The Volcano the United States is Sitting On

[Rohirrim]

Note that this article was written in January.

In an article two and a half years ago (“Countdown to a Meltdown,” July/August 2005), I described an imagined future in which a real-estate crash and shakiness in the U.S. credit markets led to panic by Chinese and other foreign investors, with unpleasant effects for years to come. The real world has recently had inklings of similar concerns. In the past six months, relative nobodies in China’s establishment were able to cause brief panics in the foreign-exchange markets merely by hinting that China might stop supplying so much money to the United States. In August, an economic researcher named He Fan, who works at the Chinese Academy of Social Sciences and did part of his doctoral research at Harvard, suggested in an op-ed piece in China Daily that if the U.S. dollar kept collapsing in value, China might move some of its holdings into stronger currencies. This was presented not as a threat but as a statement of the obvious, like saying that during a market panic, lots of people sell. The column quickly provoked alarmist stories in Europe and America suggesting that China was considering the “nuclear option”—unloading its dollars.
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In exchange, the government will hold much of the nation’s wealth in paper assets in the United States, thereby preventing a run on the dollar, shoring up relations between China and America, and sluicing enough cash back into Americans’ hands to let the spending go on.
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Whatever the provocation, China would consider its levers and weapons and find one stronger than all the rest—one no other country in the world can wield. Without China’s billion dollars a day, the United States could not keep its economy stable or spare the dollar from collapse.

Would the Chinese use that weapon? The reasonable answer is no, because they would wound themselves grievously, too. Their years of national savings are held in the same dollars that would be ruined; in a panic, they’d get only a small share out before the value fell. Besides, their factories depend on customers with dollars to spend.

But that “reassuring” answer is actually frightening. Lawrence Summers calls today’s arrangement “the balance of financial terror,” and says that it is flawed in the same way that the “mutually assured destruction” of the Cold War era was. That doctrine held that neither the United States nor the Soviet Union would dare use its nuclear weapons against the other, since it would be destroyed in return. With allowances for hyperbole, something similar applies to the dollar standoff. China can’t afford to stop feeding dollars to Americans, because China’s own dollar holdings would be devastated if it did. As long as that logic holds, the system works. As soon as it doesn’t, we have a big problem.
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Years ago, the Chinese might have averted today’s pressures by choosing a slower and more balanced approach to growth. If they had it to do over again, I suspect they would in fact choose just the same path—they have gained so much, including the assets they can use to do what they have left undone, whenever the government chooses to spend them. The same is not true, I suspect, for the United States, which might have chosen a very different path: less reliance on China’s subsidies, more reliance on paying as we go. But it’s a little late for those thoughts now. What’s left is to prepare for what we find at the end of the path we have taken.

http://www.theatlantic.com/doc/20080...hinese-dollars

We've wrapped ourselves up in a Gordian knot. In effect, we are in the position of supporting the subjugation of the Chinese people by the communist government because we cannot allow an upheaval of the status quo. This is one of the "fruits" of allowing ourselves to become a consumer economy dependent on others. We have been sold out by our business and political leadership. In the words of Ray Bradbury, "Something wicked this way comes."

[L.A. BRONCOS FAN]

There's Bush's legacy for you.

Taking America from a creditor nation to a debtor nation - and a nation that no longer produces anything.

[Dudeskey]

Originally Posted by L.A. BRONCOS FAN

Then its off to Paraguay...™

[Rohirrim]

Really, this started with Nixon and then got much worse under the rabid deregulation of the Republicans since Reagan.

[Spider]

I thought this was about Yellowstone

[Rohirrim]

This is a different kind of caldera. Read the article. It will blow your mind. BTW, it ain't over.

http://www.cnn.com/2008/US/10/05/sha...rss_topstories

[L.A. BRONCOS FAN]

Asian markets plunge on fears crisis is spreading (AP)

AP - Asian stock markets plunged Monday as government bank bailouts in the U.S. and Europe failed to alleviate fears of a global financial crisis that would depress world economic growth.

[baja]

What’s left is to prepare for what we find at the end of the path we have taken.

I have been trying to warn you all about this.

Buy gold before it becomes illegal to own. That will be the next step the US government will make it illegal for it's citizens to own gold.

'The Nut'

[baja]

Originally Posted by L.A. BRONCOS FAN

There's Bush's legacy for you.

Taking America from a creditor nation to a debtor nation - and a nation that no longer produces anything.

Actually that happened on the Reagan's watch.

[Paladin]

But he didn't make it to Paraguay or wherever he was aiming for. In fact, he really didn't make it back to California. He was "gone" before he left the office.....

