Chinese socialism and American capitalism are saving the US Dollar

Chinese Vice Premier Li Keqiang—who everyone expects might be the next head of government—has spent the last week "shopping" through major capitals in Europe. He's been hitting Germany, Spain, and the United Kingdom, snapping up $20 billion worth of deals for everything from fine wine and olive oil to luxury rides like Mercedes-Benz and Jaguar. They aren't stopping at consumer goods, either; they're diving deep into finance, energy, and tech sectors. It was all red carpets for Li and a group of 150 Chinese business leaders as they sat down with Spanish PM Jose Luis Zapatero, German Chancellor Angela Merkel, and UK PM David Cameron. Let's face it—China isn't hiding its playbook anymore: they want to bolster the European economy to make sure the Euro doesn't go belly up.
The Chinese breeze

"Europe isn't just suffering from the cold winter weather—it's hurting from financial instability. But a cold Europe can feel the warmth of a Chinese breeze. Like the old saying goes, China is 'sending coal during a snowstorm,'" Li wrote in a piece for The Wall Street Journal.

On one hand, China is looking to supply its growing middle class—and honestly, they can afford it, given those massive foreign reserves that jumped by $199 billion in just the last three months of last year, hitting a staggering $2,850 billion.

"The last decade was defined by one phrase: 'Made in China.' The next ten years? It might just be 'Owned by China,'" Gerard Lyons, chief economist at Standard Chartered, told the Guardian.

But here's the kicker: China is actually saving its own skin here. Since the Chinese yuan is pegged to the US Dollar, when the Euro drops against the greenback, Chinese products become too expensive for the European market—which, by the way, buys more Chinese goods than the US does. Plus, if things stay this way, German products could start eating their lunch because they'll become the cheaper option.

China also announced plans to diversify its foreign reserves by buying up European bonds, specifically targeting countries where debt levels are threatening the survival of the Euro—think Greece, Ireland, Portugal, and Spain.
Portugal made a good sale

More than a third of their foreign reserves are sitting in US Dollars because about a decade ago, China started aggressively buying US Treasury bonds (basically swapping mountains of yuan for dollars) to keep their currency artificially low and keep their exporters competitive. By October 2010, they held $906.8 billion, or 21% of all outstanding US bonds—a massive leap from just $59.5 billion ten years prior. When the 2008 crisis hit, they started pouring money into struggling US banks like Citigroup and Bear Stearns, and last year, they turned their attention to European Union member bonds.

Now, China says it's ready to step up for Spain, too, by potentially picking up $6 billion in their bonds. We'll see if they're serious today, when the Spanish government hits the global markets trying to borrow $3 billion.

China promised to help Portugal as well. While we don't know for sure if they actually grabbed those bonds at today's auction, it seems like the mere rumor boosted investor confidence enough that Lisbon managed to borrow $1.25 billion without much trouble—and at a lower interest rate than expected.

Arthur Ward2 said:Chinese Vice Premier Li Keqiang—who everyone expects might be the next head of government—has spent the last week "shopping" through major capitals in Europe. He's been hitting Germany, Spain, and the United Kingdom, snapping up $20 billion worth of deals for everything from fine wine and olive oil to luxury rides like Mercedes-Benz and Jaguar. They aren't stopping at consumer goods, either; they're diving deep into finance, energy, and tech sectors. It was all red carpets for Li and a group of 150 Chinese business leaders as they sat down with Spanish PM Jose Luis Zapatero, German Chancellor Angela Merkel, and UK PM David Cameron. Let's face it—China isn't hiding its playbook anymore: they want to bolster the European economy to make sure the Euro doesn't go belly up.
The Chinese breeze

"Europe isn't just suffering from the cold winter weather—it's hurting from financial instability. But a cold Europe can feel the warmth of a Chinese breeze. Like the old saying goes, China is 'sending coal during a snowstorm,'" Li wrote in a piece for The Wall Street Journal.

On one hand, China is looking to supply its growing middle class—and honestly, they can afford it, given those massive foreign reserves that jumped by $199 billion in just the last three months of last year, hitting a staggering $2,850 billion.

