View Full Version : China has a foot in the door of NATO's internal defence market
Skybird
10-16-13, 09:20 AM
http://www.eurasianet.org/node/67556
Cheaper, tech transfer, co-constructed in Turkey. These three arguments counter the idea that Ankara maybe just wanted to mount pressure on the Russian, American and European competitors to drop their prices.
However, if you google for the story, you find also reports that may add another, militarily decisive argument. During the field testings it seems to have shown that the Chinese system outperformed its competitors and hit all targets, where as the American, Russian and Italian-French systems all missed some targets.
Brussel now fears that China may get easier access to NATO tech secrets and the opportunity to infest the infrastructure with malware. However, the pressing demands to Turkey to reconsider the deal with China must also be seen as an attempt to bully Turkey into giving its money to a Western producer instead.
I'm interested to find out over time whether or not Turkey sticks to its decision.
---
In a wider perspective:
Some days ago, the Taiwanese defence ministry warns of China having reached full capability to keep the US out and away from any war over Taiwan. While this also must be seen as an attempt to get more money for the military, it nevertheless is a warning as well. That the Chinese systematically close the gap to the US is nothing new, and warnings of US submarines no longer being able to operate freely at will in the disputed territories is a warning the Navy has released already several years ago. The Chinese put tremendous priority on refusing carrier groups entrance to their operation areas close enough to Taiwan to make a difference. Without heavy support by the US, China already dominates the Taiwanese defence on sea and in the air, and has a every part of the island in the crosshairs of one of its missiles. The only thing they now must solve is how to bring tens and hundreds of thousands of troops to Taiwan in a short amount of time. I think they will get that one solved, too, within ten years.
Add to this the financial madness of Washington, and the totally hopeless situation regarding cutting its spendings and reducing its debts, not to mention to ever pay them back in value. The Chinese have so far bought over one thousand tons of gold this year alone, and their reserves are estimated to be at 7K tons minimum now, with maybe even 10K tons and thus probably already exceeding the US reserves with some 8 thousand tons. And there is no end in sight for the Chinese hunger for gold. It is louder and louder rumored that they prepare to dramatically reduce their losses and vulnerabilities by preparing their currency to get a gold-standard again, which would mean heaven falling for the US and its deeply rotten fiscal status (and Europe as well). If they do so, and disconnect the Yuan from the Dollar and for example ban trading in dollars and Euros, but insist on being payed in real values instead of worthless debt bonds and leaves of paper, the change in the global financial regime would have been established and the Chinese Yuan would be the new world's reserve currency, a regime change coming at great relief for China and great turmoil for all others. But the turmoil costs the Chinese probably less than to endlessly loosing their wealth in endless American fiscal insanity. Mind you, you only need to have enough quantity of a currency to allow the market being saturated so that business transactions can be negotiated and carried out - how high in total quantities the number of coins and banknotes is, is not important, because if it is a gold-covered currency, market prices will adapt automatically to reflect the relative value. You do not need millions and millions of tons in gold - not at all (that is one of the desperate illusions the West and especially America cling to).
Many dramatic change sin history have come surprisingly fast and did not move as slow as forseen and expected. The change from the American to the Chinese era could come much earlier and take place much faster, than most people expect. I strongly disagree with the often voiced idea that the ties between China and America are economical such that China cannot afford to let the US fall. America simply has no alternative than to just put its faith in this one desperate hope. And only a hope that is indeed, an objective sitrep it is not, imo. Such a change will come at costs for China, yes. Nevertheless it could be reasonable from their perspective - if they calculate the costs to stick with the status quo and continuing to finance America and to live with the Euro crisis would cost them more.
And tolerating that situation indeed opens a bill of disastrous costs, so nobody should be surprised if the Chinese decide against staying with that. We do not talk about solving the debt crisis, do we. We just talk about delaying the final breakdown, the day which Keynes referred to when saying that in the end we are all dead. He knew very well that in the end his system must collapse. That's is the part about Keynes that people desperately ignore nowadays.
We have a saying in Germany. Wer nicht hören will, muß fühlen. Nothing needs to be added to that. It's a form of Karma.
Last I recall, the estimated time for China to be in a position to retake Taiwan was about 2016-18, this gives them time to get a couple more carriers in place and some more carrier killer weaponry in position.
