The End of the American Century?

[lomex32]

Ayan na !!! na-downgrade na ang U.S. credit rating ....

[SaintPeter5858]

If the US economy falls, the rest of the world follows also

 

The only category where China can dominate is population. But even that can be overtaken by India soon.

 

A little sarcastic there hehehe. The main problem in China is that their people receive very little salary. So how can they compete globally in terms of spending to spur up the economy?

Edited August 10, 2011 by TheSmilingBandit

[paeng]

Master Paeng, very nice opinion. But pls verify your data on the world's top wheat producers. Thanks

 

I got the data here:

 

http://en.wikipedia.org/wiki/International_wheat_production_statistics

 

which comes from FAO.

 

Correct. Economically speaking however, the US seems to dictate the world market because of the presence of American companies in practically all parts of the world. The 2nd biggest chain of supermarkets in China now for example is WalMart (next to the French Carrefour) which is also the biggest company in the world.

 

That should be the case because Walmart is one of the largest corporations in the world, but the country also has one of the highest levels of debt, a dollar that is essentially propped up by rigged credit ratings, something like a quarter of its debts controlled by China, and economic growth based essentially on borrowing and spending.

 

And it's running out of bullets needed to borrow more.

[paeng]

The only category where China can dominate is population. But even that can be overtaken by India soon.

 

...

Chinese agri products are just enough for Chinese consumption so they rarely export them. If American companies in china close down, china will become one of the poorest countries in the world

...

China of course. But not in terms of exports

 

In relation to that,

 

http://en.wikipedia.org/wiki/BRIC

[kidpoker]

...

That should be the case because Walmart is one of the largest corporations in the world, but the country also has one of the highest levels of debt, a dollar that is essentially propped up by rigged credit ratings, something like a quarter of its debts controlled by China, and economic growth based essentially on borrowing and spending.

 

And it's running out of bullets needed to borrow more.

 

This is mainly a misconception when a foreign country buys Treasuries from the US. The country that 'sells' treasury notes is still in control and market forces still dictate the prices; also, no country can just turn treasury notes into cash and get the same price. Assuming China sells 1 trillion dollars in notes, China will be lucky to even get half of that in cash today due to market forces. And, if China gets cash for it, what does it do with the cash? Do they reinvest it in another note with the same level of security as a US Treasury Note? Or, do they leave it in a vault until it depreciates? China would be better off waiting for the notes to mature than to sell it. The US has a lot of debt but a big amount of that is also local debt - meaning the US government will pay the debt to private American citizens. Also, the US is one of the countries that a lot of money saved by private citizens for their retirement - very few countries have this. American private citizens have several trillion dollars in retirement savings. Rigged credit ratings?!! If it is rigged, so why is there a market correction right now? Remember, there are 250 million Americans in the land mass of USA while there are 1.2 billion Chinese in the same amount of land mass. Who do you think will go hungry first? The Chinese were even lucky to put money in US Treasury notes coz if they didn't they would have ended up like the Middle East financiers which put their money in risky stocks and securities. I work in the US mutual fund industry, and 1 trillion dollars can be represented by one American mutual fund company. There are hundreds of American mutual fund companies. What it means, is that 1 trillion dollars is readily available from American private citizens. Just a twist, this 1 trillion dollars in private American citizen's money is invested around the world. Do you get the picture? The problem of the US government right now is simply big government spending and they are trying to make it reasonable by cutting down on the bureaucracy - what it mean is less government employees and less spending. So, if the US government is able to cut down size, the problem is solved. Cutting down the size of US government is a hard task since the country is used to big spending. If it was food, there is no problem in the US. People get fatter in a recession coz government still gives free food. Homeless people in the US can still eat at McDonald's everyday and still have money for cigarettes and alcohol courtesy of the US government.

 

Stop the doomsday scenario. If you haven't been to a First World country, like Japan, US or Europe, you likely don't have a good picture of what wealth means and how it works. Also, the US has already seen the worst of a financial crisis of the century, the Great Depression. This recession is not even close to that.

[kidpoker]

Just to give you an idea how rich the USA is. 10% of the US population make $100,000 or more per year. It means that there are 25 million Americans who make $100,000 or more a year. This may change in the future, but still, this statistics illustrates the wealth of Americans.