"The last decade was defined by one phrase: 'Made in China.' The next ten years? It might just be 'Owned by China,'" Gerard Lyons, chief economist at Standard Chartered, told the Guardian.

But here's the kicker: China is actually saving its own skin here. Since the Chinese yuan is pegged to the US Dollar, when the Euro drops against the greenback, Chinese products become too expensive for the European market—which, by the way, buys more Chinese goods than the US does. Plus, if things stay this way, German products could start eating their lunch because they'll become the cheaper option.

China also announced plans to diversify its foreign reserves by buying up European bonds, specifically targeting countries where debt levels are threatening the survival of the Euro—think Greece, Ireland, Portugal, and Spain.
Portugal made a good sale

More than a third of their foreign reserves are sitting in US Dollars because about a decade ago, China started aggressively buying US Treasury bonds (basically swapping mountains of yuan for dollars) to keep their currency artificially low and keep their exporters competitive. By October 2010, they held $906.8 billion, or 21% of all outstanding US bonds—a massive leap from just $59.5 billion ten years prior. When the 2008 crisis hit, they started pouring money into struggling US banks like Citigroup and Bear Stearns, and last year, they turned their attention to European Union member bonds.

Now, China says it's ready to step up for Spain, too, by potentially picking up $6 billion in their bonds. We'll see if they're serious today, when the Spanish government hits the global markets trying to borrow $3 billion.

China promised to help Portugal as well. While we don't know for sure if they actually grabbed those bonds at today's auction, it seems like the mere rumor boosted investor confidence enough that Lisbon managed to borrow $1.25 billion without much trouble—and at a lower interest rate than expected.

Actually, I think a more accurate title for this thread would be:

Chinese Capitalist National Socialism vs. American Capitalism

Aside from that little tweak, I find myself agreeing with absolutely everything else said here.

Nicole Clark79 said:Actually, I think a more accurate title for this thread would be:

Chinese Capitalist National Socialism vs. American Capitalism

Aside from that little tweak, I find myself agreeing with absolutely everything else said here.

Look, socialism brings planned economies and actual efficiency to the table,
so don't give me that crap about how a free market is supposedly more efficient,
the real issues here are just raw human greed and total lack of organization.

In just a few years, we could be looking at a Chinese Mercedes-Benz, a BMW, or even a GMC
and honestly, doesn't that just signal the absolute downfall of the version of capitalism we have in the West right now?

All that'll be left of capitalism is the media machine, working overtime to trick the public into believing it's still the only way to live.

Nicole Clark79 said:Actually, I think a more accurate title for this thread would be:

Chinese Capitalist National Socialism vs. American Capitalism

Aside from that little tweak, I find myself agreeing with absolutely everything else said here.

Europe made the right call by cutting a deal with China—it's the exact same move the Americans made. You can't crawl out of a crisis without cooperation. Plus, let's be real, the West and China actually share a ton of common ground.

I'm pretty sure if you dig through my old posts on this forum, you'll find where I called this exact scenario—China stepping in to bail out the European Union...

It was always going to happen. It’s just common sense.

Stop whining about local issues; what everyone actually needs is a stable supranational currency to serve as an alternative to the filthy US Dollar.

Peter Martin said:Stop whining about local issues; what everyone actually needs is a stable supranational currency to serve as an alternative to the filthy US Dollar.

Look, the Dollar might stay the backbone of the US economy, but its days as the world's sole heavyweight are numbered—even the big shots on Wall Street and at the Federal Reserve know it. Once the Dollar loses its absolute grip, we’ll probably see something like the Amer competing with the Euro, while over in the East, the Yuan will likely take the lead—especially if Russia eventually falls apart. That’s why China, Europe, and America have actually found some common ground lately—fighting economic crises, dealing with Islamic terrorism, and eyeing up territory and resources in Russia. Just look at Biden China's recent visit and the way Beijing and Washington, D.C. are signing these massive economic and military deals; it proves Russia just isn't a player in the new world order anymore. http://www.voanews.com/english/news/...113630004.html http://www.reuters.com/article/idUSTRE70600P20110107

