North Korea says Nuke Tests Target the US

[KI4MVP]

World War I ended 3 years before Harding took office. The thing that killed the country in the great depression was the government propping up wages and prices, literally destroying wealth in the process, while the Fed's easy money prevented bad investments from liquidating.

but his budget cuts primarily cut the world war related military budget as well as an idiotic arms race we were having with Great Britain.

 

[Maximus]

I have a question about north korea, why does it matter at all that they moved the missiles to the east coast? North korea is only 160 miles wide. Is 160 miles in any direction really going to matter when considering the vast distances between north korea and any part of America?

My guess is that they moved them to the East coast so that when they crash they land in water and not on North Korea.

 

[OptimusPrime]

I have a question about north korea, why does it matter at all that they moved the missiles to the east coast? North korea is only 160 miles wide. Is 160 miles in any direction really going to matter when considering the vast distances between north korea and any part of America?

They are showing their dick to try to get more aid money. It doesn't matter where they put the missiles, they have no idea where they are going to go anyway.

 

[Jack Brickman]

They are showing their dick to try to get more aid money. It doesn't matter where they put the missiles, they have no idea where they are going to go anyway.

Probably not where they're aiming.

 

[Pyro]

 

[gourimoko]

If China dumps the dollar, the rest of the world will too. No one will be exporting anything to us unless we pay them in gold bars.

Why? The value of the U.S. dollar is not a primary indicator of the strength of our economy. Many manufacturers in the United States would prefer a weaker dollar in order to compete with other countries. To that end, China has already begun divesting much of its cash reserves from the U.S. dollar and investing in other currencies as a means of indirectly lowering the value of the yuan, by increasing those currencies value as they relate to the dollar. While this has been going on, the dollar itself has strengthened significantly over the past year.

China does not control the fate of the dollar. The Federal Reserve does.

 

[OptimusPrime]

Why? The value of the U.S. dollar is not a primary indicator of the strength of our economy. Many manufacturers in the United States would prefer a weaker dollar in order to compete with other countries. To that end, China has already begun divesting much of its cash reserves from the U.S. dollar and investing in other currencies as a means of indirectly lowering the value of the yuan, by increasing those currencies value as they relate to the dollar. While this has been going on, the dollar itself has strengthened significantly over the past year.

China is does not control the fate of the dollar. The Federal Reserve does.

You are right that the strength of the dollar does not reflect the strength of the economy. The dollar still has value because there is no better alternative (governments would never go back to hard money because it limits their power). It's certainly not because there is worldwide confidence in the U.S. economy.

The Chinese have been selling their dollars, and bought some other currencies, but also bought a lot of gold. All they have to is stop the printing press and they are a manufacturing power with solid assets and little debt. Everyone in the world would trade their dollars for that. It hasn't happened yet, so sure the dollar will go up and down against a basket of other worthless currencies.

The Federal Reserve did control the fate of the dollar and has already done it's part. There are trillions upon trillions of dollars sitting in foreign central banks, propping up their governments. If the value of those dollars crashes, and they are dumped on the market, they will all be sent back here. That means increased U.S. exports for a short time, until that money all comes back. All of those dollars flooding our economy means sky high price inflation, spikes in interest rates that will bankrupt the federal government, and a brutal correction.

 

[gourimoko]

You are right that the strength of the dollar does not reflect the strength of the economy. The dollar still has value because there is no better alternative (governments would never go back to hard money because it limits their power). It's certainly not because there is worldwide confidence in the U.S. economy.

The Chinese have been selling their dollars, and bought some other currencies, but also bought a lot of gold. All they have to is stop the printing press and they are a manufacturing power with solid assets and little debt. Everyone in the world would trade their dollars for that. It hasn't happened yet, so sure the dollar will go up and down against a basket of other worthless currencies.

The Federal Reserve did control the fate of the dollar and has already done it's part. There are trillions upon trillions of dollars sitting in foreign central banks, propping up their governments. If the value of those dollars crashes, and they are dumped on the market, they will all be sent back here. That means increased U.S. exports for a short time, until that money all comes back. All of those dollars flooding our economy means sky high price inflation, spikes in interest rates that will bankrupt the federal government, and a brutal correction.

