Was the Chinese ADIZ near Senkakus new ''day of infamy''?

[torasan]

Depending upon who writes the history books in the future, Nov. 24, the day after China announced its new air defense identification zone (ADIZ), could go down in history as “the day America lost Asia,” as Dr Michael Auslin wrote on the Politico Web site in Washington. Others have suggested that it might well be remembered as a date — like Dec. 7, 1941 — that will live in infamy as the day China began a long, protracted “soft war” to control the world.


In his speech to the US Congress the day after the Japanese sneakily attacked Pearl Harbor in 1941, then-US president Franklin Roosevelt spoke of the previous day as “a date which will live in infamy.”
[And it did, even though World War II is now long over and Japan has become a US ally.]


This Chinese ADIZ surprise move (read: attack) was not a minor event. This was an opening act. But of what?

Thoughts?

[Coligny]

My though... You are the lovechild between Mc Tojo and Takechan... Without the fun side of any of them...

[IparryU]

Well in an economic side, China is hoarding gold... And if they do decide to go to a gold standard then that xan fuck all major economies' fx.

Like when crude oil was being tried to value in euro... Didn't work out, but making a gold standard clears the QE out of the equation and can potentially force other countries to counteract or comply.

Smart moves by China, but will they have enough influence (read power) when they do it is another variable.

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[Coligny]

Like when crude oil was being tried to value in euro... Didn't work out, but making a gold standard clears the QE out of the equation and can potentially force other countries to counteract or comply.

It only failed because the american criminals decided to illegally murder Saddam Hussein rather than let it happen.

[Wage Slave]

Well in an economic side, China is hoarding gold... And if they do decide to go to a gold standard then that xan fuck all major economies' fx.

Like when crude oil was being tried to value in euro... Didn't work out, but making a gold standard clears the QE out of the equation and can potentially force other countries to counteract or comply.

Smart moves by China, but will they have enough influence (read power) when they do it is another variable.

Are you OK?

[Wage Slave]

Like when crude oil was being tried to value in euro... Didn't work out, but making a gold standard clears the QE out of the equation and can potentially force other countries to counteract or comply.

It only failed because the american criminals decided to illegally murder Saddam Hussein rather than let it happen.

What? Saddam Hussein was going to change the unit of account in the international oil market? All by himself? And that's why he was overthrown?

[Russell]

Nope, he wanted to sell his oil in Euros only.

Some people claim that he was overthrown for that.

I think it may have been one reason, but there are others too: the oil itself, Iraq's strategic position, personal reasons of G.W. Bush,...

[Wage Slave]

I see. Well, he could demand to be paid in Zimbabwean dollars but it wouldn't change a thing unless all the other players agreed to change the unit of account. Given the fact that biggest consumer is the US and given the deep involvement of US companies in the oil industry that is pretty unlikely. In the end it has to be priced in something and it may as well be dollars as Euros as far as I am concerned.

I reckon he was deposed because of oil but not because of what he was doing in the oil markets. It was more that he had set up a dynasty and that dynasty didn't align with the other oil rich dynasties that the US has established in the region or US interests more broadly.

[IparryU]

I see. Well, he could demand to be paid in Zimbabwean dollars but it wouldn't change a thing unless all the other players agreed to change the unit of account. Given the fact that biggest consumer is the US and given the deep involvement of US companies in the oil industry that is pretty unlikely. In the end it has to be priced in something and it may as well be dollars as Euros as far as I am concerned.

I reckon he was deposed because of oil but not because of what he was doing in the oil markets. It was more that he had set up a dynasty and that dynasty didn't align with the other oil rich dynasties that the US has established in the region or US interests more broadly.

All the Zimbabwean dollars gets you a couple eggs or something like that... Sorta undervalued comparison to crude ain't it?

And the point of valuing it EUR was to fuck their number one consumer and try to change the USD value. Which is where my China example came in, bit nit sure if you got it or not.

There are a couple other examples like this, just not coming to mind right now.


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[Wage Slave]

And the point of valuing it EUR was to fuck their number one consumer and try to change the USD value. Which is where my China example came in, bit nit sure if you got it or not.

There are a couple other examples like this, just not coming to mind right now.

He may have demanded payment in Euros but the market price was always in dollars cos otherwise there would be all sorts of arbitrage opportunities until the Euro price matched the true underlying dollar price. That could be changed, and it could be any currency, but it would take a lot more than one market participant to do it. Therefore, there there is no way that Saddam was deposed to protect dollar pricing of oil. He wasn't ever a realistic threat to it.