[kidpoker]

Btw, China also owes Americans money in the form of investments in Chinese public stocks. Hong Kong and Shanghai have stock exchanges where foreigners trade Chinese stocks. It's a global economy nowadays. Check on the stockholders of Chinese publicly traded companies and you will find that a lot of them have a lot of American holding companies as major investors. Also, look at Taiwan and Japan stock exchange company info - lots of American holding companies as stockholders.

[KillTheDEVIL]

This is mainly a misconception when a foreign country buys Treasuries from the US. The country that 'sells' treasury notes is still in control and market forces still dictate the prices; also, no country can just turn treasury notes into cash and get the same price. Assuming China sells 1 trillion dollars in notes, China will be lucky to even get half of that in cash today due to market forces. And, if China gets cash for it, what does it do with the cash? Do they reinvest it in another note with the same level of security as a US Treasury Note? Or, do they leave it in a vault until it depreciates? China would be better off waiting for the notes to mature than to sell it. The US has a lot of debt but a big amount of that is also local debt - meaning the US government will pay the debt to private American citizens. Also, the US is one of the countries that a lot of money saved by private citizens for their retirement - very few countries have this. American private citizens have several trillion dollars in retirement savings. Rigged credit ratings?!! If it is rigged, so why is there a market correction right now? Remember, there are 250 million Americans in the land mass of USA while there are 1.2 billion Chinese in the same amount of land mass. Who do you think will go hungry first? The Chinese were even lucky to put money in US Treasury notes coz if they didn't they would have ended up like the Middle East financiers which put their money in risky stocks and securities. I work in the US mutual fund industry, and 1 trillion dollars can be represented by one American mutual fund company. There are hundreds of American mutual fund companies. What it means, is that 1 trillion dollars is readily available from American private citizens. Just a twist, this 1 trillion dollars in private American citizen's money is invested around the world. Do you get the picture? The problem of the US government right now is simply big government spending and they are trying to make it reasonable by cutting down on the bureaucracy - what it mean is less government employees and less spending. So, if the US government is able to cut down size, the problem is solved. Cutting down the size of US government is a hard task since the country is used to big spending. If it was food, there is no problem in the US. People get fatter in a recession coz government still gives free food. Homeless people in the US can still eat at McDonald's everyday and still have money for cigarettes and alcohol courtesy of the US government.

 

Stop the doomsday scenario. If you haven't been to a First World country, like Japan, US or Europe, you likely don't have a good picture of what wealth means and how it works. Also, the US has already seen the worst of a financial crisis of the century, the Great Depression. This recession is not even close to that.

 

Very nice opinion Master Kidpoker. Very balanced argument. US will remain dominant within the next 100 or years, let's just accept that.

[BrightestStar]

I'd be crazy if I think it will ever end!

[paeng]

This is mainly a misconception when a foreign country buys Treasuries from the US. The country that 'sells' treasury notes is still in control and market forces still dictate the prices; also, no country can just turn treasury notes into cash and get the same price. Assuming China sells 1 trillion dollars in notes, China will be lucky to even get half of that in cash today due to market forces. And, if China gets cash for it, what does it do with the cash? Do they reinvest it in another note with the same level of security as a US Treasury Note? Or, do they leave it in a vault until it depreciates? China would be better off waiting for the notes to mature than to sell it. The US has a lot of debt but a big amount of that is also local debt - meaning the US government will pay the debt to private American citizens. Also, the US is one of the countries that a lot of money saved by private citizens for their retirement - very few countries have this. American private citizens have several trillion dollars in retirement savings. Rigged credit ratings?!! If it is rigged, so why is there a market correction right now? Remember, there are 250 million Americans in the land mass of USA while there are 1.2 billion Chinese in the same amount of land mass. Who do you think will go hungry first? The Chinese were even lucky to put money in US Treasury notes coz if they didn't they would have ended up like the Middle East financiers which put their money in risky stocks and securities. I work in the US mutual fund industry, and 1 trillion dollars can be represented by one American mutual fund company. There are hundreds of American mutual fund companies. What it means, is that 1 trillion dollars is readily available from American private citizens. Just a twist, this 1 trillion dollars in private American citizen's money is invested around the world. Do you get the picture? The problem of the US government right now is simply big government spending and they are trying to make it reasonable by cutting down on the bureaucracy - what it mean is less government employees and less spending. So, if the US government is able to cut down size, the problem is solved. Cutting down the size of US government is a hard task since the country is used to big spending. If it was food, there is no problem in the US. People get fatter in a recession coz government still gives free food. Homeless people in the US can still eat at McDonald's everyday and still have money for cigarettes and alcohol courtesy of the US government.

