OT: Countdown: Three Weeks to Chaos

[NotCranky]

[quote=partypup]”It has been 5 weeks since
‘Three Weeks to Chaos” has been posted. Can someone describe what the chaos looks like. Everyday seems quite normal.

Is it the 401k thing?”

Yah, it’s the 401(k) thing (or rather, the 201(k) thing). It’s also the pension crash thing; it’s the wildly-gyrating market crash thing; it’s the hedge fund crash thing; it’s the intensifying housing crash thing (am I the only one seeing open houses in the middle of the week now?); it’s the countries-like-Iceland-going-bankrupt thing; it’s the credit seizing thing; it’s the commercial paper crash thing; it’s the employment crash thing; oh, and it’s also the student loan crash thing.

Now, does all that feel like chaos to you? I suppose chaos feels like different things to different people. And I suspect that those of us living in Southern California are experiencing (for the moment) a different slice of reality than those in the Rust Belt, or Detroit, or Manteca. I doubt very seriously that days continue to feel normal for folks in those parts.

The first week of October was the first time the shills openly admitted that we weren’t in Kansas anymore. The world acknowledged that the market is *crashing* — not in one day, but in slow motion. The world shifted entirely three weeks ago.

People now seem to be adjusting to the *new normal*, i.e. wild 500 point swings in the market, trillion dollar bailouts, tens of billions injected on a daily basis. So perhaps things still seem *normal* to you. But if that’s the case, then you are not noticing the seismic movements beneath your feet.

Make no mistake: this thing isn’t coming at us all at once; like a tsunami, it is coming in waves.

The question is, when the next wave hits will you be de-sensitized? Or will you take notice and act accordingly and prepare yourself?

The old adage goes, “Put a frog in boiling water, and he’ll jump out to save his life. But put him in water and gradually turn up the heat, and he’ll die before he knows it.”

Don’t be the frog who gets used to the heat, my friend.[/quote]

Thank you,
Most of things you mention interfere with comfort and prestige, perhaps, but pose no real threat to anything of value. I am surprised you didn’t include recent events in the Congo or along the Pakistan border in your list of evidence of actual and imminent Chaos.

“Chaos in the midst of chaos isn’t funny, but chaos in the midst of order is.”

Steve Martin,

[Arraya]

I think being de-sensitized is not so bad once you’ve prepared yourself. Being hyper-sensitized and in a state of panic is what does the real damage.

Well, jeez, Nos. You assertion the partypup is advocating panic is ridiculous. If you feel that way from reading this thread maybe you should re-examine your own life. This is the old “I’m not going to live in fear” thing I hear so frequently.

Like… um… wouldn’t the only reason to actually “live in fear” be if there were something in our lives that was ongoingly frightening and threatening? And… I’m embarrassed to have to write this… if there’s something ongoingly frightening and threatening in our lives, don’t we actually want to know about it, discuss it and maybe, the gods forbid, respond? Isn’t that what fear is for? And this thread for that matter.

This is like watching a slow moving ever morphing category 5 hurricane making landfall that nobody but a few people are watching. Constant updates and honest discussion are needed.

Maybe you are well prepared and that’s great but many people are not. So if you really feel this thread is detrimental to you mental health which you have alluded, go back to your de-sensitized bubble and pretend everything will blow over.

However, when we begin to look closely at the situation in it’s totality, it becomes very clear, very quickly, that de-sensitizing and wishin’ and hopin’ are about to go the way of the Yangtze River Dolphin in terms of effective life strategies. Which is where most Americans dwell.

[Arraya]

I think being de-sensitized is not so bad once you’ve prepared yourself. Being hyper-sensitized and in a state of panic is what does the real damage.

Well, jeez, Nos. You assertion the partypup is advocating panic is ridiculous. If you feel that way from reading this thread maybe you should re-examine your own life. This is the old “I’m not going to live in fear” thing I hear so frequently.

