Closed for Christmas

I hope you’re all enjoying a sublime Holiday season, and come back soon. Love, peace and joy.

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Richard Burger is the author of Behind the Red Door: Sex in China, an exploration of China's sexual revolution and its clash with traditional Chinese values.

The Discussion: 24 Comments

Merry Christmas. Long time reader, first time poster.

2007 is a key year. Americans are starting to worry whether the game of printing money, playing the stock market and the real estate market and the oil market will continue to work. Oil-rich nations are starting to use the Euro and Yen as the currency to trade. The number of IPO’s in NYEX is 1/10 of previous few years. A look at the American car industry and electronics industry will give you a clearer picture: GM and Ford are on the brink of bankruptcy. There’s no American brand to compete with Sony, Toshiba, Samsung, etc. Militarily, without even Russian or Chinese opposition, and after spending hundreds of billions of dollars, Iraq is still a complete fuck-up with 3000 bags of corpses are being shipped back. It looks as if the “mighty American military” is only mighty in Hollywood movies.

The current American national debt is about $8,000,000,000,000. America currently only has about $140,000,000,000 of Gold, $100,000,000,000 of foreign reserves and printed money at its disposal. That’s not even enough to cover a fraction of the debt.

America is now like the desperate thug in the village, borrowing money everywhere so he can build his big house, buy his knives, rifles, and dogs. When the creditors come knocking on the door, he tells them to fuck off. If they don’t, he sends out his dog and shoots them with his rifle.

America’s assets can no longer cover its debt. Gordan Chang once wrote the Coming Collapse of China. I’m going to declare an Imminent Collapse of America, based on the following:

1) The American gov’t repeatedly said it wants to maintain a strong Dollar, and even sent out the Fed Chairman to express that “determination”. But despite that “determination”, the Dollar continues to slide.

2) Last year, the American gov’t encouraged American companies to return overseas profits back to the US, and even introduced tax benefits to encourage such actions. This is a strong sign that the American economy is standing on one leg…

3) IMF plans to convert its 3271 tonnes of Gold into currency (it’s only worth $45,000,000,000). It supposedly called it a way to assist poor nations. In reality, it’s a way to guard against any “emergencies”.

4) IEA Chairman Claude Mandil said on Dec. 19th that oil prices are rising too much, and oil production has reached 2.1 million barrels/day, much more than current consumption. OPEC, ready to decrease production, asked Goldman Sachs, known for its professionalism and seriousness, to create the rumor that oil prices will rise. This is a clear sign that the American gov’t can only maintain its economy by playing up oil prices.

5) The new Fed Chairman Bernanke (middle name: Shalom. Anyone surprised?) stopped reporting on the supply of M3. In other words, the exact amount of American money and bonds being printed is now a national secret.

Under the current scenario, a quick dumping of all American bonds is the only way to preserve one’s own interests and minimize losses. Technically speaking, America is not a Nation State. It’s what I call a “Colony without a Host Nation”. The entire world’s people came to this pirate ship, not to make the ship better, but to loot and pillage as much as they can, while guarding against others on the same ship. As soon as America’s military dominance and the reputation of the Dollar’s go bust, the looters on this ship will recreate what we saw in New Orleans post-Katrina, with 10 times the ferocity and viciousness. WASPs vs. Jews (Mel Gibson’s rant was only a freudian slip of the WASPs’ collective thinking), Lower class Anglos vs. Amigos (the Minuteman project in Arizona is only an opening salvo), Christians vs. Muslims, etc, etc.

What the international community needs to guard against is any desperate move (a nuclear strike against the Middle East, a biological attack on China similar to SARs, etc.) by this American mad dog to keep its dying self afloat.

In any case, 2007 is a key year, we need to be on alert, and defend our wallets and our lives. Tickets back to China, to Japan, to Korea, to India, to Russia, to Brazil, etc. are still on sale, grab them before it’s too late…

Sociologist Li
Christmas Day, 2007 A.D.

December 26, 2006 @ 4:06 am | Comment

What an incredible first comment! I am generally in agreement with you, and on some issues passionately so. I believe we are headed for an economic crisis the likes of which we haven’t seen since 1929, and that it’s coming way faster than most of us think (like in, say, within the next 12 weeks or so, at least the first frightening signals). Inflation is on the horizon – the Russians are tired of the low cost we’ve paid for commodities since the 90s and the good times won’t last forever. China, right after New Year’s, according to rumors, sell a huge chunk of its US dollars, spoiling everyone’s holiday. To anyone who will listen, here’s my advice: Buy gold and other commodities. There was a recent selloff in gold and the time to buy is now. US currency will become increasingly worthless, and “stuff” increasingly valuable. Commodities. Oil. Corn. And gold – did I mention you should buy gold?