 

Stop the doomsday scenario. If you haven't been to a First World country, like Japan, US or Europe, you likely don't have a good picture of what wealth means and how it works. Also, the US has already seen the worst of a financial crisis of the century, the Great Depression. This recession is not even close to that.

 

Your first point is self-contradictory because you argue that the U.S. is in control but market forces determine the value of what they lend. On top of that, you forgot to mention that each time the U.S. gets fewer cents for every dollar that it borrows due to mounting debt.

 

You don't know anything about rigged credit ratings? How do you think those investments that led to the 2008 crash received high ratings?

The problem isn't just a "big government" but increased total borrowing and spending across all sectors. The bigger problem is U.S. banks exposed to over $370 trillion in unregulated derivatives, part of a global market made up of more than a quadrillion dollars. It was some of those derivatives that led to the 2008 crash, and it's similar to that trillion dollars leveraged many times around the world. So, you see, I do get the "bigger picture."

 

Your last point is contradictory: you want to cut down the size of the government but you also want the government to give "free food."

 

What will likely happen is that one credit crunch will follow another, with government and banks attempting to thwart that with QE3, QE4, and more, meanwhile receiving fewer cents for every dollar borrowed. Oil prices will go up each time energy demand hits production ceiling, as global oil production has remained flat since 2006 and oil discoveries peaked in 1964. Ultimately, it's that type of problem--a resource crunch--that will make economic crisis look like a walk in the park.

[paeng]

Just to give you an idea how rich the USA is. 10% of the US population make $100,000 or more per year. It means that there are 25 million Americans who make $100,000 or more a year. This may change in the future, but still, this statistics illustrates the wealth of Americans.

 

"The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it"

 

http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here's-the-stats-to-prove-it-520657.html?tickers=^DJI,^GSPC,SPY,MCD,WMT,XRT,DIA

[paeng]

Btw, China also owes Americans money in the form of investments in Chinese public stocks. Hong Kong and Shanghai have stock exchanges where foreigners trade Chinese stocks. It's a global economy nowadays. Check on the stockholders of Chinese publicly traded companies and you will find that a lot of them have a lot of American holding companies as major investors. Also, look at Taiwan and Japan stock exchange company info - lots of American holding companies as stockholders.

 

Much of the wealth is not controlled by "Americans" but by only around 1 pct of U.S. citizens. The same takes place in other parts of the world. In general, only a very small number of people control much of the wealth of the world.

[paeng]

Very nice opinion Master Kidpoker. Very balanced argument. US will remain dominant within the next 100 or years, let's just accept that.

 

"The Decline and Fall of the American Empire"

 

http://www.cbsnews.com/stories/2010/12/05/opinion/main7121029.shtml

 

which includes a reference to a 2008 report from the National Intelligence Council. The group anticipates a "soft landing," though.

 

The more significant problem, of course, is the energy needed to maintain global economic growth. See the thread about peak oil for details.

[kidpoker]

Much of the wealth is not controlled by "Americans" but by only around 1 pct of U.S. citizens. The same takes place in other parts of the world. In general, only a very small number of people control much of the wealth of the world.

 

False. My access ako sa US global securities trading kaya alam ko.

[kidpoker]

"The Decline and Fall of the American Empire"

 

http://www.cbsnews.c...in7121029.shtml

 

which includes a reference to a 2008 report from the National Intelligence Council. The group anticipates a "soft landing," though.

 

The more significant problem, of course, is the energy needed to maintain global economic growth. See the thread about peak oil for details.

 

That was written by a history professor and not an economics professor.