Like… um… wouldn’t the only reason to actually “live in fear” be if there were something in our lives that was ongoingly frightening and threatening? And… I’m embarrassed to have to write this… if there’s something ongoingly frightening and threatening in our lives, don’t we actually want to know about it, discuss it and maybe, the gods forbid, respond? Isn’t that what fear is for? And this thread for that matter.

This is like watching a slow moving ever morphing category 5 hurricane making landfall that nobody but a few people are watching. Constant updates and honest discussion are needed.

Maybe you are well prepared and that’s great but many people are not. So if you really feel this thread is detrimental to you mental health which you have alluded, go back to your de-sensitized bubble and pretend everything will blow over.

However, when we begin to look closely at the situation in it’s totality, it becomes very clear, very quickly, that de-sensitizing and wishin’ and hopin’ are about to go the way of the Yangtze River Dolphin in terms of effective life strategies. Which is where most Americans dwell.

[Arraya]

I think being de-sensitized is not so bad once you’ve prepared yourself. Being hyper-sensitized and in a state of panic is what does the real damage.

Well, jeez, Nos. You assertion the partypup is advocating panic is ridiculous. If you feel that way from reading this thread maybe you should re-examine your own life. This is the old “I’m not going to live in fear” thing I hear so frequently.

Like… um… wouldn’t the only reason to actually “live in fear” be if there were something in our lives that was ongoingly frightening and threatening? And… I’m embarrassed to have to write this… if there’s something ongoingly frightening and threatening in our lives, don’t we actually want to know about it, discuss it and maybe, the gods forbid, respond? Isn’t that what fear is for? And this thread for that matter.

This is like watching a slow moving ever morphing category 5 hurricane making landfall that nobody but a few people are watching. Constant updates and honest discussion are needed.

Maybe you are well prepared and that’s great but many people are not. So if you really feel this thread is detrimental to you mental health which you have alluded, go back to your de-sensitized bubble and pretend everything will blow over.

However, when we begin to look closely at the situation in it’s totality, it becomes very clear, very quickly, that de-sensitizing and wishin’ and hopin’ are about to go the way of the Yangtze River Dolphin in terms of effective life strategies. Which is where most Americans dwell.

[Arraya]

I think being de-sensitized is not so bad once you’ve prepared yourself. Being hyper-sensitized and in a state of panic is what does the real damage.

Well, jeez, Nos. You assertion the partypup is advocating panic is ridiculous. If you feel that way from reading this thread maybe you should re-examine your own life. This is the old “I’m not going to live in fear” thing I hear so frequently.

Like… um… wouldn’t the only reason to actually “live in fear” be if there were something in our lives that was ongoingly frightening and threatening? And… I’m embarrassed to have to write this… if there’s something ongoingly frightening and threatening in our lives, don’t we actually want to know about it, discuss it and maybe, the gods forbid, respond? Isn’t that what fear is for? And this thread for that matter.

This is like watching a slow moving ever morphing category 5 hurricane making landfall that nobody but a few people are watching. Constant updates and honest discussion are needed.

Maybe you are well prepared and that’s great but many people are not. So if you really feel this thread is detrimental to you mental health which you have alluded, go back to your de-sensitized bubble and pretend everything will blow over.

However, when we begin to look closely at the situation in it’s totality, it becomes very clear, very quickly, that de-sensitizing and wishin’ and hopin’ are about to go the way of the Yangtze River Dolphin in terms of effective life strategies. Which is where most Americans dwell.

[Arraya]

I think being de-sensitized is not so bad once you’ve prepared yourself. Being hyper-sensitized and in a state of panic is what does the real damage.

Well, jeez, Nos. You assertion the partypup is advocating panic is ridiculous. If you feel that way from reading this thread maybe you should re-examine your own life. This is the old “I’m not going to live in fear” thing I hear so frequently.

