Slashdot Mirror
China's State Press Calls For 'Building a De-Americanized World'
Hugh Pickens DOT Com writes "Businessweek reports on some not-so-subtle commentary from China's official Xinhua News Agency on the U.S. budget showdown: 'It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.' Key among its proposals: the creation of a new international reserve currency to replace the present reliance on U.S. dollars. 'The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized,' the authors write. 'The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites.' The commentary calls for a greater role for developing-market economies in both the World Bank and the International Monetary Fund, adding 'the authority of the United Nations in handling global hot-spot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate.' The commentary concludes that 'the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.'"
Meanwhile, U.S. Senate Leaders are claiming a deal is close to reopen the federal government until mid-January and defer the debt ceiling debate until mid-February.
It isn't you, its me. I'm leaving you for India, as she is so much more able to fulfil my needs. I truly hope that you will find someone new. Let's be friends. - Uncle Sam.
I deny that I have not avoided attaining the opposite of that which I do not want.
The Slashdot summary already nicely shows why the Chinese do have a point of sorts:
"a deal is close to reopen the federal government until mid-January and defer the debt ceiling debate until mid-February."
In other words, the only thing they seem to be able to come up with is a deal to kick the can down the road for four months - and in the meantime, in all probability do exactly nothing about the underlying fundamental problems which have caused this mess in the first place.
You know, these pesky little details, like the U.S. habitually spending way more than it actually takes in tax earnings. As in: WAY more. A bit more could be argued to work in some lets-fudge-the-books-and-rely-on-inflation-to-make-it-work way, but the U.S. is light years from that sort of sustainable level. And no one wants to admit it.
The bit where the Chinese are IMHO wrong is that it will need any sort of centralised planning to achieve this replacement of the U.S. as hub of the global economy. That will just happen, inevitably. The fundamentals are gone, no way the U.S. can stay where it is. What will come afterwards is very uncertain - but things can stay the way they are.
The bottom line here is, the US owes-- as my economics professors (Reagan advisers) pointed out 25 years ago-- the one thing it can produce infinitely and with no cost: US dollars.
What happens in a meltdown? Well, if I ran the Fed along the principles my advisers taught me-- I'd pour payments to my allies (Europe, etc.); then I'd devalue the currency-- meaning, the creditors I didn't pay, now are owed much less. That's China, primarily, which, after all, has played quite a currency game with the US, and who's debt is quite arguably overvalued due to cheating on exchange rates.
Would China like the world to adopt the RMB as a default currency? Sure. Obvious. It's in their self-interest, at least. If everyone owes RMB, then they have to accept the global exchange rates.... they can't print or otherwise acquire USD, and pay off debts to China with the new currency.
Guess what? In short: no one's going to trust China as the global standard, as much as they aspire to it. If you're Switzerland, you know, that in a pinch, the US is going to pay off its debts to you-- not to China-- and give you a lot of notice, that it's going to devalue the dollar, so you can take advantage of the opportunity to erase 15% or 20% of your net debt to China, as well.
What's this called? Global political economics. China knows the game; it knows that it played the game to dump cheap labour and goods on the US, and accumulate capital debts (loans); and it knows, if the US reaches debt ceiling, it's China's debts that are going to get radically devalued to balance the sheets.
And good that. Unless, of course, you'd prefer that the Central Party, and not the US Treasury, is the final guarantor of the money you've loaned. A risk, I doubt, many of you (and many Central Banks) wish to take.
Or in short: the US will fulfill its obligations to allies and creditors who've played the game in good faith. To China and others who've gamed the system-- well, that's another story, and in the next days and weeks, we may very well see, what action the US can use, to re-balance the sheets.
They are right, the world needs a better currency. Preferably one not regulated by nation states or corporations: maybe bitcoin or a descendant with its flaws fixed. Also certainly the `voracious Wall Street elites have their role in the current crises (plural).
However, the real problem is all of us: run-away consumerism. The masses who took irresponsible mortgages. The `need to replace a perfectly good smartphone every two years. The throw-away society.
The economy is based on debt, and every nation is either involved in the race to the bottom for all the planet's natural resources, or they want to get into the race.
China is _not_ going to be the saviour though, also not Russia, India, Europe, South-America or the USA.
It is time to face the truth: this system cannot be saved, it can only collapse.
The quicker it goes, the better, because every day that goes by the damage caused grows bigger. There is no point in trying to hasten it (like Anonymous does sometimes), all energy should go into prepare for a rebuild.
If there is to be a new world order, whatever shape it might take, it must be build bottom up, by the people.
Capitalist-alike, but without the corporations.
Socialist-like, but not with the top-down planning and represssion.
Open sourced and based on spontaneous collaboration, but without the hippy navel gazing.
Therefore it is essential to keep the Internet free, and running whatever else in the world may go down.
It is the major advantage the world has to prepare for a soft landing, when the world order crashes.
-- a PIrate Party member who wishes to stay anonymous.
