We will see in our lifetime USD will lose its value. There is too much of it and there is a real motivation for other players to limit its global currency status. It is a matter of when not if. This motivation occurred after US decided to use USD as a weapon. US shot itself in the foot.
Chinese semiconductor industry
- Thread starter Hendrik_2000
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Indeed. Abandoning the gold standard and relying on other's trust for the value of your money (fiat) is the one move that changes everything. After that, every currency that's pegged to USD basically has no value if the USD lost people's trust. However, the world didn't react too hard to that announcement, because the US wasn't such a fickle jerk back then, at least not to their allies. Now that Trump had opened the eyes and forced the hands of everyone including US allies, that transition from USD might be accelerated beyond critical mass.
I guess what the world would be looking for is one universal currency that everyone can peg to without giving a single national government the ability to print out more of it willy nilly like what the US government is doing with USD through the Feds. That would give the advantage of gold standard without limiting currency printing to the availability of gold. It also would prevent a fickle government's action from jeopardizing the whole world's currency value (looking at you, US).
Aside from that, why are we discussing this on the Chinese semiconductor thread?
AssassinsMace
Lieutenant General
I love this nonsense how if China makes chips on its own, it still has to have the acceptance of the US in order for it to be successful. China is a continent size market. It can survive on the domestic market alone. The only other country that can say that is the US. Every other country that wants to have 1st world standard of living needs to sell to other countries in order to maintain that standard of living. China still has room to grow. The US is a saturated market. That's why overseas markets are more important than ever to US corporations. If the US has the mindset to seek new markets, then they would be looking to develop them. The US only talks about Africa because China is there. Before China no Western country thought about developing new markets because it was too expensive for them. Their governments can only give simple aid. Private corporations aren't developing anything unless they own it. The West talks about Africa now because China built the infrastructure in those very countries they talk about for them to be able to conduct business.
So why is China as they say the engine of the world economy and not the US? It's because China is the one that engages directly with the world economy more than the US. China is the factory of the world because it does all the logistical work for foreign corporations. China builds the factories that foreign corporations don't want to spend their own money on building. China has the shipping fleets that buys the raw materials from around the world that are used to make the products for foreign corporations. I hear Americans think they can take those factories in China back to the US as if they own them. And that's a reason why US corporations are reluctant to leave China because they don't have to pay for those things which they will having to bring those jobs back home or even to another country like Vietnam who don't have shipping fleets to buy their own raw materials from overseas. If Vietnam had to that, they wouldn't be so appealing to foreign corporations to outsource because the costs would skyrocket. They want to eliminate China from the picture and everything in the world will costs more and corporations around the world will go bankrupt. The dummies out there think everyone will still being buying normally. No, when things get more expensive, they will be buying less. That kills profits and then they go bankrupt especially If China is not buying from them in retaliation. That's why don't think the US can order the world not to do business with China. Yes the US plan would work if they thought China would do nothing in retaliation and continued to buy from them normally or more while they boycott China. If their goals were to be achieved, China wouldn't have money to buy anything from them.
Their plans are going to fail and the hurt will blowback on them. That's why it's all a bluff. A game of chicken they think they'll win meaning they hope China blinks first. Pompeo says a meeting with Chinese officials is being planned. Why? If the US was so omnipotent that it can order the world not to do business with China at all, no need to meet since the US has all the power. Is it because Trump is afraid China will take actions that will hurt the US economy and "give assurances" to them so they don't act before the election?
The world is a lot more complicated than the naysayers think.
So why is China as they say the engine of the world economy and not the US? It's because China is the one that engages directly with the world economy more than the US. China is the factory of the world because it does all the logistical work for foreign corporations. China builds the factories that foreign corporations don't want to spend their own money on building. China has the shipping fleets that buys the raw materials from around the world that are used to make the products for foreign corporations. I hear Americans think they can take those factories in China back to the US as if they own them. And that's a reason why US corporations are reluctant to leave China because they don't have to pay for those things which they will having to bring those jobs back home or even to another country like Vietnam who don't have shipping fleets to buy their own raw materials from overseas. If Vietnam had to that, they wouldn't be so appealing to foreign corporations to outsource because the costs would skyrocket. They want to eliminate China from the picture and everything in the world will costs more and corporations around the world will go bankrupt. The dummies out there think everyone will still being buying normally. No, when things get more expensive, they will be buying less. That kills profits and then they go bankrupt especially If China is not buying from them in retaliation. That's why don't think the US can order the world not to do business with China. Yes the US plan would work if they thought China would do nothing in retaliation and continued to buy from them normally or more while they boycott China. If their goals were to be achieved, China wouldn't have money to buy anything from them.
Their plans are going to fail and the hurt will blowback on them. That's why it's all a bluff. A game of chicken they think they'll win meaning they hope China blinks first. Pompeo says a meeting with Chinese officials is being planned. Why? If the US was so omnipotent that it can order the world not to do business with China at all, no need to meet since the US has all the power. Is it because Trump is afraid China will take actions that will hurt the US economy and "give assurances" to them so they don't act before the election?
The world is a lot more complicated than the naysayers think.
AssassinsMace
Lieutenant General
deleted repeated post.
Sounds like FreeGold to me. You may want to check FOFOA out.
John Maynard Keynes also proposed something like this called the BANCOR.
Finally, there are signs that China is preparing for the end of the USD as a global reserve currency. They are accumulating gold in large amounts, have stopped accumulating USTs, and have significantly understated their true gold reserves. In the future, when international trade is cleared in a gold backed BANCOR, the US will have far less ability to sanction countries at will.
Well said. A great summarization with a smooth touch to the global suppy chains. Simply and somehow, eliminating China from the equation (however, unlikely) without a cheaper and immediate alternative -even without a direct response from China- would result with global disorder fueled by class conflicts within the most developed nations which also happens to be the indigenous lands of the Capitalism by definition.
And how does the USA expect to fine companies that do business with Huawei?
Suppose the Chinese banks get added to the list.
They'll retreat from anything US related.
But it forces every other bank in the world to signup to a Chinese-supported currency for international trade purposes.
Remember that China already has a larger consumer retail market (at market exchange rates) than the USA.
And that China is the world's production location.
If European companies have to choose between China or the USA - they will choose China because
a) make more money from China
AND
b)China is their production base.
The same logic applies to companies elsewhere in the world.
The Middle East sells oil and gas to China, and none to the USA.
Samsung is located in South Korea, where China has more economic influence and can apply more military power than the US can.
The logical outcome is that the Samsung CFO chooses to never visit the USA again.
etc etc
The USA placing OFAC and SDN sanction on Chinese banks - means the end of the US Dollar in international trade
I would add commodities such as oil & gas being denominated (and paid for) in USD being a key element as well.
But guess who is largest importer of said commodities?
Guys, I don't want to be the jerk that say this, but we've drifted waaay off topic. Mods, feel free to move the conversation to Chinese economic thread or something similar if you feel the need to do so.
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