Here is another powerful article written by economist Paul Craig Roberts. For those of you who enjoy reading like me(and becoming more educated in the process) Paul Craig Roberts spells out why the United States is no longer a superpower, and why it bows down to China. Better start buying silver and gold while they're still accepting dollars! Uncle Sam, your banker will see you now Paul Craig Roberts Online Journal Thursday Aug 9, 2007 Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds "contributes a great deal to maintaining the position of the dollar as a reserve currency." [China threatens 'nuclear option' of dollar sales, by Ambrose Evans-Pritchard, London Telegraph, August 9, 2007] Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, "the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar." If Western financial markets are sufficiently intelligent to comprehend the message, US interest rates will rise regardless of any further action by China. At this point, China does not need to sell a single bond. In an instant, China has made it clear that US interest rates depend on China, not on the Federal Reserve. The precarious position of the US dollar as reserve currency has been thoroughly ignored and denied. The delusion that the US is "the world’s sole superpower," whose currency is desirable regardless of its excess supply, reflects American hubris, not reality. This hubris is so extreme that only six weeks ago McKinsey Global Institute published a study that concluded that even a doubling of the US current account deficit to $1.6 trillion would pose no problem. Strategic thinkers, if any remain who have not been purged by neocons, will quickly conclude that China’s power over the value of the dollar and US interest rates also gives China power over US foreign policy. The US was able to attack Afghanistan and Iraq only because China provided the largest part of the financing for Bush’s wars. If China ceased to buy US Treasuries, Bush’s wars would end. The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford. With Bush’s budget in deficit and with no room in the US consumer’s budget for a tax increase, Bush’s wars can only be financed by foreigners. No country on earth, except for Israel, supports the Bush regime's desire to attack Iran. It is China’s decision whether it calls in the US ambassador, and delivers the message that there will be no attack on Iran or further war unless the US is prepared to buy back $900 billion in US Treasury bonds and other dollar assets. The US, of course, has no foreign reserves with which to make the purchase. The impact of such a large sale on US interest rates would wreck the US economy and effectively end Bush’s war-making capability. Moreover, other governments would likely follow the Chinese lead, as the main support for the US dollar has been China’s willingness to accumulate them. If the largest holder dumped the dollar, other countries would dump dollars, too. The value and purchasing power of the US dollar would fall. When hard-pressed Americans went to Wal-Mart to make their purchases, the new prices would make them think they had wandered into Nieman Marcus. Americans would not be able to maintain their current living standard. Simultaneously, Americans would be hit either with tax increases in order to close a budget deficit that foreigners will no longer finance or with large cuts in income security programs. The only other source of budgetary finance would be for the government to print money to pay its bills. In this event, Americans would experience inflation in addition to higher prices from dollar devaluation. This is a grim outlook. We got in this position because our leaders are ignorant fools. So are our economists, many of whom are paid shills for some interest group. So are our corporate leaders whose greed gave China power over the US by offshoring the US production of goods and services to China. It was the corporate fat cats who turned US Gross Domestic Product into Chinese imports, and it was the "free trade, free market economists" who egged it on. How did a people as stupid as Americans get so full of hubris?
Unfortunately he is telling the truth. Many people in the American government are stupid and full of hubris. But China is following a philosophy of Sun Tzu from the Art of War, which is called "Win Without Fighting." Instead of weakening the U.S. through a military engagement, the Chinese have simply said they will dump their dollar based investments if the U.S. doesn't give in to their demands. Basically, the U.S. has no choice but to comply. This is precisely what happens when you borrow money from someone...you immediately become their slave. This is actually a double edged sword, because while it sucks that China controls the U.S. financially, the Chinese could also stop military action against Iran, which is likely since an attack on Iran would cause the price of oil to skyrocket, and the Chinese would have to pay more for it, which would suck for them because of their growing economy. By controlling the U.S. financially, China could actually stop an attack on Iran by either Bush or the Democrats if they get in office, which could prevent World War 3.