China and many other nations would love to see another currency supplant the U.S dollar or at the very least have a credible alternative, but the truth is that currently there is no currency that could do that. The Chinese renminbi is not free floating, the euro is not even guaranteed to survive, Japan is too leaden with debt which puts into question the future stability of the yen, and finally the British sterling, Canadian or Australian dollars etc are simply backed by too small of a economy to be considered serious contenders.
The institutions that emerged (world bank, IMF, UN) were really just codified the result of WWII. The likely reason nothing has emerged to replace it is that we haven't had WWIII yet.
It might be interesting to speculate how all this could change w/o fighting another world war, but it seems unlikely given the inertia of the current institutions.
On the currency issue, I think most of the people that talk about a non-us-dollar reserve currency are totally unaware of the history of the Bank for International Settlement and the IMF which denominates their reserves in SDRs (special drawing rights) which is a weighted basket of currency (USD, Euro, Yen, and British Pound).
The problem with any kind of currency reserves, is that countries need to be willing to put up significant assets to back up any denomination of wealth (or you might find them being attacked like George Soros once attacked the British Pound). The one thing about the USD that's hard to substitute is that it's really hard to attack it now as there are many greenbacks out there and many contracts are denominated in USD. Any transition to an alternate reserve is likely to be attackable which means it must be very quick or as part of a big movement (perhaps even war-like).
Or in short: the US will fulfill its obligations to allies and creditors who've played the game in good faith. To China and others who've gamed the system-- well, that's another story, and in the next days and weeks, we may very well see, what action the US can use, to re-balance the sheets.
I'm not seeing any evidence to support that. Going by recent history, the US seems perfectly happy to trample over its allies to secure its putative interests.
The unfortunate problem is that China owns all your dollars and doesn't know what to do with them. In fact all they can do is to float the Renminbi which would cause a collapse in the value of the dollar against it and basically crash the US economy.. and the rest of the world too. The US can't really follow your suggestion as the Chinese would kick off and do something once they saw it happening, I'm not sure what, but I could imagine nothing good overall. Probably crash the world economy in some way or another :-)
That they're trying to create something else suggests they're fed up with the US government lurching from crisis to crisis for wholely internal political reasons. And that a new inter-bank currency would allow them to spend all those dollars a little more easily. That's the main reason they want this, I think.
On the other hand, a first step towards a global currency is surely a small step forwards in human social evolution.
China still has substantial currency controls on the renminbi. It's difficult to move renminbi to other currencies. There's a "State Administration of Foreign Exchange" which issues permits to do that. Businesses and individuals in China can buy goods with renminbi from other countries, but exchanging renminbi for dollars or euros or doing other cross-currency financial transactions is heavily controlled.
(Lately, there's been a surge in Bitcoin transactions in China. This provides a way to get around exchange controls. This activity will probably provoke some government action if it gets big.)
Because of those exchange controls, the renminbi has not been a major international currency. That was the deliberate policy of the People's Bank of China for years, because they didn't want their internal economy yanked around by external events. That policy changed in July 2013. China now has a big enough economy internally to outweigh external holders.
Retail controls are loosening. HSBC and Standard Chartered Bank will now let you open a bank account outside China denominated in yuan. But it's not freely exchangeable yet.
Here's a summary of "Circular Concerning the Simplification of Cross-Border RMB Procedures and Improvement of Relevant Policies" from the People's Bank of China. The changes are slow and cautious, but are happening.
the US will fulfill its obligations to allies and creditors who've played the game in good faith.
Nope, not even close. The USA will default on those debts by inflation.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The US is hardly alone in its trouble. The Netherlands just had "prinsjesdag" the day that the budget for the next year is presented. And it was immiedialty followed by a not yet ended dance to get enough approval from non-governing parties to get it through both parlements. Because the two coalition parties don't have a majority in both. No it isn't a two party system, we got LOTS and it isn't exactly a deadlock but it does result in a compromise that nobody hates and several government in succession that haven't finished their terms. This government likely won't make it either.
The Belgians recently spend a year without a government because the sub-frenchies and the sub-dutchies hated each others guts. England is being ruled by two parties where one party is withering away because it gets the flack for supporting the other party. What people are going to vote in the next election is anybodies guess. Maybe they will punish the tories again by voting labor.... because voters never ever learn (that is how labor got in to power in the first place, only for blair to upset people so much they voted tory to punish labor).
Germany too has seen the collpase of a coalition with one party not even making the voting treshhold. To Merkel is look for another party to rule with so that party too can lose all their voters... sounds like a good plan right?
Southern Europe mostly votes for whatever guy promises the most and blames all the wrongs on nothern Europe for refusing to subsidize the south after decades of subsidies that were squandered.
Canada hates its leader but refuses to elect anyone else. New Zealand is a puppet state and Australia seems to elect people the people online hate.
The problem might be that elections are simply to simple a tool to decide with how to govern a country.
Take for instance privacy. One privacy issue that Americans often mention is their medical history since an insurance agency might reject you if they know you have ill health. But Obamacare cures that. If an insurance agency can't reject you for your medical history, neither will they want to find out your medical history. Bam! Socialism saves privacy! How is that for a twist? Every privacy freak support Obama!
