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Guest Post: China Surpasses U.S. As Number One Global Trading Power

Tyler Durden's picture




 

Submitted by Brandon Smith from Alt-Market


China Surpasses U.S. As Number One Global Trading Power

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.  This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, and consumer hub, and currency powerhouse.  In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar.  I was, of course, attacked as a “doom monger” and “conspiracy theorist”.  Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency.  This process has gone mostly ignored by the mainstream financial media.  However, I and many other independent analysts could not overlook the red flags.  I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-replaced

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan denominated debt?  Why begin borrowing capital from foreign creditors?  They certainly didn’t need the money.  Why were they moving away from export dependency and building a consumer base?  And why attempt to proliferate their currency?  Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation?  Didn’t the Chinese want their currency cheap so that they could maintain export superiority?  What did the Chinese know in 2005 that we didn’t?

Well, apparently they were either psychic, or SOMEONE gave them advanced warning.  They knew that there would be a crisis in American consumption and that this would lead to severe reduction in imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves.  They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long term treasury holdings to short term treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting Special Drawing Rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket currency.  In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar:

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half-worlds-new-money-supply

China is flooding the system with Yuan!  This means only one thing; China is no longer seeking to maintain the traditional trade relationship it has had with the U.S.

To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest BUYER, recently surpassing India.  Official estimates place Chinese gold purchases in 2012 at around 800 tons; an astonishing increase in their stockpile. 

The U.S. and the Federal Reserve can’t even deliver gold it is supposed to be holding for others, including Germany.

China has also recently quadrupled imports of rice and tripled wheat and corn imports in only one year.  Why?  Again, I ask, what do they know that we are not being told?

http://ajw.asahi.com/article/economy/business/AJ201302020056

As I have stated for many years, China is being groomed as an alternative economic engine in opposition to the U.S., and that this will lead to an eventual dump by them of the Greenback.  This scenario is not only based on my opinion, it has also been spoken of openly by elitist financiers, including George Soros:

This past month, the same plan has been reiterated by Zhu Min, the deputy managing director of the IMF.  In his statement, he proclaimed that the shift by China into a more consumer based system had been successful, and that the Yuan or RMB, was on the way to becoming a world reserve currency:

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130118000075&cid=1102

I believe that the moment for the epic changeover, and all the political and financial conflict that comes with it, has begun…

It has been announced this week that China surpassed the U.S. for the first time ever as the number one trading power in the world:

http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

U.S. exports and imports last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion:

“It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. “The surpassing of the U.S. is not because of a substantially undervalued currency that has led to an export boom,” said Lardy, noting that Chinese imports have grown more rapidly than exports since 2007.”

“According to O’Neill (Goldman Sachs Jim O’Neill), the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.

“One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,” O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. “To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.”

For those who are still not aware of why this is such a big deal, it is essentially a turning point moment in global trade.  There is no doubt that China will now be inducted into the SDR, and that their importance as a trade and consumption center will quickly lead to a move away from the dollar.  To put it simply, the dollar is going to lose its world reserve status VERY soon.  Many will cheer this change as necessary progress towards a more “globally conscious” economic system.  However, it’s not that simple.  Total centralization is first and foremost the dream of idiots, and in any mutation (or amputation) there is always considerable pain involved.  The proponents of this “New World Order” (their words, not mine) seem to have placed the U.S. squarely in their crosshairs as the primary recipient of this fiscal pain.

In my early analysis, I felt it possible that Japan would be inducted willingly into the new ASEAN trading bloc and that they would swiftly fall in line with a dump of the dollar, mainly because their export markets were suffering greatly due to the decline in American purchases.  Now it appears that Japan has not been as pliable as the globalists wanted, and so, a war may be on the table in the Pacific.

Rhetoric in Chinese newspapers has been very heated and provocative, and the tensions surrounding the Senkaku/Diaoyu Islands is reaching a boiling point.  The two countries have done everything so far EXCEPT shoot at each other, and that will be happening in due course now that China is allegedly locking offensive radar onto Japanese ships.  Even Chinese films released in the past two years have been soaked with anti-Japan propaganda, most of them usually set during WWII around the brutal invasion and subjugation by the Japanese in Chinese provinces.

The recipe is one of inevitable disaster, with the U.S. at the center of a boiling pot.  As I pointed in my last economic piece, we must now look to events rather than numbers to gain insight into where we are headed.  The time has come.  China is nearly ready for IMF inclusion.  Volatility around the world is high.  Our government has a final decision to make on the Fiscal Cliff in March, not to mention the sudden push for possible gun registration and confiscation.  My instincts tell me that so many explosive aspects coalescing together at the same tenuous moment is not a coincidence.  The next few months call for hyper-vigilance and every ounce of energy we can muster to educate as many people as possible in as short a time as possible.

I say again, China has surpassed the U.S. in global trade.  A drop of the dollar is the obvious next step…

 

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Sun, 02/10/2013 - 12:04 | 3230467 Karlus
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Well isnt that special

Sun, 02/10/2013 - 12:42 | 3230592 caconhma
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20 years ago, working in the Bay Area, CA, I met and made friends with many American's Chinese. From them I heard again and again: We Chinese the most nationalistic people in the entire world.

My regional manager told me: Never try to sell anything to Chinese unless you are a single source of these products. Do not waste your time trying to do stupid things. In a few years later, he became The Principal Financial Ex. VP.

 

Sun, 02/10/2013 - 13:57 | 3230822 zerozulu
zerozulu's picture

meanwhile China took charge of strategically situated southern Pakistan's deep sea port of Gwadar.

http://www.chinadaily.com.cn/world/2013-02/01/content_16192138.htm

http://maps.google.com/maps?q=Port+Road,+Gw%C4%81dar,+Balochistan,+Pakis...

 

Mon, 02/11/2013 - 01:05 | 3232308 jeff montanye
jeff montanye's picture

should have waited until last year to shorten the maturity of their u.s. treasury portfolio though.

Sun, 02/10/2013 - 12:05 | 3230468 nicoacademia
nicoacademia's picture

so 2019? big war in my backyard?

 

Japan is a weak country.

 

i'm sure China will find a way to bring it to its knees without invoking war in this region.

 

Granted china will be able to wipe most of SEA off easily and access even more resources(like japan once tried to achieve).

 

but being here. i guess i wouldn't want war here. i like to maintain this lifestyle of surfing twitter and zerohedge. you know?

Sun, 02/10/2013 - 12:13 | 3230484 reader2010
reader2010's picture

Does that mean the Chinese people get more happiness from the fact?

Sun, 02/10/2013 - 13:47 | 3230794 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Does that mean the Chinese people get more happiness from the fact?

Observations on Chinese citizenism encompasses hundred of millions of people.

The trading opportunities reported and exploited by merchants is built on proclaiming a fact not corresponding with neolithic hunter/gatherer level. So back to Smith and his famous argument. I wonder who is right now, the guro of US citizen economics or his opponents?

The difference between generalizing on general ground and generalizing on singular ground being rooted in a no evidence ground.

Superior ground... Yes, sure.

Nothing like a humanity age long old adage as Chinese citizenism citizens who have blobbed up while ambitioning to become a bigger version through their fabled past thingy foolish association would like to be.

Funnily enough, Chinese Communautist Party groups are the undivided entity in Chinese citizenism. For Party members, the world is their roadside. This old adage is not even that old considered how old adages are usually old.

Regards the 'distant' past, simply reading how Tibet was opened to Chinese citizenism demand for slave trade instructs.

As to the Chinese people get more happiness? Emotional appeal to authority is built on proclaiming a fact. So for Chinese citizenism citizens, by traditional Chinese citizenism expostulatory protocols, one saying so makes it so, so it is so with vigourous endeavorings.

Have not checked if it is true.

For the rest of Chineses, Tibetans, Mongolians, and others I wish good luck to try to beat that. They are going to display imagination...

Sun, 02/10/2013 - 14:19 | 3230868 reader2010
reader2010's picture

What is your definition of happiness? Owning some modern technology tools, such as mobile phones, iPads, automobiles, can give you happiness?  Or we should revisit the definition of happiness defined in the Enlightenment? Does living in a just and not more unequal society make people feel less happy? Perhaps the people living in Beijing feel much greater degree of happiness with their great air quality?

Sun, 02/10/2013 - 12:14 | 3230485 DanDaley
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Reminds me of one of those old WWII movies where the Japanese soldier screams out in the night, "American dog...you die!" Only this time it's the Chinese.

Sun, 02/10/2013 - 12:19 | 3230486 q99x2
q99x2's picture

The Chinese are susposed to run the US and Europe and the Globalists are susposed to kick back in private cities and control the world.

But the Chinese know better they will kill the globalists first chance they get. Maybe one by one in the courtyards. They have a decent track record with banksters and money changers.