December 26, 2006 @ 4:39 am | Comment

Well, in my worst moments this is what I feel is coming. Then other times I’m a lot more optimistic. I tend to agree with Chalmers Johnson, that the American economy has become increasingly militarized and in other ways hollow. And I don’t think we have long to fix it – this next presidential election is crucial, and it is going to take some real leadership and intelligence to turn things around.

December 26, 2006 @ 6:18 am | Comment

p.s. I actually am somewhat more optimistic about a majority of the American people than our first poster is, and I question the poster’s implication that the US was responsible for SARS (if I am reading the comment correctly). I can’t argue with the warning and the danger that the Bush Administration may try some other desperate, destructive act in the waning days of its power. This has been the worst six years in my political memory, and the destruction and damage these people have done can’t be underestimated.

But the looting in Katrina was much exaggerated, and it was more than balanced out by acts of courage and kindness. It was the government that screwed up, not ordinary people.

And hey, here in California, we still grow things and make movies.

December 26, 2006 @ 9:20 am | Comment

I totally disagree with this post because it is based more on emotion than on fact and analysis. The author obviously has some grudge against America and is lashing out by attacking every aspect of the country. I’d like to counter some points here.

As far as the military, I agree that Iraq is a miserable failure but I don’t really see any other country sending a sizable army, navy, and air force half way around the world to fight a long costly war. This is an objective and measurable statement about the strength of America’s military. We cannot allow our personal opinions about what is moral or just cloud the fact that this is the greatest military power in the history of the world. If you divorce your emotions from your analysis you will have to admit that America is the only world power right now. China is a power and major player in Asia, but its military is not even in the same league as America’s. When China’s air craft carriers are resting comfortably off the coast of California then we will talk about military strength.

As far as the economy, the national debt is not the only sign of the strength of an economy. If it were, there would be no need for economics departments in universities. We would simply add up the numbers and everything would be understood. Oil and currency are problems, but from reading the author’s post it would seem that the American government is solely composed of a bunch of bumbling pyschopaths who do not realize this. I would like to remind the author that the American government consists of more than just George W. Bush and his feckless friends. We also have intelligent and competent leaders, and our system is flexible enough to allow them to rise to power. Some of the author’s other economic statements are disjointed with no logical connection. He says the US is encouraging American companies by giving them tax benefits to bring profits home, therefore the economy faces imminent collapse. The second statement does not logically follow the first in much of the authors reasoning.

As far as the American people, the author claims that the coming collapse will cause mass anarchy, looting, and chaos. His evidence is the post Katrina debacle. He fails to point out that America is one of the most diverse ethnic and religious countries that exists. Sure, we have problems with racism and discrimination, but we also have successes. We have freedoms of speech and religion that have worked to achieve peace among people of many different colors and philosophies. Even if this peace has created a tossed salad instead of a melting pot, it is still an amazing success compared to many other places. The author fails to mention the people who reached out during Katrina, people who sacrificed time and money to help total strangers regardless of their color. I would like to remind the author that these people are also Americans.

In order to challenge those who believe in an “imminent collapse” of America, I would like to place a wager. Anyone who holds this opinion should put their “money where their mouth is” so to speak. Please give me some specific dates and specific ways in which we will know that America has collapsed. We can keep track and see if these theories pan out. I’m guessing that no one will come forward with any specifics about this collapse because they are just venting about America and don’t really believe this will happen. Go ahead, prove me wrong.

December 26, 2006 @ 9:30 am | Comment

Well, the collaps of the Dollar would bring down the whole world economy. China would be extreamly affected by this too.

And Richard, I don’t know where the rumor comes from that China will sell a lot of it’s Dollar reserves and I am not an economist. But I doubt this very much as it would affect the Chinese economy heavily when the Dollar drops and the rest of the Chinese reserves would loose very much in value as well.
More likely, from as far as I understand it, is that the Chinese just stop to buy so many Dollars next year which also would have a considerable effect but wouldn’t be so dangerous.

Happy Hollidays.