I think the problem with your argument is that you state a hypothetical that is extremely unlikely to happen, that being, foreign governments deciding to completely divest from the U.S. dollar. That's different than changing the primary currency of exchange; i.e., switching between the dollar and the euro. What you're suggesting is that it is a significant possibility that all of a sudden the world will turn on the United States and deliberately attempt to crash our economy.

Again, I think that begs the question - why would that happen? It would cause a worldwide destabilization and a depression, it would drive the United States into an isolationist, and protectionist fiscal stance. Ultimately, America would use military strength in order to secure and protect it's economic interests. I don't think any nation on Earth would want any of that scenario to take place.

America, trading with everyone, in an open, free, and sometimes fair market is what everyone wants - so they can dump their goods into the States, cheaply. Maybe if that paradigm were to change, and the United States were to enter a socioeconomic decline (as it relates to the rest of the World), then maybe the possibility could present itself with some greater chance of happening. But as of now, it's unthinkable.

 

[Stark]

 

[OptimusPrime]

I think the problem with your argument is that you state a hypothetical that is extremely unlikely to happen, that being, foreign governments deciding to completely divest from the U.S. dollar. That's different than changing the primary currency of exchange; i.e., switching between the dollar and the euro. What you're suggesting is that it is a significant possibility that all of a sudden the world will turn on the United States and deliberately attempt to crash our economy.

Again, I think that begs the question - why would that happen? It would cause a worldwide destabilization and a depression, it would drive the United States into an isolationist, and protectionist fiscal stance. Ultimately, America would use military strength in order to secure and protect it's economic interests. I don't think any nation on Earth would want any of that scenario to take place.

America, trading with everyone, in an open, free, and sometimes fair market is what everyone wants - so they can dump their goods into the States, cheaply. Maybe if that paradigm were to change, and the United States were to enter a socioeconomic decline (as it relates to the rest of the World), then maybe the possibility could present itself with some greater chance of happening. But as of now, it's unthinkable.

It doesn't take all that to ruin us. There are tens of trillions of dollars propping up banks around the world. If 25% of them (maybe even less) are dumped and sent back here we are finished. People don't understand how precarious our situation is. There is no economy here anymore. Only government. Every quarter $150 billion is added to the GDP, $300 billion of that is deficit spending from the government. That means the real economy is shrinking and has been many years now.

If the yuan overtakes the dollar, there will be worldwide depression anyway. Nearly all of the central banks of the world will be insolvent. That leaves China in position to capitalize like we did after World War II.

Everyone wants to get something of value in return for their goods. They don't care if they sell them here or somewhere else. When it is better to get Chinese money than American money, unless we want to pay a lot more, that's where they will dump their goods.

 

[gourimoko]

It doesn't take all that to ruin us. There are tens of trillions of dollars propping up banks around the world. If 25% of them (maybe even less) are dumped and sent back here we are finished.

Can you explain how and why that would happen, specifically? I don't understand what you mean when you say "if [banks] were dumped and sent back here."

People don't understand how precarious our situation is.

No, they don't. Our economy is fragile, but the root cause of that weakness is not foreign banks or investments lack of financial regulation here at home. The ability to create derivative financial instruments that are abstractions of yet other abstract concepts that begin to loose basis in reality; or in other words, instruments that are no longer tied to real assets. A super-set fiat economy, so to speak, of trust relationships compounded repeatedly yet without safeguards in place to prevent collapse. We would suffer a far greater demise from internal mismanagement rather than by foreign conspiracy.

There is no economy here anymore.

Our economy still pumps out $15T+, the vast majority (~80%) is entirely domestic private enterprise not the government. What we're experiencing now is slower growth, not contraction, and not recession. We have the strongest and most vibrant economy on Earth with the brightest future we could hope for. There is no better model than the American economy; it is the driving force of our country.

Only government. Every quarter $150 billion is added to the GDP, $300 billion of that is deficit spending from the government.

