Well, events are accelerating at a gradual but terrific pace. China, for the first time since the Ukrainian crisis began, has come out to openly point out that the West have to play thier part and respect the position of Moscow. This is not just an urge, it is an outright show of solidarity with Russia.
Although, the Chinese statement have not included final positional statements such as 'or else', it is however a wake up call and a clear indicationto the West of what China thinks about the crisis, how it sees the West and the US, and by implication, the position/actions it is ready to take, should things get out of hand.

For those who may play down such statements, pls just try to understand what diplomatic statements and rhetorics are all about.
China has just taken a position on the Ukraine/Russia/NATO. It does not have to spell it out or make it blunt. Believe you me, right now, some eyebrows accross the Empire are being raised, and is understandable. Because from now, Anyone who has been 'indirectly' dealing with the ''Bear,'' and plans to 'deal' more, must now also be 'aware' of the ''Dragon.''

Game on!


http://www.zerohedge.com/news/2015-02-27/china-just-sided-russia-over-ukraine-conflict

This is similar to my position on an earlier thread. It is all about interest.
We saw this coming, Putin is stubborn and seems cool under pressure.

It would have been interesting to see China join the forces against Russia.

na world war de come small small

Hm

Interesting.

Where you guys expecting China to side against Russia before?

As expected, we all knew Beijing will side Moscow on this one...

"that the West have to play their part"

This doesn't sound like an open support for Moscow's policies. This more or less sounds like reinforcing a neutral position. Beijing made its neutral position clear when it abstained from the UN vote that criticized Moscow on Crimea. An about-turn position will simply be too embarrassing and will give the US a moral ground on its policies vis a vis Taiwan and other break-away regions.

That asides, lets even assume that this is a strong support for Moscow, it is not going to influence events in any way. Western policy makers already assume that Moscow has a tacit support from Beijing anyway. There's nothing more that an open support will do beside the political nature of it. Let's take it step by step, what will China do if it openly supports Moscow?

1) Sanction the West?

Well, it will simply crash its economic growth overnight. Europe and North America (and Japan) account for more that 70% of Chinese economic growth story, it makes no sense that China will deliberately seek an economic war for the sake of Moscow.

2) Provide more financial assistance to Moscow?

It is already doing this by extending bilateral trade corporations on oil contracts, and buying more military hardware. Moscow desperately needs more than that. Beijing unfortunately cannot provide more. Chinese banks are simply refusing to lend money to Russian companies and when they do, they charge ridiculous interests compared to what can be obtained in the west. Borrowing money is much cheaper in developed economies right now compared to Emerging markets.
Additionally, China is currently facing a huge debt burden on its own from local companies, there is simply no economic sense to expand more heavy loans to Moscow - a country that is commodity based and thus more risky.

3) Provide sophisticated technology to Moscow?

This wouldn't make sense, as Moscow is likely to rank higher on the technological curve than Beijing itself.

4) Veto UNSC resolutions that are directed at Moscow?

This is very possible, but again the effect is only political as opposed to a real bite. Moscow already has a Veto power.

5) Deepen Bilateral corporation with Moscow against Washington.?

China's economic prosperity is tied to the US than it is to Russia. By trade, US consumers by more Chinese products than any country's products. By services, US companies offshore there services to China than any where else. By balance sheet China owns trillions of assets in US than anywhere else. Both countries don't agree on geopolitics. One is a hegemony, the other is seeking to become one. Both contest for power and influence in East Asia, but both countries have managed to separate politics from business.

China's ties to Russia are less obvious. Both countries are resource rich. Even though they share borders, Russia does not have the wealth to replace the US as a trading partner with China. Russians have a lower disposable income so they can't buy much stuff from China. Russians also have a lower productivity growth, so they can't sell much to China. More than likely, Russia's trade with China will only be dominated by oil & gas and military hardware. Both of which will only benefit China and increase Moscow's trade deficit with respect to China. In the not too distant future, China may likely overtake Russia in the military technology space ( they will do this by stealing from everybody else). So that Russia will only have one thing to sell to China - Oil & gas!
In the Emerging Europe space, Russia's economic clout will grow thinner and thinner as it does less business with the West. Countries like Poland are likely to be the dominant economic players in Europe in the future, probably overtaking even Germany.

So again, besides the bark, an open Chinese support for Moscow offers no real Bite. It will only alienate it from its other key economic interest, it will also provide a moral argument of support for its own key breakaway hubs. So it is more likely that China continues its tacit support and at the same time by policy remain neutral

@bookface.
Yes, it is a ''mild'' but unmistakenly strong show of support. Did you in any of the statements see where the Chinese at any time condemn whatever actions Russia has taken so far since the Ukrainian crisis began? Rather the Chinese have publicly made it ''clear'' to the West that it must have to understand Russia's position in this matter, and should things get tougher, one should no longer doubt where China's position lies. It is as simple as that.