The biggest stumbling block for any cross-straits war though is the economy, we all know how delicate the Chinese economy is, its success is the only thing keeping China together at the moment because the difference between conditions in the coastal cities of the PRC and the internal countryside villages and towns are so extreme that really the only comparison that can be made is with the UK in the early Victorian era when the Industrial Revolution drew people out from the countryside and into the cities, but while this happened over the space of five or six decades in the UK, it's happened in less than two in China, and as such it's built a house of cards which any major incident can knock it all down. In order for that economy to be made stable, China needs to reduce that gap between the coast and the countryside, increasing internal demand for Chinese goods and reducing the need for foreign trade and reliance on foreign currency.
On that note, Taiwan is one of Chinas biggest trade partners, and unless the PRC is able to take Taiwan without firing a shot which is incredibly unlikely, any war will massively damage that trade, as well as damaging the Taiwanese economy, thus making the PRC have to clean up the mess it makes if and when it takes the islands (since there are also other smaller islands other than Taiwan in question here) and this is a burden that the PRC in its current state cannot afford to undertake, however make no mistake that within the next six years this may well change, and certainly Beijing will want to have itself in a position where it has the option available. In the immediate term, unless a hardline communist coup takes place (the likelihood of which has decreased now that Bo Xilai has been locked up) then Taiwan will likely not evolve beyond the odd tense exchange in this decade, likewise the disagreements with Japan over the Senkaku islands.
Heard this once in a TV-Seminars on a danish TV-Channel(can't remember when)
it was about the economical development in that area.
If I recall it correctly on of the spectators asked if or when China will retake Taiwan.
the economist said: the day USA has a liabilities, so big towards China, that they can't pay the bill not even the interest. Then China could send some kind of Payment reminder
Then he said a lot more, which I can't remember.
I do remember thinking loud-They can send as many Payment reminder they want and they can demand Taiwan for this debt instead. USA has some kind of treaty with Taiwan and any attempt on invading Taiwan...welll
I could be wrong.
Markus
Heard this once in a TV-Seminars on a danish TV-Channel(can't remember when)
it was about the economical development in that area.
If I recall it correctly on of the spectators asked if or when China will retake Taiwan.
the economist said: the day USA has a liabilities, so big towards China, that they can't pay the bill not even the interest. Then China could send some kind of Payment reminder
Then he said a lot more, which I can't remember.
I do remember thinking loud-They can send as many Payment reminder they want and they can demand Taiwan for this debt instead. USA has some kind of treaty with Taiwan and any attempt on invading Taiwan...welll
I could be wrong.
Markus
:hmmm:
I don't know, it's partially feasible, China has just as much to lose from America defaulting on its debt as it does from retaking Taiwan by force in terms of finances. I can't see America giving up Taiwan though, it would send a very bad signal to its Pacific allies, particularly Japan, that it is willing to sell out, and that would be suicide for the US in the Pacific.
In regards to China taking Taiwan as a debt reminder, that's not feasible, it's too rash for Beijing who don't tend to make rash decisions, and there's too much collateral damage for China to risk it.
After 2020 though, given the US decline, the situation could change, certainly we're going to see a more militarily resurgent Japan, and Australia is going to have to step up more to deal with local flare-ups, and nations like Vietnam and the Phillipines are going to become a lot more important in the affairs of the Pacific. In a post-America world it will take a while for a new dominant power to emerge, and in that time there's going to be a devolution of security responsibility to regional powers, as there has been in Europe after the fall of the Berlin wall. I just hope the regional powers are ready for that responsibility... :doh:
^ I have tried to find out which countries, besides China that has borrowed U.S. most
I can see it is Japan on second place
I found some old article from 2009 and 2011.
If you can find the latest and how much it is by percentage on totally debt
Markus
Skybird
10-16-13, 04:26 PM
The Taiwan issue sooner or later will reach a state where it is not the question anymore what the US wants, but what it actually can. And the "can" is is constant decline.
China quickly approaches a status where it can send shockwaves around the global economy and fiscal system huge enough that they would paralyse Western nations and take them out of the equation.
It also has one big advantage, amongst several others. Agriculturally, it is autark - no probability for hunger revolts. And since Taiwan is an issue of utmost value for Chinese nationalism and national pride, the people hardly would go on the streets over any invasion of Taiwan. At least not in China.