Like… um… wouldn’t the only reason to actually “live in fear” be if there were something in our lives that was ongoingly frightening and threatening? And… I’m embarrassed to have to write this… if there’s something ongoingly frightening and threatening in our lives, don’t we actually want to know about it, discuss it and maybe, the gods forbid, respond? Isn’t that what fear is for? And this thread for that matter.

This is like watching a slow moving ever morphing category 5 hurricane making landfall that nobody but a few people are watching. Constant updates and honest discussion are needed.

Maybe you are well prepared and that’s great but many people are not. So if you really feel this thread is detrimental to you mental health which you have alluded, go back to your de-sensitized bubble and pretend everything will blow over.

However, when we begin to look closely at the situation in it’s totality, it becomes very clear, very quickly, that de-sensitizing and wishin’ and hopin’ are about to go the way of the Yangtze River Dolphin in terms of effective life strategies. Which is where most Americans dwell.

[Coronita]

[quote=partypup]’BEIJING (Reuters) – The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.”

This is huge, IMO. A, what do you think the chances are that dollar dumping (the kind that would devalue it by 50% or more) could occur in panic mode over a period of weeks, rather than a long, slow dumping over a period of months or years?[/quote]

First off, being out here China right now, a few things….. You have to realize a state run paper typically publishes things like this more out of an PR thing about China’s economy right now relative to everyone else… The press was along the lines of the Euro-Asian Economic summit that was held over that weekend in Beijing, which focused on China’s economy and it’s relation to the rest of the world. (Interestingly, last year European nations were pretty vocal about criticism toward China during the meeting…This time, being that most of those nation’s economy are up a creak, they pretty much just shut up and listened…)
I would venture to say that this is rather more of an editorial comment rather than an official government policy (in the short term at least)

In the short term/middle term, the world economy is too intertwined with U.S. consumers to severe ties with USD or the US economy right now. What the US brings to the table is a pool of consumers that often spend $2 for every $1 they have, and there is no other pool of consumers in the rest of the world that can substitute that in the short term.

Second, one thing that came out of the euro/asia economic meeting is that China is attempting to establish a more diverse consumer base among other nations and domestically, to mitigate a dependency on one set of consumer basis in the future. BUT, this is going to be a long, gradual transition. It consists of a two prong approach.

It described during this summit meeting that china’s short term economic strategy is to use is huge capital reserves to raise the living of the more rural/peasant population. The plan calls for GDP growth during this global economic crisis through work/jobs in building out domestic infrastructure in the rural areas, and to raise the standard of living for those areas. Apparently, the strategy is to turn China’s large population into a large consumer base over time, such that internal consumption can drive a good portion of China’s economy, along with consumption from europe and asia.

In the short/middle term though, China, rest of Asia, and Europe knows they are heavily dependent on US consumers to power their own economy.. They any drastic measure from such nations (such as dumping US treasuries, or a rejection of the USD) is only going to be self-defeating in the short/mid term.

Folks that routinely do business with the US (directly/indirectly) realize this. For example, a few friends that I’m meeting here that run export businesses are getting hit, not necessarily with reduced consumption by US, but also in Taiwan, Europe, and other parts of Asia. It’s an intertwined food chain, and goes like this. Business X in China that sells to consumers/businesses Y in Taiwan are seeing slowdowns because Taiwan business Y that sold to a much larger business/consumer base in the US had to cut back. Hence the domino effect of a pyramid with the US at the bottom of the pyramid (ironic, isn’t it?). Despite the rest of the world wanting to be less dependent on US, there currently is no other larger consumer base than US.

In sort of the world stage, the analogy is between drug dealers and junkies. U.S. consumers are junkies for the drug dealers of the world. The dealers can’t really say they don’t need the junkies. And if they want to get rid of their current junkies, they’ll need to find junkies elsewhere that are more inclined to pay them the same for their stuff. Currently, there is no larger population of junkies than ours…

Now if China over the next decade is able to provide that huge consumer base from it’s now peasant/rural class, then that’s a considerable different game, purely just on the fact of China’s enormous population and market opportunity for commerce.
BUT, even so, it remains to be seen if China’s population can match the consumption levels of U.S. consumers in a decade+. Culturally, this may be a challenge, because culturally, concepts such as buying things on “credit” and “having bad(non-investment based) debt” is the antithesis of tradition. It’s gonna be hard to get folks to starting thinking in terms of “layaway” or “buy now, pay later”….But that remains to be seen.