Now, you mentioned that China's support for Russia can not change the direction of things as they happen or would happen. This is a very grave error on the part of our thinking.
Make no mistake about it, China is the 800 pound gorilla in the room that cannot be ignored. Whomever, the Chinese throw their support behind in the event of war between the US and what is left of NATO, will be the likely winner.
But that is for another day.

Now, on the economic front like you rightly pointed out, it is true that the Chinese economic growth is tied to the West, hence, the talks of;

(1) SANCTIONING THE WEST?

Why would they want to sanction the west? There is no rationale for that, and that is, even if that can actually happen. But you must also understand that no nation is self-sufficient on the economic front, all economies are in one way or the other interwoven.
However, the key issue underlining whatever Chinese involvement will entail, is on SECURITY. That is what all this is about. And no resonable nation would place its security below economic issues, and the Chinese have made this clear on certain fronts. Because without security, you cannot guarantee economic success and dependency.

(2) MORE FINANCIAL ASSISTANCE TO MOSCOW?

Yes. The Chinese needed Moscow to be stable financially. A meltdown in Russia's financing ability would mean low or zero Russian productivity level in machineries/hardwares, and sophisticated technologies, areas in which the Chinese primarily relies on Russia. Thus, China and Russia signed a three-year currency-swap line of 150 billion yuan ($24 billion) in October, an agreement that can be expanded with the consent of both parties.
Chinese and Russian premiers Li Keqiang and Dmitry Medvedev met in Kazakhstan, signed extensive deals on railways, infrastructure and development in Russia’s Far East region, north of China. Loans, cooperation in major projects, and participation in domestic infrastructure investment in Russia are options on the table, notwithstanding China's own debt.(besides, everybody owes debt).
These offers of assistance cut across the economic war on Russia launched by US and European imperialism to punish Moscow for opposing their neo-colonial restructuring of Eurasia.


(3) DEEPEN BILATERAL AGREEMENT WITH MOSCOW AGAINST WASHINGTON?

Yes, China's economic prosperity is tied to the US, but that has not changed the fact on Benjing's mind that the greatest enemy to its immediate sovereignty and national security, is The US (i wll come back to this later).
Then why is China seeking to move away from the US economic sphere (the Dollar), since thier economics are relatively tied to one another? It is very simple. It was a failure on the part of Chinese financial planners as it relate to its finamcial and strategic interest. Why, how?

Following the 1944 Bretton Woods agreement, that established the dollar (i.e. the Petrodollar) as the world’s reserve currency, the dollar immediately became the second best invest long-term investment on the planet, next to the actual owning of gold. Subsequently, when the Chinese made the decision to purchase US debt, it had to appear to the Chinese that they were purchasing a sure thing which would return untold amounts of wealth.
What the previous generation of Chinese leaders did not foresee was that the US would purchase themselves into such a quagmire of debt, and would someday cause the US to be on the verge of committing economic suicide. The Chinese have come to realize that they have purchased a declining asset.
Twenty five years ago, if the Chinese financial planners could not have foreseen that the US would be 17 trillion dollars in debt, have an unfunded mandate liability (e.g. social security, Medicare, etc.) of 240 trillion dollars and would have assumed the liability of over one quadrillion dollars of credit swap derivatives debt that resulted in the “need” for the bailouts. If they had, the Chinese would have run from the dollar a long time ago and then would have moved in to clean up after the coming crash of the dollar occurred. In short, the Chinese failed to anticipate that the US would commit financial suicide in slightly more than a generation.

The Dollar, aside arms, is the basic commodity the US is exporting. Without it, the US can do little or nothing against other nations.

Now, on the part of Russia-China relationship, China knew that Russia is an irreplacable neighbour/ally, and both have a common enemy-the US.


To be continued.....

@bookface.
Yes, it is a ''mild'' but unmistakenly strong show of support. Did you in any of the statements see where the Chinese at any time condemn whatever actions Russia has taken so far since the Ukrainian crisis began? Rather the Chinese have publicly made it ''clear'' to the West that it must have to understand Russia's position in this matter, and should things get tougher, one should no longer doubt where China's position lies. It is as simple as that.

Now, you mentioned that China's support for Russia can not change the direction of things as they happen or would happen. This is a very grave error on the part of our thinking.
Make no mistake about it, China is the 800 pound gorilla in the room that cannot be ignored. Whomever, the Chinese throw their support behind in the event of war between the US and what is left of NATO, will be the likely winner.
But that is for another day.

Now, on the economic front like you rightly pointed out, it is true that the Chinese economic growth is tied to the West, hence, the talks of;

A strong show of support or not - it wouldn't move a shoe! simple as that! China's official position has long been against territories breaking off - hence, taiwan, tibet etc. A strong support for dismembering Ukraine will undermine China's stance on breakaway regions on its own turf, hence its neutral stance. But the Chinese understand that the conflict cannot go on for ever, there's benefit to keeping Moscow on the side. When the conflict is all over, China will be the beneficiary - it will have Moscow in the pouch and it will keep its business interest with the West, win win. There's no point jeopardizing one for the other.