Oberon, China looses billions every month over the Chinese engagement in irresponsible American fiscal policies. It is foolish that while they grow stronger and stronger thy would continue to agree to the need that they must stabilise and refinance the Western follies endlessly. They have sent so many signals in past years that clearly indicate that they have no intention to do so and that they will abandon the Dollar and even the Euro sooner or later. They will not do it, nor will they leave Taiwan to itself forever.
However, I assume that they would prefer a peaceful, though blackmailed reunification of Taiwan with the motherland to any military action. But they are working on the military solution as well, and I think they are within ten years to solving the equation.
Then it will be tough decisions for Taiwan and the US - a US that is financially tumbling already (and I do not refer to the current hokuspokus in Washington only, which is only a minor symptom: the whole system is sick and deeply rotten). A fiscal system like this cannot survive forever. It is a fiscal system founded by and on the grounds of ever-growing debts, and is a fiscal system that in principle doe snot even know what real money really is.
It is a double strategy Bejing follows to push the US out of the game. Militarily - AND fiscally. Washington thinks its remedy and primary defence is the debt-bond-printer and taking the whole global economy hostage. And that is a wrong calculation. The Chinese will not obey to that irresponsible insanity forever.
Keep your strength, and grow stronger - but hide your strength.
Since I see the destruction of the current fiscal system as inevitable anyway, I welcome any successful attempt to help accelerating the process, even if it is a most painful one. America has had its chance regarding fiscal responsibility, since decades - and it failed to honour it. The Europeans have messed up as well. Now its time for the next contender to try. Hopefully he has learned from our mistakes.
Skybird
10-16-13, 04:33 PM
^ I have tried to find out which countries, besides China that has borrowed U.S. most
I can see it is Japan on second place
I found some old article from 2009 and 2011.
If you can find the latest and how much it is by percentage on totally debt
Markus
Japan. Explicit debts are 2000% (two thousand) of the GDP. I do not even want to know what numbers you get when assessing their implicit debts.
When the gold standard was given up after Bretton Woods, the Dollar had already lost over 95% of its real buying value from shortly after the end of the civil war. Go figure how it is today, four decades later. When the Euro was introduced, the often hailed, oh so stable German Mark that was founded after WWII had already lost over 80% of its value. It was anything - but not a stable currency.
So much for stable currencies and claims that there is no significant inflation and no significant devaluation. Devaluing real money and turning it into debt bonds - bets on the future, in other words - only is the reason why you give up gold standards.
Japan. Explicit debts are 2000% (two thousand) of the GDP. I do not even want to know what numbers you get when assessing their implicit debts.
When the gold standard was given up after Bretton Woods, the Dollar had already lost over 95% of its real buying value from shortly after the end of the civil war. Go figure how it is today, four decades later. When the Euro was introduced, the often hailed, oh so stable German Mark that was founded after WWII had already lost over 80% of its value. It was anything - but not a stable currency.
So much for stable currencies and claims that there is no significant inflation and no significant devaluation. Devaluing real money and turning it into debt bonds - bets on the future, in other words - only is the reason why you give up gold standards.
Thank you Skybird for taking your time to write this long answer to me. It was however not what I was asking about. I guess it must be my bad English grammar.
Try it again
How much have China Borrowed USA(up to date)
How much have Japan borrowed USA(up to date)
How many percentage of the total debt in USA is China's part
How many percentage of the total debt in USA is Japan's part.
(I'm so terrible sorry, I really don't know how explain it in writing)
Markus
Skybird
10-17-13, 11:06 AM
No problemo, I did not mean to post it as an answer to your question, I was just reasoning about Japan's hopelessly messed up fiscal status in general. They are so far beyond all light and darkness with their debts that I wonder whether they still are part of our universe.
The numbers you ask for occasionally fly through the news and I just had them today somewhere again - now that I want them I forgot which newspaper it was. It's something in the range of 1.2 or 1.3 trillion for China, and 1.1 or 1.2 trillion for Japan, I think.
The blind showing another blind the way into the light, so to speak (Japan, USA).
The US' biggest "creditor" (the term does not fit here, since the Fed found the alchemist formula to form money from nothing), is the Fed. It holds state bonds exceeding 2 trillion, I think.
How much is one trillion?
If you would have been born in the year of Jesus's birth, and since then would have lived forever until today, and if you would have spend one million every single day of those 2013 years since then, you still would not have spent one trillion, but just around three quarters of it.