—-

Tongue and cheek, I was thinking a short term fix would be for the European and Asian nations to pool together a $1 trillion economic stimulus package and give it to the U.S. consumers directly.

Because, when it’s all said and done, most likely, they’ll get close to $1.5 trillion worth back from our consumption, since overall, we’ll probably spend more than we get. Then when the effects wear off, they should then take that $1.5 trillion they get back, and put it into next year’s economic stimulus package for U.S. consumers. By the end of next year, we’ll have sent $2 trillion back post consumption.

To fund this bailout, they could even package the bailout package as a “high grade investment bond” and sell it to our pension and 401k plans 🙂

[Coronita]

[quote=partypup]’BEIJING (Reuters) – The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.”

This is huge, IMO. A, what do you think the chances are that dollar dumping (the kind that would devalue it by 50% or more) could occur in panic mode over a period of weeks, rather than a long, slow dumping over a period of months or years?[/quote]

First off, being out here China right now, a few things….. You have to realize a state run paper typically publishes things like this more out of an PR thing about China’s economy right now relative to everyone else… The press was along the lines of the Euro-Asian Economic summit that was held over that weekend in Beijing, which focused on China’s economy and it’s relation to the rest of the world. (Interestingly, last year European nations were pretty vocal about criticism toward China during the meeting…This time, being that most of those nation’s economy are up a creak, they pretty much just shut up and listened…)
I would venture to say that this is rather more of an editorial comment rather than an official government policy (in the short term at least)

In the short term/middle term, the world economy is too intertwined with U.S. consumers to severe ties with USD or the US economy right now. What the US brings to the table is a pool of consumers that often spend $2 for every $1 they have, and there is no other pool of consumers in the rest of the world that can substitute that in the short term.

Second, one thing that came out of the euro/asia economic meeting is that China is attempting to establish a more diverse consumer base among other nations and domestically, to mitigate a dependency on one set of consumer basis in the future. BUT, this is going to be a long, gradual transition. It consists of a two prong approach.

It described during this summit meeting that china’s short term economic strategy is to use is huge capital reserves to raise the living of the more rural/peasant population. The plan calls for GDP growth during this global economic crisis through work/jobs in building out domestic infrastructure in the rural areas, and to raise the standard of living for those areas. Apparently, the strategy is to turn China’s large population into a large consumer base over time, such that internal consumption can drive a good portion of China’s economy, along with consumption from europe and asia.

In the short/middle term though, China, rest of Asia, and Europe knows they are heavily dependent on US consumers to power their own economy.. They any drastic measure from such nations (such as dumping US treasuries, or a rejection of the USD) is only going to be self-defeating in the short/mid term.

Folks that routinely do business with the US (directly/indirectly) realize this. For example, a few friends that I’m meeting here that run export businesses are getting hit, not necessarily with reduced consumption by US, but also in Taiwan, Europe, and other parts of Asia. It’s an intertwined food chain, and goes like this. Business X in China that sells to consumers/businesses Y in Taiwan are seeing slowdowns because Taiwan business Y that sold to a much larger business/consumer base in the US had to cut back. Hence the domino effect of a pyramid with the US at the bottom of the pyramid (ironic, isn’t it?). Despite the rest of the world wanting to be less dependent on US, there currently is no other larger consumer base than US.

