BREAKING: CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!
December 15
BEIJING, CHINA. -- Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China's Currency Reserves and convert those funds into Euros!
China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.
According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:
1) The Federal Reserve Bank ceased publishing "M3" data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.
2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.
3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.
For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; "we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts."
Early this week, in an unusual move, the Bush administration sent virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.
The Bush administration wanted to get China's cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.
According to the source, Fed Chairman Bernanke left the meeting "pale and in a cold sweat" as the implications of China's decision seemed to sink in.
The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.
This would cause a worldwide sell-off of dollars, create almost immediate "hyper-inflation" in the US and also impact world markets at a level "worse than the Great Depression of 1929."
Arabs to the rescue?
In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!
Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they "would not be inclined to sell oil to any particular nation that intentionally caused such a collapse."
This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.
The OPEC officials even went so far as to say "Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off."
Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .
Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.
If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
UPDATE 10:18 PM:
The Washington Post confirms. . . .
"U.S., China Clash On Currency" Click Here
-- ---------------------------------
UPDATE 12:07 AM EST, Saturday, December 16, 2006:
Additional sources, one in the U.S. Commerce Department and another in the US Treasury have confirmed the initial report above and referred me to another, Third, source in the Pentagon.
Both the Commerce and Treasury Sources report that while China will not be able to simply trade their Dollars for other paper currencies, they will spend their U.S. Cash on commodities such as gold, silver and Rhodoium as well as military hardware; ships and planes, placing large orders and paying for those orders with the one point one trillion in cash dollars they possess.
Extreme Military Concern
In speaking with the contact at the Pentagon, I am able to now report the Pentagon views this currency-killing as a cunning military aspect to Chinese plans:
The Pentagon says that while China has a 2 Million man army, they lack the logistics and heavy lift capability to move that army and supply it. They can, however, get that military to South Korea and to Japan.
The Chinese see that the U.S. Military is over-stretched and almost exhausted by its globe trotting Commander-In-Chief. They feel that by intentionally destabilizing the dollar, the U.S. economy will fail, putting tens of millions of Americans on the unemployment line and putting unbearable pressure on the US Government.
Then, with the U.S. economy in shambles and its manufacturing base eroded by a steady stream of manufacturing plants moving out of the US., the American government will be too occupied with troubles at home to do much internationally. America will be in no position to challenge China, allowing the Chinese to act militarily elsewhere in the world;
Further, if the U.S. attempted to intervene against any Chinese military action, the only plant in the world which can manufacture the specialized gyros needed for U.S. Cruise Missile guidance systems, is now located in. . . . .China.
China could prevent that plant from shipping to the U.S., and once our arsenal of cruise missiles was depleted, it would take a long time to re-tool a plant to make more gyros and resupply cruise missiles for battle. The Chinese feel they could accomplish certain military goals before the U.S. could re-tool.
They are also confident the U.S. will never "go nuclear" as long as the U.S. itself is not attacked.
The Pentagon source went so far as to say "Even if China was to lose the entire one trillion in cash to a collapse of the Dollar as a currency, they will have succeeded in taking the U.S. off the world stage as any type of effective military or economic power -- without firing a shot!" A 'classic' Sun Tzu paradigm of victory - the art of fighting, without fighting.
The crippling of the US is a highly desirable military benefit for China at a relatively cheap price since it will leave their human capital and infrastructure assets in place; assets they know they would lose if a hot war erupted with the U.S..
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
Another update!
U.S. lawmakers urge action after China meeting
By Doug Palmer
Reuters
Friday, December 15, 2006; 5:22 PM
WASHINGTON (Reuters) - Lawmakers on Friday urged the U.S. and Chinese governments to follow two days of high-level talks on trade and economic concerns with concrete action.
"Dialogue and action must go hand-in-hand. For example, greater flexibility for China's currency is overdue. Postponing further reform not only endangers our bilateral economic relationship, but also put's China's prosperity at risk," incoming Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said in a statement.
The U.S. trade deficit with China could reach a record $240 billion this year, fueling the belief in Congress that Beijing is deliberately undervaluing its currency by 15 to 40 percent to give Chinese exporters an advantage in world trade.
U.S. Treasury Secretary Henry Paulson told reporters the two countries had agreed during the meetings in Beijing to bring more balance to the U.S.-China trade relationship.
U.S. officials also told their Chinese counterparts "in the clearest possible terms" that China needs to move toward a more flexible currency exchange rate policy, Paulson said.
