From: vagans@eanna.net
On Mon, 24 Nov 2003, Kevin Calder wrote:
>
>
> In message ,
> Sourcerer writes
>
> >On Fri, 21 Nov 2003, Kevin Calder wrote:
>
> >> In message ,
> >> Sourcerer writes
> >Between now and then, there will be a collapse of the global finance
> >system. It is something less of a toss-up who will recover from it first
> >and best. Odds are it will be China, imo.
>
> My understanding of global economics never really made it past Adam
> Smith, who I understand is now a little out of date, so you'll have to
> forgive me for not understanding why global finance is about to
> collapse. I'm sure we'd be interested if you, or anyone else would care
> to post more on it though!
The system was established at the end of WWII when the allies made the
US dollar the world's trade currency (nominally, the dollar price of
gold). National currencies were controlled and did not travel and
international trade settlement occured in dollars. With the
demonetization of gold in the early 70s, the dollar became the world's
reserve currency, as well. It is the foundation of the transformation of
the US economy from an economy of production to one of consumption.
The US's major export is dollars with which it purchases commodities
from foreign producers. It is a sweet deal, since there is no
competition in the production of dollars (counterfeiting
notwithstanding). The US simply produces dollars to match the price of
the commodities imported. Since the cost of producing dollars is
negligible, the US gets its imports nearly for free.
However, the US has a vested interest in getting its imports at the
lowest possible price, because the domestic economy thrives on 'adding
value' between the port of departure and the WalMart. Therefore, the US
insists on 'free and open trade', meaning encouraging foreign economies
to be 'export oriented' thereby increasing competition among nations
exporting to the US, thus lowering the port of departure price.
The most important commodity for a modern economy is a finite one: oil,
which continues to be priced in dollars (so is gold) on the world
market. The oil producers who price in another currency (the Euro),
Venezuela and Iraq, as well as those that seriously consider it (Iran)
are, of course, at the top of the US shit list and have a future called
'regime change'.
The world order can be arranged in a hierarchy of states according to
how well their national economies can prosper under this system in
comparison to any possible alternative.
So, at the top, just beneath the US, are Japan and England; just below
that, the EU. Farther down are China and Asia ex-Japan and India. Then
near the bottom is Russia, and at the bottom are the oil-exporting
nations (the Muslim world, mostly).
The US intends to control oil, first to continue its pricing in the
dollar exclusively, and second to turn a finite resource into a scarce
one or not as we please.
The problematic here is that the growing new economies (China and India)
cannot continue to grow without easy access to the world oil market. If
the US succeeds in making oil scarce, it means the US can control the
development of the growing economies. China, for example would have to
become as compliant as Japan and England to US policy.
I believe China (and possibly India) has no intention of doing that, and
so will enter the world political stage in its own interests taking much
of Asia with it. Russia, a major but expensive oil producer, also does
not intend to be a US client. All these nations will attempt to disrupt
the global financial system to their benefit. The EU will play its hand
to create as level a playing field possible between the emerging
economic powers and the US coalition, which means the US can no longer
consider the EU states 'allies', since the levelling benefits the new
economies by default (and thereby enhancing the EUs diplomatic and
economic position). The EU, or at least Germany, has a community of
interest with Russia, as well.
Then at the bottom are the Muslim oil producers, who are looking for a
way out of the system. A way out has been offered by the jihadis.
The whole thing depends on the continued acceptance of the dollar as the
world reserve currency, which means acceptance of the role of being an
economy dependent on export to the US, which means recycling dollars
back to the US in exchange for US debt instruments (treasury bills,
notes and bonds). Basically, accepting a world order in which the US
sets the rules, rules by which the US gains everything for nothing, the
'nothing' being other nations' well being and independence.
Since the US (and also Japan, England, the EU) is closing in on the
demographic finale of its consumer culture phase, it cannot maintain
much less grow its level of consumption. Therefore, the US (or
Anglo-American) system can only continue to grow by dominating the
*domestic* economies of the emerging economic powers. Seen in this
light, the rest of the world (to the degree they are on the scale above)
have a vested interest in destroying the current financial system which
privleges the US and threatens their well being and independence.
--
(__) Sourcerer
/(<>)\ O|O|O|O||O||O When you're looking for something that doesn't exist,
\../ |OO|||O|||O|O it makes you crazier the closer you get to it.
|| OO|||OO||O||O -- R. Ebert
--- SoupGate-Win32 v1.05
* Origin: you cannot sedate... all the things you hate (1:229/2)
|
