American Politics during the Bush Presidency

[QUOTE=Badboy13]I agree with alot of what you said moore, but I have to say you overlooked two things, first being during the 1970' s, The US wasn't dealing with an economic powerhouse like China, India, or Energy giants like Russia. [/QUOTE]I agree with you that the past is always a little bit differnt from the future; analogies are just analogies, and at some point they break down and things actually [u]are[/u] different and change occurs.

Nonetheless, in terms of economic powerhouses, the U. S. Had to deal with Japan, which was perceived to be a huge economic powerhouse way back when. Magazine covers were full of feature articles about the decline of America to a resurgent Japan. What happened?

And in terms of energy giants, the U. S. had to deal with a very strong (at the time) OPEC. And the naysayers and doomsday prognosticators were beside themselves with how this spelled the end of American economic dominance. What happened?

I think Moore is spot on in his assessment about America's more intangible assets, and their imlications on the economic future.

Yes AND no, for one thing, OPEC is one of the big reasons we are STILL paying 55-60 a barrel, so they are kicking our ass in those terms, and right now as we speak the US is falling over themselves to try to stop the NEW energy cartel being started by Russia and many other african and central asian countries with loads of natural resources, the US and Europe fear these energy cartels. That is the truth so I think the jury is still out on that one, as far as your Japan assesment, you are 100 % correct, BUT, and this is a big BUT, you continue to miss the point, we aren't in a 1970's economy anymore, we aren't dealing with countries we are dealing with blocks of nations with a limitless supply of energy, consumer populations, and so on. Japan could not sustain growth because in the end it is just a small island with very little natural and energy resources of it's own. It was only a matter of time. It was like saying we should fear Taiwan. They might have big money and big industry but there is a limit to what a small island with very few resources can achieve.

The SCO is something different, you have India, China, Russia, Kazhakstan, Iran and Possibly Pakistan in the near future agreeing to work together on trade, military, science, defense, research and development, energy trade and policy. This is NOT Japan. You will see a little more in the future as this will be gradual. But the poles are slowly shifting. We can overcome that, but we need to start thinking outside the box and leave the whole " manifest destiny " bit at the door because if we don't refrain from our arrogance we will learn our lessons the hard way.

Again I never said the US isn't solid, but for how long doesn't depend on us saying so, but on our actions around the world. Nothing is certain.

Badboy

It means that we're paying the same price for oil now as we did in 1984, and a third less than we did in 1979, when you adjust for inflation.

Oooh! Oooh! The sky is falling! The sky is falling!

And by the way, BB13, the energy supply is in fact limitless, and not just in the Middle East. If oil gets expensive enough, the US can process the oil shale in the western states into fuel. There is the equivalent of 1 trillion (that's trillion with a "t") barrels of oil sitting in shale in Colorado, Wyoming, and Utah. Don't lose sleep worrying about the future. The only thing that one need fear is socialist economic policies which could strangle innovation, production, and investment.

Many of those things are found in the US economy, but I guess we can all nit pick, I don't think Japan was ever on the level that China is on. And no offense but I just can't really take serious your last comment, I mean I don't even believe you bought this last one. You are basically telling us the the TOP US corporations are all wrong and they are somehow misguidedly tripping over themselves investing billions upon billions into the chinese economy and they are all at each others throats trying to secure exclusive rights to the chinese purchase power present and future. The thing is if your "prediction" is correct some of the biggest losers will be US corporations. I don't think you could make that comment straight faced to a room full of top level multi national C. E. O's and be taken seriously. I think sometimes you try too hard to win an argument. And I am sure you agree, this time you really gave most a good laugh.

Badboy

Talk about doomsday theories

Plus, can you imgine how many Chinese Supermecardos they have in China? Not the best places to shop in BA for quality and price.

For people who owned stocks in Germany, at two times in the last 90 years their holdings went to zero. At least once in Italy and Japan. The same was true in China. And was also true in various other countries, many times.

The Chinese banking system is utterly bankrupt, Papa Benito has hit this one right on the head. The banks are forced by the government to make worthless loans to state-owned or state-affiliated enterprises. These non-performing loans far exceed any prudent reserve standards (upwards of 50% of Chinese "bank" loans are non-performing). I recently read that there are at least 3000 ball bearing factories in China either recently built or under construction. How many of them do you really think the world needs? Or that are running at 80% capacity?

On the bright side, Citibank, Morgan Stanley, and other Western banks are being brought in to "invest" in the Chinese banks. We'll see how that goes.

Well I guess we should be talking, since we owe them our shirts, or at least we owe them trillions, that is. They are paying for our war on terrorism. Those guys have stockpiles of money, I am not really worried about China in the near future. Of course there are weak points in THEIR economy, just like their are very very weak points in the US economy. I guess we are doing better since we are in a huge deficit and they have huge surpluses. Let me know when WE stop borrowing money from them, then I might take all your " concerns " seriously. Plus, all that " valuable " US real estate? Why don't you tell me how much of it is owned by China? Guys are buying american more than americans. I think one of the biggest problems the US is having is getting China to stop saving money and start spending it on US corporations.

But hey I guess we can all dream,

Badboy

Again, I think you will have a VERY hard time convinced just about every US and every other major corporation in the world NOT to invest in China. And you are very right NOT to want your " predictions " to come true, The world has become very VERY dependent on China and their economy and their money. China goes, we go also.

