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Tuesday, October 05, 2010
Gold hits $1340 an ounce. US Dollar fear rises. Collapse is near.
Climbing over $20 in a single day, gold continued it's ascent, in spite of the ever increasingly silent chorus of mainstream financial analysts who've been calling the peak of the "gold bubble" since it hit the $800 level years ago.
Complementing gold's climb was a continued weakening of the US Dollar against other benchmark currencies, sliding below 78 on the US Dollar Index, continuing the US Dollar's broad based weakening.
When the US Dollar strengthened midyear, mainstream economists claimed victory over the eccentric Dollar bears, as risk in sovereign debt issues from Greece and other European countries spiked a "flight to liquidity", shoring up demand for the US Dollar. However, the greenback has been sliding consistently since May, giving back almost all of it's gains.
The outlook for the US Dollar is worsening as central banks in China and Russia continue a campaign of foreign reserve diversification, and as the Federal Reserve in the US kicks off a second round of quantitative easing, in a desperate attempt to stop the US from falling back into recession.
Today, the Fed unleashed another round of open market operations buying up $7-$8 billion in stocks on the open market as it tries desperately to inject liquidity and prop up investor confidence through rising equity prices. But currency markets and stock market outflows show a different story from the rise in the Dow Jones Industrial Average -- small and international investors are exiting the stock market in droves and running to safety.
The US government is trying desperately to restart an economy by borrowing trillions and printing innumerable amounts of money. And as their attempts prove a failure, they are preparing to up the ante with another round of stimulus.
Like a pollster on elections night, I'm ready to call it: the US is not only going to slip into another recession, it's headed for a horrendous depression. Total economic collapse is a possibility, too, if the US government does not reverse course immediately.
If you hold US investments, take your money now and run.
Posted by Mike Brock on October 5, 2010 | Permalink
Comments
This is happening under the Marxist idiot Obama's watch ... I love it.
I cashed out of the market last year and bought five pounds of gold ... it's up 25K to date.
It would have been a shame to let such a disaster go to waste. Who said that .. Oh ya .. Rahm Emmanuel future mayor of that cesspool, Chicago ... soon to be Detroit's twin sister.
Posted by: Momar | 2010-10-05 5:40:42 PM
Don't be delusional. This all would have transpired under McCain, too. They are all Republicrats.
Posted by: Mike Brock | 2010-10-05 5:58:48 PM
Sorry not true Mike, no way. Obama is spend spend spend. He cant spend his way out of this one. How is that hopey changey thing going for ya all?
Posted by: Merle Terlesky | 2010-10-05 7:27:55 PM
While McCain would've been better, the dye was already cast even before Obama. The US would be just as broke and its Federal Reserve just as insane. Please take your TEAM RED sloganeering elsewhere.
Posted by: Cytotoxic | 2010-10-05 7:47:46 PM
Merle,
I'm not sure what you're responding to.
Posted by: Mike Brock | 2010-10-05 8:23:43 PM
I would also caution U.S. investors that cash may not necessarily be the best option if you find U.S. stocks too risky.
If your cash holdings are denominated in U.S. dollars, you run the risk of having them obliterated by inflation. Best options: foreign currency, foreign equities, or gold. I'd favor gold.
Posted by: Dennis | 2010-10-05 9:06:24 PM
Why buy gold now, close to its peak? Gold is 1,368.00 Cad. If you bought in 1980, like many did, it was a loser vis-a-vis inflation. 800.00 today is 2,088.59. Gold was ~250.00 in 2000. Unless you expect total collapse and roving bands of marauders, it makes no sense to buy gold. In that scenario, probably lead is preferable.
Posted by: Jim | 2010-10-05 11:19:48 PM
Gold is not at it's peak. People have been saying that, since it was at the $800 level. They said that at the $1000 level. And yet, here we are.
Gold is going over $2000 in the next 12 months. Governments are printing money at breakneck speed. There's no peak in sight yet.
