EPTThey also still rely heavily on imports and exports, as all modern countries do. If they kill the US dollar, then their exports shrink dramatically and again, people will get poorer. They're still producing far more than they're buying, so they still needs big buyers and none are bigger than Americans.
US Economy: How worried are you?? - Page 8
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Jibba
United States22883 Posts
They also still rely heavily on imports and exports, as all modern countries do. If they kill the US dollar, then their exports shrink dramatically and again, people will get poorer. They're still producing far more than they're buying, so they still needs big buyers and none are bigger than Americans. | ||
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Funchucks
Canada2113 Posts
On July 17 2008 08:54 GeneralStan wrote: An excellent write up. I'd like to pose an alternate reality to you Chinese government nationalizes all holdings in China. Okay, so now they have factories for a lot of third-rate consumer goods, and no customers. gj China Simultaneously they dump their holdings of US Dollars. ...and they lose their savings for a fraction of their value. The Dollar free fall plummets, but the Chinese don't care because they aren't trading with us anymore. They also get more return out of the factories they've just acquired than the loss of the currency. End scenario, begin fantasy. They turn to providing goods to the rest of the planet. Trade sanctions. No first world country would do business with them for a decade after they pull that shit. They do not fear US military retaliation since a) they have tons of factories b) US currency and economic shock prevents the US from assuming a total war stance with any real vigor c) they're all the way across the Pacific ocean, they have one of the worlds top militaries (including a Navy that is consistently closing the gap with ours), and they can outlast US What then? The USA suffers some temporary inconvenience, and China regresses to the economic condition it enjoyed in the 1960s. People really overestimate the power China's dollars give them, to the point of crazy internet conspiracy theory. Even if they dump everything overnight, the main thing that will happen is that they will take a huge loss. Investors would acquire those dollars at a fraction of their value, then store them away as their own savings, and once the dust had settled, it would just have been a huge transfer of wealth away from China to whoever they sold to. It would cause a temporary dip that would mostly hurt their own trade, not a "free fall plummet". And I described earlier in the thread my opinion of what will happen in the USA in the case of catastrophic dollar inflation. I don't think it would be a bad thing at all in the long term. I think it would be no more than a few months of hand-wringing and belt-tightening, followed by a new and superior system of commerce. | ||
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1tym
Korea (South)2425 Posts
Mark my words, this will happen within couple of years if all fails. | ||
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Ecael
United States6703 Posts
While I don't think that the scenario is as good as Funchuck has described it, for China to even think of attacking America in that way is suicide to them. As an economy that has built much on the export of cheap goods and with America as the main trade partner in mind, the scenario you are describing might as well as be described as kamikaze, except America has a much better infrastructure and economic foundation to take the hit with, whereas China is just starting to catch up. You don't start a war of attrition when you don't have an advantage that will play out in the long run. 1tym, because the war in Iraq has stimulated the economy so much, we want another war? | ||
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Funchucks
Canada2113 Posts
Let's start a war. Let's start a nuclear war... At the GAY BAR! GAY BAR! GAY BAR! GAY BAR! I say, girl! Have you got any money? I want to spend all your money... At the GAY BAR! GAY BAR! GAY BAR! GAY BAR! | ||
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Ghost151
United States290 Posts
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Funchucks
Canada2113 Posts
On July 17 2008 10:59 Ghost151 wrote: more worried about the inevitable war with Iran thats right around the corner, personally. Everyday I hear something new about what bullshit they're gonna feed us when it goes down. It's gonna happen. It's gonna happen... At the GAY BAR! GAY BAR! GAY BAR! GAY BAR! | ||
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QuanticHawk
United States32051 Posts
On July 17 2008 10:30 1tym wrote: If the situation gets fatal, it won't be long until will see another war to stimulate the economy. Maybe US will bomb Sanfrancisco Bridge this time and blame Taliban for it? Mark my words, this will happen within couple of years if all fails. http://www.youtube.com/watch?v=3KAQLmDzds8 If I was you, I'd be more worried about Big Brother getting you for exposing their diabolical plans!!!~~!@ | ||