In sort of the world stage, the analogy is between drug dealers and junkies. U.S. consumers are junkies for the drug dealers of the world. The dealers can’t really say they don’t need the junkies. And if they want to get rid of their current junkies, they’ll need to find junkies elsewhere that are more inclined to pay them the same for their stuff. Currently, there is no larger population of junkies than ours…

Now if China over the next decade is able to provide that huge consumer base from it’s now peasant/rural class, then that’s a considerable different game, purely just on the fact of China’s enormous population and market opportunity for commerce.
BUT, even so, it remains to be seen if China’s population can match the consumption levels of U.S. consumers in a decade+. Culturally, this may be a challenge, because culturally, concepts such as buying things on “credit” and “having bad(non-investment based) debt” is the antithesis of tradition. It’s gonna be hard to get folks to starting thinking in terms of “layaway” or “buy now, pay later”….But that remains to be seen.

—-

Tongue and cheek, I was thinking a short term fix would be for the European and Asian nations to pool together a $1 trillion economic stimulus package and give it to the U.S. consumers directly.

Because, when it’s all said and done, most likely, they’ll get close to $1.5 trillion worth back from our consumption, since overall, we’ll probably spend more than we get. Then when the effects wear off, they should then take that $1.5 trillion they get back, and put it into next year’s economic stimulus package for U.S. consumers. By the end of next year, we’ll have sent $2 trillion back post consumption.

To fund this bailout, they could even package the bailout package as a “high grade investment bond” and sell it to our pension and 401k plans 🙂

[Coronita]

[quote=partypup]’BEIJING (Reuters) – The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.”

This is huge, IMO. A, what do you think the chances are that dollar dumping (the kind that would devalue it by 50% or more) could occur in panic mode over a period of weeks, rather than a long, slow dumping over a period of months or years?[/quote]

First off, being out here China right now, a few things….. You have to realize a state run paper typically publishes things like this more out of an PR thing about China’s economy right now relative to everyone else… The press was along the lines of the Euro-Asian Economic summit that was held over that weekend in Beijing, which focused on China’s economy and it’s relation to the rest of the world. (Interestingly, last year European nations were pretty vocal about criticism toward China during the meeting…This time, being that most of those nation’s economy are up a creak, they pretty much just shut up and listened…)
I would venture to say that this is rather more of an editorial comment rather than an official government policy (in the short term at least)

In the short term/middle term, the world economy is too intertwined with U.S. consumers to severe ties with USD or the US economy right now. What the US brings to the table is a pool of consumers that often spend $2 for every $1 they have, and there is no other pool of consumers in the rest of the world that can substitute that in the short term.

Second, one thing that came out of the euro/asia economic meeting is that China is attempting to establish a more diverse consumer base among other nations and domestically, to mitigate a dependency on one set of consumer basis in the future. BUT, this is going to be a long, gradual transition. It consists of a two prong approach.

It described during this summit meeting that china’s short term economic strategy is to use is huge capital reserves to raise the living of the more rural/peasant population. The plan calls for GDP growth during this global economic crisis through work/jobs in building out domestic infrastructure in the rural areas, and to raise the standard of living for those areas. Apparently, the strategy is to turn China’s large population into a large consumer base over time, such that internal consumption can drive a good portion of China’s economy, along with consumption from europe and asia.

In the short/middle term though, China, rest of Asia, and Europe knows they are heavily dependent on US consumers to power their own economy.. They any drastic measure from such nations (such as dumping US treasuries, or a rejection of the USD) is only going to be self-defeating in the short/mid term.

Folks that routinely do business with the US (directly/indirectly) realize this. For example, a few friends that I’m meeting here that run export businesses are getting hit, not necessarily with reduced consumption by US, but also in Taiwan, Europe, and other parts of Asia. It’s an intertwined food chain, and goes like this. Business X in China that sells to consumers/businesses Y in Taiwan are seeing slowdowns because Taiwan business Y that sold to a much larger business/consumer base in the US had to cut back. Hence the domino effect of a pyramid with the US at the bottom of the pyramid (ironic, isn’t it?). Despite the rest of the world wanting to be less dependent on US, there currently is no other larger consumer base than US.

