China to crash U.S. dollar?

[Barnabas]

We should go back to the "here insert concept in english of pegging your currency to a certain ammount of gold"

***
A question

countries which sell little to the USA, but a lot to China, would be ruined too, right?

[DaShi]

The Russian military will be screwed.

[Barnabas]

Imagine I sell soy to China, will I be screwed if this happens?

[Darius871]

Originally posted by lord of the mark
The US polity can clearly survive serious recessions, and has done so regularly over the last 60 years.

Its not at all clear that the Chinese regime could survive a severe recession.

QFT, hell you might as well say almost the last 200 years. When was the first of many colossal American financial crises? 1819?

And how long has the reformist regime controlled Beijing? 29 years? What reason is there to think they'd survive an economic collapse any longer than the KMT did?

[Lancer]

China would have 100 million extra unemployed, the US would pay back all its debts in one huge printing run of devalued dollars, and then institute a new currency, the 'Bush'.

[Whoha]

Originally posted by Barnabas
We should go back to the "here insert concept in english of pegging your currency to a certain ammount of gold"

***
A question

countries which sell little to the USA, but a lot to China, would be ruined too, right?

Thats the gold standard, and if we were on it we'd have to pony up about 700 billion dollars worth of gold every year to the people we run trade deficits with. Still, without a trade deficit there is some merit to the gold standard.

And suppliers to China that also don't do a lot of trade with the US(which would largely be rogue proxy states) would also be thusly boned.

Originally posted by Lancer
China would have 100 million extra unemployed, the US would pay back all its debts in one huge printing run of devalued dollars, and then institute a new currency, the 'Bush'.

nuh uh, blue backs.

[DaShi]

Originally posted by Lancer
China would have 100 million extra unemployed, the US would pay back all its debts in one huge printing run of devalued dollars, and then institute a new currency, the 'Bush'.

the 'Bushmark'

[Barnabas]

The bushllion!

[Saras]

Originally posted by Tingkai
China would sell of the reserves to buy other currencies and because the Yuan is peg to the dollar, the Yuan goes down relative to other currencies making Chinese goods all the more cheaper on the world market, or the Chinese could simply shift the dollar peg.

So there is free lunch!

Dude you should start a global macro hedge fund, you'd make (other hedge funds) billions!

[Tingkai]

Originally posted by lord of the mark
At most there would be selective measures. This happens all the time in trade disputes. China would likely respond with selective measures. For China to take extreme measures in response to a relatively minor US measure, which is what youre suggesting, would simply be China flexing ITS muscle.

Selective?

The U.S. Congress is talking about a tariff on all Chinese goods. This is not a minor measure. It's a stupid all-out economic attack.

And what China is saying is that if the U.S. starts a major trade war, than China would respond in kind. Beijing is not saying that it will take unilateral action.

[Tingkai]

Originally posted by lord of the mark
There is no doubt China can weather a recession. The question is whether the CP can. The CP in its current ideological form has only ruled since the late 70s. Since that time, it has maintained rapid economic growth. It is widely beleived that that is one of the principle props of its rule, now that its ideologically bankrupt.

I was under the impression that most Asians were more interested in following in the footsteps of the four tigers, who in turn, way back in the'80s, had followed Japan. The "everyone worshipped the US model" meme is a strawman folks use to make ideological points today, more than it is an historical reality.

Do you think Hong Kong followed the Japanese model?

As for Taiwan, Singapore and South Korea borrowed aspects of the Japanese model until the early 90s when they started to move to a more free market system. This shift was particularly strong in the second half of the 1990s

There was a belief in Asia that the Japanese model was flawed, while the U.S. model, particularly at the corporate level, was the one to emulate. All that has changed in the past five years.

The U.S. has simply lost its high standing and is now seen as a sick man.

As for the Chinese Communist Party, it maintains strong control, and it squashes any opposition. It has stayed in control while creating a market economy, something the Russian communists failed to do. The idea that a recession would knock the party from power is a pipe dream.

[Patroklos]

Common mods, what are we paying you for?




In any case, the first all out economic attack is China's currency policy. We are justified in doing anything we please considering that ridiculous Chinese practice.

[lord of the mark]

[QUOTE] Originally posted by Tingkai

Do you think Hong Kong followed the Japanese model?

Hong Kong followed its own model, more free market than the US. I dont think they were looking to the US as a guide.

As for Taiwan, Singapore and South Korea borrowed aspects of the Japanese model until the early 90s when they started to move to a more free market system. This shift was particularly strong in the second half of the 1990s

To the extent that happened, I think it was because of their own internal stresses, esp in South Korea. It wasnt because they suddenly decided to copy the US.

There was a belief in Asia that the Japanese model was flawed, while the U.S. model, particularly at the corporate level, was the one to emulate. All that has changed in the past five years.

Im not sure what you mean at the corporate level. Different US corporations pursue different operating philosophies, and afaik asian corporations dont march quite in lockstep either. A "US model" if there even is one, is necessarily US public policy.

I rarely here about a "US model" except from people trying to make the case its declining. I think its a giant straw man.

Any way, why should we care exactly what model they follow, as long as they trade with us. At the peak of the cold war, we had alliances with Japan, following their model, and euros following social dem models. This idea that the US has some stake in other market democrays countries public policy approaches is a silly meme, one mainly spread by those trying to make a case for waning US influence.

The U.S. has simply lost its high standing and is now seen as a sick man.

Our share of world GDP is declining. Its been doing so since 1946. At this time so is Europes share of world GDP, and Japans.

We have particular fiscal problems. We seemed to have at least as serious ones in 1992. The Clinton admin showed how fast the US economy was capable of overcoming such problems, with a modicum of fiscal discipline.

As for the Chinese Communist Party, it maintains strong control, and it squashes any opposition. It has stayed in control while creating a market economy, something the Russian communists failed to do. The idea that a recession would knock the party from power is a pipe dream.

As they havent had a recession, theres no way to know that for sure. They have squashed opposition, that has come from intellectuals, or small groups of peasants or urban residents protesting over local issues (they also sometimes compromise the local issues, BTW, theyre not THAT confident in the squashing abilities) They have never faced mass worker protests associated with large scale unemployment. To go through that would be a gamble, at best.

Do you think the current leadership of the CCP likes to gamble?

[lord of the mark]

Originally posted by Barnabas
Imagine I sell soy to China, will I be screwed if this happens?

are you a US seller, or a Brazilian.

If youre US, your soy is now cheaper in Yuan.

If youre Brazilian, selling to a China now in recession, and competing with cheaper US exports, youre doubled screwed.

[Lancer]

I'm going to Mexico and get a job before the Mexicans get a wall built.