Diplomacy & China

Dream

Well-Known Member
Messages
3,677
Reaction score
2
Points
0
Location
Eastern USA
It seems to me a really bad idea to implore China for funds or ask it to 'make the other countries happy'. Countries with banking problems will be better off not accepting any help and just dealing with crises on their own, because...

I think China is all about internal, not external happiness. Each citizen there is responsible to be happy. This is not just political rhetoric but something they truly believe. Taking this to a larger scale, each country is responsible to be happy. The loss of reputation for a country not taking care of its own issues will be very regrettable. Its one of those situations where it is not worth asking for help.
 
China is one of the biggest holders of US dollars, and as the US tries to rescue its financial system it's been looking for countries to buy up US debt - especially China as it already holds so much.

The Big Fear for the past few months within the US treasury has been that China and other overseas investors were slowly but surely selling their US debt obligations, threatening the possibility of a stampede to sell US debt - which would have crippled the ability of the US to finance itself.

Hence Hilary Clinton has changed her tune - from the presidential campaign where China's hold over the USD was a security risk, to now within that presidential administration of courting it further - in the short-term at least.
 
It has lots and lots of US dollars. US cash is useful throughout the world, just like Euros are. You will find people trading in US cash all over, which is good for the US and makes trade simple. The existence of lots of cash is good for the world, keeping people working all the time. What is not good is that more money has been printed than there is gold to pay for it with, and every US dollar is guaranteed by the US to have gold behind it. It is serious problem (security risk) that all major cash printing countries share. There is just far too much cash to actually pay, so what everyone hopes is that the cash is treated as if it were gold and not 'cashed in' on.
 
mmm maybe this global recession will sort out the dependents from the independents; countries like turkey more or less self sufficient food-wise; macrobiotics the way to go....nostrodamus' prophecy the yellow race will....?
 
I never "got" that... It holds most of the us dollars? It's just paper... print more..... lol.
That's what the Chinese are concerned about. If the US deliberately inflates its currency, then their pile of approx. a trillion (a little more, I think, but I'm not going to look it up now) in US bonds isn't worth as much. A Chinese official recently made a statement expressing such concern and asking the US to be "responsible" and "protect the value of China's assets". If the US looks like it may behave otherwise, China could suddenly large amounts of dollar-denominated paper on the market, trying to salvage what it can: that could make the value of the dollar crash quickly, since there aren't enough other potential buyers to mop up that much. One analyst put it, "It is like that scene where Wiley Coyote has already gone off the cliff, but won't fall until he looks down and realizes there is nothing beneath him."
 
Thanks for the reply bob....(I'd suggest not looking down ;)) I still do not understand though how simply printing paper, (and it is only paper... It holds no magical powers) can cause so much chaos? What a world we live in!
 
A currency only has the value people will pay for it - you only have to look to Zimbabwe to see how a currency can become worthless, and the impact this has internally and abroad.
 
Thanks for the reply bob....(I'd suggest not looking down ;)) I still do not understand though how simply printing paper, (and it is only paper... It holds no magical powers) can cause so much chaos? What a world we live in!

If you print more money, there will be more money to go around. Prices for food, fuel, consumer goods, cars and houses will go up even more. Sellers will look for people with more money to which to sell their goods. They will, therefore, raise their prices. It's not something your local retailer or shop will do. It's something that manufacturers, suppliers and mining firms will do.

I am not an accountant/economist, but I am saying even someone like me, who has not studied economics and accountancy at a university level can understand this in a rather crude way. I have a fair idea what it means when creditors (ie. I mean bank depositors) incur interest on debtors (ie. I mean banks), but I don't know what accountants do to record what they do when they "print money."

So to put it crudely, printing $100 that isn't part of normal "accounting transactions" and isn't interest isn't going to do much, but printing $100 million will most probably send prices soaring.

It works according to the principle of supply and demand. You sell to the highest bidder. Again, it's not something you are likely to see local retailers and shops doing. It is something that happens in the supply chain of the economy, and this is something the ordinary consumer would know little about unless he has a birds-eye view of the economics in his country.

That's because individual consumers only buy individual items, whereas wholesalers, retailers, manufacturers, supplies and mining firms trade and provide services in larger quantities. They work with large quantities of things.

There is competition among these wholesalers, retailers, manufacturers, supplies and mining firms. A client will seek a supplier/provider who offers the lowest prices. A supplier/provider will seek client firms who offer to pay higher prices.