I am not going to speculate what will happen in the event of a war - but my gut feeling is that China will keep its neutral stance unless its territory is directly threatened as in the case of the Korean conflict.

(2) MORE FINANCIAL ASSISTANCE TO MOSCOW?

Yes. The Chinese needed Moscow to be stable financially. A meltdown in Russia's financing ability would mean low or zero Russian productivity level in machineries/hardwares, and sophisticated technologies, areas in which the Chinese primarily relies on Russia. Thus, China and Russia signed a three-year currency-swap line of 150 billion yuan ($24 billion) in October, an agreement that can be expanded with the consent of both parties.
Chinese and Russian premiers Li Keqiang and Dmitry Medvedev met in Kazakhstan, signed extensive deals on railways, infrastructure and development in Russia’s Far East region, north of China. Loans, cooperation in major projects, and participation in domestic infrastructure investment in Russia are options on the table, notwithstanding China's own debt.(besides, everybody owes debt).
These offers of assistance cut across the economic war on Russia launched by US and European imperialism to punish Moscow for opposing their neo-colonial restructuring of Eurasia.

I have read on the news about the hundreds of deals that are being signed left, right and center - but you are missing the point. Infrastructure/Government spending is NOT what Russia needs! Russia already has very good infrastructure. What Russia needs is a renewed business confidence - and this is exactly what is behind hindered by sanctions. US and European imperialism, could really kill off Moscow's ability to become an economy down the line. What is being introduced by sanctions are long term shocks to the economy that will take years to fizzle out. In the last century, no country has prospered economically by being antagonistic against the West.

Then why is China seeking to move away from the US economic sphere (the Dollar), since thier economics are relatively tied to one another? It is very simple. It was a failure on the part of Chinese financial planners as it relate to its finamcial and strategic interest. Why, how?

Following the 1944 Bretton Woods agreement, that established the dollar (i.e. the Petrodollar) as the world’s reserve currency, the dollar immediately became the second best invest long-term investment on the planet, next to the actual owning of gold. Subsequently, when the Chinese made the decision to purchase US debt, it had to appear to the Chinese that they were purchasing a sure thing which would return untold amounts of wealth.
What the previous generation of Chinese leaders did not foresee was that the US would purchase themselves into such a quagmire of debt, and would someday cause the US to be on the verge of committing economic suicide. The Chinese have come to realize that they have purchased a declining asset.
Twenty five years ago, if the Chinese financial planners could not have foreseen that the US would be 17 trillion dollars in debt, have an unfunded mandate liability (e.g. social security, Medicare, etc.) of 240 trillion dollars and would have assumed the liability of over one quadrillion dollars of credit swap derivatives debt that resulted in the “need” for the bailouts. If they had, the Chinese would have run from the dollar a long time ago and then would have moved in to clean up after the coming crash of the dollar occurred. In short, the Chinese failed to anticipate that the US would commit financial suicide in slightly more than a generation.

The Dollar, aside arms, is the basic commodity the US is exporting. Without it, the US can do little or nothing against other nations.

Now, on the part of Russia-China relationship, China knew that Russia is an irreplacable neighbour/ally, and both have a common enemy-the US.

Apply some common sense!

How exactly will China move away from the US dollar? - I marvel at the number of people who spit out this garbage without an iota of common sense! China is tied to the dollar, simple! It is tied by trade! The US is the biggest buyer of Chinese products, and it pays in dollars, if China demands to be paid in some other currency, the US will simply stop buying from China and turn to some other marginal low cost producers out there - Phillipines, South Korea, Singapore, Thailand, etc.

Chinese made a decision to buy US government debts because they simply have no choice! - The economics works out this way - every dollar that is issued is a debt backed by the taxing power of the US government. Every time someone buys an item from China, they exchange this debt for goods or services. China does not have a primary exchange for easy convertibility of Yuan to dollars, so Chinese products manufacturers/service providers exchange this debt with the central bank of China for yuan/reminbi at a fixed exchange rate. This process goes on and on - and at the end of the day, the Central bank of China has lots of dollars in its account - US dollars can only be spent in one place - in the US. So the Central Bank of China must choose between buying gold (/other commodities) or buying US treasuries - Gold does not pay interest, is more risky and its value is not guranteed by anything except for its face value - US treasuries pay interest, and its backed by the taxing power of Uncle Sam, so the choice is crystal clear, the Chinese central bank buys more treasury. This process simply goes on and on...


The US government has 17 trillion dollars in debt, but US households and banks have been deleveraging for the past 6 years. The contrary is true for China. The Chinese government has very little debt, but its households have a huge amount of debt. In the event of a crises, household debts are automatically transferred off to the government balance sheet. The total debt in China is now more than 250% of its GDP!!! Additionally, of the 17trillion dollars debt, more than 75% is held by US household/corporations.

The statement on unfunded liability is also without some common sense - let's assume that the government plans to spend 900 million dollars on free health-care in the case that everyone in the US becomes sick this is a liability, not a debt! This liability does not have to be funded, but budgetary provisions can be made available. And in any case, it is unlikely that everyone in the US will become sick in any given year. But none-the less, it is still a liability. This is more like given everyone a car insurance, some people will make a claim, others won't. In any case, this liability is owed to US citizens.