Geithner still looks more like the human ancestor from 65 million years ago than he does the Chinese.

Sun, 02/10/2013 - 13:30 | 3230744 Ghordius
Ghordius's picture

without taking any merit from your statement: this word, "Globalist"

currently it's being used only in the US

in your definition it seems to denote also a number of what the article called "elitist financiers", who "kick back in private cities and control the world"

many use though the word more for organizations like the IMF, the NATO, ASEAN, WTO,  and the UNO

illdefined - used only by certain media - and very suggestive, perhaps because it's nebulous

at the moment nothing much more than "them"

Sun, 02/10/2013 - 12:14 | 3230488 nightshiftsucks
nightshiftsucks's picture

Who believes anything that China say's ?

Sun, 02/10/2013 - 12:16 | 3230489 Atomizer
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Thanks Tyler. At least the message is getting out. Now we sit back and watch the three branches of US GOVERNMENT. The weasels will be easy to spot. 

Sun, 02/10/2013 - 12:24 | 3230516 lunaticfringe
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Four branches.The unelected FED. Fify.

Sun, 02/10/2013 - 12:17 | 3230491 markettime
markettime's picture

Call in all of the debt, make your enemies devalue thier currency to pay thier bills. Then announce that you have covered your currency with hard assets and that you will not trade with anyone who hasn't covered theirs. The race to the top would begin and we would see who has been swimming without a bathing suit. 

Sun, 02/10/2013 - 22:20 | 3231954 post turtle saver
post turtle saver's picture

Finance is a gun. Politics is knowing when to pull the trigger.

Sun, 02/10/2013 - 12:18 | 3230493 Yellowhoard
Sun, 02/10/2013 - 12:18 | 3230495 Rainman
Rainman's picture

Bbbut......in the 1980s Japan Inc. was supposed to displace USSA as the world's economic superpower by 2010. I'm confused.

http://teacher.scholastic.com/scholasticnews/indepth/upfront/features/index.asp?article=f022111_japan

 

Sun, 02/10/2013 - 15:14 | 3230977 zerozulu
zerozulu's picture

Yes they were. They were also thinking to replace US$ with JPY as world reserve currency. Toyota was thinking to replace Mercedes Benz. But the dream remained a dream.

1. inadequate houses to live

2. not enough food to eat

3. undeveloped  language to speak (only two tense, past and present)

4. third world army to protect

5. coward politicians

Sun, 02/10/2013 - 12:18 | 3230496 yogibear
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The way China can win without firing a shot is to bring down the US economically.

Time is doing this.

The US outsourced it's manufacturing and technology to China.

All the US has left is a saturation of debt.

Soon the US won't be able to afford it's military. 

Sun, 02/10/2013 - 12:24 | 3230500 CheapBastard
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This must mean Moar War. The Petrodollar must be saved at all costs from what I am seeing.

Sun, 02/10/2013 - 12:19 | 3230501 PUD
PUD's picture

This article is just more confirmation of the stupidity and folly of humankind. On a planet so small as ours, for a people to be pitting themselves against each other, is nothing short of madness. The competitive system of capitalism, the fostering of nationalism, the primitive notions of race and religion are as entrenched as ever and the results will be the same as they have throughout history...bloodshed.

A sane species would be moving towards a unified world not trading blocs, towards co-operation not one up manship, toward preservation and sustainability not introducing billions more to the joys of mass consumerism. A sane species would not covet a yellow metal, have weapons manufacturing a principal foundation of economies and would not be constantly seeking to prosper at someone elses expense. 

We are doomed but not because of the fed or trade or currency wars...they are all symptoms of the disease. The fatal demise of us all is this pathological desire to hoard, to thrive while others suffer, to press barbaric ideologies on to the unwilling and the tenacious hold bronze age religion still has upon the human consciousness.

Sun, 02/10/2013 - 12:25 | 3230520 PUD
PUD's picture

Don't down arrow my unless you have something of value and insight coming from your pie hole to challenge me

Sun, 02/10/2013 - 12:34 | 3230561 imapopulistnow
imapopulistnow's picture

Here'e an insight:  You sound like Ted Kaczynski

Sun, 02/10/2013 - 12:35 | 3230563 Paladin en passant
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This is a capitalist investment site, not a religious soapbox, you pud.

Sun, 02/10/2013 - 12:38 | 3230572 PUD
PUD's picture

No it is not. It is as much a philosophical site as anything else. There is as much geo political blather here as there is stock market news. It is as much a cultural site as it is a gambling site.

Sun, 02/10/2013 - 15:29 | 3230999 Cathartes Aura
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from the ZeroHedge "manifesto" at the top of your page:

our mission:

  • to widen the scope of financial, economic and political information available to the professional investing public.
  • to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.
  • to liberate oppressed knowledge.
  • to provide analysis uninhibited by political constraint.
  • to facilitate information's unending quest for freedom.
Sun, 02/10/2013 - 12:28 | 3230539 Karlus
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You, Beta-male, are the product of countless generations of conflict. You attempt to deny (you would say trancend) that what made you what you are today.

The system works. It produces humans that strive to innovate, learn, master and reproduce.

Just because you want to be cool like Anderson Cooper does not make you advanced. My spawn will pwn yours if you even have the dumb sense to reproduce. To the victor goes the spoils (and the writing of history)

Sun, 02/10/2013 - 12:35 | 3230564 PUD
PUD's picture

There are no "victors" in the 21st century fool. There are no victors when the climate itself gets altered and the planet teems with weapons of mass destruction.

Sun, 02/10/2013 - 18:23 | 3231358 Lord Of Finance
Lord Of Finance's picture

Your sentiment on "religion" is too general/labeling. The problem is not so much the religion, but its hypocritical leadership. That is the way it has always been and always will. The problem is not religion itself, but the established corrupt leadership.

 

   That is the other main theme of the new testament. Jesus came not to neccesarily condemn the sinner but to condemn the hiarchial establishment. He forgave the adulteress and even the guards who nailed him to the cross, but he had nothing but bitter contempt and condemnation for the scribes and pharasees who were the hypocritical and corrupt religious establishment.

 

The "other" message is that these things have always been this way and will pass, but we are eternal with immortal souls and our souls need nourishment, so dont become discouraged, bitter and lose faith because of the very bad example of the religious establishment.

 

Sun, 02/10/2013 - 13:54 | 3230710 suteibu
suteibu's picture

Some people have the hubris to believe that humans are somehow exempt from evolution.  In every other organism on the planet, the strongest always survive.  What the Utopians want is to stop the evolutionary process in humanity and justify it in their own minds by their belief that we have reached the pinnacle of evolution. [edit to add] ...or that they believe they are somehow qualified to guide the future evolution of humanity.

Sun, 02/10/2013 - 17:11 | 3231130 medium giraffe
medium giraffe's picture

Nah, the system just produces consumers and wage slaves, masters and soldiers.  Built in obsolecence retards technological progress, the education systems of the world fail to promote independent and critical thought and our foods poison us.  The system stands in the way of progress, it's amazing that we've come as far as we have considering.  Until you get rid of Mr Petrodollar it's staying that way.   Sorry fella....

Sun, 02/10/2013 - 12:30 | 3230543 Sean7k
Sean7k's picture

You better find another species, because you clearly have no understanding of humans. 

Hoarding is necessary for security, it is what promises future survival. Thriving is merely a measure of the fitness of the species. We require it to survive- it is what makes us stronger.

People save gold because it has value and like many other commodities, helps guarantee our future. 

To relieve the FED or government of responsibility is the ultimate folly. They rule through coercion, therefore their ethics must be judged and if found wanting- THEY ARE THE FOCUS OF BLAME.

You cannot unify people because they are not homogenous. They are INDIVIDUALS. Cooperation will only be rewarded if it produces a GAIN. 

Your socialist crap is no different from the bronze age religion you deride. 

Liberty with responsibility is the only promise worth living for.

Sun, 02/10/2013 - 12:33 | 3230559 PUD
PUD's picture

To believe your tripe is to admit that you are incapable of rational thinking. That you are incapable of seeing the advantages of using reason. That you are incapable of rising above your dna programing despite science, knowledge and your own ultimate well being.

Sun, 02/10/2013 - 12:39 | 3230581 Sean7k
Sean7k's picture

Why? Because my reasoning doesn't accept yours? Because your reasoning is somehow superior to any other, even if you are incapable of providing a defense of your reasoning? 

You think your DNA programming can be overridden by desire? Where did you study science? We don't even understand our DNA programming, but YOU do? 

What a piker...

Sun, 02/10/2013 - 12:46 | 3230610 PUD
PUD's picture

Are you blind? How many nations now are involved in competitive devaluations of their money? Each of them exercising their dna programing to gather resources and trump their neighbor. Tell me how that system is superior to one that would unify currency, allocate resources, break down nationalism and racism...