December 26, 2006 @ 9:53 am | Comment

Time will tell. I don’t see a collapse of the country – we are still the strongest and richest on the planet. I do believe many Americans will have to adjust their hopes and dreams, and that a lot will lose money in the years ahead – it’s happened before, and the dollar is in a steady downward spiral. I would definitely put my money in inflation-protected investments, and if I were entering the US job market I’d recommend a cold hard look at the opportunities. The days when opportunities were limitless are over, at least for the foreseeable future. But again, time will tell. Personally, I am definitely putting my money where my mouth is, investing in things that don’t depend on a strong dollar and choosing to work in China with my salary paid in RMB. As I said, time will tell. I’m predicting some very bad news shortly after the Holidays end, and I am taking steps now to protect myself. Do as your research and your heart and your intellect say is best for you. But don’t say I didn’t warn you. :-)

December 26, 2006 @ 10:01 am | Comment

Shulan, I agree the collapse of the dollar would directly hurt China (a true understatement), and the rumor about them selling in the near future is just that, a rumor. But the visit last week of five high-ranking US government officials and cabinet members, including Bernanke, to meet with officials in Beijing is totally unprecedented, and leads me to believe those in the know in our government are worried, very worried. Again, we’ll have to wait and see. Will China hold on forever to investments that are diminishing in value daily? I don’t know.

December 26, 2006 @ 10:05 am | Comment

richard said:

“To anyone who will listen, here’s my advice: Buy gold and other commodities. There was a recent selloff in gold and the time to buy is now. US currency will become increasingly worthless, and “stuff” increasingly valuable. Commodities. Oil. Corn. And gold – did I mention you should buy gold?”

If everyone buys gold, oil, corn, pork bellies, and other “stuff” as you suggest, and the US currency becomes “worthless,” what currency will be used for international trade?

The euro? the yen? the rmb? the ruble?

Why not just buy futures in that currency?
Do you plan to become a commodity trader?

The basic idea is to retain value not speculate in various commodities.

The US dollar is/will be devalued relative to other currencies but this is a normal economic and historical process for any currency. However, it is not the “end of the world.”

The US still has the most productive power, the creative talent, and the financial sophistication to weather this global economic readjustment it is now orchestrating.

Richard, instead of telling people to foolishly jump into corn, oil, or other commodities you know nothing about, you should do a little homework on how the US orchestrated previous devaluations of the dollar.

In the end, the dollar will be devalued as an international currency but that does not mean the end of the US. The US will eventually get its economic house in order. As a student, who once studied in the US, even I understand that.

Some of you Americans not only do not understand China, you do not even understand the real power of your own country.

Were you asleep in Econ 101?

December 26, 2006 @ 10:56 am | Comment

Hi Mingtian. I am no economist, and I have no idea what I am talking about. That’s why I’m saying these things in comments and not a post – these are just my thoughts and feelings, and I freely admit I may know nothing and may be totally wrong. Let’s watch and see. This is what I feel based on numerous conversations, reading numerous articles and watching numerous events unfold. I also know that all those economists with impressive degrees and PhD’s and 7-digit salaries with investment firms were telling us in 1999 that Amazon was worth $400 a share and that the Internet boom would last for decades.

I never said this would mean “the end of the US.” I do believe, however, that the old post-WWII image of a can-do, invincible US of limitless resources and jobs is over for now, and we face very challenging and difficult times ahead, as we have at various points in our history in the past. This one will be more painful than before and will involve a reinvention of what America is. Can I prove it? Of course not. This is a thread about how my blog is closed for Christmas, and I’m just opining on an issue a commenter brought up, Take it or leave it – time will tell. And thanks for reminding us all that we Americans don’t understand China. That distinguishes you once again as a man of superior insight, not to mention originality.

December 26, 2006 @ 11:29 am | Comment

I say invest in peanut butter. Can anybody ever recall peanut butter making drastic price changes? Peanut butter is safe, screw gold. ;)

December 26, 2006 @ 12:21 pm | Comment

Well nobody, except perhaps some big ones in Washington and Beijing, knows how serious the whole thing is by now.
As the Chinese have no interest in a collapsing dollar and have demonstrated during the Asia crisis in the 90s that they are able to make reasonable fiscal policy I have no nightmears yet. But gold is allways a good idea, though one perhaps should have bought it five or ten years ago. So I might consider the peanut butter thing when I have some Euros left.
Surely this will be an interesting year 2007.

December 26, 2006 @ 1:39 pm | Comment

The first poster displays all the hallmarks of one fully indoctrinated by the CCP at a ‘Foreign Diplomacy School’. Alternatively, he/she was denied their green card.