You may need to clarify that statement because as it is written it doesn't make much sense. $300B of $150B?? However, if you're referring to the recent 4th quarter contraction, that was a result of a 22% decrease in Defense Department spending which lowered overall GDP and brought the rate of growth into the negative (0.1%) which is expected to return positive with the upcoming quarterly report (even though defense spending has not increased).

That means the real economy is shrinking and has been many years now.

First off, the government of any nation is a significant portion of the "real economy." It is simply the nature of economics in any nation which has to provide for its own citizens security and welfare through military and discretionary spending.

Second, the amount of government spending, over the past three years, has remained stable while revenues have gradually increased. Within 2 years, revenues will finally have returned to levels prior to the financial crisis. Understand that going back to 1992, government spending has never decreased (except once, by $3M in 2007). Only in the last 4 years has government spending been at a complete (not relative) standstill. This is likely due to the deadlock in Congress.

But for whatever reasons, what this means is that government spending is not growing (not since 2009) but instead contracting, yet the private sector economy is growing, increasing the GDP and ultimately revenues.

If the yuan overtakes the dollar, there will be worldwide depression anyway.

The market value of the currency is simply not as important as you think. It is a floating marker that is controlled primarily by governments to set, what they feel, are fair trade conditions on what is supposed to be a free market. It does not indicate the strength or weakness of an economy.

Think about what you're saying. The Japanese Yen is worth 1/100th of the U.S. Dollar, but this is absolutely no indication of the strength or even the composition of their economy.

A better example would be the Euro which carries a 30% greater value than the Dollar, yet the European economy is in terrible shape.

Of course the value isn't meaningless, but I think your concept of how currency operates between economies in the overall global market conflates the overall strength of an economy with the strength of it's currency. Currency value, when considered in relation to one another, is a better indicator of trade conditions rather than the strength of the respective economies represented.

So I think it fair to say that American businesses and jobs would not evaporate if the value of the dollar changed overnight. The credit system, and overall, the faith and trust in the American banking system (whether well founded or not) are what primarily drives present growth.

Nearly all of the central banks of the world will be insolvent.

How?

That leaves China in position to capitalize like we did after World War II.

Again, how?

Everyone wants to get something of value in return for their goods. They don't care if they sell them here or somewhere else. When it is better to get Chinese money than American money, unless we want to pay a lot more, that's where they will dump their goods.

Optimus, I dont think you're appreciating the composition of our economies which truly define the extreme differences between what drives them. The American economy is consumerist, but domestically driven with almost 80% of our economy being primarily grounded within the United States. The Chinese economy is the exact opposite, with 70% of their economy being grounded by foreign businesses and investors. The remaining proportion of the Chinese economy is vitally dependent upon that 70% for domestic growth as an artifact of Chinese growth. That growth is chiefly due to extremely low labor costs, stable government, and extreme government regulation which promotes exports.

Considering we are the World's primary trading partner, and that China's economy is dependent upon the ability to export goods to foreign countries; in your scenario, if the World economies were to collapse, China would feel it worse than anyone else. Understand that the margin of their GDP that is of foreign origin is exceptionally high. Given your scenario, Americans would likely suffer a second Great Depression, with unemployment as high as 25%; whereas the Chinese would likely suffer famine and starvation by the tens of millions. Hundreds of millions unemployed and desperate for survival. Under that type of calamity, it is almost certain that whatever government were in place would fall, as they have historically.

In essence, given your scenario, the people who prevail after any banking calamity, are the banks themselves. The industries of the Western World are using China not being used by them, which follows history. They are using China as a means to circumvent humane labor practices, minimum wages, pensions, and health care costs. But if that were to stop, so would China, dead in it's tracks.

 

[Ruken]

Can you explain how and why that would happen, specifically? I don't understand what you mean when you say "if [banks] were dumped and sent back here."



No, they don't. Our economy is fragile, but the root cause of that weakness is not foreign banks or investments lack of financial regulation here at home. The ability to create derivative financial instruments that are abstractions of yet other abstract concepts that begin to loose basis in reality; or in other words, instruments that are no longer tied to real assets. A super-set fiat economy, so to speak, of trust relationships compounded repeatedly yet without safeguards in place to prevent collapse. We would suffer a far greater demise from internal mismanagement rather than by foreign conspiracy.



