

China's State Press Calls for 'Building a de-Americanized World' - sandipc
http://www.businessweek.com/articles/2013-10-14/chinas-state-press-calls-for-building-a-de-americanized-world

======
JumpCrisscross
The Chinese are making incendiary comments because the U.S.-centric world
order has done well for them. The U.S. Navy patrols the world's seas and so
protects global marine trade routes. The U.S. military provides security
guarantees which liberate a large chunk of global demand, e.g. Japan, Korea,
Singapore, and the EU, for consumption. And the U.S. financial system
lubricates the global flow of capital, goods, and services.

I agree that the global economy has put too much faith in the U.S. political
and financial system. Diversification would encourage competition as well as
increase systemic resilience. The present situation, where a U.S. default
literally means the implosion of the current world order, is encouraging
previously taboo debate to come out into the open.

A collapse of the U.S. dollar today shakes up a world in which China is
ascending. I'd get mad if someone threatened to flip the game board just as I
started getting ahead, too.

~~~
jbigelow76
I would like to see Obama start to feel out the possible response in the
international financial community to unilaterally raising the debt ceiling so
this idiocy could be done for good. Just knowing he was doing it would
probably cause Republicans to cave so they don't have to admit not authorizing
their own expenditures is devoid of all logic.

I hate politics.

~~~
rayiner
Of all of the unconstitutional things Obama has been alleged of doing,
blatantly disregarding the Constitution's allocation of the power of the purse
to the House and unilaterally raising the debt ceiling to placate the
"international financial community" would undoubtedly be the most egregious.
It would effectively be a coup d'état and the right's hand-waving about Obama
being a dictator will have become a self-fulfilling prophecy.

~~~
jbooth
So you're a lawyer, right? Politically I get what you're saying but legally,
with the 14th amendment and all, he has to either illegally prioritize or
illegally ignore the debt limit. Maybe ignoring the debt limit has more
constitutional standing than reprioritizing the congressional budget. No idea
on my end.

Personally, if we're prioritizing, I think he should do some math where they
pay all treasury bonds, on time and 100%, and then just cut every other
expenditure in half (or whichever % works out), across the board. Social
security checks, contractor payments, gov't worker payments, etc. Anybody
refuses to do work, send the half-paid national guard after them and order
them, since we're in crazytown anyways. And tell them to write their
congressman.

That's possibly the "least illegal" option, and certainly the most politically
palatable, as far as respecting congress's self-contradictory legal orders in
this mess.

~~~
waps
Believe it or not, lawyers deal with conflicting laws all the time. There's a
few general principles, the most important "rule of thumb" is :

Constitution trumps amendments (but only in certain high-up courts), which
trumps normal law, which trumps contracts (written "generally" before oral
ones), which trumps common sense ("what a good house father would do"). The
sum total of all these things form "the law" as viewed from the perspective of
a person (so yes, you are legally obligated to "generally be good" even when
the law doesn't explicitly require it (e.g. help people involved in
accidents))

Basically since the government debt obligations are contracts, while the debt
ceiling is a law, Obama has no choice in the matter : any lawful payments
(like medicare, ...) have to be fulfilled before any contract is paid. So
barring a new law (the "agreement" the news talks about), on Okt 17, the US
should default. Maybe Obama can delay it a few days, but certainly no more.

Please note that congress is doing exactly what it was designed to do.
Congress, whether you agree with it or not, represents the will of the people
of the united states and Obama is ignoring it, refusing to do so much as
negotiate (or so claims congress, and I see no reason to doubt their claims).
He knew years in advance that this was coming and gambled. Every executive who
has fought congress on this has failed, again something Obama is perfectly
aware of (it featured prominently in his education for one thing, hell, it's
one of the main forces that brought us democracy in the first place).

In case someone doesn't know this : Obama's a lawyer. Lawyers tend to be
lawyers first, people second. And he has a history of this sort of thing :
expect him to follow the law over common sense.

~~~
aboodman
Congress is not doing what it was 'designed' to do. The Hastert Rule
([http://en.wikipedia.org/wiki/Hastert_Rule](http://en.wikipedia.org/wiki/Hastert_Rule))
was only introduced in the last 30 years or so, and has never been followed as
dogmatically as Boehner is following it now.

By refusing to bring a bill to a vote unless a majority of his party openly
supports it, Boehner is explicitly preventing compromise.

~~~
waps
That's not what I mean. Congress is refusing to finance a government whose
actions it doesn't support. Which is exactly what it's supposed to do, and is
in fact one of it's core functions.

The power of the purse is allocated to the house.

~~~
polymatter
Boehner is refusing to allow Congress a vote to finance the government. This
is not the same as Congress refusing to finance the government.

~~~
mkr-hn
Days later, congress voted to finance the government. They collectively
decided it would be easier to build a better government on an economy that
isn't in a nosedive.