Either way, it was, as Pha pointed out, nothing but a rant from someone with a chip on their shoulder. Next Christmas it’ll be Japan on the receiving end.

December 26, 2006 @ 2:10 pm | Comment

And yet people like “Sociologist Li” will still be in the long line at the American consulate to get his/her PhD/MBA/etc. visa application approved with the hopes of eventually staying in the U.S. long enough to get a green card and/or citizenship so he/she can grab his/her greasy little mitts on an American passport, RETURN to China to “do business” and act like one of those arrogant Americans when he/she gets busted doing “business” the Chinese way, waving his/her passport crying that “I’m an AMERICAN citizen!!!”

Merry Christmas

December 26, 2006 @ 2:27 pm | Comment

In the early 1900s 80% of New York city was foreign born and they were ruining America.

In the 1930s the Great Depression had destroyed us forever.

From the 50′s through the 80′s, there were missile gaps, bomber gaps and by 1985 2/3 of people on Earth lived under governments that called themselves Communist or Marxist. We were done for.

In 1968 the Vietnam War was as good as lost, Bobby Kennedy and Martin Luther King were assisnated. How could our society possibly survive?

In the 1980s the Japanese economic systems was the envy of the world. The world was moving in that direction and America was foolish for not trying to copy the Japanese economic model as quickly as possible.

My point is, the wolves are always at the door. There is always some crisis, or crises threatening to inevitably chip away at American power and leave us impotent or destroy us all in great swoop. It never comes to pass (knock on wood).

The mistake I think Sociologist Li, Chang and others are making is that they don’t believe the US is flexible enough fast enough to fix it’s problems. If it were an ethnically homogeneous one party state like China (10% minorities is still pretty homogeneous), or perhaps Japan, I would agree. But our diversity is our strength, not our weakness. It breeds creativity, dynamism and problem solving matched matched by few cultures on the planet. Our problems are great, yes, but they always have been. We will rise to the occassion.

I can’t believe I’m going to say this, but I largely agree with mingtian.

December 26, 2006 @ 8:53 pm | Comment

I’m sorry, but the idea that “If America collapses, China and the world would collapse” no longer applies today. What accompanies the decline in the American economy is a rapid rise in the Chinese economy. Recently they are almost going in opposite directions.

If America is a growth engine for the world, then China is another one. The American engine has gone bust, the world is now flying with one engine. The idea that if America sneezes, the world would catch a flu is no longer appropriate.

Right now, “non-American” assets include the wealth of rich oil nations/men of the Middle East, various European funds, Japanese foreign reserves, Chinese foreign reserves. The Middle Eastern oil money and the European fund money would move in an instant ( a lot of such funds are already moving to Europe and China). The foreign reserves may move a bit slower. Personally, I think Japan’s foreign reserves would move much faster, this is the nature of Japanese culture. The Chinese foreign reserves may not necessarily leave. The Chinese gov’t may sit down and negotiate with the American gov’t, and see if they are willing to follow the leadership of China in creating a Harmonious World. This should be left for another topic.

PS: To truly appreciate the decline in the American economy, take a trip to the city of Detroit at around December or January.

December 26, 2006 @ 11:05 pm | Comment

Li, you are showing an ignorance towards economic facts which only can be explained by ideolodical dazzlement. The world today is so interconnected that the collaps of one big economic power inevitably has sever effect for all the others too. Tell me, where will China sell all the goods it sells today to America when the American market tomorrow isn’t there anymore, or when the dollar is so low that American manufacturers can compeate again with Chinese ones?

December 26, 2006 @ 11:57 pm | Comment

Buddah, I’ll say it once again – I agree, we will survive, and as in times past we’ll use our ingenuity to make the best of the situation and re-emerge. I’m just saying I believe we’re in for a lot of pain, whether China unloads its dollars or not. Inflation devastated us in the 1970s, leading to years and years of stagflation and misery. We may be in for another and potentially worse challenge soon. We’ll survive. We’re not going under. But a lot of people will face disappointments and challenges that would have been unimaginable 10 years ago. Just a prediction. Shall we place bets and keep a pool going? Because no one knows. The best economists trained in Econ. 101 got it all wrong in 2000, and often I’m inclined to believe the opposite of what they tell us – when you remember that Fortune magazine chose Enron year after year as the most successful company with the best business model, and when the analysts told us it was a sure thing to invest in it (and in Priceline and etoys and Worldcomm), you realize that things are often not as they seem based on what you read in the papers. So I’m somewhere in-between Mingtian and Li, leaning closer to Li but without the doomsday scenario. Again, if anyone wants to “put his money where his mouth is” I’m willing to start a pool with bets on where we’ll be 6 months from now. Just for fun.