As for China. You believe that China will peg the Remimbi Yuan to the price of gold in order to establish it as the new world currency deposing the dollar in the process? I may be a bit simple but I just can't see how that could be done, or even if it could be done, why it would be in China's interests to have it's exchange rate dependent on the price of gold. The US abandoned the post war gold standard and Bretton Woods agreement in 1971 for very good reasons.

[Russell]

Wage Slave, the default currency in trade is the US dollar, even if it is for trade between countries with currencies not pegged to the dollar.

That means that the US can print dollars in much larger numbers than the size of its economy justifies. Take that status as default currency away, and it could have nasty consequences for the US, because all those dollars will flow back into the US economy without them being based on an underlying resource (like gold). It could mean huge inflation and eventual collapse of the dollar.

As for using other currencies for selling oil, that can be just handled by a contract over some period. No reason why the US dollar should be involved in that. Fear for the consequences could have played a big role in the decision to invade Iraq.

[Tsuru]

Well in an economic side, China is hoarding gold... And if they do decide to go to a gold standard then that xan fuck all major economies' fx.

Like when crude oil was being tried to value in euro... Didn't work out, but making a gold standard clears the QE out of the equation and can potentially force other countries to counteract or comply.

Smart moves by China, but will they have enough influence (read power) when they do it is another variable.

Are you OK?

Someone has been reading zerohedge.

[Coligny]

Someone has been reading zerohedge.

Better than Tom Clancy ?

[matsuki]

Wage Slave, the default currency in trade is the US dollar, even if it is for trade between countries with currencies not pegged to the dollar.

That means that the US can print dollars in much larger numbers than the size of its economy justifies. Take that status as default currency away, and it could have nasty consequences for the US, because all those dollars will flow back into the US economy without them being based on an underlying resource (like gold). It could mean huge inflation and eventual collapse of the dollar.

As for using other currencies for selling oil, that can be just handled by a contract over some period. No reason why the US dollar should be involved in that. Fear for the consequences could have played a big role in the decision to invade Iraq.

Problem is too many people/companies/cuntries stand to lose with the US if the dollar goes to shit...that includes China.

[Tsuru]

Which is exactly why they've started using the dollars they hold to buy up real, physical things (African land and resources, Western gold, Madrid's water supply and a bunch of other things).

[Wage Slave]

From aforementioned Zerohedge:

Ever since President Nixon broke the US dollar's last link to gold, the world has been set adrift on a sea of fiat currencies that have been increasingly debased, serving the interests of governments and financial elites. While crypto-currencies remain insulated from central bank manipulation, governments have thus far been tolerant, perhaps because their capability to track transactions is more advanced than Bitcoin believers admit. Nevertheless, the advent of crypto-currencies represents the increasing popular demand for a currency insulated from political debasement and bank profiteering. Crypto-currencies represent a legitimate attempt by private citizens to reassert their sovereignty over such government actions. We appreciate the effort, and we believe it holds much promise. But for now, we will stay with the traditional store of value, gold.

Well, I accept of course that fiat currencies can and have, in the past, collapsed in a frenzy of hyper inflation. However, to call for currencies to be backed by gold seems nutty to me.

1. Gold possesses no intrinsic property that makes it a natural or absolute store of value. The only reason it holds value is because people believe it holds value. It's value fluctuates widely depending on how much value people believe it has at any particular time. In that sense it is no different to a fiat currency. The only difference is that the supply of a fiat currency is managed by a central bank whereas the supply of gold is more decided by market players.

2. If you unilaterally tie your currency to gold then you lose control over your money supply and over your exchange rate.

3. It seems axiomatic that too little money available to an economy is just as bad as too much. Central banks can get it wrong of course but what reason is there to believe that the amount of gold held somewhere at great expense is the correct amount of money you should have in circulation?

4. Even if you do tie a currency to a physical quantity of gold you still don't have control over the creation of money. Every time a bank grants grants credit they are effectively creating money. They typically don't lend their own money, they lend other people's and that creates money.

The last time a proper currency collapsed because of inflation was when? in the 1930s? Is it really correct to believe that we learned nothing from that experience and the systems built since then have no value? Are the IMF and World Bank completely useless and clueless?