Posted by: Mike Brock | 2010-10-06 12:29:47 AM
Jim,
If you're a bear with regards to gold, pointing to its decline in the early 80's won't cut it. There were specific reasons gold fell in the 80's. The FED stopped inflating and central banks began selling their reserves.
Here are some of the possible reasons gold could fall in USD terms: 1) demand for jewelry will fall (happens in recessions), 2) FED will tighten monetary policy, 3) new gold discoveries brought into production, 4) selling by central banks (FED perhaps). There are probably other possibilities I'm not thinking of but these are the major ones. Which one of these do you think will happen and why?
Posted by: Charles | 2010-10-06 5:57:17 AM
Gold has become the official currency of the Second Great Depression as far as the US goes. Globally it has become the de facto reserve currency as central banks accumulate more of it in a time of rising uncertainty.
World is changing at a very rapid pace now and many first world nations that don't keep up with the pace of the change are going to slip into third world states very rapidly.
Posted by: Jack | 2010-10-06 7:36:46 AM
"Third world states," Jack? Give your head a shake. Even during the Great Depression, with the stock market down 90%, American GDP never fell by more than a third. That's scarcely sufficient to make them into another Cuba. Hyperbole like this is why nobody takes the doomsayers seriously.
Posted by: Shane Matthews | 2010-10-06 8:41:39 AM
I bought gold to protect myself against inflation . I was up 700 dollars since yesterday morning and inflation hasnt really started yet. If there is a pull back i will just buy more gold.
Posted by: don b | 2010-10-06 9:43:10 AM
Except, of course, during the Great Depression the US was not risking a currency collapse. The next collapse will have more in common with Weimar Republic Germany, than what happened to the US during the Great Depression.
Posted by: Mike Brock | 2010-10-06 9:49:56 AM
don b,
Those who state that gold is protection against "inflation" (as in price increases) are making a grave error. Gold is protection against the inflation of the money supply. And just because you have inflation of the money supply does not mean you'll have price increases. If for example, the money supply increases 5% per year, but productivity increases 7% per year, price will fall. This is essentially what occurred in the 1930's.
Let's take the example of the U.S. currently. The FED has inflated. On the other hand, people are paying down debt (which results in falling prices given FRB) and banks have not lent out the money which has been made available to them by the FED. So prices aren't rising much but gold is. This is normal because the FED has increased the number of dollars and hence each dollar is worth less versus gold. If the FED were to withdraw all that unused liquidity, gold prices would fall.
Posted by: Charles | 2010-10-06 9:56:47 AM
Before someone notices ... I meant to say the 1920's. My bad ...
Posted by: Charles | 2010-10-06 9:57:30 AM
In years past, the U.S. was a nation of savers and investors with a massive manufacturing base that outpaced anything else on the planet. This manufacturing base cushioned the blow of the Great Depression.
Today, the U.S. is largely a nation of tapped-out, heavily indebted consumers, who have accumulated large trade deficits not to purchase capital goods, but vast amounts of consumer items.
Manufacturing has blossomed around the world, and the U.S. now finds itself at a severe competitive disadvantage in that field. The savings and investment cushion that could be used to sustain the American economy in a downturn is now largely gone.
Posted by: Dennis | 2010-10-06 9:58:43 AM
Dennis, don't forget that over half of all U.S. banks failed during the Depression, and when they failed, most of their customers lost their savings. Also, manufacturing output during the Depression was down by half.
Also don't forget America's resources, her highly educated, industrious, and patriotic people, her technological acumen, her vast land holdings. America could, if necessary, become largely self-sufficient to a degree attainable by few other countries. If America has become so irrelevant internationally, why did a credit crunch that began in America affect the entire world?
Posted by: Shane Matthews | 2010-10-06 10:14:29 AM
Charles
Thanks for your input, probably up until recently gold has been rising as well as the USD.
