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Jandar
Joined: 11 Jun 2008
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 Posted: Sun Sep 28, 2008 5:40 pm Post subject: |
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| Bigfeet wrote: |
America has been slowly getting weaker since the 70s. The financial collapse is just a more apparent symptom of it. But while America weakens, I don't see any other nation getting powerful enough to overtake it.
China had the 2nd largest economy in the world at one time before Mao Zedong ruined it. So they're just going back to where they were before. I don't think they will ever overtake the US. |
The pinnacle of power in the US was right around 1993 then congress started cashing in the so called "peace dividend".
As far as the present Wall Street fiasco, it truly does not compare to 1929.
The DOW Jones peaked at 381 points in 1929 then took a nose dive on Oct 29, 1929 then recovered somewhat on July 8, 1932 the DOW closed at 41.22 an 89% loss of it's peak value.
In 1987 we had Black Monday where wall street lost 22.6% of it's value in one day of trading.
There will be some big moves against the banks over the next few months.
There will be a huge effect on foreign markets in the meantime.
In the end it will take a lot longer to rip 10,000+ points out of the market than it did to rip out those 300+ points in 1932.
Some on wants to sell doom for the US economic conditions should look around the world at economies that are surviving against thousand percent inflation. |
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Sun Sep 28, 2008 6:16 pm Post subject: |
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Here's a survey on whether Chinese people view their country as a superpower or not:
http://www.chinadaily.com.cn/china/2008-03/27/content_6568705.htm
Those who have lived in China have probably also noticed the same thing. Technically they would like it if their country were to attain that status, but they're very aware that their country still has a long way to go before attaining that status, and at the moment they're not really interested. Simply getting wealthy and building up the country especially in the west is what people and government are most interested in at the time. |
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chris_J2
Joined: 17 Apr 2006
Location: From Brisbane, Au.
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| Posted: Sun Sep 28, 2008 6:27 pm Post subject: China |
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| Quote: |
| China had the 2nd largest economy in the world at one time before Mao Zedong ruined it |
I'd disagree with that statement. Most of Chinas phenomenal economic growth has been since the mid 80's. Mao died in 1976. China has been the worlds 2nd largest economy for several years & continues to grow at around 10% a year. The current milk products fiasco might slow that growth temporarily, & China may even overtake the US in the next decade, as the worlds largest economy.
China overtook Japan in January 2008, as Australias #1 trading partner. In 2005, it was 9th. In 2003, it was 20th.
I'm sure you'd see a similar pattern looking at Canada & other Western countries. |
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Jandar
Joined: 11 Jun 2008
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| Posted: Sun Sep 28, 2008 6:35 pm Post subject: Re: China |
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| chris_J2 wrote: |
| Quote: |
| China had the 2nd largest economy in the world at one time before Mao Zedong ruined it |
I'd disagree with that statement. Most of Chinas phenomenal economic growth has been since the mid 80's. Mao died in 1976. China has been the worlds 2nd largest economy for several years & continues to grow at around 10% a year. The current milk products fiasco might slow that growth temporarily, & China may even overtake the US in the next decade, as the worlds largest economy.
China overtook Japan in January 2008, as Australias #1 trading partner. In 2005, it was 9th. In 2003, it was 20th.
I'm sure you'd see a similar pattern looking at Canada & other Western countries. |
China is a the world's largest market, whether this translates to a strong economy has yet to be determined.
As far as a world dominant power it would need to exert some credibility in the eyes of the world. If China could put a step forward lets say in Sudan and solve the Darfur crisis, it may put them center stage. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Sun Sep 28, 2008 6:42 pm Post subject: |
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| You guys ought to check out Thomas J. McCormick's China Market. Great discussion on the "China market" myth, the Open Door notes, and American penetration into East Asia 1880s-1900ish. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Sep 28, 2008 6:42 pm Post subject: |
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| I can imagine a situation where the US is able to crawl out of this mess. She would need to adopt ISI development with a heavy focus on exporting high value added material. She would dramatically increase energy production at home (drill, baby) and stop spending trillion on empire. Trade like South Korea (a bit more flexible), energy like Brazil and non-intervention. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Sun Sep 28, 2008 7:05 pm Post subject: |
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| mises wrote: |
| She would need to adopt ISI development... |
So you have reduced the United States to a mid-twentieth-century, undeveloped Third-World nation now? And if we traded with the South Koreans like the South Koreans traded with us, especially the part where they would have to give us $11 billion over the next four years, I suspect they would not like it very much.
I am, like you, I take it, all for leaving South Korea and cutting this down to much less than $1 billion while doing so, Mises. Let them fund their own national-security system.
| State.gov wrote: |
| Several aspects of the security relationship are changing as the U.S. moves from a leading to a supporting role. In 2004, agreement was reached on the return of the Yongsan base in Seoul--as well as a number of other U.S. bases--to the R.O.K. and the eventual relocation of all U.S. forces to south of the Han River. In addition, the U.S. and R.O.K. agreed to move 12,500 of the 37,500 U.S. troops out of Korea by 2008. At the same time U.S. troops are being redeployed from Korea, the U.S. will bolster combined U.S./R.O.K. deterrent and defense capabilities by providing $11 billion in force enhancements in Korea and at regional facilities over the next four years... |
Last edited by Gopher on Sun Sep 28, 2008 7:25 pm; edited 3 times in total |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sun Sep 28, 2008 7:20 pm Post subject: |
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| Big_Bird wrote: |
| Kuros wrote: |
| Its too early to tell how the US will respond to this situation. I'll better be able to give a long-term prognosis on November 5th, 2008. |
I'm guessing that's election day in the US?
