China and the United States Are Preparing for War

sgarg

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Well, anyone will do if (revenue - cost) is positive .
This is my thinking, and you may correct me. I think the West is "trialling" its "strategy" with Russia only to see if the policy will work with China.

If China causes a defeat of Russia, then next target will be China.
 

pmaitra

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The dollar is tied to Western technological advancements. It is no longer tied to gold. The two pillars of US dollar today are technology and US military.

If West starts to slide technologically vs China or China/Russia combine, then USA cannot prop the dollar by manipulation.

Have you ever wondered USA has printed dollars like mad since 2008, still there is no inflation is USA. Where did the dollars go?

The dollars are earned by somebody and then locked in the bank accounts, in the banking system run by the West. This is why the manipulation succeeds.

However this printing of US dollars is a "modification" to the original scheme. The scheme fabricated in the reagan era was based on wars.
I agree with that you have said, but please answer my question: How will the US pay its bonds?
 

sorcerer

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@pmaitra, @sgarg
This is an interesting read
Consider this, the U.S. has around $16 trillion in outstanding debt and most of it is held by us, and the bulge bracket banks here at home: Goldman Sachs, JP Morgan, Citibank, Bank of America. Around 7.5 percent is held by China, the biggest foreign holder of U.S. debt.

One of the reasons why China has so much Treasury holdings is because of trade. Companies put money in short term Treasury notes and bills to settle trade payments. China's government could also call all of its own holdings and demand full payment of the money it lent us in principal plus interest, but under what circumstance would they do such a thing?

It would be a national security risk if China held a position where they could dictate U.S. policy on fiscal and monetary matters. They cannot.

If the economy was crashing and China got terrified and wanted their money back, unless the U.S. defaulted, it would hand it over and there would be nothing China would get in return. Moreover, when the U.S. economy was collapsing in 2008 all the way to the 666 low on March 6 in the S&P 500, China never retreated from Treasurys, or demand Congress get its finances in order or else it would choose to buy euros, or gold instead.

The Pentagon did an evaluation on the risks posed by China's ownership of U.S. debt in July and came to the same conclusion: "Attempting to use U.S. Treasury securities as a coercive tool would have limited effect and likely would do more harm to China than to the United States."

The bigger issue for the U.S., says John Frisbie, director of the USBC in Washington is the size of our fiscal deficit and the long term implications for the economy, not the level of China's debt holdings.
Is China's Ownership Of U.S. Debt A National Security Threat? - Forbes
 
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CCP

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This is my thinking, and you may correct me. I think the West is "trialling" its "strategy" with Russia only to see if the policy will work with China.

If China causes a defeat of Russia, then next target will be China.

Your last sentence is correct.
First sentence is wrong, Russia and China are different and not in a same level.
 

sgarg

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Your last sentence is correct.
First sentence is wrong, Russia and China are different and not in a same level.
Why you say my first statement is incorrect. What are the reasons which make China superior to Russia?
 

pmaitra

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Thank you for the interesting article.

There is this statement: "If the economy was crashing and China got terrified and wanted their money back, unless the U.S. defaulted, it would hand it over and there would be nothing China would get in return."

My question is, how would the US pay China. Will the US give China container loads of greenback? The Forbes articles says quite a few things, but avoids the most pertinent question.
 
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pmaitra

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If not , West will try China first.
I think the west is trying both Russia and PRC. The Hong Kong protests happened in PRC's sovereign territory. The Kiev revolution did not. BTW, you guys did a good job choking BBC.
 

CCP

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I think the west is trying both Russia and PRC. The Hong Kong protests happened in PRC's sovereign territory. The Kiev revolution did not. BTW, you guys did a good job choking BBC.

Is US making problem in Hong Kong ? yes, just like she did in many places.

Is US using Hong Kong to consume China like she is using Ukraine to consume to destroy Russia? No.

population
Russia : 143.5 million , Ukraine 45.5 million ------------------------>30%
Mainland China: 1.35 billion , Hong kong : 7.2 million ------------->0.5%

Also, take a look at the % of GDP , technology, location...

To "try" China,
Hong Kong is not valid target.
 