There's no point going into your "quadrillion" dollars argument, its just too dumb and painful.

..... Hence, all the talks on the disparity in the productivity growth and disposable income here and there, is but of little or no significance. The major theme of consideration here is ''NATIONAL SECURITY''.
It is on this note that China cant afford to slip in its support, nor continue to pretend as if it doesnt take cognizance of what is happening. Because, it knew that ones the Empire is through with Moscow, the next port of call would be it-China.

The US is currently trying hard to encicle China, sponsoring dissent within it, and aiding its opponents militarily against it. With its ever more reckless and violent policies, US imperialism is vastly overplaying its hand, discrediting itself at home and fueling opposition from rival states. By driving Russia and China together, in particular, Washington is undoing what was long seen as a major achievement of US imperialist statecraft: the 1972 rapprochement between US President Richard Nixon and Chinese leader Mao Zedong, which turned China into a US ally against the former Soviet Union.



Besides, Many Chinese people still view Russia as the big brother, and the two countries are strategically important to each other, expecially when referring to Soviet backing for China as it fought the United States in the Korean War, shortly after the Stalinist Chinese Communist Party (CCP) came to power in 1949.


It is For the sake of national security that China had been, and will always be in bed with Russia, knowing that it alone cannot take on or wade of the Empire, nor can it afford to lose a a strategic ally like Russia.

[quote author=bookface post=31229196]

A strong show of support or not - it wouldn't move a shoe! simple as that! China's official position has long been against territories breaking off - hence, taiwan, tibet etc. A strong support for dismembering Ukraine will undermine China's stance on breakaway regions on its own turf, hence its neutral stance. But the Chinese understand that the conflict cannot go on for ever, there's benefit to keeping Moscow on the side. When the conflict is all over, China will be the beneficiary - it will have Moscow in the pouch and it will keep its business interest with the West, win win. There's no point jeopardizing one for the other.

Lol. it wouldn't move a shoe? Not when it start developing into a "shooting" conflict, though. Dismembering the Ukraine you say? it wasn't Russia that planned the coup, overthrow a legitimate Government, an act the traditional Eastern people refuse to accept, thereby fomenting the unrest that is currently taking place. China knows this, and it can not afford to keep mum all through the face of such naked act of aggression, when it is crystal clear that it would certainly be the next. Hence, the likelihood that it would give whatever support it can muster unto Russia in the financial fronts. Russia can take care of itself militarily. And at the end like you said, it would be a win-win-win for China, in the sense that it did not lose a vital and strategic ally in Russia, nor its business interest with the west, and as well as checkmating or deterring the Empire's quest to subdue, curtail or interfere in its domestic affairs and regional sphere of influence. China does not give a damn about the Ukraine in relation to whatever actions and inaction Russia might take or has taken, cause it understand the precarious situation under which Russia is operating.

I have read on the news about the hundreds of deals that are being signed left, right and center - but you are missing the point. Infrastructure/Government spending is NOT what Russia needs! Russia already has very good infrastructure. What Russia needs is a renewed business confidence - and this is exactly what is behind hindered by sanctions. US and European imperialism, could really kill off Moscow's ability to become an economy down the line. What is being introduced by sanctions are long term shocks to the economy that will take years to fizzle out. In the last century, no country has prospered economically by being antagonistic against the West.

Yes. Sanctions no doubt, are hurting Moscow, because it own financial system is tied to the west-SWIFT paying system and rating agencies. But honestly i don't see them continuing beyond this year. The US could keep up with the charade, but the EU doesn't have the energy and will-power to continue on this level of US led imperialism, nor can it stomach the aftershocks in the event of a Russian economic total collapse. The EU had already suffer three recessions in the space of five years; the burden of Greece is a major source of worry, and adding another one to this, would definitely kill the block. This is very realistic hence, the cry against deeper sanctions by the likes of Germany. Italy, France and such others, who are beginning to see the hand writing on the wall. In fact, some EU nations are beginning to question the rationale and sustainability of the sanction war. Though they we pretend to be going along for the now, the breaking point is always at the corner. Sanctions always have boomerang effects.

Again, you are right that what Russia needs mostly now, is a renewed business confidence. and i believe they are already walking towards this, and is even yielding fruits in some quarters. Putin has urged Russian billionaires oversea to come back home and invest in huge capital based projects, with the promise that they would be given preferential treatment, and one of such has already complied and he is transferring his wealth back home,while some, though still skeptical, are seriously considering the options. I think this will go a long way to renew such business confidence, however little, plus the fact that Russia just ratified the BRICS $100 billion dollar investment package/funding, and the SCO is also rapidly trying to put its own financial system in place. All these would take some time to curtail whatever effects the sanctions must have brought or will cause. That is, on the short term, Russia must suffer, but on the long run, it would bounce back, and better off.