Slaves? LOL. The quote doesn't say the American government. It says people as stupid as Americans. It's insulting and incendiary. You do realize that the only reason China lends the US money is because we buy products from them? If they stop lending, we stop buying. If we stop buying, they go into a recession.
The American people are slaves. Have you looked at our debt statistics? The average American owes more than $10,000 in credit card debt, and that doesn't even include other debts. How can you be free when you owe money, and have to borrow for anything you have that has value? Many people, both inside and outside the U.S. are naive. They look at our houses, cars, and other stupid gadgets, and they think that "Americans are rich." NO, we BORROW money for just about everything we pay for. When you borrow, you are a slave, and the person who lends money to you is the master. Our government is in debt, and the average American is in debt. There is no way we can remain a superpower like that. Sorry, but its the truth. China can switch to Euros, and if they do, the whole world will follow them, which he stated in the article. China won't go into a recession. They will partner up with Japan and create the greatest economic powerhouse in history. Dude, just face up. The U.S. is finished. The average American is so dumb that they will shop at Walmart and continue to buy cheap Chinese made products, even when their currency is devalued. Guys like me who DON"T shop at stores like Walmart, are in the minority. Americans would rather buy from Walmart than support local mom and pop businesses, and you wonder why we're in this mess. The Euro is beating the dollar. All China has to do is start using it.
Paul Craig Roberts writes so many fantastic articles. When the shit hits the fan for the USA as it inevitably will do then idiots like GTech can go back and read about what Roberts has said. It will make for some chilling reading.
UPDATE: http://biz.yahoo.com/ap/070809/wall_street.html?.v=79 If you guys go to Yahoo News right now, the fall of the DOW Jones is on the front page. Some guy is holding his head down in anxiety. Yep, that symbolizes America pretty well. See, first they blow out the real estate market, which causes the stocks to fall, which then leads to currency devaluation. The country is basically done. America is already in decline. The Chinese control us. I'm glad I'm not in debt, have my own business, save 50% of my monthly income, and I'm buying precious metals. I'm going to survive this new Great Depression. What about you Lexiseek? The first step in survival is to admit how much trouble we're in.
Ok, so the us government is stupid in this case. and the chinese government is stupid in any other issues.
with all the recalls on chinese products these days, this won't last long...investors are already starting to dump chinese stocks and holdings.
Dunno who relies on Chinese products? Chinese products are such crap, that even crap is better than them.
You guys are right in saying that Chinese products are junk, but the thing is, because of the inflation of the dollar, the cost of goods and services in the United States are increasing. Americans have to pay more for energy, food, and housing, three of the major things which are affected by inflation and currency devaluation. Here is the thing. The three things I just mentioned are not exported from China. The housing, energy, and food we pay are not really major Chinese exports. As the cost of these three things continue to rise, struggling Americans won't have any choice but to by cheaply made Chinese goods. In fact, that is what this whole thing is about. The Chinese are intentionally keeping their currency, the yuan, undervalued against the dollar. By doing this, they ingeniously sell their products to Americans via stores like Walmart. When the typical joe goes to Walmart to buy a tv, air conditioner, or microwave, the only thing he pays attention to is the cost. Because American made products will generally be more expensive than their Chinese made counterparts, the average joe will just buy the Chinese product because its cheaper. It is just the opposite on the other side of the Pacific. The Chinese have never been very interested in buying Western made good. Big companies like Ford haven't had the grand slam sales they thought they would have in China. Most Chinese would prefer to purchase Chinese made goods. Naturally, it is easy to see why this would lead to a large trade deficit. Since the Chinese now have almost $1 trillion dollars in reserve, and the U.S. Government is in debt, the Chinese can loan money to the U.S. Government by using its dollars to purchase U.S. Securities. By loaning money to the American government, China essentially controls it. What Paul Craig Roberts is saying is that there is a current struggle between the U.S. and China over the value of the Yuan. The U.S. government wants China to increase the value of its yuan, and the Chinese do not, as this would hurt their revenues from exports. To get the Chinese to act, the U.S. is threatening sanctions, but I don't know exactly what this involves. What I do know is that the Chinese have responded by saying that they will dump the dollar if the U.S. government moves forward with sanctions, which would naturally cause the U.S. to go into a serious recession.
to many people rely on them...even today there was a recall of hundreds of thousands of chinese made tires...things will never change unless the people want it to.