But Sen. Charles Schumer, a New York Democrat who is one of China's harshest critics in Congress, said he expected Beijing to continue dragging its feet on much-needed reform.
"Every few years, with a lot of fanfare, the Chinese say they will begin a new round of serious discussions and drag the process out for a long time. At best, we end up with crumbs. The Chinese economy is advanced and sophisticated enough that they could start playing by the rules right away if they really wanted to," Schumer said.
While Baucus and Schumer focused their remarks on the need for China to act on U.S. trade concerns, Rep. Sander Levin, a Michigan Democrat, said Congress and the Bush administration need to take several steps.
Democrats will again ask the U.S. Trade Representative's office to formally challenge China's currency practices at the World Trade Organization even though USTR has rejected that request a number times in the past, Levin said.
Lawmakers will also reintroduce legislation requiring the Commerce Department to consider China's "currency manipulation" as a subsidy under U.S. trade laws so companies can apply for countervailing duties to offset it, Levin said.
Levin also urged the Treasury Department to formally label China as a currency manipulator in a semiannual report that is now two months overdue.
Many U.S. financial services group applauded this week's talks as an important step forward to Chinese reform, but some other industry associations were less impressed.
Kevin Kearns, president of the U.S. Industry and Business Council, said Paulson and a U.S. delegation that included Federal Reserve Chairman Ben Bernanke and U.S. Trade Representative Susan Schwab were "content to engage in idle diplomatic chitchat" when stronger action was needed.
"Since the Bush administration won't respond effectively to China's currency manipulation, illegal subsidies, intellectual property theft and other transgressions, Congress needs to seize control over China's trade policy," Kearns said.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
Probably the best example I have yet seen that wars with weapons of destruction are no longer effective. War fare has shifted from guns to currency. China has demonstrated that economics is much more powerfull than nuclear weapons or terroristic bombs.
The face of war has changed and China mastered the weapons to use.
U.S. is in imminent danger of Banana Republic style hyperinflation
U.S. is in imminent danger of Banana Republic style hyperinflation
"Highly placed sources in banking and business circles in Europe and South America warn that unless the U.S. government moves quickly to control the spending which is ballooning its deficit, America is in imminent danger of South American Banana Republic style hyperinflation." ---Jack Anderson
Foreword: The many parallels between 1924 Germany and present-day United States are cause for concern. We have not yet reached the depths to which Germany descended in that era, but few can look at the constant depreciation of the dollar since the early 1970's and fail to be alarmed. It seems we differ from 1924 Germany only in the duration between cause and effect. While the German experience was compressed over a few short years, ours has been more protracted. I think this has occurred for two good reasons: First, American central bankers have learned enough from the German experience to delay and extend the consequences of printing too much fiat money. Second, Germany was a small state isolated from the rest of the world --- a pariah nation of sorts --- and, as a result, it had a difficult time finding a market for its government bonds. German deficits had to be financed internally --- an impossibility which greatly accelerated the printing of fiat currency.
Up until recently, the United States enjoyed a strong world-wide demand for its government bonds, so the negative affects of government deficits were subdued. But now low interest rates, and a growing fear among G-7 nations that U.S. deficits are out of control, has greatly curtailed foreign bond purchases. The Fed has been forced to monetize an ever larger portion of the debt as a result. This is the modern equivalent of "printing money". Whether or not we are out of control seems to be a matter for debate. The trend, however, is alarming. The largest deficit during the Nixon years was $ 23.4 billion; Ford --- $ 73.7 billion; Reagan --- $221.2 billion; Bush --- $290 billion; Clinton --- $350 billion. This, to say the least, is a frightening progression.
As this report points out, the correlation between deficits and inflation is sacrosanct ---deficits lead to inflation and uncontrolled deficits lead to uncontrolled inflation. Whether or not there will be a Nightmare American Inflation remains to be seen. Let it be said though that the trend is not favorable. The survivors of the German debacle did so by purchasing gold and rare coins early in the process. As a citizen and an investor, the best you can do is prepare, and then hope against hope that it doesn't happen here. This report of Germany's hyperinflation, originally published in 1970 by Scientific Market Analysis, could play an important part in that preparation process. There is little doubt it will affect your thinking. ---MK
Introduction
If history teaches anything, it is that government cannot be trusted to manage money. When currency is not redeemable in gold, its value depends entirely on the judgment and the conscience of the politicians. (That is the situation in this country today.)