How exactly will China move away from the US dollar? - I marvel at the number of people who spit out this garbage without an iota of common sense! China is tied to the dollar, simple! It is tied by trade! The US is the biggest buyer of Chinese products, and it pays in dollars, if China demands to be paid in some other currency, the US will simply stop buying from China and turn to some other marginal low cost producers out there - Phillipines, South Korea, Singapore, Thailand, etc.

I have noticed that you are always paranoid with this. Then please explain all these "garbage", then conclude and come out with the "common sense" you think is lacking.good luck!;

The International Monetary Fund (IMF) has stated that Iraq has added 36 tons of gold bullion to its reserves. This has a value of 1.5 billion dollars. The Central Bank of Iraq (CBI) is purchasing large amounts of gold to back the Iraqi dinar currency. The CBI is doing what other countries around the world have done in the past. It is apparent that countries are moving away from the U.S. dollar. There are numerous news articles from credible news sources stating that countries around the world are moving away from the U.S. dollar.



In November 2010, the China Daily news organization reported that Russia and China have signed an agreement to conduct all trade in their local currencies. Appears that they are kicking the U.S. dollar to the curb.

The U.S. Federal Reserve has decreased the buying of debt from the U.S. government and China has also decreased their purchasing at the U.S Treasury office.

Russia and China are not the only two countries that have moved away from the U.S. dollar. Germany, a long time ally of the United States, has also made agreements with the Chinese government to conduct trade in yuan and euros.

In Feb 2011, the International Monetary Fund (IMF) called for a U.S. dollar alternative. The United Nations has also called for a new global currency to replace the U.S. dollar. This is all pointing to a global currency reset that the IMF leader spoke of in the past. Clearly, they want to remove the U.S. dollar as the world’s reserve currency. Also, the petro dollar will be no longer be the world’s reserve currency.

China and Brazil have signed agreements to only conduct trade in their local currencies. Moving away from the U.S. dollars.

China and Australia have signed agreements with each other. The article also mentions South Korea, Turkey and Kazakhstan. They all have agreed to conduct trade in a currency swap in their own respective currencies.

China and Japan have signed agreements to conduct trade in yuan and yen. There will be no U.S. dollars in their trade between the two countries.

Iran and Russia have replaced the U.S. dollar between the two countries. This article states also that Iran replaced the U.S. dollar in its oil trade with India, China and Japan.

China and Chile have also signed agreements to conduct trade in their local currencies.

China and United Arab Emirates (UAE) have currency swaps in their local currency. They will be conducting trade in yuan and dirhams.

The BRICS nations consist of Brazil, Russia, India, China and South Africa. They have all signed agreements with each other to conduct trade in their own local currency. This once again leaves the U.S. dollar out of all international transactions.

Iraq is following suit. Don’t get me wrong, they are currently still using the U.S. dollar but changes are in the works. Iraq still accepts payment for their oil and gas in U.S. dollars. However, in the future that may not be the case as they continue to back their currency with gold. It looks like they are strengthening the Iraqi dinar reserves with gold in order to move away from the U.S. dollar in the future. They recently signed agreements with India to conduct trade in both countries using local currencies. You will see Iraq conduct these type of arrangements in the future.

http://americancontractor.com/countries-moving-away-from-dealings-with-the-us-dollar

Do you still think they are Garbage and lack of common sense? I am yet to mention Nigeria been encouraged by China to dumb the Dollar. not to mention Angola, Egypt, venezuela. Now, all the SCO states towing the same line-though some how "tied" to the dollar. Garbage, you think?

Well, China is tied yet, is expanding its plans to move away from it.

http://newparadigm.schillerinstitute.com/blog/2014/09/24/china-expands-its-plans-to-move-away-from-dollar-currency/

what a paradox!

Chinese made a decision to buy US government debts because they simply have no choice! - The economics works out this way - every dollar that is issued is a debt backed by the taxing power of the US government. Every time someone buys an item from China, they exchange this debt for goods or services. China does not have a primary exchange for easy convertibility of Yuan to dollars, so Chinese products manufacturers/service providers exchange this debt with the central bank of China for yuan/reminbi at a fixed exchange rate. This process goes on and on - and at the end of the day, the Central bank of China has lots of dollars in its account - US dollars can only be spent in one place - in the US. So the Central Bank of China must choose between buying gold (/other commodities) or buying US treasuries - Gold does not pay interest, is more risky and its value is not guranteed by anything except for its face value - US treasuries pay interest, and its backed by the taxing power of Uncle Sam, so the choice is crystal clear, the Chinese central bank buys more treasury. This process simply goes on and on...

I have already addressed the issue of China buying US treasury on previous post on this thread, so i wont go into that again. But for you to say that China have no choice but to buy such treasuries, is not totally true. China gradually moving away from the Dollar is a choice. The dumping of or reduction in treasuries holding, is another. Infact, China had reduced and is still reducing its level of US treasuries, chosen to focus on Gold.. Anyone can dig around to verify that.


