As most of you know, I watch a broad range of television news since most US conventional media discusses fashion, dog behavior or anything else to avoid discussing the genuine state of affairs of the United States. Fortunately, RT, RTE, France 24, CCTV, Kazakh News, Deutsche Welle, Jewish News, and NHK all have plenty to say about the US and it's failing economy and economic place in the world. Of course, many of these reports are biased in some way, but generally if there is something that all of them or many of them are saying, it is generally true. It isn't always constructive to direct my readers to an entire news broadcast, but this time, we are fortunate enough to have one article which reliably reports very concerning news for us.
http://www.france24.com/en/20131106-china-seeks-world-role-peoples-money
In the above link, the French report that China is actively seeking to make the Chinese yuan the World Reserve Currency, replacing the US dollar. Without other nations stocking dollars, our artificially low interest rate of three and four percent would end. Rates would climb to eight or nine percent. This would bump home sales back to very low rates as few could afford to buy a home in the US at almost any price. Most people would become renters. The laws of supply and demand would cause such rents, with enhanced competition for rental homes, to rise. This would erode the value most of us feel we have in our homes if we own. In addition, with the World Reserve Currency no longer being the dollar, the US would need to pay for everything it gets outside the country, rather than obtaining it on credit. This would cause a slowdown of imported goods in the US, including the raw materials needed for the few industries which still actually occur here. The Chinese are openly calling for a "De-Americanized World". I can understand why some of the more negative aspects of the present day United States probably shouldn't be exported everywhere. (The high calorie, high fat fast food, for one) but such a change would devastate the US economy.
You and I have no genuine power to stop this. All we can do is get our own finances in order. We can pay down debt, and learn to live frugally. We can also symbolically reject China's attempt to devastate our economy by not buying Chinese products. I found this very difficult a couple of years ago, but now, it's getting easier. Before you buy something, run an internet search on "US Made Products" and see if the product is made here. If you can find it, it will not only be more expensive, it will last a lot longer. A great many Chinese goods, a la Harbour Freight etc. started as quite good in value for dollar. Now, a lot of poorly made junk is coming our way. I don't suppose that my choice and yours to stop subsidizing a nation which is trying to knock our country off the economic map will truly be noticed by them. It's largely symbolic, but we need to try to reject the treatment our nation is receiving from China. We could bark to our Congressmen, but they continued lunching with the opposition rather than blocking the implementation of a national health plan most people in the US didn't want. (I guess they had forgotten what a referendum might be.)
Tell me, what happens to the US if it cannot pay it's debts to China ? Do they repossess California ?
What kind of deal did former President Clinton and former Secretary of State Clinton make with them ? I think we'd better ask.
22 comments:
I wonder if Walmart and Tractor Supply and the other China marts will just start accepting Yuan since the dollars end up in China anyway. This could save a lot of trouble for them and streamline their organization. IF the Yuan would hold it's value better than the Dollar, I would accept them since the dollar is about to get inflated beyond belief, we will all be millionaires!
During President Clinton's presidency Japan was still the big object of worry. Under U.S. protectionist pressure a deal was signed which reduced the strength of the U.S. dollar. Thus the last great manufacturing boom which was only slightly negated by NAFTA.
The Chinese can do nothing with their dollars except protect their own currency from a collapse, and sit on them.
The Germans are in the same problem with Greece except they use the same currency.
To simplify, the Chinese (and Germans) sell their goods by lending the purchaser money. They do this mostly in the form of weakening their currency and holding onto the excess cash generated. If they float the cash their own currency will get stronger and their export economy will crash.
We should laugh all the way to the bank if the Chinese try to go off the dollar standard.
Thanks for contributing, Russell.
I wish Virginia had passed through the assembly the bill they voted on last year. They were going to mint their own silver and gold in anticipation of a collapse. Thanks for posting.
Being more self-reliant will be the best insulation against the Chinese.
We also have a problem / surplus of sub-standard Chinese goods available here in South Africa. "Cheap" clothing imports from China caused the collapse of a thriving textile industry, to mention just one.
Buying local, whenever possible, not only supports local manufacturers, but it is also an eco-friendlier option with less transport miles adding hidden "expense" to your purchase.
Tell me why should I or any White Hetero Christian Male within the US even care at this point? What have the politicians done with the incredible advantage brought by having the dollar as the world reserve currency? Other than gadgets and gear they have used it to constantly attack the values I consider most important and place as many barriers in my way as possible.
