Nalapat is back from a conference in Taiwan where war gaming US vs China was held and mentions what war planners from the two sides had to say
Warzones heat up as US-China conflict continues | SG | Nov 16 2019
In an actual contest, there will be only one winner. The game being played between the US and China is not Win-Win but Zero Sum, no matter how hard Donald Trump and Xi Jinping talk in the manner of best friends.
Xi has a plan, supplant the dollar with RMB backed by gold and verifiable by block chain
For the yuan to rise the global confidence in the dollar must drop, how or why will that happen
So now the dollar has had a correction what does China do
It seems the arguments are China top heavy here. More KMT supporters attended this conference i guess.
China's problems are surmountable yet for some reason the American problems are not (!)
China got all this whizz bang tech and what do the Americans have ? mag stripe cards and currency made out of fabric. Sooooo last century : D
Buying Yuan is fine if all you do is trade with China and that trade makes up the major share. For everything else people want dollars. Countries that are not in the hock to China won't get into yuan. And why would you get into yuan in the first place if the only recipient is China. If anything there would be active resistance here as it limits options. Holding yuan is a trap, once you enter, harder to come out.
The oil & gas exporting countries sell in dollars, they will never be in debt to China so there is zero incentive or reason for them to start asking for yuan instead.
Even if global confidence in the dollar takes a dip and demand is less the question is what next and why is that better than what we already have. I don't find answers to that in this article. The gates of heaven open and people run rushing into the welcoming arms of the Chinese ?
Yuan as a viable alternative is one thing, people actually switching over quite another. There would have to be compelling reasons to do so and for reasons mentioned i just can't see it happening unless there is more to this story.
Americans have been told they were doomed for close to a century now. There was this depression, then WW2, the reds are coming, nuclear armageddon, global terrorism, climate change and now its back to the reds are coming. They will get over this one too. yes? And if they could do that without blowing up every body else that'd be cool.
Warzones heat up as US-China conflict continues | SG | Nov 16 2019
In an actual contest, there will be only one winner. The game being played between the US and China is not Win-Win but Zero Sum, no matter how hard Donald Trump and Xi Jinping talk in the manner of best friends.
Xi has a plan, supplant the dollar with RMB backed by gold and verifiable by block chain
For the yuan to rise the global confidence in the dollar must drop, how or why will that happen
- “unsustainable” level of US$260 billion that was printed by the Federal Reserve in just a 45-day period, which is more than twice as much as was printed during the period of Quantitative Easing III
- The US Treasury under Secretary Steven Mnuchin has been increasing expenditure with cutbacks rather than increases in tax revenues. Such increases are funded through the printing of money by the Federal Reserve, cash that is then directed back to the Treasury, incentivising it to incur still more expenditure.
- Planners fearing a US defeat (and there are several more such voices in 2019 than was the case in 2015) at the hands of China say that from August 2018, US tax receipts barely cover social security, medicare and interest on debt, leaving zero balance for other expenses, including the ballooning cost of defence. This would not have been a problem in a situation where the US dollar rules the financial markets, except that external demand for US dollars has been going down since 2015, while even domestic buyers appear to have begun the process of bailing out of US dollar holdings during the final months of 2018.
- The 2013 and 2017 “weaponizing” of the US dollar against Iran (when that country was deemed to be compliant in the obligations Teheran undertook in the Joint Comprehensive Plan of Action) has had the collateral effect of sharply lowering confidence in the US dollar as a global reserve currency, for fear that such weaponization of the currency for political reasons may impact other countries as well. The expectation of those pessimistic about the US side prevailing in the contest with the PRC is that there will be a substantial depreciation of the US dollar within the next term in office of the President of the US, whether this be Trump or another individual.
- The US Treasury under Secretary Steven Mnuchin has been increasing expenditure with cutbacks rather than increases in tax revenues. Such increases are funded through the printing of money by the Federal Reserve, cash that is then directed back to the Treasury, incentivising it to incur still more expenditure.
- Planners fearing a US defeat (and there are several more such voices in 2019 than was the case in 2015) at the hands of China say that from August 2018, US tax receipts barely cover social security, medicare and interest on debt, leaving zero balance for other expenses, including the ballooning cost of defence. This would not have been a problem in a situation where the US dollar rules the financial markets, except that external demand for US dollars has been going down since 2015, while even domestic buyers appear to have begun the process of bailing out of US dollar holdings during the final months of 2018.
- The 2013 and 2017 “weaponizing” of the US dollar against Iran (when that country was deemed to be compliant in the obligations Teheran undertook in the Joint Comprehensive Plan of Action) has had the collateral effect of sharply lowering confidence in the US dollar as a global reserve currency, for fear that such weaponization of the currency for political reasons may impact other countries as well. The expectation of those pessimistic about the US side prevailing in the contest with the PRC is that there will be a substantial depreciation of the US dollar within the next term in office of the President of the US, whether this be Trump or another individual.
- Since President Xi took office in 2012, the PRC has bought gold on an unprecedented scale, purchasing about 30-50 tonnes each month, while at the same time producing more gold domestically than any other country, none of which is allowed to be exported. The present gold reserves within the control of the authorities in China are estimated to be as high as 15,000 tonnes, with some estimates breaching the 20,000 tonne mark.
- Combined with the move by Xi Jinping to install Blockchain technology within the monetary system, the opinion of war planners and forecasters is that China is positioning itself to make an RMB “backed by gold and verifiable by Blockchain the safest reserve currency in the world once the US dollar gets toppled”, according to a war planner who studies developments in the PRC from his home base.