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sorcerer

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Thank you for the interesting article.
==============================

There is this statement: "If the economy was crashing and China got terrified and wanted their money back, unless the U.S. defaulted, it would hand it over and there would be nothing China would get in return."

My question is, how would the US pay China. Will the US give China container loads of greenback? The Forbes articles says quite a few things, but avoids the most pertinent question.

How does the US government pay its bills anyway?

Strangely, no one really knows exactly how it works.

Each day, the US Treasury receives a little over two million bills from various federal agencies.

According to analysts at Credit Suisse, there are three main offices that pay those bills: the Department of Defense Disbursing Offices, the Bureau of the Fiscal Service and the Financial Management Service.

Technically, the payment systems can be turned on - to make payments - or off - but not much else.

If prioritisation were possible, the US Treasury would probably turn off the tap at the Department of Defense Disbursing Offices and the Financial Management Service. That would leave the Bureau of Fiscal Service, which pays money to bondholders.
Has the US defaulted before?

Not really.

There are three examples in US history that come close to default, with the most recent occurring in 1979.

Then, the US Treasury inadvertently defaulted on $122m, because of what it said was a word processing error.

Although the error was quickly fixed, and even though $122m was a tiny fraction of the $800bn in debt that the Treasury had at the time, a study found that the mini-default raised the cost of borrowing by 0.6%, or $6bn a year.

The other two instances, in 1933 and in 1790, both involve defaults akin to the current situation in Greece, when creditors were forced to take less money than what they were owed. Some economists have defined this as a default, but it's murky territory.
BBC News - What happens in a US debt default? (So trustable source!!! :lol: )

And what if the clock runs out? Then China, the U.S.'s biggest creditor, will be left holding the bag. Its government holds $1.3 trillion in U.S. Treasury bonds and a whopping $3.5 trillion in dollar-denominated assets.
..
..
That suited everyone just fine until the Treasury began ringing the alarm bell about a possible default on October 17th. A default could wreak havoc on the value of China's dollar-backed assets. A huge portion of China's wealth depends on the U.S.'s ability to pay down its loans.
..
..
The larger concern for China, he pointed out, extended well beyond the current impasse to the U.S.'s long-term debt burden. "I never understand how they are going to pay it back," he said. "I don't think they can pay it back." But with $1.3 trillion on the line, he argues that China must cling to its faith that the U.S. will eventually pay back its loans.

Ma Guangyuan, an economist in Beijing, echoed the sentiment that the battle in Washington really wasn't about Washington. "The fight between the two parties in America won't necessarily hurt them," he said, holding out hope for a political breakthrough, with or without Congress. "I believe this time, America will increase the debt ceiling again," he said. "If they don't, they will have to figure out a way to break the contract. For example, they may print more currency."

China to United States: Don't Default, For Our Sake | TIME.com
 

sorcerer

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Is US making problem in Hong Kong ? yes, just like she did in many places.

Is US using Hong Kong to consume China like she is using Ukraine to consume to destroy Russia? No.

population
Russia : 143.5 million , Ukraine 45.5 million ------------------------>30%
Mainland China: 1.35 billion , Hong kong : 7.2 million ------------->0.5%

Also, take a look at the % of GDP , technology, location...

To "try" China,
Hong Kong is not valid target.
==========
% of GDP= > DOesnt really matter for civil unrest. Civil unrest happens with people of a country, their emotions and faith, which affects the economy and its GDP
Technology =>China could be advanced but not as advanced as US when it comes to 'proven technologies.'
Location = > doesnt matter for USA cuz its been waging war outside its borders for decades and knows how to deal with war and keep it away from its borders.
The infamous statament "USA will take war to their homes"


There is a rumor from CHina's own agencies that civil unrest i HOngkong is staged through churches in USA. Its a double whammy. Religion+unrest, both of which China wants to keep away from border.
It wont be as quick as Ukraine, but it will slowly erode the control the Communist Party have over its people.

May be as of now, we can say Hongkong is not a valid target, but as we can see, Hongkong is in the scheme of things.
Troy and Trojan my friend....Troy and Trojan.
 

pmaitra

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Thank you for taking the effort to post these.

That article by BBC has some truth in it, while some of it might have to be verified.

This might be just me, but anything coming from the west automatically goes into the "pending further verification" basket.