Arthur Ward2 said:Look, the Dollar might stay the backbone of the US economy, but its days as the world's sole heavyweight are numbered—even the big shots on Wall Street and at the Federal Reserve know it. Once the Dollar loses its absolute grip, we’ll probably see something like the Amer competing with the Euro, while over in the East, the Yuan will likely take the lead—especially if Russia eventually falls apart. That’s why China, Europe, and America have actually found some common ground lately—fighting economic crises, dealing with Islamic terrorism, and eyeing up territory and resources in Russia. Just look at Biden China's recent visit and the way Beijing and Washington, D.C. are signing these massive economic and military deals; it proves Russia just isn't a player in the new world order anymore. http://www.voanews.com/english/news/...113630004.html http://www.reuters.com/article/idUSTRE70600P20110107

While I’d love to think you’re onto something, I feel like this VOA News narrative doesn't quite hold water when you consider how much the BRIC(A) bloc—that massive economic alliance between Brazil, Russia, India, China, and Africa—has already shifted the scales.
It feels more like the Chinese and Russians are playing both sides of the fence, keeping their cards close to their chests against "certain parties," otherwise they wouldn't have gone through the trouble of making a complete agreement to bypass the US Dollar as their primary medium of exchange in bilateral dealings.
In my experience, if you can dominate someone economically, winning a military conflict becomes a much easier follow-up if the need ever arises.
To be honest, it looks to me like Americans are feeling more vulnerable and perhaps a bit more panicked right now than they ever have before.
I don't think we gain much by ignoring these blatant realities and just burying our heads in the sand.

If you look at how nature or even the cosmos works, there's always this constant dance toward balance, whether it's bipolar or multipolar.
A unipolar world is simply never sustainable in the long run, no matter who is holding the reins.

At the end of the day, the idea of a powerful, resource-rich, and militarily strong Russia collapsing is something only modern-day, decadent versions of Napoleon & Hitler could dream about. 🤣

Nicole Clark79 said:While I’d love to think you’re onto something, I feel like this VOA News narrative doesn't quite hold water when you consider how much the BRIC(A) bloc—that massive economic alliance between Brazil, Russia, India, China, and Africa—has already shifted the scales.
It feels more like the Chinese and Russians are playing both sides of the fence, keeping their cards close to their chests against "certain parties," otherwise they wouldn't have gone through the trouble of making a complete agreement to bypass the US Dollar as their primary medium of exchange in bilateral dealings.
In my experience, if you can dominate someone economically, winning a military conflict becomes a much easier follow-up if the need ever arises.
To be honest, it looks to me like Americans are feeling more vulnerable and perhaps a bit more panicked right now than they ever have before.
I don't think we gain much by ignoring these blatant realities and just burying our heads in the sand.

If you look at how nature or even the cosmos works, there's always this constant dance toward balance, whether it's bipolar or multipolar.
A unipolar world is simply never sustainable in the long run, no matter who is holding the reins.

At the end of the day, the idea of a powerful, resource-rich, and militarily strong Russia collapsing is something only modern-day, decadent versions of Napoleon & Hitler could dream about. 🤣

Aren't the BRICS nations currently working toward a supranational currency? Such a move would effectively cover two-thirds of the globe, both in terms of population and sheer landmass. And isn't it clear they'd rather peg it to the Euro than the dollar? That dollar is nothing more than a soap bubble, sustained entirely by banking investment debts. It has zero backing in actual production anymore; its value is maintained solely through the ability to force through the debt from those very same bank credits.

And here is the best part: everyone has realized it. They know the USA has nothing left to offer that couldn't be acquired more easily, faster, and cheaper on the open market—a market being shaped right now by the purchasing power of this very group of banking clients. Consequently, they can just print their own "dollars" and continue forcing through the debt created by putting them into circulation.

Lawrence Thompson58 said:Aren't the BRICS nations currently working toward a supranational currency? Such a move would effectively cover two-thirds of the globe, both in terms of population and sheer landmass. And isn't it clear they'd rather peg it to the Euro than the dollar? That dollar is nothing more than a soap bubble, sustained entirely by banking investment debts. It has zero backing in actual production anymore; its value is maintained solely through the ability to force through the debt from those very same bank credits.

