Chinese socialism and American capitalism are saving the US Dollar

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.

We've been spending way more than we actually make for years now—including our budget. If you look at the first five months of this year versus the same period last year, we're still overspending. Right now, when it comes to the budget deficit, it stands at $2304006333. Whether you think that's a lot or not, it's a serious hole given everything else going on economically. The real nightmare for the 2010 budget will be two specific things: pensions and healthcare. At this point, none of us can pull enough from our paychecks to cover those costs, so we’re looking at needing an extra 17 billion dollars for the 2010 budget.

The Government has been getting pretty twitchy lately whenever anyone points out they're responsible—mostly because they failed to fix the liquidity crisis sooner. Over at the White House, they're claiming they've already solved their own issues. Sure, maybe they fixed *their* problems, but they haven't fixed the American problem: this massive explosion of illiquidity that's been building up since early 2009. According to the Department of the Treasury, illiquidity sits at 24 billion dollars. State-controlled companies owe 400 million dollars. But here's the real kicker—based on that same law the Government passed themselves, we have nearly 20,000 companies with zero employees that still owe 12 billion 139 million dollars. Personal spending is down, GDP is sliding, or rather, the recession just won't quit. We were in a recession along with the rest of the world. The rest of the world moved on, but we're still stuck—there's no excuse left to say "well, everyone else is struggling too." Right now, GDP dropped by 2.5 percent in the first three months. Last year was even worse, dropping 9 percent. Our major partners, like Germany and Italy, have already climbed out of the recession. Even Canada, which was in a much tougher spot than us, is seeing recovery. Our neighbors, the Mexicans, have recovered and exited the recession as well. Meanwhile, we're having a brutal year.

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.

EU lifts arms embargo on China The weapons import embargo the EU placed on China following the Tiananmen Square massacre in 1989 could be lifted in early 2011, according to the French newspaper Le Figaro.

The proposal to end the embargo was discussed during the recent EU summit when Catherine Ashton presented a confidential report.

According to Le Figaro, the main reason cited for lifting the embargo is that it has "lost its practical justification."

Catherine Ashton stated that the EU actually agreed years ago that the embargo decision needed a review, but nothing has been done until now.
http://www.naslovi.net/2010-12-31/se...oruzje/2230761 Looks like we're headed toward military cooperation between China and Europe.

Now China and Japan are jumping in to help bail out those debt-heavy EU nations and save the Euro. Apparently, the Japanese Finance Minister is signaling that Tokyo wants to scoop up 20% of European government bonds by the end of the month.

Minister Yoshihiko Noda basically said he thinks it’s the right move—having one of the world's heavyweights buy into these bonds just to restore some much-needed confidence.

Analysts are saying this move clearly shows how worried Tokyo is about the crisis hitting their own export-driven economy.

Meanwhile, the European Union has already set up a €440 billion fund to act as a safety net for the most heavily indebted countries in the Eurozone. http://www.abcportal.info/detaljno.aspx?a=23822&b=2

Arthur Ward2 said:We've been spending way more than we actually make for years now—including our budget. If you look at the first five months of this year versus the same period last year, we're still overspending. Right now, when it comes to the budget deficit, it stands at $2304006333. Whether you think that's a lot or not, it's a serious hole given everything else going on economically. The real nightmare for the 2010 budget will be two specific things: pensions and healthcare. At this point, none of us can pull enough from our paychecks to cover those costs, so we’re looking at needing an extra 17 billion dollars for the 2010 budget.

The Government has been getting pretty twitchy lately whenever anyone points out they're responsible—mostly because they failed to fix the liquidity crisis sooner. Over at the White House, they're claiming they've already solved their own issues. Sure, maybe they fixed *their* problems, but they haven't fixed the American problem: this massive explosion of illiquidity that's been building up since early 2009. According to the Department of the Treasury, illiquidity sits at 24 billion dollars. State-controlled companies owe 400 million dollars. But here's the real kicker—based on that same law the Government passed themselves, we have nearly 20,000 companies with zero employees that still owe 12 billion 139 million dollars. Personal spending is down, GDP is sliding, or rather, the recession just won't quit. We were in a recession along with the rest of the world. The rest of the world moved on, but we're still stuck—there's no excuse left to say "well, everyone else is struggling too." Right now, GDP dropped by 2.5 percent in the first three months. Last year was even worse, dropping 9 percent. Our major partners, like Germany and Italy, have already climbed out of the recession. Even Canada, which was in a much tougher spot than us, is seeing recovery. Our neighbors, the Mexicans, have recovered and exited the recession as well. Meanwhile, we're having a brutal year.