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1tym
Korea (South)2425 Posts
On July 17 2008 10:53 Ecael wrote: While Funchuck's scenario is on the extreme side in terms of the balance of power goes, GeneralStan, yours is another extreme, except it is much farther off from reality. Jibba raised the most obvious and important points, you get away with that when everyone is poor. When you have an emerging middle class and high consuming citizens earning from private industry, the very idea of nationalizing on a scale like that will lead to revolts. While I don't think that the scenario is as good as Funchuck has described it, for China to even think of attacking America in that way is suicide to them. As an economy that has built much on the export of cheap goods and with America as the main trade partner in mind, the scenario you are describing might as well as be described as kamikaze, except America has a much better infrastructure and economic foundation to take the hit with, whereas China is just starting to catch up. You don't start a war of attrition when you don't have an advantage that will play out in the long run. 1tym, because the war in Iraq has stimulated the economy so much, we want another war? Oh yes trust me I don't know about you but US government certainly does. Have you heard about Operation Northwoods? They don't hesitate to sacrifice some of their own in order to achieve what they think is greater purpose. | ||
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Funchucks
Canada2113 Posts
On July 17 2008 11:04 Hawk wrote: If I was you, I'd be more worried about Big Brother getting you for exposing their diabolical plans!!!~~!@ For exposing their diabolical plans... | ||
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jgad
Canada899 Posts
On July 17 2008 07:03 Jibba wrote: Well, I suppose you should look at the other ways they can affect (not fix) the economy, like war for instance. Which of the two is the bigger war hawk and willing to send us out again? Which of the two seems less likely to support the right types of next-gen fuel (not e85)? Or do you think a gas tax will be beneficial at all? I don't think any president is going to have much to do with the oil crisis anymore, unless they open up Alaska. It's up to private investors at this point. From what I've read, Obama has surrounded himself with academics and I'm not sure if that's good or bad, but McCain has surrounded himself with corporate chairs. I'm worried that if the economy does continue to derail, people will blame the president instead of Congress. And to the poster above, we are in a recession. Two quarters of negative growth is not the definition the BEA uses. And the Fed is both public and private. Well, I don't see Obama as being any less of a threat in terms of what wars they may start. Obama talks the language of diplomacy but he doesn't convince me for one minute that he means it. He's not even done campaigning and already he's twisting his previous words and changing his tune on Iraq, nevermind Iran. It's a game of good-cop/bad-cop, and although Obama is playing the role of the good-cop, you'd have to be a fool to think his policy decisions will be anything but in line with the unwavering direction of imperialist US foreign policy that has continued for nearly a century now. It's like Clinton - everyone loved him, but while they were all inspecting his dick for signs of lipstick everyone seemed to miss the fact that he was funding radical Islamic terrorists in Kosovo to fight a proxy war of conquest in the Balkans. Just because the average American is ignorant of this doesn't mean the rest of the world hates the US any less for what they perceive as blatantly obvious acts of aggression - and all under the rule of the "Democratic Saint". Bullshit - Clinton was an imperialst and Obama is one no less. I don't think the president should be "supporting" alternative fuels at all. It's not his job. He doesn't know enough about it and I fully expect that the academics he surrounds himself with also don't know enough about it. Hell, I'm a professional physicist - my job IS working in alternative energy - I make next-gen flexible, polymer solar cells and, at this point, also being keen on keeping up with other technologies in the industry, I don't think it's possible to predict which energy technologies are going to pay off and which won't. How some Great Decider should have better knowledge than the experts is beyond my comprehension. The only difference between Obama and McCain is the intent of their reforms, not the means, and my objection is firmly to their means and not their ends. Obama's support comes because the ends he espouses sound more appealing, but the means he intends to use are no different than those used by previous