This illustration does not stop to fascinate:
LINK: http://demonocracy.info/infographics/usa/us_debt/us_debt.html
The explicit debts of the US exceed their yearly GDP. The implicit debts of the US are calculated to be beyond one hundred trillion.
The better question to answer is is where china got the money to loan to the US and also fuel further growth internally to prop itself up during the GFC. The answer would make most thinking people understand the house of cards we live in.
The reason to why I ask these questions is that in this program I mentioned in a thread above, this economist said something about a single country own more than 40 or was it 50 % of an another countries total (forgot the word)
and what if China has more than these 40 or 50 % of USA total....
what kind of claim can they have?
Markus
Not a great deal, because Chinas economy is so based around the US economy that if the US economy falls down the Chinese one falls right next to it, and they've got a lot more to lose from their economy falling over than the US has...well...ok, maybe not a LOT, but certainly a bit more, such as their entire governing elite and most of the progress of the last twenty years. The US on the other hand, it would go to pot but would probably be able to rebuild itself quicker than China would because the US has taken the slow and steady route to its current economic spot, whereas China has taken all the shortcuts and so its economy is propped up by twigs.
In regards to Taiwan...Skybird has a point in it eventually boiling down not to what the US wants but what it can do, eventually the US military is going to have to be cut back, and I mean cut back, to like half the spending it has right now, if not further, which means that US overseas involvement is going to really taper off. South Korea and Japan are slowly preparing for this by building up their regional military forces, so that South Korea can counter the DPRK and Japan can hold its own, I expect that Japan will within the next two decades start to examine Article Nine of the Japanese Constitution with an eye to, if not remove it entirely, modify it to allow enough military force to defend Japans territory against any Chinese aggression. Australia will also likely look to work with Indonesia to create a military buffer zone along the Southern Pacific. The US will also work with Australia and Japan to keep US bases in the area as well as the Guam and Diego Garcia facilities, but forces elsewhere in the world may be reduced, certainly in Europe they have and already have been reduced, perhaps also in the Middle East as the Shale Oil boost takes hold, although whether Shale Oil will be enough to allow the US to disregard the Middle East is another matter entirely.
China will continue to exercise soft power, they are very good at it, I can't see them pushing the US too far too early, again I reiterate that the latter half of this decade, and early into the next will see the Chinese military start to assert itself more, probably just as the US hits its big financial problems. It's possible Beijing will be able to persuade Taiwan to rejoin the fold peacefully, perhaps through a similar deal to Hong Kong, once Taiwan knows that the US cannot defend it any more, certainly this would be the preferred option for Beijing, but we will see.
But I will be very surprised to see China take any major action over Taiwan before 2018.
^ Thank you Oberon. You could be wright the only things I know about economy is how to balance my own home-economy.
Al most every of these economist they interview in Danish and Swedish news program say about the same
USA is using more money than they have or as one of them put it, last time USA was in trouble.
Imagine you got 100 dollars from your mom and you use 110 dollars every week these extra 10 dollars you lent from your friends and you do so every week-sooner or later it's going to...
But what do I know and I could have misunderstood these economist
Markus
Skybird
10-17-13, 05:16 PM
Well, 1.3 trillion in state bonds held by China, 1.1 trillion held by Japan, compared to 17-19 trillion in explicit US debts (depending on which debt clock you want to believe in) - do the math.
If you throw 5% of US state bonds onto the market in one short period of time, you cause an avalanche that would wash Western finances away. Not to mention the cataclysmic loss of trust in the currency. No paper money - which is nothing else but another name for "note of debt" - can survive without the players falling to the illusion that these pieces of paper actually represent a value that already is secured for the player. In other words, most players - people, everybody - believe these leaves of paper were the same like gold and silver coins, real property, material resources.
That illusion will collapse, paper money illusions always must collapse, due to their illusory nature. And that hammer is falling hard down on us. We can already feel the shockwave of compressed air that precedes the solid head of the hammer while it slams down on us. 15 more weeks, maybe 15 months or even 15 years - everything is possible, imo. Certain I think is one thing, however: it will not be another half of a century, or even longer. The Eastern economies were in ruins already in the early 70s, but it lasted another 1.5 - 2 decades before they ultimately collapsed, and when it did, it all went very quickly and surprised everybody.