In sort of the world stage, the analogy is between drug dealers and junkies. U.S. consumers are junkies for the drug dealers of the world. The dealers can’t really say they don’t need the junkies. And if they want to get rid of their current junkies, they’ll need to find junkies elsewhere that are more inclined to pay them the same for their stuff. Currently, there is no larger population of junkies than ours…

Now if China over the next decade is able to provide that huge consumer base from it’s now peasant/rural class, then that’s a considerable different game, purely just on the fact of China’s enormous population and market opportunity for commerce.
BUT, even so, it remains to be seen if China’s population can match the consumption levels of U.S. consumers in a decade+. Culturally, this may be a challenge, because culturally, concepts such as buying things on “credit” and “having bad(non-investment based) debt” is the antithesis of tradition. It’s gonna be hard to get folks to starting thinking in terms of “layaway” or “buy now, pay later”….But that remains to be seen.

—-

Tongue and cheek, I was thinking a short term fix would be for the European and Asian nations to pool together a $1 trillion economic stimulus package and give it to the U.S. consumers directly.

Because, when it’s all said and done, most likely, they’ll get close to $1.5 trillion worth back from our consumption, since overall, we’ll probably spend more than we get. Then when the effects wear off, they should then take that $1.5 trillion they get back, and put it into next year’s economic stimulus package for U.S. consumers. By the end of next year, we’ll have sent $2 trillion back post consumption.

To fund this bailout, they could even package the bailout package as a “high grade investment bond” and sell it to our pension and 401k plans 🙂

[Coronita]

[quote=partypup]’BEIJING (Reuters) – The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.”

This is huge, IMO. A, what do you think the chances are that dollar dumping (the kind that would devalue it by 50% or more) could occur in panic mode over a period of weeks, rather than a long, slow dumping over a period of months or years?[/quote]

First off, being out here China right now, a few things….. You have to realize a state run paper typically publishes things like this more out of an PR thing about China’s economy right now relative to everyone else… The press was along the lines of the Euro-Asian Economic summit that was held over that weekend in Beijing, which focused on China’s economy and it’s relation to the rest of the world. (Interestingly, last year European nations were pretty vocal about criticism toward China during the meeting…This time, being that most of those nation’s economy are up a creak, they pretty much just shut up and listened…)
I would venture to say that this is rather more of an editorial comment rather than an official government policy (in the short term at least)

In the short term/middle term, the world economy is too intertwined with U.S. consumers to severe ties with USD or the US economy right now. What the US brings to the table is a pool of consumers that often spend $2 for every $1 they have, and there is no other pool of consumers in the rest of the world that can substitute that in the short term.

Second, one thing that came out of the euro/asia economic meeting is that China is attempting to establish a more diverse consumer base among other nations and domestically, to mitigate a dependency on one set of consumer basis in the future. BUT, this is going to be a long, gradual transition. It consists of a two prong approach.

It described during this summit meeting that china’s short term economic strategy is to use is huge capital reserves to raise the living of the more rural/peasant population. The plan calls for GDP growth during this global economic crisis through work/jobs in building out domestic infrastructure in the rural areas, and to raise the standard of living for those areas. Apparently, the strategy is to turn China’s large population into a large consumer base over time, such that internal consumption can drive a good portion of China’s economy, along with consumption from europe and asia.

In the short/middle term though, China, rest of Asia, and Europe knows they are heavily dependent on US consumers to power their own economy.. They any drastic measure from such nations (such as dumping US treasuries, or a rejection of the USD) is only going to be self-defeating in the short/mid term.

Folks that routinely do business with the US (directly/indirectly) realize this. For example, a few friends that I’m meeting here that run export businesses are getting hit, not necessarily with reduced consumption by US, but also in Taiwan, Europe, and other parts of Asia. It’s an intertwined food chain, and goes like this. Business X in China that sells to consumers/businesses Y in Taiwan are seeing slowdowns because Taiwan business Y that sold to a much larger business/consumer base in the US had to cut back. Hence the domino effect of a pyramid with the US at the bottom of the pyramid (ironic, isn’t it?). Despite the rest of the world wanting to be less dependent on US, there currently is no other larger consumer base than US.