As long as the chinese is the cheapest, then it will never die. Anyway all factories are moving there.. sooner or later. Everything will be made in China.
I put a lot of it down to utterly shite Hollywood "gung ho" BS movies conditioning the sheeple that killing people is OK. Take Arnie in Commando, he killed hundreds of people all on his own with his limitless amount of ammo.
Thank the credit society. Our grandparents are flipping in their graves. They believed in NO dept, and giving to their children (land, materials, estates ext). The Me-First generation of the 1960's cared little for their protege'. And today, young men and women speak of their wealth in terms of the payments they can afford...lol And don't forget the dept created police state legislation. You need a license for everything! Example - For 6,000 years you could be a massage therapist without a license. It is an art and should not be regulated. But today, a young man or woman will have to go $7,000 in dept for the 'government regulated schooling' in order to get their American 'privilege license'. In Florida, it costs over $250,000 for a liquor license. Open market is around $311,000 dollars as of today. My Dad just got one. Now, if you don't call that extortion, what is it? I would love to have seen a man try to tell some cowboy who owned a salon, in the 1800's, (in America) that he had to have a liquor license or else face felony charges. I think the cowboy would have shown his license in the form of a double-barrel shotgun. Lets face it, we are screwed. The US economy cannot come back from this without a total collapse, liquidation, and depression to clean the slate. As long as America leaves the Federal Reserve (which is a private bank) to print our money, and then charge us interest - we will always be slaves of those bankers. Forget Gold and Silver. Once the semi-trucks stop rolling, food will prevail as the greatest currency. No one will trade you their last hamburger for coin if they are starving. The elites can pump all the drug money they want into stock market to try and stabilize the economy, but it is too late for propping up the propagandized greed machine. Time for the real numbers boys!!!!!!!!!!! and it an't peeeertty (ignorant spelling for free). D
You are right on it bigdoug, but I wouldn't discount Gold and Silver, because if you have a nest egg, and aren't broke and in debt like a lot of Americans, it doesn't make sense to sit by and watch your hard earned savings drop down to the value of toilet paper. At the same time, having a lot of food stored away will definitely come in handy if the U.S. economy goes where a lot of people are saying its headed. You're definitely right about "licenses." They are all a load of crap. Hundreds of thousands of dollars just to get the license, and this doesn't even include the cost of land, advertising, and the cost of the actual product you're trying to sell. No wonder so many Americans are not self employed today! I laughed when you talked about a cowboy owner of a saloon pulling out a shotgun as a license is someone asked him for it in the 1800s. That is the damn truth, and that is exactly what would have happened. No one in their right mind back then would pay money like that for a license. Of course, this is exactly the way the globalists want it. Make the cost of starting a business so expensive that only monolith multinational corporations like Microsoft and Walmart can afford it, and push everybody else out of business. Then the fake conservatives and Republicans dance around talking about a "free market." Yeah, a free market for Fortune 500 and 1000 companies. It sure isn't a free market for a small to medium size business owner. Americans like the cowboy in your example had balls back then. Over the years we've become fat, lazy, dumb and cowardly, though there are still a few of us left who believe in freedom, and will give our lives to preserve it. Then the government adds insult to injury by allowing these same transnational corporations to send jobs overseas, and bring foreign workers into the country on H-B visas. Combine this with the high cost of education and currency devaluation, and it becomes easy to see why so many Americans have nothing. Not only do they make it cost too much to start your own business, they then turn around and make it hard for you to even get a good paying job. Yet, people like Gtech, Lorien, and Lexiseek believe "everything is ok." Yeah right. Maybe for them, but not for most of the country. Thankfully, the moron Elites forgot about the Internet. Their own invention turned against them. They forgot that small time entrepreneurs could become self employed and outsource just like the big corps, and we don't need a license online. Normally, the Elites would never allow technology such as the Internet to fall into the hands of the people, but it was inevitable, with the decreasing cost of computers and global networks starting in the 1990s. Yes, the Elites screwed up on that one, and that is why they're coming for the Internet next. Everything has to be under control. Of course, their move against the net will blow up in their face.