The Chinese claim that they have against Am erica, doe snot help them, since America just gives sh!t about the mess it does to the rest of the economic globe. The Chinese will not invade America. But they will stop financing the newly accumulating debts, and will stop caring for the cataclysm they cause by getting rid of their US papers - that in principle are good only for paper recycling and making toilet paper of it. They may not have the military power to overthrow the US, but they have the power to slowly strangle it, or to make it gasping for air so much that the US cannot afford to stick to its many global claims and treaty obligations - namely Taiwan. Whatever the US does, it does it on tic. And if it does not find new creditors, than this living on tic comes to an end, and everything collapses, the whole house of lies. A house build on sand may have strong walls, and high watchtowers, and glamorous saloons and several safe rooms with hidden treasure chests - it still is a house build on sand.
A good book on it is by Detlev Schlichter, it is available both in English and German, here is the English link. The author also runs a website.
LINK: Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown. (http://www.amazon.co.uk/Paper-Money-Collapse-Monetary-Breakdown/dp/1118095758/ref=sr_1_1?ie=UTF8&qid=1382047649&sr=8-1&keywords=detlev+schlichter)
And a site where plenty of free stuff is to be discovered and more names can be learned about:
LINK: LvMI (http://mises.org/)
Thank you once again and this time I'm glad for your in-deep answer to me.
If I have calculated it correctly China "own" about 8 % of USA total debt.
I also what you wrote earlier about a blind leading another blind(Japan-USA)
You know, it is not only USA, Japan, Greece almost every country in the western world is up over their head in debt to some other countries.
Either they come up with some solution or the whole thing is going to fall apart.
Markus
Skybird
10-17-13, 05:42 PM
The two most likely possible outcomes are a state-enforced debt-based currency in a fully planned economy like we have seen in the Warsaw Pact states - this will happen if the elites are strong enough to enforce the submission of the crowds; else there will be a currency reform, which is the euphemistic term for expropriating most of the possessing people, hyperinflation, a massive depression - collapse, in other words. I would wish that after that they would return to an equivalent to the gold standard, some substantial form of real, of commodity money, but history tells us that the same mistakes are repeated again and again, and even more easily so if the crowds are being told sweet lies - leading them on the path towards paper money again. And without paper money, neither plutocratic elites nor democratic politicians can exist, so they definitely have no interest to return to a gold standard. As a matter of fact it was for the selfishness of these antisocial parasites that they destroyed the gold standard and turned things to paper money. And that was not just the end of Bretton Woods, or the time of WWI - that was already a motive in the American Civil War.
A lot of things need to be changed, not just economically and financially. Talking about nothing else but reorganizing the whole cultural and communal forms of living, communal organizing and administrating. What is needed is a totally different world, nothing less. That's why I am extremely pessimistic that we or the next coming two generations will really go that way. I think they will just repeat the same old patterns and schemes that we just see collapsing.
There is nothing new under the sun - except what has been forgotten. - Santayana
Skybird
10-17-13, 06:07 PM
Not a great deal, because Chinas economy is so based around the US economy that if the US economy falls down the Chinese one falls right next to it, and they've got a lot more to lose from their economy falling over than the US has...well...ok, maybe not a LOT, but certainly a bit more, such as their entire governing elite and most of the progress of the last twenty years. The US on the other hand, it would go to pot but would probably be able to rebuild itself quicker than China would because the US has taken the slow and steady route to its current economic spot, whereas China has taken all the shortcuts and so its economy is propped up by twigs.
This is the belief that is very popular today, because it allows the believer to assume that all things will go well and China will play ball and be stupid like it is expected.
But consider this: 1.3 trillion in bonds that every day lose value due to inflation, financial suppression, money printing and all that. The party holding these bonds looses millions and millions in buying power - EVERY SINGLE DAY. And with every escapade Washington performs like just now, or by making the uber-Keynesian super money printer Yellen the new head of the Fed, and by printing money and printing and keep printing on, the chance for the collapse of the ponzi scheme that it all is, are rising. Not to mention that the only American answer to its debts is - to make more debts.
But you cannot spend your way out of debts. You just cant.
How could you seriously assume the Chinese will play by these insane, suicidal rules at their costs, forever? How could you ignore the many signals from that country that they work on unlinking from the dollar, reducing their bonds held, and forming an economic an fiscal order that is dominated by them?
I predict that the Chinese sooner or later will give a very hard wakeup call to the world.