- Asked about the problems created by the enormous debt burden in China, the response of planners pessimistic about US prospects for victory (especially in the context of India adopting a non-aligned policy during the conflict) was that “the communist state owns all the land in the country”, and that such a holding provides a reserve to sustain even so large a debt. “So long as its citizens have confidence in the longevity of the rule of the CCP, the leadership core will have the means to ensure that a meltdown in the economy does not take place”, an analyst temporarily based in Hong Kong stated.
- Meanwhile, the Chinese leadership has not been complacent of the dangers facing its continued control. In a sign that he recognises that the 21st century requires a paradigm change in economic and financial policy, President Xi Jinping declared on 22 October that adoption of Blockchain technology would form part of the core of state policy. The Peoples Bank of China has unveiled a Digital Currency Electronics Payment system that has been reinforced by the PRC’s new cryptocurrency law. Together with advances in Artificial Intelligence (which relies less on innovation than on continuous and massive inputs of data) and bio-technology, Xi Jinping is seeking to convert China into a global technological powerhouse that will far outstrip the US
- According to the war planners spoken to, the Belt & Road Initiative “has become a method for China to exchange soon-to-depreciate US dollars into physical assets” in a range of countries. Countries involved in the BRI incur debts to China that finally get repaid by transfer of assets to PRC entities, as has recently happened for example in Sri Lanka. Thus, US dollars (the currency mostly used for BRI financial computations) are being exchanged for physical assets that can collectively add to China’s ability to replace US-controlled global supply chains with their own.
- At the same time, China has become a key holder of Bitcoin, even while Indian monetary authorities seek to roll back the waves in the manner of Canute by passing an impossible to enforce law banning bitcoin. China sought to do the same in 2017 and quickly reversed course once the CCP leadership understood both the impossibility of such a prohibition as well as the advantages of being a world leader in a currency of the future attuned to internet-enabled systems and processes.
- Combined with the move by Xi Jinping to install Blockchain technology within the monetary system, the opinion of war planners and forecasters is that China is positioning itself to make an RMB “backed by gold and verifiable by Blockchain the safest reserve currency in the world once the US dollar gets toppled”, according to a war planner who studies developments in the PRC from his home base.
- Asked about the problems created by the enormous debt burden in China, the response of planners pessimistic about US prospects for victory (especially in the context of India adopting a non-aligned policy during the conflict) was that “the communist state owns all the land in the country”, and that such a holding provides a reserve to sustain even so large a debt. “So long as its citizens have confidence in the longevity of the rule of the CCP, the leadership core will have the means to ensure that a meltdown in the economy does not take place”, an analyst temporarily based in Hong Kong stated.
- Meanwhile, the Chinese leadership has not been complacent of the dangers facing its continued control. In a sign that he recognises that the 21st century requires a paradigm change in economic and financial policy, President Xi Jinping declared on 22 October that adoption of Blockchain technology would form part of the core of state policy. The Peoples Bank of China has unveiled a Digital Currency Electronics Payment system that has been reinforced by the PRC’s new cryptocurrency law. Together with advances in Artificial Intelligence (which relies less on innovation than on continuous and massive inputs of data) and bio-technology, Xi Jinping is seeking to convert China into a global technological powerhouse that will far outstrip the US
- According to the war planners spoken to, the Belt & Road Initiative “has become a method for China to exchange soon-to-depreciate US dollars into physical assets” in a range of countries. Countries involved in the BRI incur debts to China that finally get repaid by transfer of assets to PRC entities, as has recently happened for example in Sri Lanka. Thus, US dollars (the currency mostly used for BRI financial computations) are being exchanged for physical assets that can collectively add to China’s ability to replace US-controlled global supply chains with their own.
- At the same time, China has become a key holder of Bitcoin, even while Indian monetary authorities seek to roll back the waves in the manner of Canute by passing an impossible to enforce law banning bitcoin. China sought to do the same in 2017 and quickly reversed course once the CCP leadership understood both the impossibility of such a prohibition as well as the advantages of being a world leader in a currency of the future attuned to internet-enabled systems and processes.
China's problems are surmountable yet for some reason the American problems are not (!)
China got all this whizz bang tech and what do the Americans have ? mag stripe cards and currency made out of fabric. Sooooo last century : D
Buying Yuan is fine if all you do is trade with China and that trade makes up the major share. For everything else people want dollars. Countries that are not in the hock to China won't get into yuan. And why would you get into yuan in the first place if the only recipient is China. If anything there would be active resistance here as it limits options. Holding yuan is a trap, once you enter, harder to come out.
The oil & gas exporting countries sell in dollars, they will never be in debt to China so there is zero incentive or reason for them to start asking for yuan instead.
Even if global confidence in the dollar takes a dip and demand is less the question is what next and why is that better than what we already have. I don't find answers to that in this article. The gates of heaven open and people run rushing into the welcoming arms of the Chinese ?
Yuan as a viable alternative is one thing, people actually switching over quite another. There would have to be compelling reasons to do so and for reasons mentioned i just can't see it happening unless there is more to this story.
Americans have been told they were doomed for close to a century now. There was this depression, then WW2, the reds are coming, nuclear armageddon, global terrorism, climate change and now its back to the reds are coming. They will get over this one too. yes? And if they could do that without blowing up every body else that'd be cool.
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