(06-07-2016, 08:59 AM)radind Wrote:(06-07-2016, 08:12 AM)pbrower2a Wrote:(05-17-2016, 12:34 PM)Cynic Hero Wrote: As I mentioned before an unspoken reason for trump's policies is our entire economy's dependence on petrodollars. Because of this, the saudis, the russians or the chinese can simply cut of our oil (in the case of the saudis) or shift the world's reserve currency to something other than the dollar (in the case of China and Russia). If That occurs the US economy would immediately crumble and we would be reduced to a pre-industrial subsistence economy practically overnight. Zerohedge has published many articles explaining how this process would come about.
The Chinese can decide at a moment's notice, and at their convenience, that all dealings with business in China will be made in the yuan.
They are onto something: people throughout the world are placid because of cheap manufactured goods, especially entertainment devices, from China. Like them or not for their domestic politics, one can't deny that they are smart enough to know how to hurt us at a time of their choosing and convenience.
I am concerned about China long term( ~20 years out) as they continue to develop on military front. However, in the near term we seem to be mutually interdependent in terms of trade. China has internal struggles and cannot afford to end exports to the USA. Also, there has been some migration of production out of China.
The question becomes: when does one want to start a trade war or a military war?
I hope that the US maintains a military strong enough to deter military action.
Some good perspective there, Radind.
All trade, EXPORTS as well as imports, represents about 15% of our economy, and China only has a share of that. China could fall off the map tomorrow, and after some adjustments, would not be missed (economically, the cultural loss would be staggering).
China does use the Yuan for ALL internal economic transactions. Their national bank "sterilizing" the Dollar, Euro, Ruble, etc. it gets through foreign trade. Their foreign currency accounts sit on the ledgers of the central banks of the nations that are THE sovereign monopolies of their respective currencies - if it ever came to it, those China accounts could be 'disappeared' in a millisecond.
If you owe the bank several thousand dollars, that is your problem. If the banks owe you billions or trillions, well, you better be on your best behavior.
This is not rocket science, but it goes against all the memes about federal debt and fiat currency that the elites use to keep the sheeple worried and in line.