Especially in an economic crisis or a war, the pressure to inflate becomes overwhelming. Any alternative may seem politically disastrous. Whether it be the Roman emperors repeatedly debasing their coinage, the French revolutionary government printing a flood of assignats, John Law flooding France with debased money, or the Continental Congress issuing money until it was literally "not worth a Continental," the story is similar. A government in financial straits finds its easiest recourse is to issue more and more money until the money loses its value. The entire process is accompanied by a barrage of explanations, propaganda and new regulations which hide the true situation from the eyes of most people until they have lost all their savings. In World War I, Germany--like other governments--borrowed heavily to pay its war costs. This led to inflation, but not much more than in the U.S. during the same period. After the war there was a period of stability, but then the inflation resumed. By 1923, the wildest inflation in history was raging. Often prices doubled in a few hours. A wild stampede developed to buy goods and get rid of money. By late 1923 it took 200 billion marks to buy a loaf of bread.
Millions of the hard-working, thrifty German people found that their life's savings would not buy a postage stamp. They were penniless. How could this happen in a highly civilized nation run at the time by intelligent, democratically chosen leaders? What happened to business, to wages and employment? How did some people manage to save their capital while a few speculators made fortunes?
The Years 1914-1921
When the war broke out on July 31, 1914, the Reichsbank (German Central Bank) suspended redeemability of its notes in gold. After that there was no legal limit as to how many notes it could print. The government did not want to upset people with heavy taxes. Instead it borrowed huge amounts of money which were to be paid by the enemy after Germany had won the war, Much of the borrowing was discounted and monetized by the Reichsbank. As explained later, this amounted to issuing straight printing press money.
By the end of the war, the amount of money in circulation had increased four-fold. In view of this, the extent of inflation was less than one might have expected. The consumer price index had risen 140% by December 1918. This was equal to the inflation during the same time in England, a little more than in the United States, but less than in France. Yet the floating debt of the Reichsbank had increased from 3 billion to 55 billion marks!
Why was inflation kept within bounds? For the same reason that it got off to a slow start in the Unites States during World War II. Necessities were rationed and luxury goods were not easily available. Millions of men were at the front and not in the market for goods. Civilians worked hard and had little leisure for spending. People saved money against peace time, and in some cases to evade taxes. But the fuel for inflation was accumulating in the form of vast hoards of money.
The harsh reparation payments imposed on Germany led the mark to depreciate against foreign currencies. Also, the new democratic socialist leaders had promised the people all types of bounties--increased wages, reduced hours, an expanded educational system, and new social benefits. But all this meant a vastly increased demand on a limited production capacity.
For these reasons inflation resumed after the peace until by February 1920 the price level was five times as high as it had been at the armistice. Yet during this same time the amount of currency in circulation had only doubled. Prices were in fact rising much faster than the rate at which money was being printed. Therefore, reasoned the officials, the price inflation could hardly be blamed on the government. Actually, as we shall see, the ebb and flow of confidence can play a big role in the short-term trend of prices. Confidence in the mark had weakened. At the same time, and as a consequence, billions of hoarded marks came out of hiding and entered the marketplace. The accumulated fuel was burning.
By February 1920 this inflationary episode had run its course. For the next fifteen months the price index held stable. The mark actually gained in value against foreign currencies, so that prices of imported goods fell by some 50%. Here was a golden opportunity to establish a stable currency. However, during these fifteen months the government kept issuing new money. The currency in circulation increased by 50% and the floating debt of the Reichsbank by 100%, providing fuel for a new outbreak.
In May 1921, price inflation started again and by July 1922 prices had risen 700%. The Reichsbank continued printing new currency, although more slowly than the rate at which prices were rising. In fact, all through this period the issue of currency proceeded at a fairly smooth steady rate, while the price index moved up in great surges, interspersed by periods of stability.
After July 1922 the phase of hyperinflation began. All confidence in money vanished and the price index rose faster and faster for fifteen months, outpacing the printing presses which could not run out money as fast as it was depreciating.
Wholesale Price Index
July 1914
1.0
Jan 1919
2.6
July 1919
3.4
Jan 1920
12.6
Jan 1921
14.4
July 1921
14.3
Jan 1922
36.7
July 1922
100.6
Jan 1923
2,785.0
July 1923
194,000.0
Nov 1923
726,000,000,000.0
The Years 1922-1923 -- Hyperinflation!