administrations - namely coercion, collusion with industry, and massive interference in the natural development of things, almost always with results counterproductive to the intended goals. By this I mean to say that typical post-Keynesian logic completely ignores praxeological effects. It works like a chess player who never thinks more than one move ahead - the concept of unintended consequences is practically unknown to these people and their policies, more often than not, have unintended consequences of sufficient magnitude to significantly nullify the positive effects of legislation while causing even more problems in the wake of the political collateral damage. It's like students in France having a bitch of a time to find work because the state decided that employers should not be able to just casually hire and fire employees, but makes it a torturous process to sack a relatively new and unproductive worker. Hire them and you're stuck with them - so nobody hires. Wow. Didn't that help out young people, eh. Or in the UK now young women are finding it very difficult to get work and there are wide reports of recruiters simply binning CVs from women of child-bearing age. This because they are forced to give them paid leave for maternity and nobody wants to hire someone who they will have to support for several years while they raise children. Result? Women go back to the kitchen. Yay progressive government! I could go on - example after example of policies with good intentions and poor judgement f**king up the lives of everyday people on account of some self-righteous god-figure who has the audacity to think that they are intelligent enough and somehow mandated to direct the whole of society. I quote: The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. --Adam Smith As for who to blame, yes the Congress certainly deserves a good dose of it, but neither the President nor the Congress can fuck anything up unless they both agree, and if the Democratic Congress has been any indication of the policies which Obama would pursue, then the forecast is dim indeed. | ||
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jgad
Canada899 Posts
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zatic
Zurich15328 Posts
On July 17 2008 06:23 1tym wrote: I don't understand it when people are saying that we're running out of oil. NO WE'RE NOT. Nobody really says that. What everybody means is we are running out of affordable oil. | ||
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baal
10541 Posts
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jgad
Canada899 Posts
Yes, this is key. Everyone likes to cite the tar sands and very-deep oil, etc, but what everyone seems to forget is that this sort of oil, while plentiful, is very, very expensive to extract. In the good old days of the Texas oil boom, in the first half of the 20th century, a typical oil well had an EROEI (Eneregy Return Over Energy Invested) of about 30 to 1. This means that the well was full and pumping was easy - you had to use about one barrel of oil to run all of the equipment and do all the work of pumping out thirty barrels of oil. Net profit on one barrel of oil would be 29 barrels of oil. This makes that oil very cheap. The easy oil to pump is also the lightest - the high quality sweet crude that is most valuable for making gasoline and other fuels. These days most of those oil wells have run dry - US oil production has been in decline since the 1970s as a result. Most wells these days pump at an EROEI of about 10:1, which means, as above, the net energy return on one barrel of oil is now only about nine barrels instead of twenty nine. This deeper oil tends to be heavier crude as well, which means that it can't produce as much refined fuel as a barrel of light crude. Clearly, it is getting harder to get oil out of the ground and, as a result, the price has to go up - especially in light of skyrocketing demand. Now we consider things like Canada's tar sands and the situation is dire - the EROEI of the tar sands is between 1.5 and maybe 3 to 1, at best, which means the net profit per barrel of oil invested is only about a half to two barrels of oil - not nine and not twenty nine. It's literally squeezing oil out of sand. Imagine trying to do that with water - scoop up huge amounts of sand to squeeze the water out of it. Compare that to pumping it out of a nice, spring fed well - clearly, the former is an act of desperation. Now consider that the oil that comes out of the tar sands is horrible bituminous crap. To even make useful fuel out of it you need to consume huge amounts of natural gas to hydrogenate the excess carbon and that is NOT cheap. The process also consumes huge amounts of water - another commodity soon to be under considerable threat. In all cases, and so long as you continue to extract oil, the EROEI of each individual well continues on a downward trend, each bucket of oil becoming more difficult to extract, until you