There is a known sociopsychological dilemma that plays a role in economics as well. It is that in a situation were many investments have been made, actors tend to argue and think that one cannot afford to give it up, because then all the invested things would be lost, and so the conclusion is that one needs to carry on supporting the system, and invest more and more in an attempt to keep it alive, else one would loose all one has already pumped into the system. However, the current situation already costs the Chinese a fortune every day, and the situation is such that it becomes destabilised not just by China's interests to free itself from this drowning man threatening to pull it down along with him, but by the devaluing and eroding of the fiscal system and the currencies themselves.
In the end it is not the Chinese actions of the future that dig our fiscal graves. We dig them ourselves. And we have build a whole industry about digging them.
If that is not morbid.
In the end, no wishful thinking, no economic plan and no law suite ever has managed to distort nature's ways, and since the market cannot be planned because the ways by which it reaches its natural price indexing by participants and conditions of trade cannot be humanly understood and described no matter how much empiric data you collect, all such theories must fail, and if you have no theory that functions, you better leave the flow of things to the flow of things. Not to mention that humans act by their own motives that no economic theory ever could measure, describe, calculate into formulas.
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - A. F. Hayek.
Skybird
10-17-13, 06:10 PM
Any comments on the Chinese missile system and Turkey's deal, btw? :D
Forgot to mentioned it every time we discuss economy and our debt.
Well maybe it is a unattainable dream some of us have? Even Gene Roddenberry had it
A world without money, as it is the world of Star trek.
Markus
This is the belief that is very popular today, because it allows the believer to assume that all things will go well and China will play ball and be stupid like it is expected.
But consider this: 1.3 trillion in bonds that every day lose value due to inflation, financial suppression, money printing and all that. The party holding these bonds looses millions and millions in buying power - EVERY SINGLE DAY. And with every escapade Washington performs like just now, or by making the uber-Keynesian super money printer Yellen the new head of the Fed, and by printing money and printing and keep printing on, the chance for the collapse of the ponzi scheme that it all is, are rising. Not to mention that the only American answer to its debts is - to make more debts.
But you cannot spend your way out of debts. You just cant.
How could you seriously assume the Chinese will play by these insane, suicidal rules at their costs, forever? How could you ignore the many signals from that country that they work on unlinking from the dollar, reducing their bonds held, and forming an economic an fiscal order that is dominated by them?
I predict that the Chinese sooner or later will give a very hard wakeup call to the world.
There is a known sociopsychological dilemma that plays a role in economics as well. It is that in a situation were many investments have been made, actors tend to argue and think that one cannot afford to give it up, because then all the invested things would be lost, and so the conclusion is that one needs to carry on supporting the system, and invest more and more in an attempt to keep it alive, else one would loose all one has already pumped into the system. However, the current situation already costs the Chinese a fortune every day, and the situation is such that it becomes destabilised not just by China's interests to free itself from this drowning man threatening to pull it down along with him, but by the devaluing and eroding of the fiscal system and the currencies themselves.
In the end it is not the Chinese actions of the future that dig our fiscal graves. We dig them ourselves. And we have build a whole industry about digging them.
If that is not morbid.
In the end, no wishful thinking, no economic plan and no law suite ever has managed to distort nature's ways, and since the market cannot be planned because the ways by which it reaches its natural price indexing by participants and conditions of trade cannot be humanly understood and described no matter how much empiric data you collect, all such theories must fail, and if you have no theory that functions, you better leave the flow of things to the flow of things. Not to mention that humans act by their own motives that no economic theory ever could measure, describe, calculate into formulas.
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - A. F. Hayek.
I don't disagree, but I think that the timeline is different. Right now China is moving towards a more balanced economy, it was, if I recall correctly, one of the chief goals of the 2012 five year plan, to boost internal demand for products which are currently sold to export markets. To do that they really have to do something about the massive gulf between the rich and the poor in China in order to avoid a second Communist uprising which is something the Deng Xiaoping generation are terrified of, a second Mao. The last thing they need is someone telling the poor people of the countryside that they need to rise up and overthrow the rich people of the coastal cities, right now they can keep them happy with the right amount of PR and government grants, but with the economy slowing down, that money isn't going to last forever, so it really has to be wisely spent away from the cities and redeveloping the countryside. This is one of the reasons there's been so much upset in the villages about property redevelopment, because whole families are usually bought out of their homes/shacks which are then torn down and more modern homes built in their place. This brings to the west stories such as the man who defended his farm with a homemade cannon (http://www.telegraph.co.uk/news/worldnews/asia/china/7810735/Chinese-farmer-declares-war-on-property-developers-with-homemade-wheelbarrow-cannon.html) and the man who had a road built around his house (http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/121125/road-build-around-china-couples-house) usually because the housing bubble has meant that the government is currently offering lower prices than the market value for the houses that they're knocking down, so naturally the more obstinate people of China are telling them where to put their money, these people are often known as 'nails' and there's an old Asian proverb 'The nail that sticks up gets hammered down'.