Posted by: don b | 2010-10-06 10:37:51 AM
I don't mean to suggest that it is impossible for the United States to recover from its current troubles. However, the political will to do so is very lacking right now. The Tea Party movement is only in its infancy, so the development of a broad-based movement devoted to cutting the size and scope of the federal government may take years to effect, if not decades.
Most people have a very limited understanding of the breadth of the task ahead. A few token spending cuts or discovery of new "efficiencies" will not be sufficient. What I am talking about is entire departments of the federal government and the rapidly expanding number of bankrupt state governments needing to be shut down entirely. Then there is the winding down of entitlement programs like Medicare and Social Security, and the closure of vast numbers of military bases around the globe.
If such cuts are not undertaken, your chances of reigning in spending deficits, given how large they are, are slim to nil.
Posted by: Dennis | 2010-10-06 10:43:05 AM
I agree that tough decisions remain to be made, and that the status quo is not sustainable, Dennis. I just don't think it is inevitable that we have a lost-with-all-hands catastrophe before the will to fix it appears. Look at Europe. Twenty years ago no one would have predicted the rise of Right-wing, anti-immigration governments, or a tacit admission that the heady days of socialism are over. It'll be a painful adjustment, but it won't be the end of the world, either.
Frankly, once the baby boomers start to retire, and the younger generations begin to tire of the expense of coddling them, I expect significant change. Expect to see a lot of boomers living in basement suites with their kids instead of spending their golden years cruising in the Mediterranean.
Posted by: Shane Matthews | 2010-10-06 11:15:46 AM
Shane,
Nobody doubts that America will eventually recover, in some form or another. But questions about the interim are pertinent.
Resources may very well be the only thing America has to sell, and countries like China will come holding their trillions of US dollars and buy up those resources. Will America begin a round of socialistic nationalization to prevent this? Could such an act lead to a war between China and the US?
Will America's most intelligent, entrepreneurial class, flee the United States for green pasteurs in the coming downturn, creating a brain drain for the US?
Will political instability in the US reach a boiling point, with states threatening to leave the union, movements like the Tea Party being even angrier and resorting to revolutionary like activity which will boil over with full-on civil strife?
These are real questions to consider before you simply shrug it off and say: they'll recover in the end. Well, of course they will. But we all have to live through the intervening period.
Posted by: Mike Brock | 2010-10-06 11:19:19 AM
I think you're right about the baby boomers, Shane. I know lots of people who are retiring way too early and its not sustainable.
I sincerely hope I'm wrong about the issue of political will. I suspect people pretty much wrote off New Zealand in the early 80's when they grappled with financial collapse. For the most part, they did what they needed to do and got through it.
Posted by: Dennis | 2010-10-06 11:22:15 AM
Don,
USD has been rising versus other fiat currencies. I'm talking about it rising versus other goods and services.
Posted by: Charles | 2010-10-06 12:08:15 PM
Thanks Charles
I do like idea of gold going up but without big price increases, sweet.
Posted by: don b | 2010-10-06 1:03:09 PM
donb,
No problem. I'm not saying there won't be any price increases (there will be), but if you want to make money with gold, look at the money supply, not price increases.
Posted by: Charles | 2010-10-06 1:55:47 PM
How is it that the British pound has not collapsed when its seigniorage (65% of British government spending ) has already exceeded Weimar German policy (50% of spending)?
Posted by: Jim | 2010-10-06 2:36:32 PM
I'm not too worried, Mike, for a number of reasons. America is unlikely to hemorrhage much talent because, let's face it, it's still one of the best places in the world to live.
Russia and Venezuela were considered lands of opportunity in the 90s, but only a few of the most adventurous went--and, in the case of Venezuela, had all their assets seized by a tin-hatted dictator right out of the 1930s.
