Quote of the Day

[Tarrel]

When commenting on the Republicans' suggestion for a short-term temporary raising of the debt-ceiling, President Obama apparently said:

"It wouldn't be wise, as some suggest, to just kick the debt ceiling can down the road for a couple of months, and flirt with a first-ever intentional default right in the middle of the holiday shopping season."



http://www.bbc.co.uk/news/business-24515290

[emordnilap]

https://i.chzbgr.com/maxW500/7845104384/h023124C4/

[biffvernon]

"holiday shopping season" What's that?

[RenewableCandy]

It's when people buy xmas presents (you tight-a**ed git )

[cubes]

Yet kicking the can 2-3 years down the road is ok?

[SleeperService]

Yet kicking the can 2-3 years down the road is ok?

Of course it is. That means you solved the problem. When it rears up in 2-3 years it is a new problem. Apparently.

[cubes]

[UndercoverElephant]

It's when people buy xmas presents (you tight-a**ed git )

"Xmas presents"? What are those?

[UndercoverElephant]

Yet kicking the can 2-3 years down the road is ok?

Where else can they kick it?

For those making the decisions, there is no option other than to keep kicking the can down the road. The alternative is a "fast crash" enacted by the entire globalised, electronic monetary/financial system imploding.

That's why I believe this situation can't end until somebody whose interests lie outside the western elite ends it. And that means the government of the People's Republic of China, and the way they end it is by backing their own currency with gold and thus making it the de-facto global reserve currency. If the Chinese do this then kicking the can down the road becomes just as suicidal as not kicking it.

This is not as crazy as it sounds. The US dollar was itself backed by gold from 1946 to 1971, and only stopped being so because the US passed its own internal peak oil while spending vast amounts of money losing a war in Vietnam. The Chinese have a massive trade surplus, and a relatively small military. They can afford to accumulate gold, and are doing so at an increasing rate. Eventually they just say "OK, we've got enough gold now, we are backing our currency with it". The US is then reduced to the status of a banana republic without any bananas.

[Snail]

Surely it's in China's interest to help keep kicking the can too. After all, if West's economy goes kaput, then who will buy all that crap they make and export. It's MAD. So there won't be anybody choosing to end it. It'll end itself.

Maybe China is looking long-ward, preparing for the eventual collapse when confidence in the dollar is completely gone. But I don't think they'll risk doing anything first (unless tensions increase dramatically off-course).

[SleeperService]

This lot makes interesting comparisons Linky

China's military is rather larger than it seems. But UE is spot-on IMHO at some point China will at least threaten to do just what he(?) suggests. With the historical progression of global empire westwards it would be silly not to think the unthinkable.

As to who would buy 'all that crap' Snail I'd suggest the home market would be pretty impressive. It would be as great a game changer as India for the British and WW2 for the US.

[biffvernon]

Funnily enough, and unlike Britain or USA, China has always had a policy of not intervening in how other countries govern themselves and certainly never invade others. (Leaving aside the fact that some folks have differing views as to whether Tibet is part of China.)

[Snail]

As to who would buy 'all that crap' Snail I'd suggest the home market would be pretty impressive. It would be as great a game changer as India for the British and WW2 for the US.

It'd be impressive if and when they actually manage to develop it. A long and difficult process with no guarantees. As for becoming a reserve currency, that brings problems too (triffin dilemma for eg.); especially so for a country like China.

The world economies are so integrated, that damage to one will affect them all. China has benefited from debt-based growth as much as anyone. It IS part of the system now imo.

Look, I'm still astounded, in awe, and even shocked at what China has done. I'm not that old, but have still grown up experiencing China's rise. Describing as 'crap' doesn't mean I'm dismissing China - just a little angry about actual consequences of China dominance.
---
ps. I know I can come over as something of a dunderhead. I apologise for this. But it annoys me when I see people firmly saying this or that will happen, when 2008 et al has taught us how unpredictable things actually are. Even if the unpredictable/unknown (for some) turned out to be predictable/known (for others) in handsight (if that makes sense); the Euro remaining for instance, extent of libor manipulation etc.

So sometimes, I can't help myself and say "well, maybe this can happen instead". Though, in this case, I do think UE and SS are wrong. But who knows?

[biffvernon]

With 20% of the global population, we should be astounded if China were not the dominant economy.

[SleeperService]

Hi Snail,

I certainly don't think of you as a 'dunderhead' there is a lot you post I agree with (and I hope the reverse is true) but, naturally, most of the time a person responds is because they share a different perspective.

I know I'm not always right, in full possession of the facts, clouded by emotion and so on. My basic posture is that the 'little people' don't have an issue with each other on a general basis, they may not like individuals but rarely a whole population. It's the leaders who use artificial distinctions to enhance their own agenda including domestic dominance and international relations.

Another site I use has recently introduced a 'like this post' button which has altered the tone completely. I think this is because the members realise they have a great deal in common with few dissenters rather than the other way round.