[Kingcoal]

I think China screwed up majorly years ago. They wanted to become the world’s factory, which they have, but they did it by buying the position. At a company I do work for, the sales guys sometimes refer to "buying a sale" which means simply undercutting all your competitors to get the business. That results in a loss for the company in the name of more market share. China has started at the bottom and has been trying to work their way up, which is backwards. The golden rule is if the price is going to change, it has to go down, otherwise the market shrinks. I've been shocked how low China can go. For many of the products produced in China, I can't see how they can make the plastic, steel and components cheap enough to break even. I’ve read that Chinese loan officers can “get in troubleâ€

[smiley]

I think the Levey and Brown are exemplary of a certain attitude.

One word reverberates through the article: superpower.

Because we are a superpower we can afford the trade deficit.
because we are a superpower we can afford the budged deficit.
Because we are a superpower we can afford our frivolous money creation.
In other words we are to big too fail.

And of course they are right. Whereas other countries would be scared to death when they had to post such deficits, the US can get away with it.

However other countries would immediately act upon them. Because of this superpower status, there is no incentive in the US to do something about the deficits. When you don't have to worry about the trade deficit, why should you act upon it? As a result the US is not competitive enough in the global markets. Since the government can create money at its will and get away with it, there is no need for fiscal responsibility.

Levey and Brown seem to be convinced that this will stay unchanged. Their reasoning seems to be that it takes a superpower to bring a superpower down. Since there is no superpower able to challenge the US the situation will remain unchanged. However here they fail to acknowledge the power of the global markets. The fate of the dollar and thus of the economic hegemony is not decided by governments, it is decided by the financial markets, and they are a superpower in their own right.

At one point the US must either change its heading or face a serious recession. Granted, the US is very flexible and has a very motivated workforce, so they can make a change fast. But if they push it too far then they might be too late.

The evidence that this point is approaching is mounting.

[Malthus]

To see which article tells the truth you have to ask yourself would you have made money following foreign affair or Jim I guess it would be Jim. I know for sure for sure that you didnt made money being in $ or US stocks. I share most of the views of Jim as well as most of his bets and I am glad of it. If you still dont have silver,gold,palladium you are disirous of losing money.

[tokyo_to_motueka]

$this->bbcode_second_pass_quote('Kingcoal', 'C')hina has started at the bottom and has been trying to work their way up

[tokyo_to_motueka]

$this->bbcode_second_pass_quote('smiley', 'I') think the Levey and Brown are exemplary of a certain attitude.

One word reverberates through the article: superpower.

Because we are a superpower we can afford the trade deficit.
because we are a superpower we can afford the budged deficit.
Because we are a superpower we can afford our frivolous money creation.
In other words we are to big too fail.

And of course they are right. Whereas other countries would be scared to death when they had to post such deficits, the US can get away with it.

However other countries would immediately act upon them. Because of this superpower status, there is no incentive in the US to do something about the deficits. When you don't have to worry about the trade deficit, why should you act upon it? As a result the US is not competitive enough in the global markets. Since the government can create money at its will and get away with it, there is no need for fiscal responsibility.

Levey and Brown seem to be convinced that this will stay unchanged. Their reasoning seems to be that it takes a superpower to bring a superpower down. Since there is no superpower able to challenge the US the situation will remain unchanged. However here they fail to acknowledge the power of the global markets. The fate of the dollar and thus of the economic hegemony is not decided by governments, it is decided by the financial markets, and they are a superpower in their own right.

[tokyo_to_motueka]

The Overstretch Myth by David H. Levey and Stuart S. Brown in Foreign Affairs, March/April 2005:

$this->bbcode_second_pass_quote('', 'D')espite the persistence and pervasiveness of this doomsday prophecy, U.S. hegemony is in reality solidly grounded: it rests on an economy that is continually extending its lead in the innovation and application of new technology, ensuring its continued appeal for foreign central banks and private investors. The dollar's role as the global monetary standard is not threatened, and the risk to U.S. financial stability posed by large foreign liabilities has been exaggerated. To be sure, the economy will at some point have to adjust to a decline in the dollar and a rise in interest rates. But these trends will at worst slow the growth of U.S. consumers' standard of living, not undermine the United States' role as global pacesetter. If anything, the world's appetite for U.S. assets bolsters U.S. predominance rather than undermines it.