China? Better run than Venezuela, certainly, and not bad if you can put up with semi-solid air, pestilential overcrowding, and no Internet. War is unlikely because China is not the pushover it was in 1931, and neither country is insane enough to try to invade the other. Torpedoing the merchantmen is bad for business. And remember how people overreacted to the business practices of the Japanese in the 1980s, when they never owned more than three percent of all U.S. real estate--most in Hawaii?
It may be we'll see some strife in the U.S., but we saw plenty of that in the 1960s (plus a war besides), and for most Americans it was still business as usual. It may actually take strife on the level of the 1960s to undo some of the damage that misbegotten decade did to us. The old guard will find it increasingly difficult to convince the younger ones to keep picking up the tab for their high living, and in all likelihood they'll be forced (finally) to grit their teeth and make concessions. Lord knows, it's long overdue.
As for the Tea Party, I expect at some point it'll merge with the Republicans, producing a more Right-wing but still recognizable Grand Ole Party. The Dems will likely find themselves increasingly the second choice, because all those special interests just don't add up to a majority of Americans. The pathetic feminists Obama has appointed to the Supreme Court are just the icing on the cake.
Posted by: Shane Matthews | 2010-10-06 7:21:51 PM
Shane,
You're assuming when this all happens, the US consumer will still be important to China. He won't. The US consumer's dollars will be worthless to China, because China will be trying to collect on it's debt.
China will do this by trying to buy up American companies and resources at fire-sale.
China will only get back pennies on the dollar, but they'll take what they can get, and what they'll try and get is every single capital asset in the US they can get their hands on.
The thing is, if China tries to collect on it's debt: America instantly goes bankrupt. The government and the consumer.
What's obvious to me, is the US government will move to prevent this, by passing laws on foreign ownership, currency convertibility (capital controls), and claim they're doing it to prevent American from being sold out to foreigners.
This would be the equivalent of you lending millions from Bank of Montreal, and then telling BMO that not only can they not collect on their debts or seize any collateral because it's not in your personal interest. Except, replace personal interest with "national interest".
If you were China, you would be justly pissed off. And such an act could be provocation for war. An almost justifiable one, I might add.
If the US, after borrowing trillions of dollars from China and giving China trillions of it's currency in exchange for "nothing", as the US blocks China from buying up US resources for payment, one -- objectively speaking -- might understand why China would be compelled to launch a war against the US.
The US is about to stiff China, and the question is: will China stand for it?
They're going to say: "Sorry we borrowed all that money, and we're sorry you're going to get nothing for it... but it's not in our 'national interests' to let you buy up strategic American economic assets as payment. So, sorry. Waddaya gunna do China? Huh? Huh? Fuck you!"
That's basically what's going to happen in the next five years. There's really no avoiding it.
So not only has America's drunkin' national borrowing imperiled it's own finances, it may have imperiled global security on an epic scale. Because we know America is not going to let the Chinese take payment for their debts... America will be like 40% owned by the Chinese if that happened. So we can simply assume that there's massive geopolitical strife on the way.
Posted by: Mike Brock | 2010-10-06 7:47:38 PM
While there are far too many who say the end is nigh, there is considerable opportunity in all this. So what if the US goes bankrupt. It's not like anyone, like the Chinese, is going to cut them off from their credit addiction. It's more likely that international lenders will become that much more passionate about keeping the US afloat. What happens if that vast consumer market of 300+ million people fails? The whole world will dive with them. It maybe that the US really is too big to let fail. And another truth that will come out of all this is that the US will become more isolationist on foreign policy. I say it's about time. The US already spends a vast portion of their GDP on defence, and a goodly portion of that is spent on imperial adventures in America's various vassal states. Cut these states off from the largess of US protection, and the US will realize tremendous instant savings. A smaller military, zero interventionism, and a greater focus on the US proper will allow the US to reap huge rewards in the future. As for the claim that the rest of the world will fail under the yoke of tyranny without US protection, I say nonsense. They will have to defend themselves for once. Imagine what they can learn from the experience. And if things get out of hand international, the US will, at last, get to use all those awesome nukes on the followers of Islam and anyone who causes grief. At last, some really effective diplomacy.