And here is the best part: everyone has realized it. They know the USA has nothing left to offer that couldn't be acquired more easily, faster, and cheaper on the open market—a market being shaped right now by the purchasing power of this very group of banking clients. Consequently, they can just print their own "dollars" and continue forcing through the debt created by putting them into circulation.

👍Signed!

Arthur Ward2 said:Europe made the right call by cutting a deal with China—it's the exact same move the Americans made. You can't crawl out of a crisis without cooperation. Plus, let's be real, the West and China actually share a ton of common ground.

Look, Europe is already getting hit hard by recession, skyrocketing unemployment, the middle class basically vanishing, and massive deindustrialization, all because countries like China and India are surging ahead.
The thing is, Europe should probably be looking at an embargo on cooperation with China, because it’s not really Europe that depends on China—it’s actually the other way around.

Timothy Wilson2 said:Look, Europe is already getting hit hard by recession, skyrocketing unemployment, the middle class basically vanishing, and massive deindustrialization, all because countries like China and India are surging ahead.
The thing is, Europe should probably be looking at an embargo on cooperation with China, because it’s not really Europe that depends on China—it’s actually the other way around.

It makes perfect sense why China bought up so much US debt in the first place. Now, they're essentially handing that debt back to Europe as a "gift." Good luck trying to collect that from our "friendly" allies in the USA! Instead, China can use that leverage to fund their own economic recovery. They couldn't care less about the state of the European Union, especially when they see how much the domestic economy in the USA is allowed to crumble. For China, it doesn't matter who pays back the US or the EU, and frankly, they'll just sit back and watch to see if the USA eventually sabotages European efforts through some shady banking maneuvers.

But hey, no big deal, right? Because Europe and the USA successfully fought wars in Iraq and Afghanistan and still insist on playing global police officers. The only real question left is whether they'll suddenly find themselves needing those same "policemen" tomorrow to prevent a starving mob from tearing the current ruling class out of power.

Lawrence Thompson58 said:It makes perfect sense why China bought up so much US debt in the first place. Now, they're essentially handing that debt back to Europe as a "gift." Good luck trying to collect that from our "friendly" allies in the USA! Instead, China can use that leverage to fund their own economic recovery. They couldn't care less about the state of the European Union, especially when they see how much the domestic economy in the USA is allowed to crumble. For China, it doesn't matter who pays back the US or the EU, and frankly, they'll just sit back and watch to see if the USA eventually sabotages European efforts through some shady banking maneuvers.

But hey, no big deal, right? Because Europe and the USA successfully fought wars in Iraq and Afghanistan and still insist on playing global police officers. The only real question left is whether they'll suddenly find themselves needing those same "policemen" tomorrow to prevent a starving mob from tearing the current ruling class out of power.

Now you guys have stumbled onto another massive, burning issue that's just as critical. The European Union has to sort out its relationship with Atlanticist integration. American interests and European interests aren't even on the same page anymore; they're actually working against each other. There's really no point wasting breath talking about how absurd, harmful, illogical, or unfair it is for European nations to be dragged into these American imperialistic wars in the Middle East.
The solution to Chinese and Asian expansion shouldn't be leaning harder on the USA. Instead, Europe needs to start acting like a collection of sovereign nations and pursuing its own specific interests. But let's be real: that's pretty much impossible under the current free market system and the mandates coming out of Brussels, especially when you consider how they either prop up American imperialism or systematically gut the middle class and cause deindustrialization in Europe just so industry and the middle class can migrate over to China and India.

Timothy Wilson2 said:Now you guys have stumbled onto another massive, burning issue that's just as critical. The European Union has to sort out its relationship with Atlanticist integration. American interests and European interests aren't even on the same page anymore; they're actually working against each other. There's really no point wasting breath talking about how absurd, harmful, illogical, or unfair it is for European nations to be dragged into these American imperialistic wars in the Middle East.
The solution to Chinese and Asian expansion shouldn't be leaning harder on the USA. Instead, Europe needs to start acting like a collection of sovereign nations and pursuing its own specific interests. But let's be real: that's pretty much impossible under the current free market system and the mandates coming out of Brussels, especially when you consider how they either prop up American imperialism or systematically gut the middle class and cause deindustrialization in Europe just so industry and the middle class can migrate over to China and India.