This statement below is deliberately vague, if not utter codswallop, but it serves one purpose - the purpose is to keep the readers' faith in the Dollar.

"A default could wreak havoc on the value of China's dollar-backed assets."

(Notice closely, the statement could mean very bad news for PRC, or very bad news for the US.)
 

sorcerer

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@pmaitra
US Bond is now a double edge sword.
USA had paid PRC for its commerce and services 'recieved' in Bonds, in the case of eventuality, PRC loses its 'commerce' as well as 'payment' for it.
May be this fear of double whammy is the reason why PRC is distributing its risk by settling trade with other countries in US Bonds.

Then again, bonds are considered to be more safe.
Its a good thing to have faith, its a rare item these days anyway and is invaluable.
 
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pmaitra

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@pmaitra
US Bond is now a double edge sword.
USA had paid PRC for its commerce and services 'recieved' in Bonds, in the case of eventuality, PRC loses its 'commerce' as well as 'payment' for it.
May be this fear of double whammy is the reason why PRC is distributing its risk by settling trade with other countries in US Bonds.

Then again, bonds are considered to be more safe.
Its a good thing to have faith, its a rare item these days anyway and is invaluable.
A bond essentially is a piece of paper. Of course, part of the faith, as correctly implied by @sgarg, is the US' #1 military power, but faith cannot rely solely on military power. People needs to see the possibility of acquiring actual assets in exchange for these bonds. What if countries begin to refuse accepting these bonds?
 
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Kshatriya87

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My view is for India to step aside and let China confront USA and Japan in the path of its superpowerdom.

No need to weather Chinese storm. This Chinese storm is very much created by USA. The foreign policy of USA is the most myopic of any empire that has ruled so far in the world.

What do you think will happen if China wins irrespective of the fact the India goes neutral? China invades India, no doubt about that.
 

sorcerer

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A bond essentially is a piece of paper. Of course, part of the faith, as correctly implied by @sgarg, is the US' #1 military power, but faith cannot rely solely on military power. People needs to see the possibility of acquiring actual assets in exchange for these bonds. What if countries begin to refuse accepting these bonds?
One way is to do commerce based on own currency. Like India doing Oil trade with Iran. In my opinion, this is more reliable than basing trade on third currency. I understand that It has its huge limitation on the cieling of bilateral trade between two countries.
 
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pmaitra

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One way is to do commerce based on own currency. Like India doing Oil trade with Iran. In my opinion, this is more reliable than basing trade on third currency. I understand that It has its huge limitation on the cieling of bilateral trade between two countries.
Look at the positive side.

India was insulated from global turmoil which happened due to mismanagement by people outside India.
  • We rode the sanctions.
  • We rode the IT bubble.
  • We rode the Housing Bubble.

It is a very good thing that the Rs. is not fully convertible. We do not play by other's rules. Other's rules are bound to be designed to benefit them, at our expense.

As long as India continues to produce the bare essentials of the nation, it will survive. Our two deficiencies are in oil and land. Nothing else.
 

sorcerer

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What do you think will happen if China wins irrespective of the fact the India goes neutral? China invades India, no doubt about that.
Do you think, in a situation where PRC is fighting USA it will invade India and stretch its military assets thin? Wont that be a suicide on part of PRC, where India having farily good military assets to knock serious damage to its adversaries!!
 

Kshatriya87

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Do you think, in a situation where PRC is fighting USA it will invade India and stretch its military assets thin? Wont that be a suicide on part of PRC, where India having farily good military assets to knock serious damage to its adversaries!!
That's exactly why I said what happens if and when China wins. Once they win, there are no other opponents.
 

sgarg

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What do you think will happen if China wins irrespective of the fact the India goes neutral? China invades India, no doubt about that.
"China invades India" is very unlikely. A border skirmish or even a limited war is NOT an invasion. You have used the word "invasion" very loosely.

China needs to have very strong reason to invade India. What will China accomplish?

My view is that a serious war between India and China is very unlikely. India does not want a war with China. I have no idea if China wants a war with India but I do not see very strong argument for such an initiative from China's side.

China containing influence of India in South Asia is a totally different issue. This is a sort of competition which will not be handled in a military manner.
 

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