[QUOTE=Badboy13]You are basically telling us the the TOP US corporations are all wrong and they are somehow misguidedly tripping over themselves investing billions upon billions into the chinese economy and they are all at each others throats trying to secure exclusive rights to the chinese purchase power present and future. The thing is if your "prediction" is correct some of the biggest losers will be US corporations. I don't think you could make that comment straight faced to a room full of top level multi national C. E. O's and be taken seriously.[/QUOTE]I would never, ever, ever, in a million years, take the fact that all U. S. Corporations are doing something as proof that it is in any way the right or prudent thing to do. This falls under the category of Exon's joke, "I do this for a living so I know what I'm talking about."

If I were going to look somewhere for guidance on where things might be going, I'd look to see what a tried and true investor like Warren Buffett, or a tried and true fund manager like Bill Miller, is doing.

But corporations? No fucking way.

[QUOTE=Badboy13]we owe them trillions[/QUOTE]When I owe one million dollars, the bank owns me. When I owe one trillion dollars, I own the bank.

A lot of those numbers are inflated, wrong, or simply misleading when viewed in isolation. Don't sweat them.

Well I can't argue with you there Stray, The Sage of Omaha is a good bet, moreso than our very own mongering nostrodamus (no offense nostradamus) On CNN money as we speak " the US dollar is at a 20 month low against the Euro". Seems hedge funds are dumping on the dollar.

Some of Warren's thoughts.

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Public stances:

Buffett has repeatedly criticized the financial industry for what he considers to be a proliferation of advisors who add no value but are compensated based on the volume of business transactions which they facilitate. He has pointed to the growing volume of stock trades as evidence that an ever-greater proportion of investors' gains are going to brokers and other middle-men.

Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

Buffett believes that the U. S. Dollar will lose value in the long run. He views the United States' expanding trade deficit as an alarming trend that will devalue the U. S. Dollar and U. S. Assets. As a result it is putting a larger portion of ownership of U. S. Assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005, as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States.

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Well I hope that helped ease some minds. If you need citations I would be happy to give you some.;)

Badboy

[QUOTE=Hunt99]When I owe one million dollars, the bank owns me. When I owe one trillion dollars, I own the bank.

A lot of those numbers are inflated, wrong, or simply misleading when viewed in isolation. Don't sweat them.[/QUOTE]Again, your comments make alot of sense, and they are hard to argue, but at the same time they are using that debt to buy out our corporations and our real estate, guess what? They don't want our government bonds.

Some facts and stats I came across.

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Consequences of foreign ownership of U. S. Debt:

U. S. Treasury statistics indicate that, at the end of 2004, foreigners held 44% of federal debt held by the public. About 64% of that 44% was held by the central banks of other countries. A large portion was held by the central banks of Japan and China, although, most was held by members of the EU. This exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then.

On 3 August 2006, Italy's central bank announced that it would sell off a large portion of its dollar holdings (including US Treasury bonds) and instead shift to British Pound Sterling. The reason Italy gave for doing out of fear of an "expected slide in the dollar." Russia, Sweden, and the United Arab Emirates had announced similar shifts out of the dollar into other currencies and gold earlier and cited the United States's "twin deficits" (I. E. The US trade deficit as well as its budget deficit) as the reason for the expected fall in the dollar's value.

U. S. Public debt on 30 December 2005 was $8,170 billion (or $8.1 trillion) circulation (M1 Money Supply) estimated to be $1,372 billion.

The debt equates to $28,412 per head of the U. S. Population, or $58,390 per head of the U. S. Working population.

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I would read this link, if you haven't allready:

[url]http://www.executivefocus.com/displayStory.cfm?story_id=8083036[/url]

These are some quotes from this article:

China's central bank is thought to be switching from Treasury bonds to American mortgage-backed securities and corporate bonds in an attempt to earn higher yields. Chinese officials have also discussed in private the need to diversify reserves out of dollars in order to reduce exposure to a big drop in the greenback. The bank may be putting a bigger slice of any increase in reserves into euros and emerging Asian currencies, but so far there is little sign of a shift out of its existing stock of dollars. One problem is that China's investments are so big that they move markets. Shifting money into euros would push down the dollar. China would then not only suffer a capital loss on its remaining dollar reserves, but it could also be forced to buy yet more reserves to hold its currency down against a weaker dollar.

China's official reserves already far exceed what is required to ensure financial stability. As a rule of thumb, a country needs enough foreign exchange to cover three months' imports or to settle its short-term foreign debt. China's reserves are equivalent to 15 months of imports and are six times bigger than its short-term debt.

Badboy

Since China is a communist state they do not care much, if anything for the lives of their people so what would stop them from calling in $1 trillion of our notes they hold (they do not hold that much now but withing 8 years they will) and bankrupt us.

The fact that it would hurt their people would have little meaning to them at this juncture of the 'capitalistic' state.

I would expect that they could and might do that in the future when we are adversaries over Taiwan or Korea or something else?

No country stays on top forever and with an $8 trillion dollar debt, there is no logic that could explain how the US can continue to be such an economic power.

The other option is for countries with oil to have begin trading on something other than the dollar, something Iraq (pre-invasion), Iran and Venezuela have been advocating. While this is not likely in the near term, the result of that would be a massive decline in the dollar. I have read where it could be up to 30% drop.

Suerte.

Stowe