From Mid-1922 to November 1923 hyperinflation raged. The table above tells the story. Seemingly Reichsbank officials believed that the basic trouble was the depreciation of the mark in terms of foreign currencies. In late 1922 they tried to support the mark by purchasing it in the foreign exchange markets. However, since they continued printing new currency at a feverish rate, the attempt failed. They merely succeeded in buying worthless marks in return for valuable gold and foreign exchange.
All hope of checking the collapse of the mark vanished in January 1923 when the French--alleging treaty violations--occupied Germany's key industrial district, the Ruhr. Germany subsidized the occupied companies and financed an expensive program of "passive resistance." New billions of marks were printing to finance these heavy new costs. By late 1923, 300 paper mills were working top speed and 150 printing companies had 2000 presses going day and night turning out currency.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
format_quote Originally Posted by Pygoscelis
All this talk of China operating with the US dollar and Euro. What of Chinese currency?
The Chinese currency does not need to have any value if they use either the Dollar of the Euro as their standard currency. The advantage of using the Euro is their economy will be based on both their own economy and that of the European market. The best of both worlds with out the risks. China can still have it's own currency but use Euros as the backing for it.
What this whole thing means is the US will have to buy back dollars with our remaining Gold reserves. In order for China to use the US dollars to buy Euros.
It really does not make any difference what is used as currency as long as it has something of value backing it. For centuries unminted gold has been used as international currency. through out most of history a loaf of bread was valued as 1/10 ounce of siver. An ounce of Gold was valued as 20 ounces of silver and a weeks standard pay was one ounce of gold. It made no difference as to the origin of an ounce of gold as long as it was gold. Often gold was not even made into coins but simply as small jewelry of established weight. Or in the case of the USA when we were on the Gold Standard it was bars of gold and not coins. When I was a Kid we were on the silver standard which meant that at any bank you could exchange a dollar bill for one ounce of silver. Larger bills were Federal bills and were backed by gold in Fort Knox. One ounce of Gold for every $20 in circulation. Now if I understand correctly, the precious metals are only used to back dollars used in foreign trade.
In the era of paper money the value of the money is based upon the credability of the country printing it. Right now the Euro is based on precious metals backing it and the stability of the European market.
This whole China thing can prove to be very detrimental to the economies of the US and to many mid eastern countries that currently have large reserves of American Dollars from oil profits.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
Not to mention us up here in Canada, whose biggest trading partner is the US. If the US gets a financial sniffle, Canada gets a cold. Sad but true fact of life for Canadians.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
format_quote Originally Posted by Pygoscelis
Not to mention us up here in Canada, whose biggest trading partner is the US. If the US gets a financial sniffle, Canada gets a cold. Sad but true fact of life for Canadians.
Quite true. Canada's economy is very much dependant on the value of the US Dollar. Maybe both of our countries will have to look into Mexican Pesos. It will be something to start seeing yankees swimming south on the Rio Grande.
Reminds me of the man who was in a comma for 50 years. He came out of the coma and his first concern was to look at his stocks in a newspaper to see how well his stocks had done in the 50 years. He then realised he was a billonaire so he tried to use a pay phone to call a broker and sell some of his stocks. The operator came on the line and said "Please Deposit $10 Billion dollars for the first 3 minutes."
The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.
That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government (Download here: http://fms.treas.gov/fr/06frusg/06frusg.pdf ) that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. Sometimes I wonder why the Treasury Department doesn't just pay somebody to come in at 4:30 am Christmas morning to release the report. Additionally, I've yet to read a single account of this report in any of the major news media outlets but that is another matter.
But, hey, I understand. A report is this bad requires all the muffling it can get.
In his accompanying statement to the report (Download here: http://fms.treas.gov/fr/06frusg/06gao2.pdf ), David Walker, Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government's accounting systems that the GAO was "unable to express an opinion" on the financial statements. Ha ha! He really knows how to play an audience!
In accounting parlance, that's the same as telling your spouse "Our checkbook is such an out of control mess I can't tell if we're broke or rich!" The next time you have an unexplained rash of checking withdrawals from that fishing trip with your buddies, just tell her that you are "unable to express an opinion" and see how that flies. Let us know how it goes!
Then Walker went on to deliver the really bad news:
Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government's total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation's total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.
As this long-term fiscal imbalance continues to grow, the retirement of the "baby boom" generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.
Given these and other factors, it seems clear that the nation's current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation's large and growing long-term fiscal imbalance.