Posted by: AB Patriot | 2010-10-06 8:01:06 PM
AB,
Think of the logic of what you're saying. You're saying the US consumer is so important, that the Chinese need to lend them infinite amounts of money so the US consumer can turn around and buy from the Chinese with that lended money.
That would be like me going into a IKEA, and getting an IKEA Credit Card, running it up to it's max, and then going to the store manager and saying: "Look, I can't keep being your customer if you don't keep raising my credit limit".
And then he says: "But you don't even make you payments!"
And I say: "I know, but don't you need me as a customer to keep buying? I can't keep buying if you don't keep lending."
And then he says: "You're right! Borrow all the money you want."
That's basically what you're saying China's logic will be. And that's nonsense.
You're saying IKEA (China) needs me the customer so much (America) that it's much better off to infinitely finance me with credit (Buying treasuries to balance exchange) than to just produce shit for itself.
What the hell kind of logic is that?
You're saying the US consumer is this mythical centre of the world's economy that the world just "needs". Without US consumers, there's no global economy.
Wow, you've really bought into the bullshit. =)
Posted by: Mike Brock | 2010-10-06 8:10:01 PM
As for the notion that if the US defaults, China will be so pissed that they will go to war with the US, this has got to be the biggest spew of bile ever. China has a military that is vintage 1960s. Their front line fighter aircraft are waiting for 1978 to call them, because they really do come from 1978. As for China's far-strike potential, it can be summed up as not being as effective as all that lead-laced paint that was found on Chinese-made toys. What can be said about a nation whose nuclear forces still require their bulk to be carried by bomber. All those vintage "Bear" bombers will make excellent targets; slow moving and easy to shoot down. I suggest that one action (at the time of the US default) will teach China a savage lesson. The day of the default, the US orders their four carrier battle groups in Asia to strike at the Chinese Navy. In 72 hours, not a single ship of the Chinese Navy will be afloat. As well, strikes against China's coastal defences and air bases will greatly impair their ability to respond. China will be smashed and left helpless. Sometimes you have to break a lot of eggs to get egg roll.
Posted by: AB Patriot | 2010-10-06 8:10:16 PM
Mike Brock
That depends how much you spend at IKEA. If you spend $600 billion at IKEA, I suspect that not only will they give you all the credit you can possibly use (as long as you use it at IKEA) they will likely deliver their crap to your door, assemble it for you, and take away the old crap you bought from them. As the payments, it all a circle: what comes from China goes to the US, then circles around and comes back. It's a massive ponzi scheme.
Posted by: AB Patriot | 2010-10-06 9:57:27 PM
The US consumer is King. Just cut the #1 economy out of the global economy and see how far that gets you. California alone is the eighth largest economy in the world -- bigger than even France. The US is the largest consumer of everything. And the US has lots and lots of nukes. Nukes are great! I love them. Canada should start getting them. Really. Just build a 10 megaton nuke and do a surface test right over Lund Island. You want to scare the Russians shitless and get them to back off on their claims to Arctic sovereignty? Do just that. Greenpeace will likely close up shop and leave the oils sands alone as well. Pussies need not apply.
Posted by: AB Patriot | 2010-10-06 10:11:42 PM
The US consumer's credit card is maxed. They are not king. They are bankrupt. And the next few years will prove that to you.
Posted by: Mike Brock | 2010-10-06 10:38:59 PM
Mike Brock
Nonsense in the extreme. The sheer size, not to mention the voracious appetite of the US consumer is legendary. The volume of consumption has made the US economy -- alone -- the largest, most powerful economy in all of human history. Though China's leap to the number two spot has been lauded, what has been ignored is that they leaped over Japan, an economy that has been, either stagnant or contracting, for more almost two decades. Not exactly a great achievement for China. For China to even catch the US would require more than a century of double-digit growth. This against the US economy, where a single percentage point of grow represent hundreds of billions of dollars increase in the US GDP. Indeed, if the US ran balanced budgets for a mere two decades, they could eliminate their national debt entirely just on GDP growth alone. It is your pea-brained perspective on the mighty US that is utter laughable and not even worthy of serious discourse or attention. You are a mere child in an adult world. It's best for you to think small and keep it that way; it's all you can handle.
