01 Dec 08
Originally posted by SeitseDon't Hold your breathe ......
US economic, military and political dominance is likely to decline over the next two decades, according to a new US intelligence report on global trends.
http://news.bbc.co.uk/2/hi/americas/7741049.stm
So, what do you think about the report?
01 Dec 08
Originally posted by SeitseThe biggest threat to US dominance is the diminishing value of the US dollar. Period.
US economic, military and political dominance is likely to decline over the next two decades, according to a new US intelligence report on global trends.
http://news.bbc.co.uk/2/hi/americas/7741049.stm
So, what do you think about the report?
Foreign central banks (think China) currently hold trillions of US dollars in their foreign reserve accounts. With the US looking to go into protracted contraction, thus reducing demand for products from China, China will see its exports decrease and this threatens to reduce the economic output of China.
To combat this, China will most likely try to stimulate demand for the products it makes by creating its own DOMESTIC demand. The people that live in China will be encouraged through various economic means to consume its own products. In order to pay for that, China can either issue treasury bonds (like the US does), thus getting the money from foreign investors, OR it can simply sell off its US dollar holdings to pay for its own stimulus package(s).
The latter is the easiest and cheapest method for China to stimulate domestic demand for its own products. This selling of US dollars will have a twofold effect:
1. It will increase the supply of US dollars into the market, thus driving the value of the dollar down.
2. China will stop buying US treasury bonds thus lowering demand for US dollars which will drive the US dollar down even further.
The combined effect will force the US dollar into the tank. If this scenario plays itself out, there aren't many bright days ahead.
04 Dec 08
Originally posted by uzlesschinas main market for goods is america, to tank the dollar is to destroy its own economy.
The biggest threat to US dominance is the diminishing value of the US dollar. Period.
Foreign central banks (think China) currently hold trillions of US dollars in their foreign reserve accounts. With the US looking to go into protracted contraction, thus reducing demand for products from China, China will see its exports decrease and this threatens to r ...[text shortened]... dollar into the tank. If this scenario plays itself out, there aren't many bright days ahead.
Secondly, the reason why billions are in chinese banks have more to do with fighting inflation, selling its foreign capital reserveswould cause rampant inflation
04 Dec 08
1 edit
Originally posted by bojangles32chinas main market for goods is america, to tank the dollar is to destroy its own economy.
No, it's the EU.
Secondly, the reason why billions are in chinese banks have more to do with fighting inflation, selling its foreign capital reserveswould cause rampant inflation
It can just trade $ for €, for example.
04 Dec 08
1 edit
Originally posted by bojangles32chinas main market for goods is america, to tank the dollar is to destroy its own economy.
chinas main market for goods is america, to tank the dollar is to destroy its own economy.
Secondly, the reason why billions are in chinese banks have more to do with fighting inflation, selling its foreign capital reserveswould cause rampant inflation
Not if the people that live in china start to buy the things that china manufactures. Currently they consume their own products at a small level. If China can increase its consumption of its own products, they won't need the US!
04 Dec 08
Originally posted by uzlessAh yes, the old myth that a nation could support itself ientirely and still be well off.
[b]chinas main market for goods is america, to tank the dollar is to destroy its own economy.
Not if the people that live in china start to buy the things that china manufactures. Currently they consume their own products at a small level. If China can increase its consumption of its own products, they won't need the US![/b]
04 Dec 08
Originally posted by PalynkaIt can just trade $ for €, for example.
[b]chinas main market for goods is america, to tank the dollar is to destroy its own economy.
No, it's the EU.
Secondly, the reason why billions are in chinese banks have more to do with fighting inflation, selling its foreign capital reserveswould cause rampant inflation
It can just trade $ for €, for example.[/b]
Not really. That'sa big market and it's might not be that easy to find a buyer for those dollars and with the Euro having it's own troubles, China would have to be willing to give up those dollars that are in a rising trend against the Euro.
04 Dec 08
Originally posted by MerkI said it CAN do it without dumping yuan into its own economy. I didn't say that I think it's in China's best interests.
It can just trade $ for €, for example.
Not really. That'sa big market and it's might not be that easy to find a buyer for those dollars and with the Euro having it's own troubles, China would have to be willing to give up those dollars that are in a rising trend against the Euro.
04 Dec 08
1 edit
Originally posted by MerkOf course they will still sell some things to the US. My point is that they don't need to sell as MANY things to the US.
Ah yes, the old myth that a nation could support itself ientirely and still be well off.
Look, most economists will tell you that an increase in domestic consumption is a good thing for your economy.
05 Dec 08
Originally posted by uzlessThese economists are incompetent, unless you mean by "good for the economy" short-term gains in GDP. On the long term GDP and welfare in general may or may not benefit from increased consumer spending.
Of course they will still sell some things to the US. My point is that they don't need to sell as MANY things to the US.
Look, most economists will tell you that an increase in domestic consumption is a good thing for your economy.
07 Dec 08
1 edit
Originally posted by SeitseBritain, France, Germany, Spain - dominant for a while, lost dominance to the US...and are back on top again.
US economic, military and political dominance is likely to decline over the next two decades, according to a new US intelligence report on global trends.
http://news.bbc.co.uk/2/hi/americas/7741049.stm
So, what do you think about the report?
The US might not be top dog in the near future but we're not going anywhere. Our core system is too effective, we have too much high quality land, and too much infrastructure.