reach the point where the EROEI becomes less than 1 - at that point you can continue to extract oil from the well but, critically, you must burn more oil to get it out of the ground than you end up with when you're finished. You would start the morning with a barrel of oil, put it into your machines, and run them all day to end up with 80% of a barrel of oil by the end of the shift. This oil well would produce oil, but it would consume more than it produced, so even though the oil is there in the ground there is no way to get it out. I guess the point is, as you say, that all oil is not created equal. We have lots of oil, but it is very labour intensive to extract and is impossible to make anywhere near as cheaply as in the golden days of beautiful light crude just bubbling out of the ground. | ||
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Mannerheim
766 Posts
On July 17 2008 06:23 1tym wrote: I don't understand it when people are saying that we're running out of oil. NO WE'RE NOT. America has not even actively started pumping their own oil yet. Plus Canada and Venezuela possesses sand oil enough to feed the entire continents for decades. They will start outsourcing from 2010 I think. Also we have technology to extract oil from plastic. When people are talking about oil crisis, it's never the extinguishment of oil in next 100 years, it's talking about supply not meeting the demands. So get your facts right. Heh, if you think gas costs are high now, wait until shale oil (which the vast majority of the oil on American soil is, and which is still too expensive to drill and process) is the only type available. It'll be effectively used just to keep the industry going, not for consumers. | ||
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1tym
Korea (South)2425 Posts
On July 17 2008 22:19 Mannerheim wrote: Heh, if you think gas costs are high now, wait until shale oil (which the vast majority of the oil on American soil is, and which is still too expensive to drill and process) is the only type available. It'll be effectively used just to keep the industry going, not for consumers. I never mentioned any cost nor affordability, I stated simple fact that we're not running out of oil, literally. Since you've mentioned it, I believe that demand creates technology. We've come long way with oil production, evolving from primary to secondary to tertiary recovery, aka Enhenced Oil Recovery which could allow up to 30~60% of original oil. Canada and Venezuela alone at the moment posseses tar sand almost equivalent to total conventional crude oil reservoir, not to mention US, EMEA and Russia. Canada's tar sand oil production now takes up about 50% of the entire Canadian oil production. There are talks of Countries like India investing up to 10 billion US dollars in Canadian tar sand industry, and Korea has recently purchased rights to extract 35,000 barrels of oil per day for the next 25 years beginning 2010. Sure there will be initial sturggle and hurdle, but it will only be a matter of time until the whole process stabilizes. Some argue that we have already deployed a system where we can profitably and affordabily extract and distribute oil from the sand. Don't underestimate the power of human technology. | ||
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jgad
Canada899 Posts
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GeneralStan
United States4789 Posts
On July 17 2008 23:53 1tym wrote: I never mentioned any cost nor affordability, I stated simple fact that we're not running out of oil, literally. Since you've mentioned it, I believe that demand creates technology. We've come long way with oil prodcution, evolving from primary to secondary to tertiary recovery, aka Enhenced Oil Recovery which could allow up to 30~60% of original oil. Canada and Venezuela alone at the moment posseses tar sand almost equivalent to total conventional crude oil reservoir, not to mention US, EMEA and Russia. Canada's tar sand oil production now takes up about 50% of the entire Canadian oil production. There are talks of Countries like India investing up to 10 billion US dollars in Canadian tar sand industry, and Korea has recently purchased rights to extract 35,000 barrels of oil per day for the next 25 years beginning 2010. Sure there will be initial sturggle and hurdle, but it will only be a matter of time until the whole process stabilizes. Some argue that we have already deployed a system where we can profitably and affordabily extract and distribute oil from the sand. Don't underestimate the power of human technology. I just don't think its worth the effort or technology to try to squeeze blood from a rock when investing in another form of energy will allow us to do away witht he worry of ever running out of fuel. | ||
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TheosEx
United States894 Posts
Lol. I found that hilarous for some reason. | ||
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