So, whilst appearing strong and invincible, the Chinese economy is actually very precarious right now. Why should they continue to fund the US, I hear you ask? Well, that is a good question and certainly Beijing IS looking to use its powerful soft power to encourage a move away from the dollar in global trading, they've been talking about it for some time in fact, and it's only because the US has been able to project a strong front in return that no-one has taken the prospect seriously...however, the strong facade of the US is in pieces and so I expect within the next few years the conversation will come up more frequently, at the moment though there are not many good alternatives to the dollar, but I think that something will come from the BRICS that will be put into play, or they might just try for Gold if they're desperate enough to get out from the dollar.
This takes time, especially if they want to avoid a total collapse of the Chinese economy, and make no mistake, it's something that they are no doubt laying the framework for right now, but their primary focus is preventing a second Mao from putting all the progress of the past thirty years down the drain, and to do that they need to keep the masses in the countryside quiet and happy, and China has a lot of countryside, so this is something that's going to take at least five to ten years.
Of course, that is providing that the cracks in the Three Gorges Dam don't get any bigger and do to China what the supervolcano in Yellowstone threatens to do to America. :03:
Skybird
10-17-13, 07:55 PM
More on topic, Turkey: WP reports that Ankara has disclosed identity of ten Israeli agents in Iran to Iranian authorities.
http://www.washingtonpost.com/opinions/david-ignatius-turkey-blows-israels-cover-for-iranian-spy-ring/2013/10/16/7d9c1eb2-3686-11e3-be86-6aeaa439845b_story.html
I say since long that the Turks cannot be trusted, and that they play a double game . But if true, this act even by Erdoghan's underhanded standards would a rich. NATO and Washington need to draw consequences from this story. If the story is true, Turkey cannot be NATO member any longer, and should be thrown out, no matter formalities.
Well. Should.
The kicking-out will not happen, as we all can easily forsee. Obama loves Erdoghan. Obama tolerates a nuclear armed Iran just to not needing to take action about it. And he dislikes Netanyahu. Obama and the new Iranian smile-wolf in a sheep's fur will soon be the closest of penpals, you'll see.
The EU, arabophile and anti-Israeli as it is, will not care for the Turkish treason, and will use it as an illustration of why Turkey more urgently than ever needs to become EU member.
With allies like this, you'll soon may find your enemies to be the lesser evil - they are easier to be recognised as such.
But what is the future of NATO? I mean, now that the Soviet Union is no more and the likelihood of Russia storming across Germany has been relegated to Call of Duty Modern Warfare, aside from Kosovo NATO hasn't really got much in the way of a role in the current Europe.
Skybird
10-18-13, 07:17 AM
That a defence is currently not needed should not make anyone believe that one could dismantle all defences. One should keep it up as a regional defence force for the North Atlantic region: North America, Europe. Cannot hurt to maintain a reserve. Whether that reserve indeed is stable, is another question.
Against out-of-area operations I have been from all discussions on. I do not follow the American idea of turning NATO into auxiliary forces for globalized American action. I am all for taking the term NATO literally. All operations outside that area should be understood as national war operations by individual states with no obligation by official NATO to help, assist, support them.
The alternative would be to form a military union of Europeans only, a NATO without Canada and the US. Realistic? Not in the forseeable time, I think.
But possible that America's role in NATO erodes all by itself, due to financial constraints.
The function of a reserve strictly is to be available when it is needed. It must not produce benefits and interests while waiting.
That is the problem, to maintain a decent reserve requires money that is simply not available. In some situations you can do it on the cheap, the Boneyard comes to mind, but in regards to ships and the like, it gets expensive over time to keep the units ready that they may be reactivated within a short period of time. Plus there's the difficulty of actually attracting people into the reserve forces to begin with, you can draw down standing forces and allocate a large portion of them to the reserves, but when it comes to getting new blood into the system, as Australia is showing, it's not that easy in the modern society where people would rather sit at an office chair than in the back of an APC (and I can't say I blame them), of course in a war time scenario there's always the draft but then you have training problems to deal with as well as a war time economy.