------
zoba
Kind of interesting to think about his comment about the goal being to “create
an international reserve currency that is disconnected from individual nations
and is able to remain stable in the long run.” Hmm...I wonder if there are any
currencies which currently exist which fit the bill...

And then think about pg's point #3 about why a government would have created
Bitcoin: "because they felt their currency would never become the standard
reserve currency, and they felt it was better that no one's be if theirs
couldn't be"
([https://news.ycombinator.com/item?id=5547423](https://news.ycombinator.com/item?id=5547423)).

It won't be proof that BTC came from China if China suggests using BTC as the
reserve currency, but pg's point will be proven to me, at least.

~~~
andy112
"...is able to remain stable in the long run."

How sure are you that there won't be any significant breakthroughs in bitcoin-
mining math/tech over the next 30 years? 100 years?

~~~
allochthon
Also, bitcoin is deflationary by design. It will effectively run out at some
point, if I understand the situation. I believe its proponents consider this a
feature, but I suspect it will prove to be a liability.

~~~
ekianjo
SO what? You can have tons of fractions of bitcoins, and that covers the needs
of any micro-payment even if a single bitcoin becomes worth a million of
dollars.

~~~
allochthon
The issue is subtle. It has to do with the need for a currency supply to
expand to match overall increases in production in absolute terms. I don't
understand the matter in any detail, but I trust economists in their general
aversion to deflation.

~~~
ekianjo
There have been tons of economies which worked before on the Gold standard,
which has been the model for the bitcoin "mining" model. I know nowadays you
have lots of Keynesian economists who tell you that going in debt to the death
and inflating the money supply is a good thing, but you have to look at how
things worked before and why it made sense to have a limited supply currency.

~~~
21echoes
the difference being that they kept discovering gold. bitcoin will effectively
eventually run out.

~~~
ekianjo
Nope, the new discoveries of gold were usually marginal vs the actual
worldwide gold reserves. Bitcoin is following the exact same model. Mining
will become marginal over time.

~~~
bicknergseng
>>the new discoveries of gold were usually marginal vs the actual worldwide
gold reserves

I think 17th century Portugal and others would have something to say about how
"stable" commodity monetary systems are over long periods of time.

~~~
ekianjo
Because you think fiat currencies based systems are way better? How stable is
your system going to be when you expand your credit line to the infinite just
because you can print/create money which has no intrinsic physical value ?
Fiat currencies hurt the future generations and not just the present ones.

~~~
21echoes
you think gold has "intrinsic, physical value"? you think _bitcoin_ has
"intrinsic, physical value"?!

why have almost all currencies used throughout history had a significant
fiduciary element? why has the world constantly cycled between bullion and
fiat currencies? why do you think bullion currencies are more common during
times of warfare?

when are countries incentivized to "expand their credit line to the infinite"?

would you rather have a currency that can modify its inflation/deflation rate
based on any number of relevant factors, or a currency whose
inflation/deflation rate is tied to the rate of mining of some rocks in the
ground?

~~~
ekianjo
Gold has physical value, yes, because it is relatively rare on Earth and has
interesting chemical and physical properties that can be used in several ways.
And on top of that, it's dense, can be melted, and does not corrode over time.
Therefore making is a good tool to represent "money".

> why do you think bullion currencies are more common during times of warfare?
> Because inflation runs crazy during warfare and therefore people trying to
> save their earnings go for gold, silver and others in order to avoid losing
> the face value of their fiat currencies. And by the way, the Gold standard
> was abandoned in History mainly to fund the war in Europe during the 1st
> world war, and then later in the 20th century because of the expenses of the
> US military policy during the Cold war.

> when are countries incentivized to "expand their credit line to the
> infinite"? Look at the current situation in the US. Everyone knows they will
> never pay their debt, yet it keeps growing. You can expect things to crash
> hard down the road.

> would you rather have a currency that can modify its inflation/deflation
> rate based on any number of relevant factors, or a currency whose
> inflation/deflation rate is tied to the rate of mining of some rocks in the
> ground?

The later, obviously, because Gold is neutral and does not belong to any
government. The US Dollar, the Euro and other fiat currencies are all
controlled by different central banks with different agendas. I have no
control over what they can do in the future. But Gold is tangible, and there's
not much Gold being extracted nowadays to change the face value of it.

Why do you think China is building a huge Gold reserve currently, and buying
Gold as much as they can from all over the world? Do you think they are just
plain stupid ?

------
ChuckMcM
You see how easy it is to make fun of Americans? :-)

It is like Putin deciding to give Snowden asylum. Free poke at the gorilla,
look he can't reach over here and hit back.

Of course a more open dialog is good, but nobody, especially the Russians or
Chinese actually _want_ a world government. That would take all the fun out of
being a dictator.