Sun, 02/10/2013 - 12:54 | 3230641 Sean7k
Sean7k's picture

I never said this system is superior. I implied that your idea of benign socialism is naive and moronic. We have competitive devaluations because we have fiat currencies that are not linked to stable commodities (like gold). 

When you unify currency, allocate resources and breakdown nationalism you have.....global socialistic totalitarianism. This is because the "good guys" never get to be in charge. It is because you destroy the market mechanism that allows for the efficient allocation of resources. 

I am always amazed when people fail to see this historic fact. Historical blindness...you might want to get some glasses.

Sun, 02/10/2013 - 13:04 | 3230675 suteibu
suteibu's picture

The problem with your idea of unity is always "who" decides.  You?  Obama? Xi?  There is no messiah who is capable of unifying the planet except by force of arms.  Ultimately, that is where you path to Utopia leads.  Is that really what you want?

Sun, 02/10/2013 - 13:19 | 3230715 PeeramidIdeologies
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Leadership is not about control. It is assisting those around you to reach their full potential. Of course people would need to be motivated to presue their natural inclinations to the greater good, so utopia isn't really in the cards...

Sun, 02/10/2013 - 13:23 | 3230729 suteibu
suteibu's picture

Test your leadership definition against the current world "leaders" and show me who passes the "not about control" ideal.

Sun, 02/10/2013 - 13:32 | 3230749 PeeramidIdeologies
PeeramidIdeologies's picture

I don't consider them leaders. Do you? They seem more like a bunch of crotchety old bastards, who missed the boat on the true value of life, wouldn't you say?

Sun, 02/10/2013 - 13:39 | 3230771 suteibu
suteibu's picture

Well, that's the point.  No one is in a position to lead this world by your definition.  And, yet, many people who want a unified world (socialists and Utopians) don't seem to have a problem with our current "leaders" taking us in that direction. 

Sun, 02/10/2013 - 14:08 | 3230845 PeeramidIdeologies
PeeramidIdeologies's picture

That's why a change in ideals is needed here. I see you mentioned evolution above. I believe there is a strong case for the argument that we stopped evolving a long time ago. If indeed we ever did. Either way, we stopped needing to evolve when we became able to manipulate our environment. That was a long time ago. We have since become our own worst enemy, always infighting, never working towards balance and sustainability. We pride ourselves in being superior beings on this planet, with the brains to solve all our issues. Yet we keep making the same mistakes. What's the next stage for mankind? A step forward or another bout of snatch and grab?

Sun, 02/10/2013 - 14:25 | 3230883 suteibu
suteibu's picture

We (our generations) are but a blip in human history and irrelevant to the evolution of humanity.  To assume that we even know what evolution is is to be closed-minded and narcissistic.  To suggest that we can direct the further evolution of humanity by dictate limits our ability to evolve because we have no idea what the pinnacle of our species is or can be.  Without a goal, direction does more harm than good.  We haven't learned anything about ourselves even with all of the documented history to review as evidenced by our current failed attempt to unify the planet.  All such attempts in the past have failed so why do we force it now when the results are mostly destructive?

Sun, 02/10/2013 - 14:55 | 3230942 PeeramidIdeologies
PeeramidIdeologies's picture

I see that we still use the same mathematics, astrology, science, religion, in fact all of the pillars of society today were learnt thousands of years ago. Why did we stop there? We know this structure doesn't work. To be complacent at this stage is to be destructive, which is too name this the pinnacle of our species. To admit now that because all efforts have failed in the past, all efforts will fail in the future, is rather pessimistic. Although realistic...

On that note

A giant leap for man began with a small step ~ T.K.

Sun, 02/10/2013 - 15:43 | 3231030 Anusocracy
Anusocracy's picture

The zero-sum game of the animal world is the modus operandi of government. When man departed from nature's zero-sum economics and created positive-sum economics through plant and animal husbandry - applying intelligence to nature - government and its zero-sum economics, being biologically based, was not amenable to man's increasing intelligence.

It still is not, and we are still suffering from all the grief government causes.

 

Sun, 02/10/2013 - 16:01 | 3231067 suteibu
suteibu's picture

Recorded history is insignificant to evolution.  The mistake is to take the past 5000 years and think we understand ourselves.  We need more da Vincis and Einsteins and fewer kings and would-be kings who think they know better than those of the past.

Sun, 02/10/2013 - 22:45 | 3232016 Anusocracy
Anusocracy's picture

Precisely.

More people who create, and far fewer who expropriate.

Sun, 02/10/2013 - 14:47 | 3230922 suteibu
suteibu's picture

And people are not the problem.  Most people get along fine with others out of their desire for self-preservation and the natural inclination to find commonality in their society.  It is always the "leaders" who cause the problems.  Ergo, the less power we give to the "leaders," the less turmoil in life.  Decentralization, not globalism, is the best path for peace and security.

Sun, 02/10/2013 - 14:56 | 3230949 PeeramidIdeologies
PeeramidIdeologies's picture

Can't argue that.

Sun, 02/10/2013 - 15:05 | 3230961 Anusocracy
Anusocracy's picture

Human society, like rhesus macaque society, is built around the alpha-male social hierarchy. Snatch and grab is how it functions: might makes right. Except that it has metastasized from an alpha-male taking food from you, beating the crap out of you, or killing your offspring, to an alpha-male leader of a nation that takes 50% of your productivity, imprisons or kills you for not being obedient, and sends you or your offspring off to war because he wants to.

All so his type of mindset (genes) can survive at the expense of decent, productive people.

So, how do you stand on alpha-male social hierarchy governments?

 

Sun, 02/10/2013 - 15:23 | 3230988 PeeramidIdeologies
PeeramidIdeologies's picture

I can't say I agree with the idea of it. But in today's world I have been able to build a life that allows me to provide for myself as well as enjoy some of the finer pleasures. Do you really believe those in power fully intend to cause a society to collapse? Or are they simply actors in the same play that has be rerun many times?

Sun, 02/10/2013 - 15:51 | 3231043 Anusocracy
Anusocracy's picture

Is a parasite aware of the fact that it is harming the host and it might die after it kills its host?

It doesn't matter, as long as the parasite continues to reproduce.

Is that a question the elites are asking?

Sun, 02/10/2013 - 15:56 | 3231058 suteibu
suteibu's picture

And, thus, you have succeeded in fulfilling your duty to evolution.  What more do you want?  But everyone is not like you.  Many don't want your life or your way of thinking.  Who are you, or anyone else, to say that they should.  Evolution, innovation, and growth demands that we allow everyone to contribute to the process in their own way, not as a part of some homogeneous, hive-minded society.  That is why central-planned economies and societies ultimately fail and the lesson we can't seem to learn.  It is the hubris of those in power who believe that this time will be different.

Sun, 02/10/2013 - 12:40 | 3230585 Karlus
Karlus's picture

Fool, it's my genes that I want to survive. No level of your "rational thinking" will change that.

Look, Im not against charity nor am I against feeling pride in my country and my brother man. There are even scanarios where I would die for him.

But, conflict and a desire to better yourself and your family are not the traits of someone with irrational thought, quite the opposite.

Go put on your hairshirt and live a life of charity and servitude, I care not.

But that is the way of the grass-eaters. Me, I prefer the meat

Sun, 02/10/2013 - 12:43 | 3230601 PUD
PUD's picture

Tell me then...If 7 billion homo sapiens all share your philosophy what will be your future?

Sun, 02/10/2013 - 12:51 | 3230631 Karlus
Karlus's picture

May the best man win

Sun, 02/10/2013 - 14:02 | 3230834 ISEEIT
ISEEIT's picture

Now that was seriously lame. Go back to troll school and study the meaning of epistemological

Remedial education could just be the 'next big thing' :)

http://www.innerexplorations.com/catjc/st2.htm

Sun, 02/10/2013 - 12:32 | 3230554 lunaticfringe
lunaticfringe's picture

Excellent. People don't like hearing the truth about themselves. Ignore the down arrows.

People are unconscious, self absorbed, narcissists. Tolle speaks to the insanity of this planet in a New Earth. That insanity would be bad enough- but mankind acts on it. He kills people that don't believe like he does. It is a sickness wherein the willingness to kill others is based in some ridiculous fear. Hoarding is fear. 

It's all about the irrational fears of mankind and man's willingness to kill those he fears. Always has been.

Sun, 02/10/2013 - 12:39 | 3230580 PUD
PUD's picture

Thank you. Correct you are.

Sun, 02/10/2013 - 12:42 | 3230597 Sean7k
Sean7k's picture

This is perfect. You both agree we are incapable of transcending our base natures, IN COMPLETE DISAGREEMENT with your original post. Hilarious!