At this point a little reality sinking in would be a good thing. Our government, both the Repubs and the Femocrats have totally abused the economic power we managed to slide into and have become decoupled from the real world.
Some claim China cannot afford to crash the dollar. I say crashing the dollar will in the end be cheaper for them than all out war. At this point there is more FIAT money in circulation than the entire world is actually worth so that money really has no value when you come right down to it.
The natural balance will be restored one way or another.
We should let them repossess Florida, it's going to be under water in the future anyway.
Of course, you have made many good points. I accept that I will not be acquiring anything additional and that I will likely never retire. My fears now are that my children, will never have the opportunities than I had, and they are already saying that they don't plan to have children in such an economically unstable environment. I suppose I fear 18% interest rates, starvation, civil unrest, and the US being bounced right into a Third World nation. The US has squandered the post WWII advantages that it, at one time, had.
Thanks for posting, Dani. I did not realize that South Africa also purchased goods in fairly large amounts from China. I know in Russia they do, but they prefer American goods when they can get them. The textile industry in the US also collapsed some time ago, which is a shame. It paid fairly well and a lot of women raised families alone on their salaries.
Yes, I think you're right. This is what we have been trying to do, but it's tough work. My husband has spent the entire day repairing and rebuilding chicken housing. It seems a lot to do for the number of organic eggs they give us.
Chinese funny money will not be replacing our money anytime soon. The world loves our currency, drug lords love it, terrorists love it, black market arms dealers love it, all criminal elements love it, shucks, it's even good in the whorehouses in Amsterdam.
There is much more of our paper currency (especially 100's) outside of this country than there is in it. Even Saddam had a large horde of it, and I'll bet there is a hell of a lot of it in China.
They've been buying gold for years, and we've been selling it. What should we expect? The only thing that backs our money is the fuel value of the paper it's printed on. (Yes, I know it's more complicated than that, but that's a lot of it.)
Eek ! We have some subscribers from Florida, and they don't speak Chinese !
I hope it isn't replaced. BTW. US dollars function quite well in Russia also, although it is frequently and very well counterfeited.
The future does not look bright for the US. However, a lot of the people I know have been living like paupers for a long time anyway, and they are getting good at it.
We need to continue to prepare, and get rid of our debt before the SHTF or Westinghouse.
We still have a low amount of debt which is unsecured. Still in a collapse, we need to be able to pay taxes, homeowner's insurance, food, electricity (if it's still on) maintain our place (make sure the well and septic are maintained and can keep working.), buy medications, and help our large family as is appropriate. We wouldn't have an easier time than most everyone else, because we are a great distance from anything, and because our animals still need to eat. My point is that even with low debt, it could be very difficult.
I have no debt except for a couple of small monthly bills and can and have lived without electricity and plumbing. Plenty of wild game here and it's easy to grow things to eat here. And all I have to take care of is myself, and the old lady next door, but she is low maintenance also.
Sounds like a plan !
I live in an area that lost many industries that manufacture cloth, and manufacture clothing. With Clinton's deals, all these industries are lost forever. Men who repaired the machines lost their living. Men in their 50s don't adapt well to losing their livelihood.
Besides the manufacture of fabric and sewing plants, there were satellite industries. There was a seconds store where many people found clothing at amazingly low prices from fabric made in the USA, made by Americans. There was a cutting room that sold scraps. Now, a cutting room is over 150 feet wide and that long. The bolts of fabrics are actually rolls, some 6 feet in diameter, moved by machinery. The fabric is cut using a vertical knife that slices through a foot of fabric rolled out on the table. When I bought scraps, pieces were often 10 yards or maybe 2 yards. I could make a sweat shirt for less than one dollar, plus they had the cuffs and collar bands for sale. I bought commercial machines and made money at home. No, I never sewed in a factory. So, you see, we lost on a grand scale and on the personal scale.
One factory made clothing for Spiegel, so some of my clothing was of high quality fabric. All that is lost now. Walmart has fabric that is not made in the US.
We lost the sock factories! That means no stores selling seconds of socks, no loops to make potholders!
This area suffered but people are resourceful and resilient.
Sadly, that was the beginning. The work, the industry which helped to make America great for almost everyone, was sold to other nations by our leaders. The high tech jobs which were to replace the manufacturing ones we "gave away" didn't materialize in the numbers in which we needed them.
Thanks for your post.
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