the faster they would lose money IMO.

However if the Chinese see financial warfare as a means to assure themselves of global dominance in a war for resources, I can see a reason now why somebody might think like that and consider it. I still don't believe it would be in China's interest and definitely not the US for any massive dumping. I think it would all be a lose lose proposition. The Chinese would be stupid I believe if they angered and hurt the US and got one of their biggest customers angry at them. I don't believe they are stupid. I myself and everyone I know would take the time to make sure we don't buy any products made in China if that scenario happened. You know it's bad though when you can't find an American flag at the local store that isn't made in China.

Hairdryers for Houses

Many of the Billions of Dollars that have left the country have returned to buy our homes. Here in California, it is the driving force behind the housing surge. California is one of the most desirable places in the world to live. So everyone in the world who has money is bringing it here to buy homes and property. This effect will ripple across the rest of the country. As more and more money comes back into the country, the cost of homes and property will increase. Inflation of everything else will follow after.

Our National Debt is money that our government has printed, whether physically or digitally. It's money that "We the People" have put into circulation. For some reason, everyone in the world likes it better than other currencies of the world. Expect interest in the Euro to increase from here on though, especially when President Greenspan retires.

Originally posted by orionthehunter
I also find it interesting if it's true that a book by the Chinese mentions bombing the world trade center and bin laden all together back in 1999 two years before 9/11 happened. If true, that might make me wonder if there is a secret war in the works and getting ready to get a lot nastier.

The book does exist. I have given in the past other links to this book including a link to a U.S. military paper where this book is mentioned. The CCP is not afraid to let some of their plans known, I guess it is less of a shock to the world once it happens, and for some reason the world at large don't seem to mind the CCP making threats to the rest of the world if they interfere with their plans for Taiwan. They haven't made it a secret that they are ready to nuke California and other U.S. cities, killing millions of people, if the U.S. defends Taiwan once China tries to invade it.

Originally posted by orionthehunter
However if the Chinese see financial warfare as a means to assure themselves of global dominance in a war for resources, I can see a reason now why somebody might think like that and consider it.

I still don't believe it would be in China's interest and definitely not the US for any massive dumping. I think it would all be a lose lose proposition. The Chinese would be stupid I believe if they angered and hurt the US and got one of their biggest customers angry at them. I don't believe they are stupid. I myself and everyone I know would take the time to make sure we don't buy any products made in China if that scenario happened. You know it's bad though when you can't find an American flag at the local store that isn't made in China.

China is making other economic allies, so they won't lack customers. Also when the currency of a country devaluates, the price of gold and other precious materials increases. China, Russia, and some other countries have been buying gold and other precious materials at an alarming pace, as if they knew something is about to happen to the global market.

China To Increase Gold Reserves

28.12.2005 09:58
Some economists have been appealing to the State Administration of Foreign Exchange to expand China's gold reserve after the Renminbi appreciation in a bid to reduce the country's reliance on the greenback, Xinhua new agency reported.

But others believe it's not a proper time to buy gold at such high prices.

The State Administration of Foreign Exchange did not let out their voice, but folk economists have been prompting them to take actions.

China should increase its gold reserve from 600 tons to about 2,500 tons in a short term and to 3,000 tons in a long term to cope with the versatile exchange rate risks, said Teng Tai, an economist of China Galaxy Securities Company.

Too little gold reserve would pose threat not only to China, but also to the global monetary system, Teng said.

Excerpted from.
www.neftegaz.ru...

Russian Gold Reserves Increased by $50bn

28.12.2005 10:10
The Central Bank of Russia official said Monday that Russia's gold and foreign currency reserves have reached $173 billion.

The reserves have increased by $50 billion since the start of the year and would have grown by $70 billion if not for foreign debt payments.

The increase in gold and currency reserves has expanded the monetary base by 24%, whereas money supply has increased 40%, according to the bank official.

Excerpted from.
www.neftegaz.ru...

[edit on 10-1-2006 by Muaddib]

If this is all true...then why haven't the major news networks reported this already?

I don't know if China is doing this in preparation for a "world takeover" but I doubt it. And I don't think they could take over anything even if they did this.

What the US needs to do, is get very friendly with India (India and China will start competing for things when they start getting too big for one region) and...boost education! We are no longer a manufacturing economy, we need to change into an experienced, educated economy. We need to expand our horizons and develop new areas!

Who's with me!? lol

[edit on 17-12-2006 by RetinoidReceptor]

Originally posted by k4rupt
If this is all true...then why haven't the major news networks reported this already?

Best one I have heard this week....

hahahah.....

If it is true, then don't count on FOX or CNN to tell you, that would just panic everyone and make it worse. They just want you to go about your business, nothing to see here, move along....

6.5 billion people in the world. 300 million Americans? The chinese have lots of other customers.
The Chinese commoners / peasants don't use credit. They save the majority of their wages as they don't have social programs. The international banking community has to induce an economic disaster with the chinese in order to bring their populations into borrowing money so they (Banks) can get even richer. Now the chinese gov't isn't exactly pro - citizen, Mao killed millions, they don't care if some of their peasants starve.
Now what about the fact that OPEC threatened not to sell oil to any country that causes an economic disaster to the U.S. dollars.

What chapter in revelation talks about a 2 million man army from the kings of the "East" entering the holy land?

Hmm, could this be how OPEC tries to save the U.S. dollar in order to protect their own currency reserves? Could this be how this 2 million man army enters the middle east? Who has a 2 million man army? China.

I've heard this all before. In the 1980's. Only then it was Japan that was going to wreck the US economy. Look at how that turned out.

Originally posted by davenman
Hairdryers for Houses
Many of the Billions of Dollars that have left the country have returned to buy our homes.

And then presumably it's in the hand of American banks that basically does what the fed allows; how is that good for business?

Here in California, it is the driving force behind the housing surge. California is one of the most desirable places in the world to live.

It's actually just very cheap to borrow money in the USA and especially so for housing it seems...

So everyone in the world who has money is bringing it here to buy homes and property.

Everyone? What percentage?

This effect will ripple across the rest of the country.

How and why? Everything i read suggest the US housing bubble is as great as it ever was and that it has very little to do with market fundamentals?

As more and more money comes back into the country, the cost of homes and property will increase. Inflation of everything else will follow after.

Since when is inflation a good thing? Since when is rising house prices good for anyone but the already rich ?

Our National Debt is money that our government has printed, whether physically or digitally.

Actually relative to the federal debt there is very little physical money to go around

It's money that "We the People" have put into circulation.

"You" the people had very little to do with the spending of this money so why pretend like it's a problem you should have to accept responsibility for?

For some reason, everyone in the world likes it better than other currencies of the world.

It's not a question of 'liking' as much as it is one of the US, by military and economic terrorism, ensuring that it is exceedingly hard to do business or survive economically without trading in Dollars.

Expect interest in the Euro to increase from here on though, especially when President Greenspan retires.

WHY?

Stellar

Chinese remove the veil.

Recent public statements by Chinese officials leave no doubt that Beijing is prepared to play economic hardball in the face of US political pressure. In light of current US dollar weakness, and market volatility, even posturing, and rhetoric can have an affect.