Sun, 02/10/2013 - 12:48 | 3230619 PUD
PUD's picture

No, I acknowledge that most humans can't or won't. That they are slaves to superstition and perceived self interest. There are those of us who are more enlightened which proves that it is possible

Sun, 02/10/2013 - 12:57 | 3230651 Sean7k
Sean7k's picture

Oh enlightened one! Show us poor pathetic souls the true path! Stop it, you're killing me!

Sun, 02/10/2013 - 14:07 | 3230843 ISEEIT
ISEEIT's picture

If we were so 'enlightened' as you abuse the term, why in the fuck would we be in front of a monitor typing bullshit into a website?

I do understand the plato's cave deal......But arguing with idiots doesn't really leave me feeling satiated. More like a dumb whore who just did it again despite the remorseful vow made yesterday....And nearly each day prior for the last number of meaningless to count days.

Sun, 02/10/2013 - 12:54 | 3230644 lunaticfringe
lunaticfringe's picture

Men are unconscious Sean. They believe the same tribal BS they have always been taught. To transcend means to awaken. Offer proof or yield. 

Sun, 02/10/2013 - 13:03 | 3230671 Sean7k
Sean7k's picture

If we were unconscious, we would all be in comas. What you probably mean is we are at different levels of consciousness, which is in itself a form of narcissistic evaluation. You want to celebrate a subjective philosophy, because it meets the needs of your own narcissism. 

Transcend to what? Your own ideal? You are only awakened if you believe as I do? 

There is no proof of philosophical ideal. There is only acceptance, an in so doing, condemning yourself to the little world of ideas that form your intellectual cage. You believe the same bs that you have accepted. You are no different from those you ridicule.

Sun, 02/10/2013 - 13:39 | 3230750 lunaticfringe
lunaticfringe's picture

Alright, I am going to ignore my first impulse to trade insults with you.

Read the book. Learn something useful or spend the rest of your life being miserable and trading insults with people.

Btw, wtf do you know about me? http://realemotionalfreedom.blogspot.com/

Sun, 02/10/2013 - 12:58 | 3230658 PeeramidIdeologies
PeeramidIdeologies's picture

A lot of people on this site have a smaller perspective then the palm of my hand. History didn't begin 175 years ago. Unfortunately small minded people like you will have this planet consumed before you figure that out.

Sun, 02/10/2013 - 13:12 | 3230693 Sean7k
Sean7k's picture

Of course it didn't. You must be a modern malthusian, another relic of resource doom and gloom. The economics of resource allocation and development are available, in books that fit in the palm of your hand.

"Energy: The Master Resource" by Bradley and Fullmer.

My small mind enjoyed it, perhaps your "great big mind" will too. Keeping in mind that without an adequate knowlege of the complexities of the folds and canyons within my brain, it is pretty hard to make a good determination of neuroactivity.

Sun, 02/10/2013 - 13:28 | 3230741 PeeramidIdeologies
PeeramidIdeologies's picture

There is only one way to find out, isnt there. I imagine your small mind did enjoy that book, it needs to be told what to think. Infact you are the amazing creature that you are due, in thanks, to those that came before you. They taught you what you know, shared with you what they had. You would do well to remember that while sitting on your pile resources.

Sun, 02/10/2013 - 13:45 | 3230789 Sean7k
Sean7k's picture

" Infact you are the amazing creature that you are due, in thanks, to those that came before you. They taught you what you know, shared with you what they had."

It's the White House on line one. Obama has entered the conversation. 

How small is your mind if it gets its' marching orders from the first kenyan?

Sun, 02/10/2013 - 13:46 | 3230790 ISEEIT
ISEEIT's picture

Oh lunatic...So pray tell your solution in overcoming the resistance of others to your present determination of highest and best value?

1.) Who the fuck granted you this authoritie?

2.) By what means do you suggest 'we' 'assist' (cough, cough) 'others' hmmmm....Like, into doing what we/you want?

Do you actually suggest we assign that role to some global authority? Fucking really?

You are either ignorant to the point of unwellness by choice or design.

Not sure what the case is with you, but NEVER would I desire to fuck with your 'space' as so long as this YOU thing does not fuck with mine.

It's the non aggression principle fellow soul, and it would work quite well if considered properly.

Boils down to respect, something the monsters who desire universal control have none of just by simple definition of that which they/you? represent.

Leave others the fuck alone and we will all by natural selection sort it out.

Piece of shit.

Sun, 02/10/2013 - 14:52 | 3230934 e-recep
e-recep's picture

fear is good. it keeps one alive. it's our evolutionary heritage.

Sun, 02/10/2013 - 12:46 | 3230611 adr
adr's picture

Wrong. We should move in the exact opposite direction. Progress has never come from a centrally planned system. E need to go back to tribes, villages, and local control. If a town runs itself well, they will live and prosper. If a different town tries the more liberal, everyone is the same method and fails, they will die off. The diffrence between this system and the current one, is that failure is punished instead of bailed out by the few that are successful.

Let's see what we get with the end result of globalism:

When Unfied Central Control tells you your 500sq ft block must be painted red, and you want it blue, what do you do?

When you are told you must be castrated, but first they will harvest sperm, and eggs from your wife. So at specific times you will be granted children by the government, what will you do?

People are different, they think different, have different skills, like different things. This is not learned, it is ingrained in our DNA. If I want to do smething different, who are you to tell me I can't?

Do you think people are born evil, or is it all learned behavior? If you think it is learned you are 100% wrong. A sociopath is born that way. They may learn to be a productive member of society, but the sociopathic tendancies will always be there. That is the true problem on Earth, that we don't recognize the sociopaths and lock them away. Since a sociopath tends to not care about the good of anyone else, they tend to seek power and control. Is it any wonder that so many CEOs and politicians are textbook sociopaths?

The easiest way to prevent a sociopath from taking control is to make sure they have no power over a large group. Say you get an absolute sociopath that controls the government of the entire globe, where do you escape?

The only way you get all of the people to live under on system is slavery. Best case scenario, it turns out like the movie Wall-E where everyone becomes drones unaware of their surroundings.

Global kumbaya is a pipe dream of madmen.

Sun, 02/10/2013 - 12:50 | 3230629 PUD
PUD's picture

Well when your medieval village has a good crop and the 3 surrounding ones don't because you hogged all the water, let me know how well you're doing ok?

Sun, 02/10/2013 - 13:01 | 3230667 Karlus
Karlus's picture

Im kinda getting done arguing with a grass-chewer. If you dont conquer the other tribes that took your water, then you genes dont get passed on. You can try and cooperate, but what do you have to trade or offer?

That is my whole point. Why do people study, save money, pospone pleasure now for additional benefit later? Why to be competetive of course.

Humans are winners. Americans consume more per capita than anyone. What gives us the right? Why are we so special when others starve? Are we just lucky? Did we "steal" land from the indians? Does the rest ofthe world have a score to settle with us?

Are we like Rome before the fall, navel-gazing a bread and circuses and wondering about gays in the military, if women should be in combat, if certain groups need more "fairness" than others?

Let me be explicit with you, when the s hits the f, its going to be people like me grinding to get that last bit of gristle off of your tibia before Im off to enjoy your daughter. Graphic? Yeah, it is. Your "socialism" will loose the savage in some of us that want to win at any cost. We will then rebuild until the weakest of us pollute the strongest.

See you soon, Anderson C, dont forget the steak sauce :)

Sun, 02/10/2013 - 13:36 | 3230758 PeeramidIdeologies
PeeramidIdeologies's picture

You better hope your the biggest fish in the pond...

Sun, 02/10/2013 - 13:51 | 3230809 Karlus
Karlus's picture

I would prefer the smartest, most well prepared and armed.

The crisis, when it hits, will be all about our supply chain collapsing. Can you survive the first few months without Kroger?

You can be a big fish, but being hungry and thirsty will take the fight out of you. It comes down to he who owns the protein wins

Sun, 02/10/2013 - 14:19 | 3230865 PeeramidIdeologies
PeeramidIdeologies's picture

I have no worries in regards to supplying my own needs. I have more concern for those around me, and those looking to take advantage of the situation. Preparation is fine though the actions of a sane, logical, compassionate individual. But these can be trying times for those closer to the edge. I believe that's worth considering.

Sun, 02/10/2013 - 13:48 | 3230788 Babushka
Babushka's picture

There are sheep, wolf and a shepard. Shepard kills wolf and occasionally does fleece, milk and eat sheep, wolf kills/eats sheep and occasionally shepard, sheep eats grass and most of the time is being, milked, fleeced, eaten and occasionaly fucked.

Sun, 02/10/2013 - 13:52 | 3230810 Babushka
Babushka's picture

And of cause there are some dogs but this is another story.

