Worst case scenario in the U.S. and elsewhere

[Triaxis]

Originally Posted by Myplanet2

China owns a lot of the USA's wealth by now. They own a lot of dollars, companies, and real estate, and hold a lot of US debt.

Much has been made of China's high profile purchases of US assets recently. What is not discussed so much is the extent of US investment in China - particularly in manufacturing.

It's hard to trace the extent of the bi-lateral foreign investment between the US and China, but it can be safely said that this has been a pretty much one way street in favor of the U.S.

Originally Posted by Myplanet2

When they want to redeem any of their investment in the above, and if they are refused, then the credibility of the US will suffer. And that would matter big time. The US has moved so much of it's manufacturing off shore that it would take too long to generate a local economy again.

This is where the deflation of the US currency comes in (and what I believe they are going to do)

Deflating the value of the dollar:
(1) Wipes out debt
(2) Makes cheap Chineese imports less cheap, thus less attractive
(3) Makes US products cheaper, thus more attractive

I believe the US will do this, and then you will have a situation where US manufacturing companies will begin to desert China and return to the US. A few well placed tarrifs will seal the deal.

Then you have a situation where China suddenly loses it's manufacturing base, and the US regains it.

China is very vulnerable. Right now, they are building things they don't even need, just to keep enough of their people occupied and placated. That's why they are propping up the US by buying bonds. If the US stops utilizing their labor to make things, and stops buying those things, China is up the creek.

Originally Posted by Myplanet2

If China joined forces they could do whatever they like.

It doesn't matter who they joined forces with. Calculate the amount of forces required to attack the US. Then calculate the amount of shipping that would be required to move those forces. Then try to imagine, in your absolute wildest imagination, how they would safely move that massive flotilla from one side of the pacific to the other, without even a semblance of control of the sea lanes, the air, or space.

It is just SO impossible, i'm sorry. I have heard a lot of "out there" theories over the years, and frankly this one (China invading America) takes the cake easily.

I wouldn't underestimate the US. It took Russia less that two decades to recover from their collapse. The US is not going to collapse, thus their recovery is going to be much quicker IMO

I will also say that i don't believe China wants war. They don't want to dominate the world, but do want to regain their traditional sphere of influence in south east Asia via relatively peacful economic methods