You said The US government has 17 trillion dollars in debt, but US households are so on, are still functioning well. Pls wait until the Government adopts a balance budget and see what happens. All of this prosperity that we see all around in the US is just an illusion. It is a false prosperity that has been purchased by the biggest mountain of debt in the history of the world. I don't even need to go into all of these Gold of a thing since the likes of China, Russia, India, Iraq, and many more Nations, are piling up their Gold reserve gradually. Even recently, Brussel has requested to London to return its Gold holdings. All these and the issue of your theory on unfounded liability, i just don't have the time for full foreclosure. But when one must have finished reading the link below, then one can be convinced as to why it is popularly held that the US economy is the greatest sham of all ages.

A whole 34 reasons are carefully laid out here for all to see. i just cant type them.

http://theeconomiccollapseblog.com/archives/34-shocking-facts-about-u-s-debt-that-should-set-america-on-fire-with-anger

Whatever your arguments about the current situation in Ukraine is - there are simple facts that are not contestable - Ukraine has lost much of its territory and a huge chunk of it now belong to Russia. Ukraine has therefore been dismembered. Justifying this with tales of "coup" is brazen at best. The US should not simply annex cuba because it feels that a coup has taken place there.


I am going to go on a limb and conclude that you haven't studied much of economic history - I have - and you likely don't have much economic/global trade intuition - i do - so a debate between us on such topic will not be on equal terms since you are much likely to simply purge out what someone else thinks or have written - I on the other hand will provide you with economic arguments based on my knowledge, experience and work in such a field.

All your talks about government conducting trades in local currencies amount to nonsense - If trades between Turkey and Russia are conducted in local currencies, Turkey pays Russia in Ruble and Russia pays Turkey in Lira, since neither currencies have a reserve status, the Russian/Turkish central bank will immediately convert them into dollars/swiss francs/Euro/yen. No central bank in the world will hold another emerging markets local currencies as a reserve currency, it is simply suicidal to do so. For example, If for some crazy reason the BRICS could offer a better risk/return situation than dollars, then you could still do the transaction and swap or arbitrage the risk away. In dollar markets. But it is crazy to think that if all the Russian pipeline costs are going to be dollars, that they will want to finance in roubles, or even Yuan. That is a lot of risk that will have to be hedged away over a long period of time. Just to get your hedge, you will have to hit dollar markets

Secondly, your argument is even more nonsensical since you haven't factored global trade. Russia and Nigeria can trade in local currencies for all they want, but if Nigeria were to trade with the US, the US will demand dollar payments. Since Nigeria conducts more trade with the US than with Russia, it simply makes more sense for Nigeria to demand that Russia pays it in dollars rather than in Naira/Rouble. As long as the US continues to maintain a trade deficit with much of the world, it will remain in their interest to keep selling more to the US than what the buy from the US.



Your arguments about prosperity in the US being an illusion is nonsensical - it is backed by no evidence and just more of innuendos. You haven't actually said what will happen if the government adopts a balanced budget. How does this affect US households/companies? This is further evidence that you don't know what you are talking about. For a matter of fact, the US has actually moved towards a balanced budget in the last couple of years, see the chart below.

http://www.tradingeconomics.com/charts/united-states-government-budget.png?s=fddsgdp&d1=19700101&d2=20151231

It's budget deficit has considerably narrowed, this is simply because its economy is growing faster so government spending can be funded via tax revenues, and some excessive spending has been cut, for example in military spending.

Debt is never an issue so long as they are issued in local currencies and you have the economy to pay for it. Looking at absolute debt is just illiteracy. This is why you scream to high heavens about the mountains of debt (~17 trillion dollars) . For a country like the US, this is sustainable, for a country like Nigeria, it is not. The debt to GDP ratio and the total external debts is what counts. If the US has 17 trillion dollars in debt and three-quarters of that was borrowed from US citizens, then it is not an issue. Japan's Government debt to GDP ratio is approximately 300%. But it doesn't matter because much of that money is owed to Japan citizens.

And here's one bit of juice for you and the many others out there who have no iota of understanding of monetary policies - No central bank in the current world, and i mean none! - will ever back their currencies with gold! It is really quite simple, central banks can control their own currencies via their printing press - backing your currency with gold will take away the flexibility of such central banks to control inflation or stimulate growth. What you have going on in the current global market is a currency war with each country trying to devalue their currency against the other to get a trade advantage. Uncle Same got a head start with it post the financial crises - Now the ECB is on to it with the huge monetary stimulus, Japan has announced similar programs, and China has more than twice cut its borrowing rates. When a country's currency is backed with gold, it loses this ability.

Let's even assume that some countries intend to back their currencies with gold - The total number of gold in the world is limited, and the Gold held by the US is approximately 3 times as much as all the BRICS country combined. They will never have enough gold to back their currencies unless they can convince the US and all its allies to sell them gold at a discounted price.

Stop your innuendos and simply read more about how economies work.