[tdrive]

$this->bbcode_second_pass_quote('', 'I')n my opinion, the argument for limiting growth fails to adequately take into account two things, both variants on the notion that unlike biology, economics is not a field bound by limited resources.

Jim Mueller
April 18, 2005
The Economy: A Growth Industry?

[Stoic]

I really shouldn't laughing because it his type of attitude that landed us in this mess in the first place. Not his fault, so much as the generations of people who have held his same POV.

[Wildwell]

Since when was ALL the economy based on physical resources in the ground? And what happens when those resources get scarcer?

http://www.peakoil.com/post89207.html#89207

[Sys1]

"Further, as our planet becomes more crowded, I firmly believe we will begin colonizing space and using the resources there."

[Tyler_JC]

$this->bbcode_second_pass_quote('', '"')Further, as our planet becomes more crowded, I firmly believe we will begin colonizing space and using the resources there."

[khebab]

$this->bbcode_second_pass_quote('Wildwell', 'S')ince when was ALL the economy based on physical resources in the ground? And what happens when those resources get scarcer?

http://www.peakoil.com/post89207.html#89207
$this->bbcode_second_pass_quote('Wildwell', 'T')hink about what makes money: Sports, acting, inventions, music, art, writing, lawyers, and consultants - all relatively low energy activities.

Then read the entire thread.

[Wildwell]

$this->bbcode_second_pass_quote('khebab', '')$this->bbcode_second_pass_quote('Wildwell', 'S')ince when was ALL the economy based on physical resources in the ground? And what happens when those resources get scarcer?

http://www.peakoil.com/post89207.html#89207
$this->bbcode_second_pass_quote('Wildwell', 'T')hink about what makes money: Sports, acting, inventions, music, art, writing, lawyers, and consultants - all relatively low energy activities.

Then read the entire thread.

[tdrive]

$this->bbcode_second_pass_quote('Sys1', '"')Further, as our planet becomes more crowded, I firmly believe we will begin colonizing space and using the resources there."

[Ludi]

$this->bbcode_second_pass_quote('', 'W')ildwell wrote: Think about what makes money: Sports, acting, inventions, music, art, writing, lawyers, and consultants - all relatively low energy activities.

[linlithgowoil]

$this->bbcode_second_pass_quote('', 'W')ildwell wrote: Think about what makes money: Sports, acting, inventions, music, art, writing, lawyers, and consultants - all relatively low energy activities.

[Wildwell]

So what are 'real' wealth and 'real' goods and services? A lot of agriculture is not wealth creating and in fact requires subsidy. Mining is also very unprofitable in some cases. But yet film and sports stars work is profitable if it is *perceived* or tested they are good at what they do.

I smell a rat.

I’m going back to energy intensity again here. The work of an artist is a lot less energy intensive than someone making sports cars for example.

[Ludi]

$this->bbcode_second_pass_quote('Wildwell', '
')
I’m going back to energy intensity again here. The work of an artist is a lot less energy intensive than someone making sports cars for example.

[Wildwell]

Well it depends on every task. For example, you're actually making things there for movies. How about if you did it digitally? Say using 3dmax, Maya, Lightwave for example. Sure, your computer would depend a petro chemical input, and you would need electricity to run it, but if you are moving software and files about (which are non tangible) over say the internet or LAN network it would may mean less energy so on and so forth.

[kerosene]

$this->bbcode_second_pass_quote('Wildwell', 'W')ell it depends on every task. For example, you're actually making things there for movies. How about if you did it digitally? Say using 3dmax, Maya, Lightwave for example. Sure, your computer would depend a petro chemical input, and you would need electricity to run it, but if you are moving software and files about (which are non tangible) over say the internet or LAN network it would may mean less energy so on and so forth.