Honestly, in this day and age, talk about "free markets" or "democracy" is pretty much empty rhetoric without any real substance behind it, don't you think?

Basically, whoever's got the most muscle dictates the market terms, and if you've got the most cash, you get to claim you have a "bigger" democracy.
The whole idea of a free market is a total myth;
what we actually see are the big players calling the shots through quotas, coercion, shady deals, and straight-up bullying—and hey, if the trade deals don't go their way, they aren't afraid to reach for weapons eventually, right?

Whether China is trying to save the European Union for its own sake, trying to undermine the USA, or just looking to dump the US Dollar while it still holds value... honestly, who cares?

What really matters is that a Chinese worker makes way less than someone working in the USA or Europe,
and since the world is getting smaller by the second, we seriously need to find a way to level the playing field regarding labor costs.
If we don't come up with something absolutely revolutionary soon, the middle class in the USA and Europe is toast,
and China is going to eat us all alive in the next 20 or 30 years!

Andrew Wright23 said:Honestly, in this day and age, talk about "free markets" or "democracy" is pretty much empty rhetoric without any real substance behind it, don't you think?

Basically, whoever's got the most muscle dictates the market terms, and if you've got the most cash, you get to claim you have a "bigger" democracy.
The whole idea of a free market is a total myth;
what we actually see are the big players calling the shots through quotas, coercion, shady deals, and straight-up bullying—and hey, if the trade deals don't go their way, they aren't afraid to reach for weapons eventually, right?

Whether China is trying to save the European Union for its own sake, trying to undermine the USA, or just looking to dump the US Dollar while it still holds value... honestly, who cares?

What really matters is that a Chinese worker makes way less than someone working in the USA or Europe,
and since the world is getting smaller by the second, we seriously need to find a way to level the playing field regarding labor costs.
If we don't come up with something absolutely revolutionary soon, the middle class in the USA and Europe is toast,
and China is going to eat us all alive in the next 20 or 30 years!

Look, there’s really no point in trying to reinvent the wheel here; the US and Europe just can't afford to let cheap Chinese goods run wild and compete head-to-head with local products on the open market. We honestly can't afford that kind of luxury, so the West has to step up and protect its own goods, its own brands, and its own manufacturers. If we don't, American workers are looking at a guaranteed wipeout of their market share, especially since they can't possibly compete with that Asian production—which, if you think about it, is actually being fueled by money from American and European capitalists.

Timothy Wilson2 said:Look, there’s really no point in trying to reinvent the wheel here; the US and Europe just can't afford to let cheap Chinese goods run wild and compete head-to-head with local products on the open market. We honestly can't afford that kind of luxury, so the West has to step up and protect its own goods, its own brands, and its own manufacturers. If we don't, American workers are looking at a guaranteed wipeout of their market share, especially since they can't possibly compete with that Asian production—which, if you think about it, is actually being fueled by money from American and European capitalists.

I mean, seriously, how are you even supposed to invent trade barriers in a true free market?
At the end of the day, cheap goods did exactly what they were supposed to do, and that's how China won this "war."
It looks like we might be heading toward a trade war over high-end luxury goods next.
It isn't even a struggle for China to just buy up a bunch of European brands and move all the manufacturing over to China, right?
They're basically turning the European Union and the USA into nothing more than a customer base.

It’s honestly wild that this whole process, which has been grinding along since the 80s, didn't show its face sooner, don't you think?
Where were all those famous economic theorists and Nobel laureates when it actually mattered?

THE GLOBAL ECONOMY

A currency war might be brewing right after this economic crisis.
Author/Source: Bloomberg/smedia
WASHINGTON, D.C. - Fears about a potential global currency war are spiking now that the dollar has hit its lowest eight-month mark against the Euro, especially as pressure builds from the United States for China to let its own currency strengthen. Just yesterday, the Euro was trading at over $1.40.