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
funny i remember having a discussion about this a few weeks ago on LI, question is this the New Cold war only this time between the US and China? who will blink first this time? the Soviets a decade ago blinked first and there gone.
today China's nukes are all aimed at US cities, in the future a whole new weapons buildup like in the Soviet era could start all over again ,but one thing i did notice when going through world politics and events of the last several decades is outside competition seems to benefit the US most of the time examples are the space race and the nuclear weapons race
China as a new Superpower who unlike the Soviet Empire also knows how to play world economics game will definitly spark something..
World war 3?
Great depression part 2?
Collapse of the US or the newly born superpower China?
new world order?
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
format_quote Originally Posted by AHMED_GUREY
funny i remember having a discussion about this a few weeks ago on LI, question is this the New Cold war only this time between the US and China? who will blink first this time? the Soviets a decade ago blinked first and there gone.
today China's nukes are all aimed at US cities, in the future a whole new weapons buildup like in the Soviet era could start all over again ,but one thing i did notice when going through world politics and events of the last several decades is outside competition seems to benefit the US most of the time examples are the space race and the nuclear weapons race
China as a new Superpower who unlike the Soviet Empire also knows how to play world economics game will definitly spark something..
World war 3?
Great depression part 2?
Collapse of the US or the newly born superpower China?
new world order?
who knows.....
China's Nukes are of no concern. I suspect that they had the foresight not to invest much into nukes and only enough to keep the World convinced that they were preparing for nuclear dominence. Now they have pulled the largest mass attack in all of recorded history and the world is caught off guard that there has been an invasion against which no nation has prepared itself.
China seems to be the only nation to have realized that while the world was playing war as a chess game the game board has changed to monopoly. The tactics of chess no longer apply and the ability to kill and destroy is no longer a feasable game move. China is now the only nation that has grown into the point were they can safely disarm and have no further need of military strength. I think it is safe to assume that today there are Chinese entrepeneurs sitting back laughing their heads off at all of the nations that have wasted their wealth in the production of useless weapons that are soon to become heavy chains and a burdan on their economies.
This is not a cold war. It is a very hot war and China has staged a mass attack against all nations that none of us are prepared for. China is now in the posistion to dominate the world without even have to send a single soldier into combat and has set up a battle plan that none of us have developed weapons to fight.
Unless every nation can now find a safe way to stop wasting money on military might, we had best start taking Chinese language lessons. If we expect to be able to ask our Chinese bosses for a raise.
Soon our products are not going to say "Made in China" they will say "Owned by China"
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
format_quote Originally Posted by AHMED_GUREY
Europe could be an alternative to the US as a trading partner for China in the future
do you really think europe would buy from China as the US does now? Why would they? They would have no more reason to buy from China then than they do now, in fact, it would cost them more
"War does not determine who is right - only who is left."
- Bertrand Russell
"He who fears being conquered is sure of defeat." - Napoleon Bonaparte
"There is nothing so likely to produce peace as to be well prepared to meet the
enemy." - George Washington
Re: Breaking: China To Dump One Trillion In U.s. Reserves!!!
format_quote Originally Posted by MTAFFI
do you really think europe would buy from China as the US does now? Why would they? They would have no more reason to buy from China then than they do now, in fact, it would cost them more
the EU is according to China allready it's biggest trading partner
you will notice that they are not considering changing everything to Euro they are trying to figure how to diversify their funds to suit their best interest. Believe me no one in their right mind would want the US dollar to fail, it would be just a great depression in the US it would be worldwide
"War does not determine who is right - only who is left."
- Bertrand Russell
"He who fears being conquered is sure of defeat." - Napoleon Bonaparte
"There is nothing so likely to produce peace as to be well prepared to meet the
enemy." - George Washington
this is true but that doesnt make europe the importing trade partner, if you look at this article closely you will notice Airbus, Siemens, Nokia and Volkswagen, these are european companies and they are exporting to china which means china is spending on europe whereas the US is spending on China. Without the US spending, China could not spend as much or really not nearly as much. Chinas economy is thriving and is one of the largest in the world but do not forget that it is new economy and really just got on its feet not long ago (when you consider the speed of growth of a countries economy) and depends on other economies for security.
"War does not determine who is right - only who is left."
- Bertrand Russell
"He who fears being conquered is sure of defeat." - Napoleon Bonaparte
"There is nothing so likely to produce peace as to be well prepared to meet the
enemy." - George Washington
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