Our economy still pumps out $15T+, the vast majority (~80%) is entirely domestic private enterprise not the government. What we're experiencing now is slower growth, not contraction, and not recession. We have the strongest and most vibrant economy on Earth with the brightest future we could hope for. There is no better model than the American economy; it is the driving force of our country.



You may need to clarify that statement because as it is written it doesn't make much sense. $300B of $150B?? However, if you're referring to the recent 4th quarter contraction, that was a result of a 22% decrease in Defense Department spending which lowered overall GDP and brought the rate of growth into the negative (0.1%) which is expected to return positive with the upcoming quarterly report (even though defense spending has not increased).



First off, the government of any nation is a significant portion of the "real economy." It is simply the nature of economics in any nation which has to provide for its own citizens security and welfare through military and discretionary spending.

Second, the amount of government spending, over the past three years, has remained stable while revenues have gradually increased. Within 2 years, revenues will finally have returned to levels prior to the financial crisis. Understand that going back to 1992, government spending has never decreased (except once, by $3M in 2007). Only in the last 4 years has government spending been at a complete (not relative) standstill. This is likely due to the deadlock in Congress.

But for whatever reasons, what this means is that government spending is not growing (not since 2009) but instead contracting, yet the private sector economy is growing, increasing the GDP and ultimately revenues.



The market value of the currency is simply not as important as you think. It is a floating marker that is controlled primarily by governments to set, what they feel, are fair trade conditions on what is supposed to be a free market. It does not indicate the strength or weakness of an economy.

Think about what you're saying. The Japanese Yen is worth 1/100th of the U.S. Dollar, but this is absolutely no indication of the strength or even the composition of their economy.

A better example would be the Euro which carries a 30% greater value than the Dollar, yet the European economy is in terrible shape.

Of course the value isn't meaningless, but I think your concept of how currency operates between economies in the overall global market conflates the overall strength of an economy with the strength of it's currency. Currency value, when considered in relation to one another, is a better indicator of trade conditions rather than the strength of the respective economies represented.

So I think it fair to say that American businesses and jobs would not evaporate if the value of the dollar changed overnight. The credit system, and overall, the faith and trust in the American banking system (whether well founded or not) are what primarily drives present growth.



How?



Again, how?



Optimus, I dont think you're appreciating the composition of our economies which truly define the extreme differences between what drives them. The American economy is consumerist, but domestically driven with almost 80% of our economy being primarily grounded within the United States. The Chinese economy is the exact opposite, with 70% of their economy being grounded by foreign businesses and investors. The remaining proportion of the Chinese economy is vitally dependent upon that 70% for domestic growth as an artifact of Chinese growth. That growth is chiefly due to extremely low labor costs, stable government, and extreme government regulation which promotes exports.

Considering we are the World's primary trading partner, and that China's economy is dependent upon the ability to export goods to foreign countries; in your scenario, if the World economies were to collapse, China would feel it worse than anyone else. Understand that the margin of their GDP that is of foreign origin is exceptionally high. Given your scenario, Americans would likely suffer a second Great Depression, with unemployment as high as 25%; whereas the Chinese would likely suffer famine and starvation by the tens of millions. Hundreds of millions unemployed and desperate for survival. Under that type of calamity, it is almost certain that whatever government were in place would fall, as they have historically.

In essence, given your scenario, the people who prevail after any banking calamity, are the banks themselves. The industries of the Western World are using China not being used by them, which follows history. They are using China as a means to circumvent humane labor practices, minimum wages, pensions, and health care costs. But if that were to stop, so would China, dead in it's tracks.

Basically a way more eloquent way to explain global economic interdependence...nicely put sir

 

[Jack Brickman]

 

[JDeezy]

War mongler?

 

[Jack Brickman]

War mongler?

Yeah I noticed that, but I didn't make the image so I just went with it.