Sun, 02/10/2013 - 14:21 | 3230871 PeeramidIdeologies
PeeramidIdeologies's picture

Sounds like your analogies are a loosely based... Are you sure you know the role of all the animals in the barn yard?

Sun, 02/10/2013 - 18:58 | 3231453 Babushka
Babushka's picture

the one I am not sure about is the shepard...

Sun, 02/10/2013 - 13:35 | 3230752 suteibu
suteibu's picture

So decentralization automatically means regression?  No more mobile phones or communication?  No modern agricultural or manufacturing equipment?  Just mud huts and wooden plows?  That seems to be the threat toward any thought of allowing communities decide their own lives without some centrally planned overseer who does little more than redistribute wealth to the politically favored.

Sun, 02/10/2013 - 13:27 | 3230739 ISEEIT
ISEEIT's picture

Absolutely retarded. I suppose this same species, if sane by your definition would also communicate telepathically and be entirely gender neutral whilst the poetry of compassion would fill the consciousness of each member of the nirvana in which the collective would harmonize as ultimately one?

All well and good for a fantasy and maybe even for an all volunteer collective which I entirely support your right to organize and promote.

Globalized anything is a fucking moronic disaster. Consolidation of power always has and always will lead to evil being the arbiter of 'justice' and 'fairness'.

You live in this world PUD.

 

Sun, 02/10/2013 - 16:07 | 3231078 PeeramidIdeologies
PeeramidIdeologies's picture

No wonder your so angry, an old conservative stuck in the system you probably used to support. Nobody here is making the case for another version of what we already have. I think everyone here would like to see some positive change come of this situation. Maybe you even have some ideas to add?

Sun, 02/10/2013 - 13:44 | 3230780 fiftybagger
fiftybagger's picture

Now you went and made me log in just down vote this twaddle ;-)

Silver For The People

http://www.brotherjohnf.com/

Sun, 02/10/2013 - 15:24 | 3230989 zerozulu
zerozulu's picture

Humans are simply a type of animals, need food to live, protect life (fight or flee), sex to preserve species.

Sun, 02/10/2013 - 22:48 | 3232022 ptolemy_newit
ptolemy_newit's picture

1000 + new PUD

separatism are destroying the world !

what we DO need is ONE WORLD ORDER

 

Sun, 02/10/2013 - 23:34 | 3232145 ptolemy_newit
ptolemy_newit's picture

1000 + new PUD
separatism are destroying the world !
what we DO need is ONE WORLD ORDER

Sun, 02/10/2013 - 12:27 | 3230505 Kaiser Sousa
Kaiser Sousa's picture

importing all the Gold they can from here and London while the sociopath bankers continue to suppress the phony paper price on the manaipulated futures exchanges...

absorbing all the Gold from their mines as they r the #1 producer in the world...

once again have moved way up the list via record offical tons imported just last month - more than all they imported last year...not to mention what their unoffcial holdings really r???

trades pacts with numerous industrialized powerhouse in the Renminbi bypassing the debt coupon dollar...

"Ladies and gentlemen...it is my pleasure to introduce to you the worlds NEW GOLD BACKED REDSERVE CURRENCY......"

FUCK YOU BERNANKE AND ALL YOU SOCIOPATH COCKSUCKER BANKERS......

Silver and Gold must be bought..................

 

PS: ya'll want another clue where this is headed - watch "Looper"...like the Matrix - every movie aint just a movie.....

Sun, 02/10/2013 - 12:21 | 3230508 apberusdisvet
apberusdisvet's picture

The ugly fact not stated is that Japan is doomed in any event.  The unstoppable Fukushima radiation keeps spewing, spewing, exposing a majority of the population to levels far exceeding those considered "normal".  The best case scenario is that life expectancy has been reduced by 20-30 years.  I can't help but wonder why the Chinese have allowed this ongoing pollution of the China Sea basin.  Perhaps a war over islands is China's logical response rather than having to expose the reality to its citizens who are also being exposed in the coastal provinces.

Sun, 02/10/2013 - 13:13 | 3230696 Karlus
Karlus's picture

What facts do you have to back this up?

Seen the areas around chernobyl? Nature seems to be doing fine. Im not for a high rad diet, but why are you saying they are doomed?

I remember when the BP spill was the worst disaster in mankinds history and would render the gulf sterile for a thousand years...or maybe not.

Where are your facts, man? Or is this like global warming in Boston today?

Sun, 02/10/2013 - 12:25 | 3230522 impermanence
impermanence's picture

The U.S. Dollar is going to be the reserve currency as long as the U.S. wants it to be.

 

It's not necessarily about who's making the stuff, but instead, who owns the people who are making the stuff.

 

China is a mess. 

Sun, 02/10/2013 - 15:30 | 3231002 zerozulu
zerozulu's picture

Its hard to compete with some one who work (physically make things) for living.

Sun, 02/10/2013 - 19:19 | 3231501 DosZap
DosZap's picture

The U.S. Dollar is going to be the reserve currency as long as the U.S. wants it to be.

No it wont!, we are already HAVING to purchase 85 B a month just because NO ONE else is taking up the slack.

When not IF the Yuan becomes thje Reserve it will be precisely because they are gobbling up all the GOLD on the planet they can get their hands on.(and Ag also)

As soon as they announce a Gold backed currency, they are the Default Reserve Currency,WHO would not want them over the USD?.

Then all those USD's 2/3rds of all ever orinted are coming home to roost.

Bank on it.

Sun, 02/10/2013 - 12:26 | 3230524 adr
adr's picture

Amazing how a total of $3.8 trillion of actual productive goods can be turned into $17 trillion. What's left out of the equation, the miracle of modern finance and medicine that somehow creates over four times everything else put together.

It doesn't really matter if China surpassed the US. 75% of the world economy is pure financial engineered bullshit. All created by moving debt around. When 75% is debt and 25% is real, you'll never dig yourself out of the hole.

Try and let China become a consumer powehouse, they can't be a house of production and a house of consumption. The global elite won't let them. There isn't enough raw material to turn 1 billion people into the second coming of US type consumerism. The bankers have sold China on the idea that they wil rule the world, and somehow Africa will be the next domino, where China controls Africa like America controlled China. Good luck building industry in Africa. The Elites think they can turn another rural dust bin continent into a manufacturing powerhouse in 20 years.

The game is to siphon greater wealth for the elites from an ever larger central bank dominated populace. The only thing that follows a global currency is a total economic collapse and mass rebellion.

Sun, 02/10/2013 - 12:26 | 3230527 imapopulistnow
imapopulistnow's picture

Excellent post.  It may or may not be 100% spot on, but it certainly points to the bigger agenda of a confident and patient China that knows it is only a matter of time before they become the world's dominant nation.  It also points out the cluelessness of Americans - and all developed economies - as to what is happening.

Tue, 02/12/2013 - 05:06 | 3236045 ptolemy_newit
ptolemy_newit's picture

How long will it take for China to rule the seas?  until then they have no power because the shipping channels can be cut in 24 hours.

China is long term thinking and may be patient but there citizens do not trust each other and will cheat each other on a daily basis so how can that team survive?  they just do not have the American spirit of days gone by.

The future is in the stratosphere and who owns that will control the planet.


Sun, 02/10/2013 - 12:31 | 3230552 linniepar
linniepar's picture

We all know gold, silver and yuan pave the way of the future. Duh, it was in looper!

Sun, 02/10/2013 - 12:35 | 3230555 Floordawg
Floordawg's picture

Recently moved from NYC to BKK (eat your heart out Simon Black!)

Visited northern Thailand this past weekend scouting out farmland and couldn't help but wonder... would Chinese tanks be rolling through that rich, fertile land one day when food and water takes priority over all other assets?

Sun, 02/10/2013 - 12:43 | 3230602 Bob
Bob's picture

It's nice when a question answers itself.  Hope you didn't write the check. 

Sun, 02/10/2013 - 13:31 | 3230745 Floordawg
Floordawg's picture

Nothing signed yet (hesitant with pricing so far). Diversification out of the $ has definitely been interesting.

Sun, 02/10/2013 - 12:35 | 3230560 Monedas
Monedas's picture

There are many countries who out export us on a per capita basis .... Germany, Japan, Korea come to mind .... they have to export to eat .... they aren't blessed with our natural resources, what's left of our freedom and our eager, highly skilled nigger pool ?

Sun, 02/10/2013 - 12:40 | 3230588 digalert
digalert's picture

Nov. 20, 2012 Asian summit, Phnom Penh,

fifteen Asian nations,  half the world’s population,

Told Obama (and his anglo-western banskters) to:

take your "asian pivot" 360 degrees and go home!

http://pjmedia.com/spengler/2012/11/26/asia-shuts-obama-out-of-new-trade...