A bit silly perhaps but this shows that issues don't stand alone yet during elections they are presented like they are and most elections boil down to a handful of issues and then everybody bitching about how party X who promised Y is not doing Y and totally screwing you over on Z as well.
Or maybe democracy is alright and it is just needs a better class of human beings.
But the US is not alone in being screwed up and suffering gridlock. It is just dealing with it in the most immature way possible. But hey, that is Americans for you and we love them for it. Makes for an entertaining way to end the news, first 10 minutes of how your own country is falling apart, then a 1 minute "silly yanks" bit to show that no matter how silly your own leaders, there are sillier people on this planet.
USA, showing the world things can always get sillier!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
No they don't, Europe gets a lot of its energy from Russia. You don't have the monopoly you think you do.
There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.
1) You assume that there is some unified entity called "US" that is able to act in its best interest. Clearly not the case.
2) You assume China's won't learn about the plan and if they learn they will not act.
In fact, very likely some Congresscritter would learn about such plan before it could even be executed, use it to criticize the president in public forum. As a response, China would immediately and quietly start to get rid of US dollars en masse, probably using some sort of derivative schema, which would hide it for some time. This would happen before US could even agree on any sort of plan. As it would become apparent in a couple months that China is dumping US dollars, it would simply dump the rest of them in bulk, causing the dollar to lose all the remaining value. Now all the US allies, those who didn't dump US dollars as well, are left holding useless currency and they lost on all the debt they were owed. They will demand US to repurchase all of the US dollars dumped on market to drive the currency back up. This is not gonna happen. US will be facing a lot of angry countries demanding some sort of reparations. All the US foreign trade will cease immediatelly. The fact that US is not self-sufficient in almost any area and the US dollar being worthless will start draining the country of all its natural resources, because that is the only thing they can use to pay for what they need by now. In another 10 years, US would be a shell of a country. At this point US will use their only remaining option and declare war on China and use their military to shore themselves up economically. But at this point US has no allies and no goodwill at the UN. The result is a war of US against the rest of the world.
So good luck with your brilliant economic plan. Your advisers had to be some brilliant thinkers.
If programs would be read like poetry, most programmers would be Vogons.
The US has gone to war a number of times (it is claimed) to prevent countries trading oil in currencies other than the Dollar. Some of those claims might border on conspiracy theories, but it remains that the tactics to keep oil trading based on the U.S. Dollar look remarkably like 'force'.
Etymology note: Petroleum is latin for 'Rock Oil' (Petra, rock + Oleum, oil, from the Latin for Olive.). When we created that abbreviation, Petrodollars, dollars for oil, all that was left of the oil was the 'o'. The word looks more like 'Rock 'o Dollars, doesn't it?
Prediction for end of Universe #42: Fencepost error in Quantum_bogosort.cpp
There are not many countries that would prefer to be under Russia's thumb, however loudly they complain about the US.
Historically not. This is because it was widely known that Russia would screw you over hard.
With the recent revelations about NSA it is pretty clear that the US us following the same fucked up realpolitik and that you have to think of dealing with US in the same way as you think about dealing with Russia.
While both nations have a lot of wealth it is generally more beneficial to deal with other more idealistic nations.
It may seem like it is naive to be "soft" and kind hearted but in the long run people learn that they can trust you. I have seen this a lot in the business sector. Companies that makes sure that everyone involved benefits form the deals makes it in the long run.
Those who screws people over only lasts until word gets around. They do great for a decade or two until everyone else realizes that there is more money in working with other people.
I've been saying for awhile that the smartest thing the US could do would be to get behind a world government NOW, while it still has the clout. It's been obvious for a decade now that the US's time in the spotlight is up. History tells us it couldn't go on forever. If you're thinking 'too big to fail', look at the Roman Empire. THAT was too big to fail. Or the British one.
If the US were as smart as they like to believe, they'd see the writing on the wall now and get behind providing more authority to the world bodies which work to ensure that countries treat each other in a civilized manner, because the US is REALLY going to wish they had down the road, when we're all talking about the ______ian/ise/etc Empire.
Min
On the whole, I find that I prefer Slashdot posts to twitter ones because I don't get limited to 140 chars before
Let's hope so.
I don't mean they should hand the world to the Chinese, but change is definitely needed. Big change, not Obama-sized "change".
OTOH I don't see where that change could possibly come from. The people don't look like they're going to revolt anytime soon, and the NSA is busy making revolt ever more difficult.
No sig today...
I came here for the punch and pie. Sadly, I *was* disappointed.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
It's amazing how nobody in the media was talking about the problem of Gerrymandering 2007-2009...I wonder why?
Probably because 2010 was the last census, after which the districts were required to be re-drawn, so this is all recent history and therefore gets reported on. Because the Republicans had just swept into power after the 2010 elections, they were able to draw districts favorably for themselves. This doesn't mean Democrats wouldn't/haven't done it, just that the most recent use of gerrymandering has been just a couple years ago by Republicans.
Ultimately, I'm wondering if we can't push for an open source algorithm for computing districts based on population centers? This way, it cannot be political, it is open source and verifyable.