The more posts I see from you in P&R the more impressed I am, you hit the crazy gang head on and take the time to explain things to them also. The elites will try and silence the net next because it is only through the net that these scumbags are being exposed. As 90% of the mainstream media is controlled by 6 organizations it has been easy to keep the sheeple in line in the past, now the net has gone viral they are on the run, something has got to be done. These corrupt fools are starting to worry. Their control over the sheeple is waning.
Don't worry their representatives are all around. Some of them act in the "Rah-Rah" manner with respect ti Iraq and the like, but the subtle ones are here to lead everyone down inummerable "rabbit holes." The latter is the best option, i.e., flood the net with crap... Exhibit A: http://www.trufax.org/matrix5/welcome.html
Very good points Tesla, I think most Americans are waking up to a simple fact. What is that fact? That the American educational food fed to them from the kinder garden system through graduate school and on to the ( ass on coach) laden media years is what it is - BS! Do you know how I woke up? The IRS tried to extort $80,000 dollars of back taxis from me that I didn't owe. They put my wife and I through 2-years of hell by saying we did not have children to deduct. Even after we brought are children down to the IRS with birth certificates in hand, they still said anyone can pick up kids and anyone can falsify birth certificates. It took letters from our Church leaders and community (notarized) to make them finally drop the charges. We even offered DNA if needed to prove our case but they didn't even want that. After this I started to dive deep in to the constitution (I took classes) and governmental systems of our modern day. Like a good reporter, I was bound and determined to see what else is happening outside my materialistic bubble. Are others being bullied? Is their a law that says they have this power? Is their a law that says I must pay the tax in the first place? Did the founding fathers pay this tax? What was life like for our founding fathers? If they lie about this, what else could they be lying about? Where are our rights? And let me tell you - the more I dug the scarier it got. The truth is way worse than I had ever imagined (even without the fluoride). The White Anglo-American Citizen rights are extinct. But I have digressed... Back to the subject: The reason people are waking up is because what is fed to us lacks one thing. It's the thing we always had generation after generation that made men sane. This thing is called "the ring of truth". Most things expounded on by the media lack this. Politicians lack this. The monetary system (as presented by corporate) lacks this. It may be why Ron Paul is looked at with bewilderment? What makes sense to our gut feeling as raw humans is completely contradicted by the media. If given enough time and resources (taxis) they would try to tell me that gravity is a myth. I mean after all, Popular Mechanics can hire enough experts can't they? People see that housing, gas, food and energy have doubled over the last 5 years - yet the media (for years it was greenspinner) say that inflation was under 2% and life is good. If inflation was held at 2% per year a house should cost around 28,000 dollars (since 1913). Are standard of living is crap compared to our forefathers. Just do the research. Get this, techno heads actually brag abut their six-figure salary and yet in the same breadth admit to working 14 hours a day on the internet...Haaahaa Both husband and wife work 3 jobs and the government raises their children for them..lol But, its time for Paul to pay Peter for their naughty business schemes. PS. as a side note; My dad met a man who went through the great depression the other day. He told us how his family survived and got food. He happened to be a farmer who had just purchased barrels full of nails to build stalls for cattle just before the market collapse. He traded those nails a little a time for food, land and cloths. He said, that those nails bought more than Gold and Silver. He purchased an entire Florida property (1000 feet of lakefront) for 100 pounds of nails. The land today is worth millions and his family still owns it. I agree the Gold is better than useless IOU notes, but all money is relative to its use. A gold screwdriver might be worth........Gold D