~~~
zhemao
World government and world currency are not the same. The Chinese government
wouldn't really want either though, given the games they play with the
Renminbi.

~~~
ChuckMcM
They kind of are, the same that is. A reserve currency (such as the one called
out here in the article) is a sort of 'place holder' currency. But to be a
valid place holder it has to have some structure against which to balance, a
connected monetary policy if you will.

Look no further than the Euro to see how challenging it is to manage a
currency. And note that the countries in the EU are _co-operating_. Imagine
how hard it would be if Greece or Spain was actively trying to siphon money
out of Germany because of treaty obligations. If a recipe can be figured out
for managing the Euro, then there will be a call for doing the same thing
world wide, but until then its just a free poke at the US for being stupid.

------
selmnoo
Here's the actual Xinhua (official Chinese journal) article:
[http://news.xinhuanet.com/english/indepth/2013-10/13/c_13279...](http://news.xinhuanet.com/english/indepth/2013-10/13/c_132794246.htm)

------
dimitar
* The US also provides safe assets in the form of US Securities.. by going into debt.

* Treasury notes and bills are widely used as collateral and upon maturity they turn into reserve currency cash.

* China, the oil producers run budget and trade surpluses and don't have a history of providing safe assets, like the US, Japan and some EU countries.

* Having a reserve currency causes your currency to appreciate, which isn't good for exporters.

* On the flip side too much spending will cause inflation, which plagues developing countries, but not the developed.

* So they cannot afford to spend as much, without their CB raising interest rates to fend-off inflation, which causes.. currency appreciation and trade deficits.

Which country will provide reserves AND safe assets? And what will China do to
back this organization in these circumstances?

------
hetman
Of course, I'm sure any military actions regarding Taiwan, the Spratly
islands, etc, isn't going to need any kind of UN approval since they're
already Chinese territory that has been unjustly annexed by foreign powers.

------
gadders
I can understand why two political parties arguing might be difficult for
China to understand.

And the UN has no moral authority at all.

------
pippy
It would be interesting to see how the Chinese envision an international
currency. Essentially fiat currencies regard tax payers as asset-backed
securities, and create value by issuing government backed bonds. With no tax
payers and no central body (or a joint venture with unconstructive bickering)
you'd run into some fundamental issues. You could: 1) peg existing currencies
to it (good luck getting buy in)

2) peg the currency to physical goods (gold, oil, etc). Fiat currencies have
distinct advantages which make it optimal for modern trade.

3) use treaties to regulate government sovereign bonds with the global
currency

------
dllthomas
Something which occurred to me - a bit without precedent but possibly legal...

Congress has the power, with a 2/3 vote, to expel a member. How about, instead
of playing chicken with the world economy and _our_ jobs, they put their _own_
jobs on the line: scrap the existing debt limit and replace it with a rule of
procedure in both houses that says if the House and Senate can't prevent
breach of the debt ceiling (moved as they feel is necessary) they're _all_
expelled.

Obviously it'd need to be worded such that a veto couldn't force out congress,
but that sounds doable.

~~~
idProQuo
They'd all be expelled, we'd hold elections and elect a new congress that does
the exact same thing.

The problem isn't the people in congress, its the people they represent.

~~~
dllthomas
I don't think they'd wind up being expelled. The mainstream republicans are
supporting this because they fear primary challengers. If the choice is
"possibly lose your job vs. definitely lose your job", one obviously
dominates.

------
znowi
Chinese got the balls. I hope the rest of the world will join the effort.

------
lurkinggrue
I guess congress can now say Mission Accomplished!

------
oscargrouch
Bitcoin to the rescue! :)

~~~
HowardMei
No. Deflation is even worse for economy than inflation is. That's why gold was
abandoned. In fact, ancient China had a long history of struggling in awful
situations caused by lacking copper/silver/gold for producing enough coins to
feed the booming economy system, while the coins were either smuggled to
neighbor countries or remelted by domestic speculators.

I propose a new digital currency be created according to certain
eigenvectors[1] and allometry[2] features of trading network flows or simply
the internet traffic flows.

The progress of Complex Network[3] theory may tell us more about how to build
a solid algorithm for this kind of "evolving coins" to make them decentralized
and evolve along with real economic activities.

I've been investigating the theory in part time and I dare say somebody with
sufficient knowledge is able to figure out a model eventually.

IMO, bitcoin is the start of inventing a better currency, not the end.

[1][http://en.wikipedia.org/wiki/Centrality](http://en.wikipedia.org/wiki/Centrality)
[2][http://www.nature.com/scitable/knowledge/library/allometry-t...](http://www.nature.com/scitable/knowledge/library/allometry-
the-study-of-biological-scaling-13228439)
[3][http://en.wikipedia.org/wiki/Complex_network](http://en.wikipedia.org/wiki/Complex_network)

------
AsymetricCom
I wonder how much of this is scripted by the globalist bankers.

~~~
pekk
"Globalist banker" is a euphemism for the same old tired "Jews control the
world" trope peddled by the John Birch society.

~~~
CmonDev
Facebook, Google, Microsoft... What would Birch say?