In sort of the world stage, the analogy is between drug dealers and junkies. U.S. consumers are junkies for the drug dealers of the world. The dealers can’t really say they don’t need the junkies. And if they want to get rid of their current junkies, they’ll need to find junkies elsewhere that are more inclined to pay them the same for their stuff. Currently, there is no larger population of junkies than ours…

Now if China over the next decade is able to provide that huge consumer base from it’s now peasant/rural class, then that’s a considerable different game, purely just on the fact of China’s enormous population and market opportunity for commerce.
BUT, even so, it remains to be seen if China’s population can match the consumption levels of U.S. consumers in a decade+. Culturally, this may be a challenge, because culturally, concepts such as buying things on “credit” and “having bad(non-investment based) debt” is the antithesis of tradition. It’s gonna be hard to get folks to starting thinking in terms of “layaway” or “buy now, pay later”….But that remains to be seen.

—-

Tongue and cheek, I was thinking a short term fix would be for the European and Asian nations to pool together a $1 trillion economic stimulus package and give it to the U.S. consumers directly.

Because, when it’s all said and done, most likely, they’ll get close to $1.5 trillion worth back from our consumption, since overall, we’ll probably spend more than we get. Then when the effects wear off, they should then take that $1.5 trillion they get back, and put it into next year’s economic stimulus package for U.S. consumers. By the end of next year, we’ll have sent $2 trillion back post consumption.

To fund this bailout, they could even package the bailout package as a “high grade investment bond” and sell it to our pension and 401k plans 🙂

[Coronita]

[quote=partypup]’BEIJING (Reuters) – The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People’s Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.”

This is huge, IMO. A, what do you think the chances are that dollar dumping (the kind that would devalue it by 50% or more) could occur in panic mode over a period of weeks, rather than a long, slow dumping over a period of months or years?[/quote]

First off, being out here China right now, a few things….. You have to realize a state run paper typically publishes things like this more out of an PR thing about China’s economy right now relative to everyone else… The press was along the lines of the Euro-Asian Economic summit that was held over that weekend in Beijing, which focused on China’s economy and it’s relation to the rest of the world. (Interestingly, last year European nations were pretty vocal about criticism toward China during the meeting…This time, being that most of those nation’s economy are up a creak, they pretty much just shut up and listened…)
I would venture to say that this is rather more of an editorial comment rather than an official government policy (in the short term at least)

In the short term/middle term, the world economy is too intertwined with U.S. consumers to severe ties with USD or the US economy right now. What the US brings to the table is a pool of consumers that often spend $2 for every $1 they have, and there is no other pool of consumers in the rest of the world that can substitute that in the short term.

Second, one thing that came out of the euro/asia economic meeting is that China is attempting to establish a more diverse consumer base among other nations and domestically, to mitigate a dependency on one set of consumer basis in the future. BUT, this is going to be a long, gradual transition. It consists of a two prong approach.

It described during this summit meeting that china’s short term economic strategy is to use is huge capital reserves to raise the living of the more rural/peasant population. The plan calls for GDP growth during this global economic crisis through work/jobs in building out domestic infrastructure in the rural areas, and to raise the standard of living for those areas. Apparently, the strategy is to turn China’s large population into a large consumer base over time, such that internal consumption can drive a good portion of China’s economy, along with consumption from europe and asia.

In the short/middle term though, China, rest of Asia, and Europe knows they are heavily dependent on US consumers to power their own economy.. They any drastic measure from such nations (such as dumping US treasuries, or a rejection of the USD) is only going to be self-defeating in the short/mid term.