Sun, 02/10/2013 - 14:27 | 3230889 TNTARG
TNTARG's picture

You can't fuck almost every country in the whole World for years and get away with it.

Sun, 02/10/2013 - 12:46 | 3230591 jwthomps
jwthomps's picture

I am not so certain of this analysis.

What are the underlying reasons for China to confront Japan? 

How can a country remain stable when 50% of its GDP is infrastructure senpending?

How can a country be viable when it has 1/5 acre of arable land per person?

Don't fall for the reserve currency status fear, all that means is that the country who has the reserve currency must be a net debtor nation. Does China or anyone else want that?

China's fragility due to its internal debt, money printing and financial structure and internal imbalances are not considered in this article.  We are presented the view of "The Great Strong China." 

If you want a different view, read Michael Pettis @ mpettis.com.

Sorry for the rant, I seldom write, but this smells of mainstream media, politicians, academics and big bankers.

Sun, 02/10/2013 - 15:40 | 3231025 zerozulu
zerozulu's picture

pivotal point seems to me ia Asad regime. if asad regime, China will take Japan as hostage.

Sun, 02/10/2013 - 16:04 | 3231071 Zwelgje
Zwelgje's picture

Why do you write "Asad regime" and not Syria?

I bet you do not write Obama regime, or Cameron Regime etc.

Sun, 02/10/2013 - 19:40 | 3231560 zerozulu
zerozulu's picture

Asad relation with Iran and Russia is a pain in the Jewish ass. He is also close to Hezbollah in Lebanon. Syria is not the problem but Asad's relations are problems for Israel.  Now china and Russia are backing Asad or hurting USA or let me say world is getting sick of this bulldog left in the middle of the desert. American are paying a very big price to nurture this animal and other powers are pocking USA exactly where it hurts more.

Sun, 02/10/2013 - 12:58 | 3230615 alfbell
alfbell's picture

 

 

As if Brandon Smith knows anything (does he have a crystal ball or something). These amazing "end of the USD" statements are ridiculous (and the people who utter them are even more ridiculous). China is a communist country that is corrupt in government and has been locked away from the rest of the globe for decades. They lie about their true conditions and statistics. They build their model on export. Do you think they are going to be able to continue to export to Europe and the USA and Japan like they've been doing over the last few decades. They have a long way to go to readjust their model and a lot of internal work that needs to be done. They will most likely have a hard landing.

The USA has the largest economy, the largest financial markets, the largest military and is the reserve currency of the world. The USA is the super power with the largest military power base. These factors mean something.

The USD is the world reserve currency and will remain so for some time. When Japan collapses the USD will become even stronger from capital flight. The same thing will occur when the EU collapses. This is common sense and based on historical facts and easily predicted through deductive reasoning that will most likely prove to be accurate.

The USD is deep in the coffers of all major countries in the global economy and is so locked into trade that there are no competitors. The yen? The euro? The swiss franc? The renmimbi? None of them have what it takes.

It doesn't matter if China trades with Iran or Brazil or Venezuela or anybody else using gold or each others' currencies. It just isn't that significant.

My guess... and it is purely a guess, is that...

1) The USD will hold its position and strengthen for awhile before it finally collapses from high inflation or replacement. 

2) Gold will flatten out. Governments won't allow the people to prosper from its mistakes. Gold will be taxed like hell so that people are dissuaded from it (hell if you live in California and sell your gold right now you pay 40% in taxes on it!)

3) The next step is a global electronic currency that isn't backed by anything other than the IMF, BIS and world central banks telling the world population that "here is your new currency".

Sun, 02/10/2013 - 13:38 | 3230765 Sean7k
Sean7k's picture

Just to play devils advocate:

The US is a fascist country that is corrupt and lies about its' statistics. We originally built our model on export but changed to a consumer debt based economy. Much like Britain, once the reserve currency and over time and through massive debt accumulation has forfeited that role.

The US is the largest economy because we measure size subjectively. We INCLUDE government expenditures without subtracting revenues. We include all debt. We place higher values on numbers that make us look good and depreciate those that point to our misallocation.

We have the largest military base (that is bankrupting us), but are incapable of subdueing a third world country (Afganistan) and we only pick on small countries. 

The USD is deep in their coffers, but what hapens when the coffers are turned out? If there were no competitors, why do we defend the petrodollar so maliciously?

The US represents 25% of global GDP. If the world or even 50% decides to trade outside the dollar, it becomes VERY significant-especially since as global importers, these exporters would demand something other than dollars.

Neither Brandon Smith nor you or I know the future, that being said, if the dollar collapses from high inflation, where is your argument?

Sun, 02/10/2013 - 14:52 | 3230936 alfbell
alfbell's picture

Just to play the devil's advocate:

YOU DEVIL YOU.

The US is a fascist country that is corrupt and lies about its' statistics. We originally built our model on export but changed to a consumer debt based economy. Much like Britain, once the reserve currency and over time and through massive debt accumulation has forfeited that role.

AGREED. BUT FORFEITURE WON'T HAPPEN OVERNIGHT AS BRANDON SMITH SUGGESTS. TOO MANY POWERFUL AND MANIPULATIVE INTERESTS INVOLVED. WOULDN'T YOU AGREE.

The US is the largest economy because we measure size subjectively. We INCLUDE government expenditures without subtracting revenues. We include all debt. We place higher values on numbers that make us look good and depreciate those that point to our misallocation.

YOU CAN'T ARGUE WITH THE FACT THAT WE HAVE THE LARGEST FINANCIAL MARKETS AND LIQUIDITY AVAILABLE ON THE PLANET. THAT MEANS SOMETHING. I'M NOT IN ANY WAY SAYING OUR COUNTRY IS IN GREAT SHAPE AND HAS A BALANCE SHEET TO BE PROUD OF. BUT IF YOU WANT TO GET THINGS DONE AND GET THEM DONE FAST THE USD IS STILL THE MEDIUM FOR IT. THAT'S NOT GOING AWAY IN A YEAR OR TWO.

We have the largest military base (that is bankrupting us), but are incapable of subdueing a third world country (Afganistan) and we only pick on small countries.

WE ARE NOT THERE TO SUBDUE AFGHANISTAN. WE TURN THAT PLACE INTO A DESERT IF WE WANTED. THE SUPPOSED REASON IS TO ROUT OUT THE TERRORISTS. THE REAL REASON IS ONLY KNOWN BY THE PRIVILIGED IN THE MILITARY/INDUSTRIAL/CONGRESSIONAL/SECURITY COMPLEX... MORE ALONG THE LINES OF A BASE IN THE MID EAST, A POSITION TO PROTECT IRAQ FROM IRAN, MONITORING AND THREATENING IRAN, ETC.

The USD is deep in their coffers, but what hapens when the coffers are turned out? If there were no competitors, why do we defend the petrodollar so maliciously?

WILL TAKE A LOT AND A CONCERTED EFFORT FOR THOSE COFFERS TO BE TURNED OUT. YOU'RE RIGHT ABOUT THE PETRODOLLARS. AND WOE TO ANYONE WHO SERIOUSLY THREATENS IT AS THE US WILL FUCK THEM UP BIG TIME.

The US represents 25% of global GDP. If the world or even 50% decides to trade outside the dollar, it becomes VERY significant-especially since as global importers, these exporters would demand something other than dollars.

THINK EVERYONE WILL DECIDE TO TRADE OUTSIDE THE DOLLAR SIMULTANEOUSLY? AND WHAT WOULD THEY USE THAT COULD REPLACE THE SPEED, FACILITY AND OMNIPRESENCE OF THE USD?

Neither Brandon Smith nor you or I know the future, that being said, if the dollar collapses from high inflation, where is your argument?

I DON'T REALLY HAVE AN ARGUMENT OTHER THAN THE FACT I'M CHALLENGING THE IDEA THAT THE USD IS GOING UNDER IN THE NEXT FEW YEARS. AND THAT GOLD IS THE ANSWER TO THE COMING INFLATIONARY STORM.

Sun, 02/10/2013 - 15:44 | 3231032 Sean7k
Sean7k's picture

Do you think it helps your argument to yell?

I find nowhere any suggestion it will happen overnight. I read a slow process. As possible as any other sequence of events. Please note, I don't agree with all of the author's points. I believe he has presented an argument that ignores other possibilities (chinese resource issues) as well as the possibility that all central banks are run by the same "masters"- meaning results may not follow from available data.

Saying we have the largest financial and liquidity markets without considering collateral requirements merely says we print the most money. This is not an enviable position nor one of strength.

We are in peace talks with the Taliban. How do you say, "Loser"? Many nations can turn parts of the world into glass, but they don't because all the other nations are committed to return the favor. If you cannot control the theatre of operations, you are not in control.

We cannot continue to "fuck them up" especially if China and Russia decide to pay in yuan and rubles. In fact, their collusion points to a unified leadership outside the constraints of government.