Posted by: AB Patriot | 2010-10-06 11:56:01 PM
I think you are putting your adoration for the United States ahead of economic reality.
The reality is, that to be a consumption-oriented economy, you must also be a debt-oriented economy. Which the US is, with over 70% of the economy being consumer consumption.
When you have more consumption than production, what you get is debt. This is basic economics.
While you fumigate over how wrong you think I am, its worth noting that my investment predictions over the past three years have been nearly spot on. My predictions of the US economy stalling in the 4th quarter of 2010, made at the end of 2009 have come true.
You see, I am actually experienced independent investor and educated in economics.
And my views, extreme as they may seem to you, are being found less and less on the periphery and more and more in the mainstream. Why? Because the optimists like yourself are not delivering the goods.
The structural problems with the US economy persist. There is ever decreasing confidence in the US Dollar, by most of America's trading partners -- something that everyone insisted would never happen, because the greenback was the ultimate safe currency. When people like myself insisted the greenback was in trouble and headed for serious trouble two years ago, I was given the same reaction you're giving me now.
Yet, you can turn on the American financial cheerleading channel, CNBC, and find more and more people stating the Dollar is imperil.
You can wax nostalgic about America's past glory, and pretend that it's glory is forever etched into the global economy, and that Pax Americana is as always, upon us, but it will change nothing about the simple realties America faces.
Your statement that the US could repay the entirety of it's debt on two decades of GDP growth alone is one of the most economically ignorant statements I've heard. Almost nobody believes that, and besides, those of us who actually study these things have done the math; for the US to grow itself out of deficit and balance it's accounts, it would need to average 6-7% economic growth over the next 40 years, when factoring in future obligations.
When you consider the average annual GDP growth over the past 30 years in the US, in America's "gilded age" was only around 3%, it goes without saying that your ignorant statement is even close to being true. And then even then, that's being generous and assuming interest rates don't go above 4.5% and average only 3.0% in the intervening period. A scenario that is, in my estimation, unlikely.
So cheerlead all you want. But rational people will try to be objective.
Posted by: Mike Brock | 2010-10-07 12:37:07 AM
And we should note that best case scenario is based on starting last year. The US has over a trillion a year deficit and the government is talking a second stimulus package, so I'm sure that best case 6-7% growth scenario will look like a cakewalk compared to what it looks like now in another 1, 2, 3 years.
Posted by: Mike Brock | 2010-10-07 12:47:48 AM
Mike Brock
Claiming to be experienced in investment, however, the US stands and remains stronger than all. Short changing the US is always a bad idea. Hitler learned that harsh lesson as did the Soviets. The US is not Argentina. The US is the US, a mighty monolith of power, creativity, and enormous human potential. Was the US not supposed to go into crisis and social/political collapse in the 1960s? It did not. As nation, the US remains more powerful that all nations together. What they perceive as an outside threat, will be crushed. As your idiot comment that the US cannot outgrow it's debt, if there was any truth behind that statement, the US would have collapsed in 1993, even under the weight of crushing debt. It did not, however, and logged the biggest gains in economic grow not seen in human history. The US remains the greatest nation of all time, populated by the great people humanity has ever seen. You and your fellow travellers will be smashed like the Soviets.
Posted by: AB Patriot | 2010-10-07 5:01:14 AM
AB,
You seem to be assuming that it is consumption that drives an economy. And yet, the only way someone can consume is by producing. Producing allows you to consume and hence is the source of all wealth. Right now, the U.S. consumes more than it produces. That's like me making $100,000 per year and spending $150,000 per year. It is not sustainable.