[quote author=bookface post=31299164]

Whatever your arguments about the current situation in Ukraine is - there are simple facts that are not contestable - Ukraine has lost much of its territory and a huge chunk of it now belong to Russia. Ukraine has therefore been dismembered. Justifying this with tales of "coup" is brazen at best. The US should not simply annex cuba because it feels that a coup has taken place there.

Yes! Ukraine has lost a huge chunk of its territory because, the people in that territory (Crimea) refused to be identified with Nazis that has taken over in Kiev. And You forgot to mentioned that over 90% of those people (Crimeans) voted overwhelmingly to reunify with Mother Russia. Tales of brazen coup you say? Even blind Bathemos knew that what happened in Kiev was a US sponsored coup. It wasn't just tales, It is a fact. US sponsored coup is a global phenomenon. Oh. are you saying that Russia should have sat with hands crossed and watch neo-Nazis controlling affairs around its borders, and do nothing about it? Cuba you said; how did the US react in the 70s when the then Soviet Union moved missiles into that country? you and i knew how that almost brought the world under nuclear confrontation. And now that the equation has changed, Russia should just sit closed up in a closet and forget about a vital and strategic neighbor like Ukraine, a place that harbors its Main naval fleet? There are times postulations like this make me wonder aloud if we humans actually have conscience and judgmental fairness. So, the US can fight for its strategic interest, even thousands of miles away from its borders, but Russia or other nations should not protect even their immediate environs, right?

Lets assume that Pearl harbour is in Cuba, how would the US react should Russia move to hijack the government over there? Or, better still, if Russia or the SCO is to make Mexico a member or a strategic ally, i guess the US will just sit and allow that to happen, huh?

I am going to go on a limb and conclude that you haven't studied much of economic history - I have - and you likely don't have much economic/global trade intuition - i do - so a debate between us on such topic will not be on equal terms since you are much likely to simply purge out what someone else thinks or have written - I on the other hand will provide you with economic arguments based on my knowledge, experience and work in such a field.

All your talks about government conducting trades in local currencies amount to nonsense - If trades between Turkey and Russia are conducted in local currencies, Turkey pays Russia in Ruble and Russia pays Turkey in Lira, since neither currencies have a reserve status, the Russian/Turkish central bank will immediately convert them into dollars/swiss francs/Euro/yen. No central bank in the world will hold another emerging markets local currencies as a reserve currency, it is simply suicidal to do so. For example, If for some crazy reason the BRICS could offer a better risk/return situation than dollars, then you could still do the transaction and swap or arbitrage the risk away. In dollar markets. But it is crazy to think that if all the Russian pipeline costs are going to be dollars, that they will want to finance in roubles, or even Yuan. That is a lot of risk that will have to be hedged away over a long period of time. Just to get your hedge, you will have to hit dollar markets

Secondly, your argument is even more nonsensical since you haven't factored global trade. Russia and Nigeria can trade in local currencies for all they want, but if Nigeria were to trade with the US, the US will demand dollar payments. Since Nigeria conducts more trade with the US than with Russia, it simply makes more sense for Nigeria to demand that Russia pays it in dollars rather than in Naira/Rouble. As long as the US continues to maintain a trade deficit with much of the world, it will remain in their interest to keep selling more to the US than what the buy from the US.

I never for once simply and out rightly dismissed your thesis. Rather, i have provided my own line of argument, backed with references and citations. I have even gone as far as acknowledging some of your postulations and admitting them as facts. It is you that have refused to take the opposite into consideration.

Yeah, you may boast of your versatility in the economic arena and the concept of international trade. Besides, am only a lawyer in the making, and so. like you rightly said, a debate between us regarding such topic can never been of equal footing. I am no island of knowledge. Thanks.

your arguments about prosperity in the US being an illusion is nonsensical - it is backed by no evidence and just more of innuendos. You haven't actually said what will happen if the government adopts a balanced budget. How does this affect US households/companies? This is further evidence that you don't know what you are talking about. For a matter of fact, the US has actually moved towards a balanced budget in the last couple of years, see the chart below.

http://www.tradingeconomics.com/charts/united-states-government-budget.png?s=fddsgdp&d1=19700101&d2=20151231

Who is dismissing one's argument now? you didn't consider, if at all you read, the information containing the 34 reasons why the US economy is not as it is widely perceived to be, yet you are saying i don't have any backing. well, it is apparent that in your view, analytical discourse must be one sided, thus, no amount of proof i may bring forth would consistute anything as facts relating to such discourse. Not to mention that ""we are not on equal footing"" on such matters. But if there is anything i have learned in my entire life as it relate to disputed topics and debates, it is the doctrine of "audi altarem patem", which simply means, "hear the other side".

Anyway, since this is not the issue here, i think it will be better sticking to our own narratives and perceptions, and allow events take their course inline with the divine laws of nature and human imperfect conduct. Stay well.