I try to keep in mind that there is a market for everything and when supply exceeds demand, the results are predictable. There are more dollars that production dictates. Thinking the dollar is impregnable flys in the face of reason- especially if the world can get what it needs from other countries and currencies is being blind to possibilities.

Personally, the only reason for the Elites to risk large scale destruction is if their position becomes perilous. The US functions as the world's military force. Until it can be replaced, the US will remain safe. However, I would look to Britain for signs- it is they that control the financial markets of the world through their creation: the central bank.

As for gold, it will always hold value because the Elites prize it. It will never be the basis of the money supply, because the people own the majority of it.

Sun, 02/10/2013 - 17:10 | 3231170 alfbell
alfbell's picture

 

 

Apologize. Wasn't yelling. Trying to respond to each of your points and distinquish my type from yours (obviously not a good method).

Yes, you make good arguments. I may be over-reacting to this article as a result of so many "the collapse of the dollar is nigh" articles on this blog. Agreed... it will be a slow process. 

USTs, US bond market (corporate and municipal), US stock market and US real estate is the biggest catchall for capital. That is what I mean, this is where the money flows to, especially in crises. You just watch... when the next major global or major country crisis occurs... the flight to safety will be to the USD. Again, that will prove my statement about the USD's continued "supremacy" for now and the fairly long term future. There is no where else to go. (People tried the Swiss franc... and what did the Swiss just do to stop that?)

Let's continue to watch global trade and see what percentage of it is continued to be done via the USD. That will be telling.

China is doomed once they can't export to EU and USA. Being the producer of the lowest cost items is a niche that is over for them. We have a global recession now... new game. It will take them a long time to retool their model. If they can't feed their population and give them jobs there will be big trouble for them. They've got empty cities and are continuing to build more. Factory workers are already heading back to the farmlands due to unemployment. Their demographics are not pretty. How are they going to convert their population into consumers as the US and EU have done? 

The elites/international bankers have their hands around the throats of most governments because they have everyone in debt. It is their plans and actions that will direct the future course of events I'm afraid.

Sun, 02/10/2013 - 18:13 | 3231348 Sean7k
Sean7k's picture

This is gloom and doom central and unfortunately it leads many to underestimate the will and resources of the Elites. I am old enough to have heard the cries of," the OPEC nations will takeover the earth" and " Japan will soon own everything" which have been replaced with China is taking all our jobs and will run the world because of its' cheap labor.

The Far East has been the most powerful economic engine for much of history as well as innovators. Just because they experienced a time of servitude to the west, to dismiss their ability to climb back up would be shortsighted. 

To think that an empire as young as the US will collapse overnight is just wishful thinking. 

However, we have never been in a position where global forces, massive populations, resource restrictions and collapsing markets threaten everyone. There are few places to hide, no resource edens to rape and there is a terrible will to commit violence. 

You are as right as anybody else on this thread. Hope you continue to keep your eyes open. Best of luck.

Sun, 02/10/2013 - 15:08 | 3230966 e-recep
e-recep's picture

> "Gold will be taxed like hell so that people are dissuaded from it (hell if you live in California and sell your gold right now you pay 40% in taxes on it!)"

 

something that got lost during a boating accident cannot be taxed. besides, silly capital controls do not last for more than 12 months. they rarely did in history. patience is the key.

 

Sun, 02/10/2013 - 22:30 | 3231974 post turtle saver
post turtle saver's picture

The skies will rain fire, the seas will become as blood, and the LAKES WILL BE DREDGED.

Sun, 02/10/2013 - 12:49 | 3230626 AnAnonymous
AnAnonymous's picture

Figures from 'american' economics. Bup, therefore it means nothing.

Sun, 02/10/2013 - 13:03 | 3230673 Piranhanoia
Piranhanoia's picture

China will implode under it's own weight. It's people are terribly happy, and know the source of their happiness.  If China chooses to attack Japan,  they will find wild mushrooms growing at the politburo and it won't matter any more.  Since they are poisoning their own water and food supply as rapidly as they can,  the land is turning to desert at a pace faster than you can say;  too late.  already done.

Sun, 02/10/2013 - 13:04 | 3230674 darkpool2
darkpool2's picture

Lets not forget the upcoming sequestration issue. The administration wants nothing more than an opportunity to kick the can on this. What better way to whip the Republicans into line than a " military scare"......its all too transparent.

Sun, 02/10/2013 - 13:09 | 3230686 PeeramidIdeologies
PeeramidIdeologies's picture

I have to laugh when I hear people say lets get this reset going, it's exciting, like it's a switch that you flip. No clue what is to be lost and gained in this game....

On another note I had a ten cent jump at the pump the other day. Happened to coinside almost prefectly with the new trade data out of the states. How self sufficient can they afford to be?

Sun, 02/10/2013 - 13:14 | 3230703 Jack Sheet
Jack Sheet's picture

So-so post, but must you display that disgusting reptile Soros?

Sun, 02/10/2013 - 13:26 | 3230734 earleflorida
earleflorida's picture

a lot of folks forget, that japan enslaved all-n&skorean young  woman/girls as sex slaves and servants... and were quite manchurian-like brutish!

Sun, 02/10/2013 - 13:28 | 3230742 ThisTimeIsDifferent
ThisTimeIsDifferent's picture

At this point in UK German relations, war broke out in August 1914.

Sun, 02/10/2013 - 13:46 | 3230791 Solarman
Solarman's picture

I think America preempts.  We are now energy independent (at least from a continent point of view), we censure all non U.S. citizen owned U.S. debt, we change the currency, and we pull back our military.  Or we suggest it, as we renegotiate all of those bilateral agreements the Chinese have.  The world would sh*t the bed.

China must secure a 5,000 mile corridor for their energy, that can be destroyed by America's Aurora jet/missles at will.  China is one food shortage away from regime change, and has not built up the kind of relationships around the world that America has.

China is also growing older faster than America, and are too xenophobic to allow immigration to stabilize this situation.

This China masterbation is tiresome.

I see a Russia/Germany hookup as potentially more a direct threat to the U.S. hegomeny than China. I think China probably does too.

 

Sun, 02/10/2013 - 14:00 | 3230828 TNTARG
TNTARG's picture

Hey pal, what not to think some more peaceful strategies?

Warmongers didn't achieve satisfactory results for US citizens, have they?

Sun, 02/10/2013 - 14:10 | 3230849 Solarman
Solarman's picture

Dude, just laying out the facts.  I'd love nothing more than for America to go isolationist again.  Let the rest of the world wail on each other.  The European elites dragged us into this mess. We have no beef with China, per se, nor they with us, but that changes the minute they threaten our way of life.  don't you think?

Sun, 02/10/2013 - 14:07 | 3230842 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

I think America preempts.  We are now energy independent (at least from a continent point of view)

Only if one walks in the land of fantasy, and willingly submits to the whim of propaganda.

China is one food shortage away from regime change

Could say the same of many nations, including the US.

and has not built up the kind of relationships around the world that America has.

This benefits the Chinese, as they build relationships on diplomacy and trade. The US uses subterfuge, threats, and military aggression, thus its relationships have a foundation of distrust, loathing, and fear.

This China masterbation is tiresome.

May want to switch hands. There is plenty of porn in China. They are hungry for that.

Sun, 02/10/2013 - 14:37 | 3230909 PeeramidIdeologies
PeeramidIdeologies's picture

Nailed it.

Sun, 02/10/2013 - 16:30 | 3231105 Solarman
Solarman's picture

You are hilarious.  I deal with Chinese equipment companies, they invented subterfuge.  You must be a child.  The moment they are not low cost producer, they are back to third class world.

Sun, 02/10/2013 - 19:35 | 3231543 DosZap
DosZap's picture

China is one food shortage away from regime change

Could say the same of many nations, including the US.

and has not built up the kind of relationships around the world that America has.

Maybe you have not being paying attention the Chinese, they are/have bought almost every avialble arable farmland in Africa, and other countires, along with mines(Aussie) and others, and everything else they ALWAYS depended on the US for.

They are setting them selves up to be totally self sufficent outside of ANY US exports.

These folks plan 50yrs ahead, while we KICK the can.

Why do you think the US is sending troops into 35 African Nations now for?.

Sun, 02/10/2013 - 14:56 | 3230947 alfbell
alfbell's picture

 


Vote up!

0
Vote down!

0

Just to play the devil's advocate:

YOU DEVIL YOU.

The US is a fascist country that is corrupt and lies about its' statistics. We originally built our model on export but changed to a consumer debt based economy. Much like Britain, once the reserve currency and over time and through massive debt accumulation has forfeited that role.