Folks that routinely do business with the US (directly/indirectly) realize this. For example, a few friends that I’m meeting here that run export businesses are getting hit, not necessarily with reduced consumption by US, but also in Taiwan, Europe, and other parts of Asia. It’s an intertwined food chain, and goes like this. Business X in China that sells to consumers/businesses Y in Taiwan are seeing slowdowns because Taiwan business Y that sold to a much larger business/consumer base in the US had to cut back. Hence the domino effect of a pyramid with the US at the bottom of the pyramid (ironic, isn’t it?). Despite the rest of the world wanting to be less dependent on US, there currently is no other larger consumer base than US.

In sort of the world stage, the analogy is between drug dealers and junkies. U.S. consumers are junkies for the drug dealers of the world. The dealers can’t really say they don’t need the junkies. And if they want to get rid of their current junkies, they’ll need to find junkies elsewhere that are more inclined to pay them the same for their stuff. Currently, there is no larger population of junkies than ours…

Now if China over the next decade is able to provide that huge consumer base from it’s now peasant/rural class, then that’s a considerable different game, purely just on the fact of China’s enormous population and market opportunity for commerce.
BUT, even so, it remains to be seen if China’s population can match the consumption levels of U.S. consumers in a decade+. Culturally, this may be a challenge, because culturally, concepts such as buying things on “credit” and “having bad(non-investment based) debt” is the antithesis of tradition. It’s gonna be hard to get folks to starting thinking in terms of “layaway” or “buy now, pay later”….But that remains to be seen.

—-

Tongue and cheek, I was thinking a short term fix would be for the European and Asian nations to pool together a $1 trillion economic stimulus package and give it to the U.S. consumers directly.

Because, when it’s all said and done, most likely, they’ll get close to $1.5 trillion worth back from our consumption, since overall, we’ll probably spend more than we get. Then when the effects wear off, they should then take that $1.5 trillion they get back, and put it into next year’s economic stimulus package for U.S. consumers. By the end of next year, we’ll have sent $2 trillion back post consumption.

To fund this bailout, they could even package the bailout package as a “high grade investment bond” and sell it to our pension and 401k plans 🙂

[sd_bear]

[quote=partypup]”I guess that means I should stop contributing to my retirement.

Also, does this apply to my dog as well? Or should I leave a lot of food and water out for him when I make the transition and leave him behind?”

If you are still on the fence about continuing to contribute to your *retirement*, in the face of all that is going on around us, then my guess is that your dog is much more equipped to make the transition than you are.

You may very well be the one who is left behind.[/quote]

I can still contribute without putting it into stocks. As I stopped doing long ago.

[sd_bear]

[quote=partypup]”I guess that means I should stop contributing to my retirement.

Also, does this apply to my dog as well? Or should I leave a lot of food and water out for him when I make the transition and leave him behind?”

If you are still on the fence about continuing to contribute to your *retirement*, in the face of all that is going on around us, then my guess is that your dog is much more equipped to make the transition than you are.

You may very well be the one who is left behind.[/quote]

I can still contribute without putting it into stocks. As I stopped doing long ago.

[sd_bear]

[quote=partypup]”I guess that means I should stop contributing to my retirement.

Also, does this apply to my dog as well? Or should I leave a lot of food and water out for him when I make the transition and leave him behind?”

If you are still on the fence about continuing to contribute to your *retirement*, in the face of all that is going on around us, then my guess is that your dog is much more equipped to make the transition than you are.

You may very well be the one who is left behind.[/quote]

I can still contribute without putting it into stocks. As I stopped doing long ago.

[sd_bear]

[quote=partypup]”I guess that means I should stop contributing to my retirement.

Also, does this apply to my dog as well? Or should I leave a lot of food and water out for him when I make the transition and leave him behind?”

If you are still on the fence about continuing to contribute to your *retirement*, in the face of all that is going on around us, then my guess is that your dog is much more equipped to make the transition than you are.

You may very well be the one who is left behind.[/quote]

I can still contribute without putting it into stocks. As I stopped doing long ago.

[Author]

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