Journalist Tarric Brooker and I discuss the interplay between the U.S and China, and how this might play out for Australia.
Tarric uses the handle @AvidCommentator on Twitter.
The U.S. Vs China – Who’s Going To Win? – With Tarric Brooker
3 thoughts on “The U.S. Vs China – Who’s Going To Win? – With Tarric Brooker”
Leave a Reply
You must be logged in to post a comment.
– Interesting discussion with Tarric Brooker.
– Between october 2000 and say may 2003 anyone who wanted to buy oil from Iraq had to do that in EUR. That was a direct threat for the PetroDollar. And that was ONE (of a number of reasons) why the US invaded Iraq in march 2003 (see my previous reply). It was also meant to control China. (think: oil & PetroDollar).
– My personal opinion is that the “Age of Globalisation” is over. And that in the future both China & the US will only be able to “project power” in a (very) limited, regional “Sphere of Influence”. Australia could be part of a regional “sphere of influence” in say South East Asia + India.
– But this is based on the assumption that large countries like the US, China, India, Australia etc. are able to stay “in one piece” and each won’t fracture, won’t split into multiple separate independent states. E.g. the US could fracture/split into say 20, 30 or 40 independent separate states. Guess what will happen then with Washington DC’s ability to “project (military) power” around the world …………..
– Topic: PETRODOLLAR.
– The former governor of the BoE, Mark Carney, said that some day the USD won’t be the world’s reserve currency any more. That day is – in my opnion – (much) closer than many people think. One has to think: Trade, Current Account, Capital Account Balances, Budget deficits and US interest rates.
– The Petrodollar system is “protected” by the US military projecting its military might around the world. (Think: US invasion of Iraq in 2003). But Mr. Michael Hudson has pointed out that the US is running a Balance of Payment deficit and that pays for those US military “adventures” around the world. So, in other words: the world outside the US is paying for the US military “adventures” in that same world outside the US.
– The REAL danger is WHEN (NOT IF !!!!) the US starts to run a Current Account Surplus & a Capital Account Surplus. Then a number of things starts to happen. Then the worldwide Demand for US T-bonds turns into a SUPPLY of US T-bonds. Do combine that with the (rising) (yearly) Budget Deficits (> US$ 1 trillion) of the Trump administration and anyone with some working braincells left in his/her body knows what that portends for US interest rates. In that regard the Trump administration has made financials things in the US much much worse by running these massive Deficits.
– Rising US interest rates will force the US to reduce or eliminate US military spending. But it’s this military spending that’s responsible for a LARGE / MAJOR chunk of the Capital Account Deficit. So, the Capital Account Deficit will shrink or even turn into a Surplus.
– The US Trade Deficit reached a post GFC high of ~ $ 60 billion in december 2018/january 2019 but now has shrunk by a third down to ~ $ 40 billion. And with the “weakening” US economy AND rising US interest rates I expect to see a US Trade Surplus much sooner than many think. In the 2nd or 3rd quarter of 2020 (???). With all the “interesting” consequences …….
– Suggestion: Ask Mr. Michael Hudson to come back on a next video podcast and let him explain these topics.
– My personal opinion is that both the US & China will end up in the (same) gutter (think: debts & Steve Keen). I am not sure who will end up there in the gutter first: China or the US.
– The USD currency swaplines from the the FED with e.g. the ECB, RBA, RBNZ etc. etc. is meant (and I have said this before) to save to Uncle Sam’s “rear end”/bum from getting “roasted”. In 2008 there also were currency swaplines because then there was a “shortage of USDs” (Source: Ben Bernanke (!!!!!!!!!) in a hearing for Congress ( 2009 (or was it 2010 ??)).
– E.g. the RBA has USD reserves but these are invested in US T-bonds. When there is a (large) net demand for USD then the RBA is FORCED to sell those T-bonds to get its hands on USDs. Guess what happens when A LOT OF people sell their US T-bonds ? Rising US interest rates any one ?? And rising US rates is the last thing ANY US government wants. It will – with the current giant amount of debt – destroy the US economy.