Appleyard:


Yes! Ukraine has lost a huge chunk of its territory because, the people in that territory (Crimea) refused to be identified with Nazis that has taken over in Kiev. And You forgot to mentioned that over 90% of those people (Crimeans) voted overwhelmingly to reunify with Mother Russia. Tales of brazen coup you say? Even blind Bathemos knew that what happened in Kiev was a US sponsored coup. It wasn't just tales, It is a fact. US sponsored coup is a global phenomenon. Oh. are you saying that Russia should have sat with hands crossed and watch neo-Nazis controlling affairs around its borders, and do nothing about it? Cuba you said; how did the US react in the 70s when the then Soviet Union moved missiles into that country? you and i knew how that almost brought the world under nuclear confrontation. And now that the equation has changed, Russia should just sit closed up in a closet and forget about a vital and strategic neighbor like Ukraine, a place that harbors its Main naval fleet? There are times postulations like this make me wonder aloud if we humans actually have conscience and judgmental fairness. So, the US can fight for its strategic interest, even thousands of miles away from its borders, but Russia or other nations should not protect even their immediate environs, right?

Lets assume that Pearl harbour is in Cuba, how would the US react should Russia move to hijack the government over there? Or, better still, if Russia or the SCO is to make Mexico a member or a strategic ally, i guess the US will just sit and allow that to happen, huh?

Leave your emotionally charged argument for once, and debate with sound intelligence like a proper lawyer should.

You claim that those that have taken over in Kiev are Nazis - that's line of argument that mirrors closely the Russian narrative, what you have failed to do is provide evidence for your logic. Why are they Nazis? Why is Poroshenko a Nazi?

You argue that Crimea voted overwhelmingly to join Russia. But you neglected to mention that this "referendum" was conducted by a foreign state with its own troops on the ground, lawyers that are worth their salt are very likely to see why this must be illegal. You forgot to reference that 100 countries at the United Nations voted for a bill that asserts that the referendum is illegal and 58 countries abstained - many of which included Russian allies.

Let's take your fact as true that this is a US sponsored coup, what you have failed to explain is why even if it is a US sponsored coup, has Russia violated Ukraine's territorial integrity, and also violated its own commitment under the Buadapest agreement.

You referenced US's reaction to Cuba, yes its true, the US instituted a blockade against CUBA - but it did not - annex its territories even though it had the military power to do so.

Ukraine is a strategic neighbor to Russia - it will therefore make sense that Russia should seek to achieve its objective in Ukraine through soft power means rather than the threat of war or the actual hybrid war against Ukraine. 30 years from now, Ukraine would have drifted far away from Russian orbit and Russia would be weaker for it. Ukraine may one day become the present day Poland. Russia has played the short term game here and it has gained Crimea plus some parts of Eastern Ukraine, the long term game will not be in its favor.

The talk of consciences and Judgmental fairness bears no play. That's simply your emotions speaking, that sh1t clouds your judgment.

Who is dismissing one's argument now? you didn't consider, if at all you read, the information containing the 34 reasons why the US economy is not as it is widely perceived to be, yet you are saying i don't have any backing. well, it is apparent that in your view, analytical discourse must be one sided, thus, no amount of proof i may bring forth would consistute anything as facts relating to such discourse. Not to mention that ""we are not on equal footing"" on such matters. But if there is anything i have learned in my entire life as it relate to disputed topics and debates, it is the doctrine of "audi altarem patem", which simply means, "hear the other side".

Anyway, since this is not the issue here, i think it will be better sticking to our own narratives and perceptions, and allow events take their course inline with the divine laws of nature and human imperfect conduct. Stay well.

I checked out the link, and i stopped immediately i realize that it is mostly crap - the writers are probably journalists, not real economists. They even ignore the role of inflation with national debt. The face value of debt gets eroded with inflation over time - GDP on the other hand has been growing faster than inflation so that the real DEBT/GDP ratio is actually much lower than may seem.

It is easy to make politically charged argument about national debt since the average Joe (meaning folks like you) only hear the absolute number and you go ballistic! The US currently have a public debt of 17 trillion dollars ~108% of its GDP, but some of that debt includes the money that the Federal reserve has lent to the US government. i.e the US government owes the money to itself!

I can go on and educate you more about national debts - but i suspect that such wouldn't do you much good. And although you may have attempted to hold the moral angle on "audi altarem patem", i suspect that your inability to produce counter debate is what puts you in this position, not because you've "truly heard the other side". Obviously, since the other side is producing arguments that run completely counter to what you genuinely wish to believe.

damn spam bots! why does it keep hiding your posts @appleyard?

bookface:

damn spam bots! why does it keep hiding your posts @appleyard?

I am the one trying to respond to your last post o oga but i keep getting blocked!

Mynd44:
Where you guys expecting China to side against Russia before?

Exactly oh,China will always favour Russia in issues like this,even their voting pattern in the UNSC is a clear evidence.

Let the strongest man(bloc) win.

I see no support here.

bookface:

damn spam bots! why does it keep hiding your posts @appleyard?

Honestly, i dont know oo. last time. i remember that i was only trying to upload two pics, before i know it,i was banned. still do not understand it. seems like we have a ban-happy mod in the house. my thought, thought.