December 27, 2006 @ 12:25 am | Comment

Buddha: the biggest difference between now and the previous episodes you cited is that now, the U.S. is financially and militarily overextended to an unprecedented extent.

The U.S. is heading into the next crisis — whenever it hits, whatever it is — with a financial system built on the buying and selling of debt, with the majority of its citizens sunk in debt and impelled by its cultural overlords to further frenzies of unsustainable overconsumption, and with an economy and thus a society deeply and mostly unwittingly enmeshed in a fragile web of international relationships and dependencies that could unravel in an instant.

As an American living in America, I’d obviously like to think that everything will be OK, that the Chinese and Indian Ph.D. students currently toiling in our universities will engineer a technical fix, and that all our religious, cultural, and economic differences that provide the very lifeblood of American politics will somehow evaporate in favor of that almost-forgotten entity, the “greater good.”

I’d like to think that, and frankly I think that I here in the San Francisco Bay Area have it pretty good (at least until the next earthquake hits!). I live in a small, diverse city where people have a tendency to know their neighbors, and where many people care deeply about what happens to their immediate surroundings.

But for those in America who find fulfillment through competitive shopping, for those whose lives revolve around the vagaries of the real-estate marking (which is the main generator of national “revenue” these days), for those who believe that the “rest of the world” doesn’t extend much beyond a few angstroms from their own epidermises — for those, in short, who see their own desires and needs and dreams as the only ones in existence — any economic paradigm shift will cause great distress. Actually “distress” isn’t the right word, because when someone who has been conditioned by decades of TV and peer-group influence that the only way to be a true American is to be a big fat greedy acquisitive pig is suddenly told his favorite toys aren’t going to be available anymore, the result is less likely to be distress than violent, inchoate, uncomprehending rage.

The only question that remains is, what form will that rage take, and against whom will it be directed? *That’s* when things might start getting a bit unpleasant.

December 27, 2006 @ 3:54 pm | Comment

PS: To truly appreciate the decline in the American economy, take a trip to the city of Detroit at around December or January.

Sociologist Li,

As a native Michiganian, I have taken many a trip to Detroit, Flint, and other begone relics of the motor city era. I am now in Virginia, whose continued growth and prosperity are fueled by the talents and ambitions of immigrants from around the world.

To appreciate the costs of China’s growth, I suggest you take a trip to Taiyuan, but make sure you pick up a respirator mask at the drugstore before you go. If Taiyuan’s sooty air doesn’t choke you to death, you can continue on to Shenyang, the heart of China’s northeastern rust belt.

With the US buying almost a quarter of China’s exports and buying goods from other major trading partners like Japan and Korea, the economies of China and the United States are strongly intertwined. If one catches a cold, the other will get sick, too.

December 28, 2006 @ 5:41 am | Comment

I completely agree, Sonagi. Ultra-nationalists of all stripes really need to get that – a China collapse would be as bad for the US as a US collapse would be for China. We’re partners in a very complicated and at times treacherous dance.

December 28, 2006 @ 6:36 am | Comment

Sociologist ‘CCP’ Li wrote:

“The Chinese gov’t may sit down and negotiate with the American gov’t, and see if they are willing to follow the leadership of China in creating a Harmonious World.”

Only a fully paid-up member of the party could possibly spout such inane, vacuous nonsense. There’s a conspicuous dearth of harmony within China and no inclination on the part of their leaders to stop supporting despotic regimes or act on the international stage out of anything other than self-interest.

I’ve a theory that you’re about to graduate from the spy school having completed an overseas assignment in the States. Your latest brief is to infiltrate and destabilize an internet community that offends your paymasters by allowing freedom of expression.

I strongly recommend some re-re-education.

December 28, 2006 @ 9:03 am | Comment

I can see the headlines now: “China to Support American Economy; Comrade Bush Calls for the Development of a Harmonious and Well-Off Society”
Sub-headline: “No More Laws or Lines!”

December 28, 2006 @ 9:59 am | Comment

Sociologist Li, I love you! I will tear out monkey’s eyeballs and feed them to you, if you were starving!

December 31, 2006 @ 2:28 pm | Comment

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