As long as inflation is kept under control and the central banks/IMF/World Bank have sufficient fire-power then managed fiat currencies and floating exchange rates are the preferred option as far as I can see. Not perfect but by any means, but the alternatives are worse.

My problem with Bitcoin and such is that no-one is under any compulsion to accept it. At least with dollars or Yen or Pounds or Euros I know I can take them somewhere where they will buy something unless things really go pear shaped. Bitcoin isn't backed by anywhere or anything except belief.

[Tsuru]

Yes, I mean after all gold is only one of the least reactive and most ductile elements known to man, as well as being one of the most efficient conductors of electrical current and reflectors of EM and IR radiation.

It's pretty clear it's of absolutely no use to anyone if you don't take into account its almost universal appeal to people who know nothing of science and technology.

[Wage Slave]

Yes, I mean after all gold is only one of the least reactive and most ductile elements known to man, as well as being one of the most efficient conductors of electrical current and reflectors of EM and IR radiation.

It's pretty clear it's of absolutely no use to anyone if you don't take into account its almost universal appeal to people who know nothing of science and technology.

Point taken, but the amount of gold actually used for these purposes is a tiny proportion of the gold that has been mined, refined and stockpiled. It's monetary value rests on human belief in its value just like dollars have an almost universal appeal to people who know nothing of science and technology.

[Tsuru]

The thing about gold in finance is that it has high density, so you can stockpile high values of it rather compactly, and in addition to that it won't reduce or deteriorate over time without any protective environment. Someone can leave it in a vault and forget about it for 1000 years and it will still be there when it's dug back up, exactly how that person left it.

In that way it is has an advantage over printed or coined (fiat) money, money which exists in a computer, in the form of debt, over other commodities, equity or other physical items.

Although having said that, there will probably be a lot of people who will discover they actually bought a bunch of gold-plated tungsten when they try to cash their hard-earned gold back in when the world economy inevitably takes a shit again.

[Isle of View]

From aforementioned Zerohedge:

Ever since President Nixon broke the US dollar's last link to gold, the world has been set adrift on a sea of fiat currencies that have been increasingly debased, serving the interests of governments and financial elites. While crypto-currencies remain insulated from central bank manipulation, governments have thus far been tolerant, perhaps because their capability to track transactions is more advanced than Bitcoin believers admit. Nevertheless, the advent of crypto-currencies represents the increasing popular demand for a currency insulated from political debasement and bank profiteering. Crypto-currencies represent a legitimate attempt by private citizens to reassert their sovereignty over such government actions. We appreciate the effort, and we believe it holds much promise. But for now, we will stay with the traditional store of value, gold.

Well, I accept of course that fiat currencies can and have, in the past, collapsed in a frenzy of hyper inflation. However, to call for currencies to be backed by gold seems nutty to me.

1. Gold possesses no intrinsic property that makes it a natural or absolute store of value. The only reason it holds value is because people believe it holds value. It's value fluctuates widely depending on how much value people believe it has at any particular time. In that sense it is no different to a fiat currency. The only difference is that the supply of a fiat currency is managed by a central bank whereas the supply of gold is more decided by market players.

2. If you unilaterally tie your currency to gold then you lose control over your money supply and over your exchange rate.

3. It seems axiomatic that too little money available to an economy is just as bad as too much. Central banks can get it wrong of course but what reason is there to believe that the amount of gold held somewhere at great expense is the correct amount of money you should have in circulation?

4. Even if you do tie a currency to a physical quantity of gold you still don't have control over the creation of money. Every time a bank grants grants credit they are effectively creating money. They typically don't lend their own money, they lend other people's and that creates money.

The last time a proper currency collapsed because of inflation was when? in the 1930s? Is it really correct to believe that we learned nothing from that experience and the systems built since then have no value? Are the IMF and World Bank completely useless and clueless?

As long as inflation is kept under control and the central banks/IMF/World Bank have sufficient fire-power then managed fiat currencies and floating exchange rates are the preferred option as far as I can see. Not perfect but by any means, but the alternatives are worse.

My problem with Bitcoin and such is that no-one is under any compulsion to accept it. At least with dollars or Yen or Pounds or Euros I know I can take them somewhere where they will buy something unless things really go pear shaped. Bitcoin isn't backed by anywhere or anything except belief.

How to make a small fortune:

1. Start with a large fortune.

2. Follow the advice promoted on ZeroHedge.

[Russell]

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

[...]

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

4. “I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

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