AGREED. BUT FORFEITURE WON'T HAPPEN OVERNIGHT AS BRANDON SMITH SUGGESTS. TOO MANY POWERFUL AND MANIPULATIVE INTERESTS INVOLVED. WOULDN'T YOU AGREE.

The US is the largest economy because we measure size subjectively. We INCLUDE government expenditures without subtracting revenues. We include all debt. We place higher values on numbers that make us look good and depreciate those that point to our misallocation.

YOU CAN'T ARGUE WITH THE FACT THAT WE HAVE THE LARGEST FINANCIAL MARKETS AND LIQUIDITY AVAILABLE ON THE PLANET. THAT MEANS SOMETHING. I'M NOT IN ANY WAY SAYING OUR COUNTRY IS IN GREAT SHAPE AND HAS A BALANCE SHEET TO BE PROUD OF. BUT IF YOU WANT TO GET THINGS DONE AND GET THEM DONE FAST THE USD IS STILL THE MEDIUM FOR IT. THAT'S NOT GOING AWAY IN A YEAR OR TWO.

We have the largest military base (that is bankrupting us), but are incapable of subdueing a third world country (Afganistan) and we only pick on small countries.

WE ARE NOT THERE TO SUBDUE AFGHANISTAN. WE COULD TURN THAT PLACE INTO A DESERT IF WE WANTED. THE SUPPOSED REASON IS TO ROUT OUT THE TERRORISTS. THE REAL REASON IS ONLY KNOWN BY THE PRIVILIGED IN THE MILITARY/INDUSTRIAL/CONGRESSIONAL/SECURITY COMPLEX... MORE ALONG THE LINES OF A BASE IN THE MID EAST, A POSITION TO PROTECT IRAQ FROM IRAN, MONITORING AND THREATENING IRAN, ETC.

The USD is deep in their coffers, but what hapens when the coffers are turned out? If there were no competitors, why do we defend the petrodollar so maliciously?

WILL TAKE A LOT AND A CONCERTED EFFORT FOR THOSE COFFERS TO BE TURNED OUT. YOU'RE RIGHT ABOUT THE PETRODOLLARS. AND WOE TO ANYONE WHO SERIOUSLY THREATENS IT AS THE US WILL FUCK THEM UP BIG TIME.

The US represents 25% of global GDP. If the world or even 50% decides to trade outside the dollar, it becomes VERY significant-especially since as global importers, these exporters would demand something other than dollars.

THINK EVERYONE WILL DECIDE TO TRADE OUTSIDE THE DOLLAR SIMULTANEOUSLY? AND WHAT WOULD THEY USE THAT COULD REPLACE THE SPEED, FACILITY AND OMNIPRESENCE OF THE USD?

Neither Brandon Smith nor you or I know the future, that being said, if the dollar collapses from high inflation, where is your argument?

I DON'T REALLY HAVE AN ARGUMENT OTHER THAN THE FACT I'M CHALLENGING THE IDEAS THAT THE USD IS GOING UNDER IN THE NEXT FEW YEARS, AND THAT GOLD IS THE ANSWER TO THE COMING INFLATIONARY STORM.

Sun, 02/10/2013 - 15:55 | 3231053 besnook
besnook's picture

there is one thing westerners don't know about asians in general and chinese in particular. they don't like jews. there is no pc pressure for them to like jews(or blacks, or white people or gays or any of the other diversity hangups encouraged in the west). they willl not play the jewish banking game. they will make the jewish bankers play their game if they have to play at all. japan doesn't really like jews either. they played the jewish banking game because they felt it was necessary for survival. they have remained remarkably independent despite their participation. the japanese will turn to china when the circumstances allow it, so will south korea, taiwan already has, and the rest of the asian nations are just working out the details. this is the main reason there will be a shooting war. china and russia are the weakest they will ever be right now. that is why there will be a shooting war right now.

Sun, 02/10/2013 - 18:41 | 3231389 Clesthenes
Clesthenes's picture


Tyler, you wrote, “To put it simply, the dollar is going to lose its world reserve status VERY soon.

I think you’ve overlooked something.

As of 2012 Nov, foreign central banks held nearly $4 trillion in US Treasury securities.  They took ownership of these securities in exchange for native currency and bank reserves within their “jurisdiction”.  As such, these US Treasuries serve as collateral for $4 trillion dollars’ worth of foreign currencies and foreign bank reserves around the globe.  Just as, in a rational world, gold would serve as the collateral.

This is what makes the dollar the reserve currency of the world.

If the dollar is “to lose its world reserve status VERY soon”, $4 trillion in US Treasuries will have to be dumped on the world market VERY soon.

Have you any idea how the market would be affected if it suspected that China was planning to dump $50 billion on the market?  Forget about dumping $4 trillion.  Fifty billion would cause major disruptions.

Suppose a disruption would cause the dollar to lose 10% (choose your percentage) of its value.  Who suffers the loss?  They lose who hold US Treasury securities… or any other dollar-denominated asset.  This 10% loss would cause a loss of $400 billion for those central banks that hold dollars.

Suppose we lived in a world that used gold as collateral for issued paper money (actually, we do live in such a world; but hardly anyone knows it).  Suppose further that 10% of that gold went missing.  What would happen when people learned of this missing gold?

Today, the collateral for issued paper money and bank reserves consists of government bonds, which is the mechanism by which a current generation of tax consumers cannibalizes following generations of tax payers.  To the demonically deranged, promises to cannibalize following generations (in the form of government bonds) is the most secure investment in the world and should be/is used as collateral for issued bank notes and reserves.  What happens when 10% of this collateral evaporates?

 

 

Sun, 02/10/2013 - 21:20 | 3231804 besnook
besnook's picture

and that is why china has hedged it's dollar holdings with gold, commodities and currency trade agreements. they are willing to take a loss on their treasuries. no one seems to understand this part of the chinese strategy. they are hedging a loss they expect to take.

Sun, 02/10/2013 - 22:40 | 3231992 post turtle saver
post turtle saver's picture

They have to hedge because they will need to turn it around to buy stuff, otherwise their state collapses. This is the "dollar backdraft" that took down Japan's aspirations in the 80's and the same playbook is being used on China... the scale is simply larger.

Sun, 02/10/2013 - 23:07 | 3232071 besnook
besnook's picture

china learned valuable lessons in the baht takedown in '97. my guess is they have full contingencies in place and are prepared to win a war where the least harmed wins despite devastating losses. russia and china are willing to share world power. they have let it be clearly known they are opposed to a unipolar(dollar) world for the last twenty years. they will be fully ready to face off in just a few years but if push comes to shove they are ready now as evidenced by their poking at the perimeter.

Sun, 02/10/2013 - 18:43 | 3231414 alfbell
alfbell's picture

 

 

To put it simply, the dollar is going to lose its world reserve status VERY soon.

Exactly the point I was trying to make Clesthenes. What a dumb ass comment. Alarmist. Based in a fundamental misunderstanding of our global economy and the role and function the USD plays in it.

Sun, 02/10/2013 - 19:40 | 3231559 Babushka
Babushka's picture

Would you be so kind to elaborate on your post?

Sun, 02/10/2013 - 19:39 | 3231555 DosZap
DosZap's picture

Suppose a disruption would cause the dollar to lose 10% (choose your percentage) of its value. Who suffers the loss? They lose who hold US Treasury securities… or any other dollar-denominated asset. This 10% loss would cause a loss of $400 billion for those central banks that hold dollars.

So what?, 400B is chickenfeed,Bernie is using the Fed to prop up European banks inside the US now, with Billions of dollars, because their HOME base banks in the EU are dead ass broke.

The Fed is basically (behing the curtain of Oz), propping up the entire EU, and with American tax dollars.

Sun, 02/10/2013 - 22:41 | 3231997 post turtle saver
post turtle saver's picture

Between that and NATO, the US owns Europe and they know it.

Mon, 02/11/2013 - 00:37 | 3232262 silverdragon
silverdragon's picture

Great article Brandon Smith one of the better article ref China on ZH. You guys actually know what you are talking about. Forget about all the white noise ref "the doubters/ignorant plebes" your analysis is bang on.

Trade

In 2012 China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion. How many idiot posters can't understand what this means. Blows my f*ckin mind.

China actually trades with pretty much every country in the world their chunk of world wide trade will continue to increase, all the little bits add up.

Gold/reserve Currency

China had a "declared" 1,000 tonne of Gold ages ago. Anyone that understands China knows that the number was larger. Then add 1-2,000 tonne of Gold to their stash every year via declared HK import, digging it up in China and most intriguingly, imports via all the other borders and clandestine world wide purchases. They have to be a few ounces short of 10,000 tonne or are they shooting for 20,000 tonne.

Conclusion

They are the dominant trading power their currency is already more desirable for trade than the dollar or Euro, when its backed by 10,000 or 20,000 tonne of Gold they are the only game in town.

 

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