By printing $100 million, there is $100 million more to go around. Some people will suddenly have "more buying power." But it is only short term. Once this $100 millions spreads throughout the entire country, prices will have shot up and suppliers/providers are all of a sudden charging more for their goods and services. Clients and customers will have to pay more.

Consumers that only yesterday were living comfortably are now all of a sudden struggling to pay their living costs.

Let's say the government, or the national bank foolishly and stupidly decides to print another $100 million. Again, it's only short term gain for the people who get the money. The prices will go up again. Suppliers/providers now charge even more for their services.

Suppose the government, in order to stay in power, decides to repeat this process ad nauseum. I guess you see the pattern.

That's why a country's banks have to choose their interest rates carefully. It's to prevent hyperinflation, where prices just shoot up beyond control. Under such conditions, an economy simply spirals out of control.

That's why instead of printing money out and putting that into circulation, governments unleash economic stimulus packages. They use whatever money is already in the economy that they have either acquired through taxes or borrowing (ie. from China $$$$$:D:D:D:D) and China has, in past years, been all to happy to lend because of its trade surplus.

China's money has paid for the U.S.'s war in Iraq and Afghanistan. It has paid for U.S. military spending and is now paying for the U.S. government's economic stimulus package. Western governments are borrowing heavily from China to keep their economies afloat.

I can understand how China feels about this.:eek::eek::eek: The decadent foreign devils have crashed and burned and now they want to drag China down with it. China doesn't want its trade surplus wasted on problems that foreign countries are having. It probably . . . wants to spend it on its own military industrial complex.:eek::eek::eek::D:D:D

Heck, how did the U.S. get into this mess in the first place? It's either George W. Bush choosing to embark on expensive wars or it's Americans taking home loans they know they will never be able to pay back. How could this superpower nation go so wrong?

It's all just shambolic.

Shame on America. Shame on this country with a crappy public education system. This country with so many social problems, with unruly youth, whose crimes rates are so high, which has so many killings on its educational institutions, and with so many religious fundamentalists. Shame. Shame. Shame.

I think America needs to sit down for a good ol' Bible lesson.;):rolleyes::D:eek: with Daddy and Mummy saying tsk tsk tsk. It needs to plunge its face deep into the sand and dirt and cry long and hard: I'm a wreck! I'm a failure! The world doesn't love me anymore! I'm not who people thought I was! I need to run away and hide for a while . . . in my Mummy's wardrobe . . . I used to be proud, but now I'm so ashamed.

God is not giving any blessings today, so nobody say "God bless America." It's detention. Someone deserves a reprimand. Someone deserves to be spanked . . . with a candlestick . . . It's God curse America. It's time to admonish and lecture America on its faults.
 
If you print more money, there will be more money to go around. Prices for food, fuel, consumer goods, cars and houses will go up even more. Sellers will look for people with more money to which to sell their goods. They will, therefore, raise their prices. It's not something your local retailer or shop will do. It's something that manufacturers, suppliers and mining firms will do..
Our FED is an interesting thing. Federal Reserve Notes, that is what it says on our money. The Federal Reserve handles our money...a group which has no reserve and isn't federal, they are a group of private banks. Now our money used to be on the gold standard...ie for every bill printed we had that equal amount of gold in holdings. We don't anymore, so we went to silver certificates, so our money was backed by silver and gold holdings, we tossed that out with treasury notes...which said they could be used for all debts public and private and redeemed for real money at any federal reserve bank (an indication of the piece of paper in your hand was not real money). Now we just have FRNs Federal Reserve Notes, and all they say on them is 'can be used for all debts public and private' (even though today this is not so, there are plenty of places private and government that will not take FRNs (cash)...only credit/debit cards.

So interestingly enough until recently the FED used to print money. They paid like 83 cents for a one dollar bill, (the cost of printing from the treasury) of course they also paid 83 cents for $5, $10, $20, $50, and $100 bills....pretty good profit eh?

But now in the past few months they've let loose over 2 trillion dollars in funds (outside the stimulus package, the FED needs no congressional review to do their things, remember they are private banks) so how do they provide 2 trillion dollars to thier banks? With key strokes on a computer...no dollars move, no gold moves..just add some zeros to an account and the bank has more money...

I haven't yet figured out how they account for this...

So what is our money backed on now? Same thing as the economy, the fickle nature of public feelings...I feel good....I knew that I would...
 