When people talk about a "currency war," they're really talking about countries intentionally devaluing their own money to make their exports cheaper and more competitive on the world stage. Right now, it looks like several nations are fighting against the natural trend of their currencies getting stronger. China is leading the pack here, keeping the yuan artificially weak..

Charles Michel, the head of the IMF, mentioned that if a currency war with China actually kicks off, it could seriously derail parts of the global economic recovery.

"It's clear the global economy is bouncing back, but let's be honest, it's still pretty fragile, partly because growth is so uneven. Over in Asia and South America, things are moving fast and the crisis there seems largely behind them. However, Europe is still dragging its feet in the recovery process. That’s what worries us, because Europe is such a massive pillar of the global economy. If they stumble, everyone feels it. Then you have the United States, where things are still feeling a bit uncertain," Charles Michel noted.

But China isn't the only player in this game. The United States is also playing a role by pushing Beijing to let the yuan appreciate against the dollar, all while the Federal Reserve keeps flooding the markets with dollars.

http://www.seebiz.eu/hr/valute-i-rob...ama,94665.html

We reached out to some top experts to get their take on this ongoing global currency battle. With the dollar currently struggling against both the Euro and the Yen, things are looking tense. Brkić explained that these currency wars often happen quietly in the background every single day, and the general public usually only notices when there's a major shakeup. He also pointed out that we can't ignore how this hits our own economy, since roughly 65% of global trade is settled in dollars.

Santini thinks the current climate feels a lot like the beginning of the last century.

"Whenever a crisis hits, everyone naturally starts looking out for number one. The exchange rate battles we're seeing today remind me of the 1920s, back when people called this 'beggar-thy-neighbor' policy. The logic is pretty blunt: keep your own production levels high no matter how much it hurts everyone else. That's exactly what we're witnessing now through this currency war," Santini concluded.

So, it looks like World War III has already kicked off, and for now, it's being fought "only" with currencies... 😲

Arthur Ward2 said:Look, the Dollar might stay the backbone of the US economy, but its days as the world's sole heavyweight are numbered—even the big shots on Wall Street and at the Federal Reserve know it. Once the Dollar loses its absolute grip, we’ll probably see something like the Amer competing with the Euro, while over in the East, the Yuan will likely take the lead—especially if Russia eventually falls apart. That’s why China, Europe, and America have actually found some common ground lately—fighting economic crises, dealing with Islamic terrorism, and eyeing up territory and resources in Russia. Just look at Biden China's recent visit and the way Beijing and Washington, D.C. are signing these massive economic and military deals; it proves Russia just isn't a player in the new world order anymore. http://www.voanews.com/english/news/...113630004.html http://www.reuters.com/article/idUSTRE70600P20110107

The era of Dollar dominance is dying. Sure, the USA will always be a massive player, but the days of one global dictatorship are over.
As for Russia falling apart? Keep dreaming, buddy. Plenty of people have had those same fantasies. The USSR collapsed, and honestly, Russia is much better off now than dealing with the headaches of places like Tajikistan, Kyrgyzstan, or Azerbaijan.
The Caucasus is a mess, sure, but it's a small area that Russia can handle. If it weren't for the support from Chechen Islamists coming from the outside, they'd have wrapped that situation up long ago.

Andrew Wright23 said:I mean, seriously, how are you even supposed to invent trade barriers in a true free market?
At the end of the day, cheap goods did exactly what they were supposed to do, and that's how China won this "war."
It looks like we might be heading toward a trade war over high-end luxury goods next.
It isn't even a struggle for China to just buy up a bunch of European brands and move all the manufacturing over to China, right?
They're basically turning the European Union and the USA into nothing more than a customer base.

It’s honestly wild that this whole process, which has been grinding along since the 80s, didn't show its face sooner, don't you think?
Where were all those famous economic theorists and Nobel laureates when it actually mattered?

That’s exactly why I made the point that we really need to put an end to this free market system. A totally unrestricted market just ends up empowering people who are economically and politically predatory.
If you're wondering why nobody saw this coming, check out what a truly brilliant mind had to say right after 1945: http://www.youtube.com/watch?v=Q7So4-VjEjc

Chinese socialism?

Man, the kind of capitalism you see in Oliver Twist stories is nothing compared to what's happening in China.