Yeah, what you mentioned there are the hard stats. But what's the actual fix? It isn't through austerity measures, and it certainly isn't through waiting for foreign investment. That’s the same old song and dance from the politicians who caused this entire disaster in the first place—it’s just a way to pull the wool over the public's eyes. The same people who drove us into this collapse aren't the ones who are going to pull us out of it! This ever-widening deficit is essentially the result of debt plus interest. Interest basically breeds more interest, feeding into a cycle of mounting debt and budget deficits. It’s totally predictable: if the US Government keeps taking out new loans every single year just to pay the interest on old ones (let alone touching the principal), then obviously the debt just snowballs, and the budget has to be propped up with even more borrowing. Plus, almost all the money circulating in America is credit-based. So, if we want real change, we have to go to the root and overhaul the monetary system we have, which gives way too much leverage to the banking and financial sectors.

Timothy Wilson2 said:Yeah, what you mentioned there are the hard stats. But what's the actual fix? It isn't through austerity measures, and it certainly isn't through waiting for foreign investment. That’s the same old song and dance from the politicians who caused this entire disaster in the first place—it’s just a way to pull the wool over the public's eyes. The same people who drove us into this collapse aren't the ones who are going to pull us out of it! This ever-widening deficit is essentially the result of debt plus interest. Interest basically breeds more interest, feeding into a cycle of mounting debt and budget deficits. It’s totally predictable: if the US Government keeps taking out new loans every single year just to pay the interest on old ones (let alone touching the principal), then obviously the debt just snowballs, and the budget has to be propped up with even more borrowing. Plus, almost all the money circulating in America is credit-based. So, if we want real change, we have to go to the root and overhaul the monetary system we have, which gives way too much leverage to the banking and financial sectors.

That’s exactly why the IMF exists—to put a leash on monetary speculation coming from George Soros and Wall Street.

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?

The idea of a global free market was just a massive blunder by a greedy Western elite. We basically dug our own graves. A true free market requires at least some level of economic and especially social parity. Anything else doesn't lead to market integration—it leads to war.

China is stepping in to bail out Europe, all while hoping for an end to the arms embargo

BRUSSELS - It seems like China is becoming the ultimate lifeline for many European nations currently struggling with massive financial hurdles. Looking closely at how much money Chinese investors are pouring into Europe, it’s pretty clear there are some very specific economic and political motives at play here.

"True friends show up when times get tough." I remember reading about how the Chinese premier actually used this exact sentiment back in November 2010 during a trip to Athens. Since then, he hasn't just been talking the talk; he's been putting his money where his mouth is. We've seen billions of dollars poured into Greek ports and government bonds. It's a similar story over in Spain, too—where the Chinese government now holds about ten percent of the country's state bonds.

While visiting Madrid to meet with Prime Minister Zapater, the Chinese Vice Premier Li Keqiang promised his Spanish host that China would pick up a new package of Spanish bonds, essentially helping the government in Madrid navigate through their current economic and financial storm. Interestingly, the Vice Premier is heading to Germany this Thursday, where he’s looking to secure even more investments into China.

The media over in China is really leaning into this narrative of their country acting as a savior for European nations in distress. If you look at the real reasoning behind these moves, it comes down to simple math: China exports way more than it imports, which has sent their foreign exchange reserves soaring to a staggering $2.6 trillion. About a third of that is estimated to be in euros, and they need somewhere to put it to work. Up until now, they’ve kept about two-thirds of those reserves in US dollars, making them the largest creditor the USA has ever had. This has created a situation where Beijing is deeply tied to the fate of Washington, D.C.

In an effort to break free from that intense "embrace" with the US, China is increasingly pivoting toward the euro. It looks like they might be trying to kill two birds with one stone. By helping stabilize the euro area—which helps prevent the crisis from dragging down European economies further—they are also protecting their own export markets, which are the primary engine driving the Chinese economy forward.

At the heart of these Chinese business ventures in Europe lies some very calculated political maneuvering. By increasing their footprint, China aims to bolster its influence across Europe. They are also hoping this influence will lead to a softening of EU restrictions on high-tech goods, which are vital components for China's national defense programs. Ultimately, they are eyeing the lifting of the arms embargo, a restriction that has remained in place for twenty years, dating all the way back to the protests at Tiananmen Square.

It feels like China's wishes are starting to carry more weight in Europe. For instance, the EU High Representative for Foreign Affairs and Security, Catherine Ashton, recently voiced her doubts about whether the aforementioned embargo still makes sense. China has successfully transitioned into the role of both a supporter for European nations in crisis and a major international investor—a new reality that Europeans are still very much adjusting to.

http://seebiz.eu/hr/makroekonomija/s...ja,102480.html