Yes, we consumers need to get out there and stimulate the economy. Spend..spend spend. God forbid that you save and live within your means and under your means. Debt is the American way. When will this madness end? :eek:
 
A currency only has the value people will pay for it - you only have to look to Zimbabwe to see how a currency can become worthless, and the impact this has internally and abroad.
Robert Mugabe is the greatest economic manager of all the world leaders: he has made every Zimbabwean into a trillionaire!
 
Yes, we consumers need to get out there and stimulate the economy. Spend..spend spend. God forbid that you save and live within your means and under your means. Debt is the American way. When will this madness end? :eek:

Capitalism. Keynesianism. Hmmmphhhhh. Utter scum.:rolleyes:

Why do we have to be slaves to this parasitic economic system? The U.S. economy had to go under some day. Look what happened to Japan. The same could happen to America. Someone needs to prescribe a better economic system. In this world of computers, I don't think it's really that hard.

Throw in a bit of socialism and environmentalism that benefits the community as well as the environment, and you have more frugalism, better judgment and less wastage. You'd have a more rational economy based on reasonableness rather than frivolity and vanity.

The thing about capitalism and socialism is that it's about the idea of being rich. But the question is, rich in what?

Capitalism is about money, status, ego and prestige. Capitalism emphasises individual private ownership of property. Capitalism is about the individual. Socialism (I am not talking about communism here) is about community. It emphasises collective public ownership of property.

The trouble with both systems in their pure form is that you can't please everybody because you have to make rules on whole owns what and in the end it won't necessarily benefit everybody individually and collectively.

Too much collectivism stifles creativity and imagination. Those who could well have something helpful to offer the community have their talents and intellect suppressed because the rules governing the collective forbid them from gaining possession of certain items, goods or services. Communism (the extreme case of a coercive socialism) doesn't reward smart people and nor does it give them either the means or the power to contribute to the community at their full potential. Under pure socialism, the minds of smart people are wasted.

Too much individualism and people become selfish, narcissistic and vain. People spend their whole lives competing against others for wealth, increasing the size and value of their private property to remain employable. The thing about middle-class-dominated societies is that the amount of property you must accumulate to have a sense of dignity is proportional to the average of what the rest of the middle class portion of the population owns. If you lack something that another middle class citizen owns, you feel bad about it. They have a nice house, a nice car, kids, a television set and computer. You want that too. Capitalism breeds jealousy and envy.

Because of the jealousy and envy you feel within you, you accumulate goods you don't really need. Your personal, private property goes beyond your basic needs. You get married before you're even ready because you want to impress your friends.

Capitalism doesn't share. It covets.

Communism takes away your individuality. You have no right to be different. Everybody is the same.

Neither capitalism nor communism is the ideal. There needs to be a balance between the two, a balance between individualism and collectivism.

It's about time we started moving towards more practical economic systems. I think we are in a position to do that.

If there was more community-connectedness, they would be less of a need for individual private ownership of property, because people share what they have, there is less of a need for us all to have multiple copies of that one same thing. There would be less duplication and redundancy.

Because people are allowed to have their full spontaneity and individuality and get credit for the work they do for the community, there is less of a need to be cynical about who gets what because people aren't concerned about what they have but what they can do for others.

This eliminates the need for both pure capitalism and pure socialism. Furthermore, it puts us in a position, individually and collectively, to deal with environmental issues. We need less and use less because we have found ways to share what we have and to be more frugal in the way we live.

Rising unemployment is an opportunity to change the economic system. What would be good is if all you and us jobless out there and out here collectively refused to go back to work and instead formed your and our own self-sufficient communities. Why don't we, for once, stop relying on this capitalist economic system.

Put together a computer network or set up a web site for your community. Pool your resources and start thinking of ways to work together. Save money. Exploit the power of computers to reach the geographically invisible. Meet people you never knew existed before!

www.economy-for-the-unemployed.com (non-existent web site as far as I know; I haven't tried; I just made it up just then:))

Sign up for an account and register today.

Marketing motto: The new economic system - Becoming less dependent on capitalism

Week 1: 100 people
Week 2: 10,000 people
Week 3: 1 million people:)
 
Robert Mugabe is the greatest economic manager of all the world leaders: he has made every Zimbabwean into a trillionaire!

Oh boy! Unfortunately . . . there wasn't quite enough bread and butter to go around!:eek:

Too many trillionaires meant that the bakery sold out last week and will be out of stock until Tuesday. Bugger! Being a trillionaire is no fun when everybody else is a trillionaire! I tried another shop but it turns out the other trillionaires bought everything there was to buy.

Next time we'll hold an auction! I bet I'm richer than the other trillionaires!
 
Back
Top