Let me put it to you this way. Let's say there is a group of three people (Mike Brock, you, and myself). Let us further assume that we all produce $100,000 worth of stuff. Let us also assume that you and Mike spend half of it ($50,000), and lend the other half to me for me to consume. So I produce $100,000 of stuff but consume $200,000. The two of you are effectively lending to me for me to consume what you are producing. Do you see what is happening here? I can't possibly pay you back. The both of you decide to cut me off. Does the world come to an end? Of course not. You both produce for $100,000 each. Why are you lending to me so I can buy what you are producing. You can easily just exchange it between yourselves because you are producers. Problem solved.
The same goes for the U.S./China relationship. The Chinese don't need to finance the Americans to buy all those products and services. They can simply cut the financing and consume or invest themselves. Right now, with the whole Yuan manipulation, they are actually shooting themselves in the foot.
Posted by: Charles | 2010-10-07 5:45:07 AM
But Charles, you're missing AB's central point: America can just kill whoever tries to collect on their debt! AB's vision of a just world is one where America borrows as much as it wants from the rest of the world, and then threatens to nuke them if they don't keep the goods flowing.
AB is clearly a very moral individual. And not a psychopath at all.
Posted by: Mike Brock | 2010-10-07 8:49:42 AM
"you're missing AB's central point"
Yeah ... I wasn't really sure how to respond to that so I ignored it ;)
Posted by: Charles | 2010-10-07 9:44:11 AM
I hope AB is right ,that China is incapable of fighting back , because were in an ugly situation right now. China executes more of its own citizens every year than the rest of the world combined, they dont seem to have any problems with killing people.
Posted by: don b | 2010-10-07 10:10:54 AM
What makes you think that a bankrupt America will be capable of fighting at all? Continuing to pay their armed forces, fuel their aircraft and such sort of depends on the ability of America to you know, buy stuff. A feat which will prove very hard in a hyper-inflationary environment.
Sure, the government could simply start seizing assets from citizens for the war effort, but will Canada keep giving the US oil in exchange for worthless currency? Or will our government seize oil from oil producers and give it to America for free?
Unless America and China simply exchange nuclear ballistic missiles, it's hard to see how America could sustain a conventional war against China in the midst of an economic collapse. Especially if Russia became a Chinese ally, which would be likely, given they'd probably be screwed over too, and it would be in their interests to ally themselves with China.
Posted by: Mike Brock | 2010-10-07 10:24:00 AM
Sustaining a conventional war against China will be easy, provided the US doesn't invade the mainland. Indeed, the bulk of China's armed forces -- navy and airforce -- can be completely wiped out with one week. With enormous throw-weight of the US military, China will be completely annihilated and suing for peace within days. Air and naval blockades will be unnecessary as all of China's ports will be in ruins, and their air terminal completely destroyed. Given that this is the consequences of a war with the US, China will not initiate any hostilities. As for paying and supplying US forces in the field, considerations of national security will put those matters aside. US forces in the field and on the seas already have sufficient resources to initiate combat operations against China. China has a 1960s military: they will be easily defeated and their casualties in the millions. I would say US casualties would be a mere one hundred -- if that.
Posted by: AB Patriot | 2010-10-07 1:52:52 PM
China executes more people every year to satisfy demand for organs.
Posted by: AB Patriot | 2010-10-07 1:54:21 PM
And not forgetting one more thing: the world owes the US its Liberty. Yes. It was the US who defeated Hitler, the Soviets, and is currently the heaviest hitter in the war against Islamists. While Europe falls under the yoke of Islam, their governments confused by their efforts to fight or coddle Islam, the world does expect the US to preserve their Liberty. Given this reality, there can be no doubt that the world owes a considerable debt to the US. It is a debt that can never be repaid, but extending limitless credit to the US is a good start.
Posted by: AB Patriot | 2010-10-07 3:23:29 PM
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