Britain certainly has a lot at stake. I hope the UK is not royally f***ed by it all. |
In the case of a debt default, the UK will be in BAD shape. Its the third largest holder of our debt. As you can see here. Actually, the UK has increased its piece of US debt by $100billion in the last year alone. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Sep 28, 2008 7:23 pm Post subject: |
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| So you have reduced the United States to a undeveloped, Third-World nation now? |
No, I haven't. I'd say that the poor trade policies have not been good for the country and it is time to try and build a much stronger manufacturing base. Also, America can't count on foreign states to finance her debt anymore, so she needs massive income and very quickly.
http://blogs.cfr.org/setser/2008/09/28/it-is-almost-official-the-quiet-bailout-is-roughly-equal-in-size-to-the-us-current-account-deficit/
But then, yes. America is in a very similar situation to Indonesia in '97, except (as is noted by Yves Smith) that it has the reserve currency and nukes. This financial crises is indicative of a system more appropriate for a banana republic or poorly run plutocracy.
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| And if we traded with the South Koreans like the South Koreans traded with us, I suspect they would not like it very much. |
Fuckem'. The US has used trade policy to keep the Koreans in the American camp. What good does this do you? How much money must be thrown at that state?
Anyways, this "bailout" won't do shit. Tomorrow the 'markets' will rally and an October or November collapse is now a certainty. Credit cards, hedge funds, private equity etc etc are all still to fall. This is called the "Great Unwind" and congress throwing a mere 700bn at the problem is like a band-aid on a shotgun wound. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Sep 28, 2008 7:26 pm Post subject: |
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| Kuros wrote: |
| In the case of a debt default, the UK will be in BAD shape. Its the third largest holder of our debt. As you can see here. Actually, the UK has increased its piece of US debt by $100billion in the last year alone. |
Now, that is really scary.
Private demand for American debt has evaporated.
http://blogs.cfr.org/setser/files/2008/09/bop-q2-graph-3.JPG
And governments are trying to prop up a market that the market has rejected. That will not end well. |
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Bigfeet
Joined: 29 May 2008
Location: Grrrrr.....
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| Posted: Sun Sep 28, 2008 7:32 pm Post subject: Re: China |
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| chris_J2 wrote: |
| Quote: |
| China had the 2nd largest economy in the world at one time before Mao Zedong ruined it |
I'd disagree with that statement. Most of Chinas phenomenal economic growth has been since the mid 80's. Mao died in 1976. China has been the worlds 2nd largest economy for several years & continues to grow at around 10% a year. The current milk products fiasco might slow that growth temporarily, & China may even overtake the US in the next decade, as the worlds largest economy.
China overtook Japan in January 2008, as Australias #1 trading partner. In 2005, it was 9th. In 2003, it was 20th.
I'm sure you'd see a similar pattern looking at Canada & other Western countries. |
China was the largest economy on earth for most of the recorded history of the past two millennia.[1][2][3][4]
The Financial Times noted that "China has been the world�s largest economy for 18 of the past 20 centuries",[5][6] while according to The Economist, "China was not only the largest economy for much of recorded history, but until the 15th century, it also had the highest income per capita � and was the world�s technological leader."[5][7]
As recently as 1820, China accounted for 33% of the world's GDP. Barely a hundred years later, the tables had turned. By the early part of twentieth century, China accounted for only 9% of world's GDP. The primary explanation for the relative eclipse of China lies in the fact that the industrial revolution of the nineteenth century, which made Europe and then America rich, almost completely bypassed China. [8]
http://en.wikipedia.org/wiki/Economic_history_of_China |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Sun Sep 28, 2008 7:34 pm Post subject: |
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| When has an empire ever fallen from power peacefully? Just a question... This isn't over yet. |
The dissolution of the Soviet Union (Russian Empire) in 1991 was remarkably peaceful. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Sun Sep 28, 2008 7:39 pm Post subject: |
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| Ya-ta Boy wrote: |
| ...remarkably peaceful. |
Right. Just ask M. Gorbachev. Or the Chechens or Georgians, for that matter. The dissolution processes did not simply start and stop in one year. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sun Sep 28, 2008 7:43 pm Post subject: |
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| mises wrote: |
| Kuros wrote: |
| In the case of a debt default, the UK will be in BAD shape. Its the third largest holder of our debt. As you can see here. Actually, the UK has increased its piece of US debt by $100billion in the last year alone. |
Now, that is really scary.
Private demand for American debt has evaporated.
http://blogs.cfr.org/setser/files/2008/09/bop-q2-graph-3.JPG
And governments are trying to prop up a market that the market has rejected. That will not end well. |
President Barack needs to establish those tax hikes on the top 1% and basically forego all the middle-class tax cuts.
I want him to man up and show some leadership. So far he hasn't. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Sep 28, 2008 7:45 pm Post subject: |
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| Check out the Saving America thread Kuros. Lots of manning up to do in that. |
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