A NATO without the US and Canada is very unlikely though, although the idea of an EU army has been floated time and again, I don't see any of the EU agreeing on something long enough to pass it through, especially when it comes to military sovereignty.
Skybird
10-18-13, 09:02 AM
Drones take over the air war within the forseeable future now, I think. The next field where I could imagine drones becoming the dominant platform, are naval forces. That could help against the personnel problem of reserve forces that you outlined.
A very major step will be the shift from remote-controlled drones to autonomous drones. Only this will really adress the vulnerability of RC drones. I imagine the developing of such software is no easy task.
What for the forseeable future will remain difficult to replace it by drones, is the boot on the ground. However, the opposing boot on the ground can be hampered by own air drones.
Drones take over the air war within the forseeable future now, I think. The next field where I could imagine drones becoming the dominant platform, are naval forces. That could help against the personnel problem of reserve forces that you outlined.
A very major step will be the shift from remote-controlled drones to autonomous drones. Only this will really adress the vulnerability of RC drones. I imagine the developing of such software is no easy task.
What for the forseeable future will remain difficult to replace it by drones, is the boot on the ground. However, the opposing boot on the ground can be hampered by own air drones.
True, although drones are really just starting up, but definitely they are the future of the armed forces, and when autonomous drones come online then the whole balance of warfare is going to change quite spectacularly. I expect that the Terminator series will suddenly become very popular again... :haha:
I'm surprised that more hasn't taken place with land and sea drones, but with land drones I guess the RC is a limitation, you'd have to use either satellite or LOS which both have disadvantages.
Given the advances in AI technology, I'd carefully pencil in autonomous drones by 2020, perhaps 2017 at the earliest. In terms of saving the economy though, I think it's a little too little too late.
Skybird
10-18-13, 04:33 PM
@ mapuc especially, but all others interested as well:
since you asked about the Chinese share of us bonds, and seemed to ask for what that could mean for the dollar, and since this thread already is running two main tracks anyway.
LINK - How much longer will the dollar be the reserve currency (http://mises.org/daily/6556/How-Much-Longer-Will-the-Dollar-be-the-Reserve-Currency)
The dollar is very susceptible to losing its vaunted reserve currency position by the first major trading country that stops inflating its currency. There is evidence that China understands what is at stake; it has increased its gold holdings and has instituted controls to prevent gold from leaving China. Should the world’s second largest economy and one of the world’s greatest trading nations tie its currency to gold, demand for the yuan would increase and demand for the dollar would decrease. In practical terms this means that the world’s great trading nations would reduce their holdings of dollars, and dollars held overseas would flow back into the US economy, causing prices to increase. How much would they increase? It is hard to say, but keep in mind that there is an equal amount of dollars held outside the US as inside the US.
President Obama’s imminent appointment of career bureaucrat Janet Yellen as Chairman of the Federal Reserve Board is evidence that the US policy of continuing to cheapen the dollar via Quantitative Easing will continue. Her appointment increases the likelihood that demand for dollars will decline even further, raising the likelihood of much higher prices in America as demand by trading nations to hold other currencies as reserves for trade settlement increase.
^ Skybird I know I should have posted it here
http://www.subsim.com/radioroom/showthread.php?t=207916
Funny you mentioned the dollars, earlier this evening I saw a person from a danish bank talking about the dollar, the central bank in USA buying lots of bonds(or what it's called) to keep the interest as low as possible and keep on "creating" new dollar note.
Lets go back to what this thread is about.
China's increasing interest in Africa, Middle east and South America and thereby pushing NATO and other western country aside.
I which I could remember every word of an very interesting article I once read in a Swedish newspaper. It was about About China who had expanded its sphere of influence to including Africa and the Middle East and if I remember it South America.
Markus
periunder
10-18-13, 11:05 PM
I'm not a fan of drones, It will gradually take more and more jobs away from career soldiers and people who have no other hope than join the military.
Being in the military can be a dangerous occupation, but in the US the ratio of those killed to those wounded in action has shifted drastically in favor of actually surviving the war. Manufactured limbs and other impressive advances in our health industry also make the military a very sound financial employment opportunity in the US. There is no question the respect and government treatment of US personnel has skyrocketed since the 70's.
Technology is the greatest threat to our working wages.
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