China has a foot in the door of NATO's internal defence market

[Skybird]

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.

[Oberon]

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.

[mapuc]

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

[Oberon]

Originally Posted by mapuc

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

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...

[mapuc]

^ 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]

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]

Originally Posted by mapuc

^ 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.

[mapuc]

Originally Posted by Skybird

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]

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...t/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.

[TarJak]

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.

[mapuc]

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

[Oberon]

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.

[mapuc]

^ 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]

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.

And a site where plenty of free stuff is to be discovered and more names can be learned about:

LINK: LvMI

[mapuc]

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