[alkemical]

Originally Posted by Rohirrim

This is a different kind of caldera. Read the article. It will blow your mind. BTW, it ain't over.

http://www.cnn.com/2008/US/10/05/sha...rss_topstories

That is why i didn't want to do the bail out. Right now, the rats are getting their money before **** hits the fan.

[Rohirrim]

Originally Posted by amesj523

That is why i didn't want to do the bail out. Right now, the rats are getting their money before **** hits the fan.

Exactly. That's all this bail-out was about. The rats are leaving the sinking ship and they wanted to stuff their bags with money before they jumped. That's why I say, the Caribbean banks are very busy right now.

[alkemical]

Originally Posted by Rohirrim

Exactly. That's all this bail-out was about. The rats are leaving the sinking ship and they wanted to stuff their bags with money before they jumped. That's why I say, the Caribbean banks are very busy right now.

How maay i help you mon?


Yep, i swear you can almost smell it...you know the **** coming out of this whole deal. Wall Street held "you" hostage. They manipulated the markets, ****ed us up the ass - said "pay up, or else" - Our Politicians don't care, and gave in to who gives them the most.

We are the unwashed masses.

We are beneath them.

They don't fear us. They hold us in contempt.

[Rohirrim]

Does it occur to anybody else that the only way out of this mess - eventually - may be all out war?

[alkemical]

Originally Posted by Rohirrim

Does it occur to anybody else that the only way out of this mess - eventually - may be all out war?

Ro~

Tsk Tsk. come on, a sort of manufactured economic disaster, and a fight for resources (water, oil, etc)? I mean, war is the only answer left to keep people pushing for a cause (in which dissent will be punished, at this state - people that don't buy into it will have to be dealt with, you can't have inefficiency in such states)...where the only "solutions" will be ones we "have to buy into" (no choice).

You make it sound like...there could be some collusion in this matter....

[Rohirrim]

I'm thinking more along the lines that historically speaking, as economies fall, feelings of nationalistic fervor rise, with the attendant xenophobia and scapegoating, followed by war.

[alkemical]

Originally Posted by Rohirrim

I'm thinking more along the lines that historically speaking, as economies fall, feelings of nationalistic fervor rise, with the attendant xenophobia and scapegoating, followed by war.

ya, it's a good script

I'm talking historically as well from my own observation (1991-present). If you look at history through that lense, it's not much different.

In some cases "threats" arose that had to be dealt with, but i feel as though many events were...manufactured and/or allowed to happen.

[SJ Bronco]

Originally Posted by amesj523

ya, it's a good script

I'm talking historically as well from my own observation (1991-present). If you look at history through that lense, it's not much different.

In some cases "threats" arose that had to be dealt with, but i feel as though many events were...manufactured and/or allowed to happen.

you can tell there is something wrong if they have to hide half of our conflicts under the guise of "operations". See Grenada.

[alkemical]

Originally Posted by SJ Bronco

you can tell there is something wrong if they have to hide half of our conflicts under the guise of "operations". See Grenada.

"Contractors", "Trainers", "Good-will Ambassadors", lol

[enjolras]

The the 30000000000000000000000000000 time. We manufacture more in the U.S. today then we have at any point in our history. No matter how you measure it. The only thing we've lost is (per capita) manufacturing jobs. Primarily because we have the most automated production apparatus on the planet.

I've posted references, citations, and even pretty graphs in the past.

[Rohirrim]

Originally Posted by enjolras

The the 30000000000000000000000000000 time. We manufacture more in the U.S. today then we have at any point in our history. No matter how you measure it. The only thing we've lost is (per capita) manufacturing jobs. Primarily because we have the most automated production apparatus on the planet.

I've posted references, citations, and even pretty graphs in the past.

More what?

I once wrote a short story where a man shows up to work and all he does is push a button on the wall and the entire factory starts up. He sits there all day. A little screen is there, on his desk. His boss, who lives in the Aruban Enclave, comes on the screen. The boss gives a speech. He stands with his back to the Caribbean. His hair blowing in the breeze. Paradise. The boss announces that all the button pushers have been replaced. A robot shows up. It will now push the button on the wall. The man goes outside. He stands in a long street bordered by nothing but automated factories. Other men come out into the street. All wearing the same, white, overalls. They all shrug and march off to a bleak horizon while the factories continue to belch out steam.

[baja]

Originally Posted by enjolras

The the 30000000000000000000000000000 time. We manufacture more in the U.S. today then we have at any point in our history. No matter how you measure it. The only thing we've lost is (per capita) manufacturing jobs. Primarily because we have the most automated production apparatus on the planet.

I've posted references, citations, and even pretty graphs in the past.

Its about the trade defecit neighbor