chinese collapse mortgages war predictions

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China

You can't begin to understand the USA economic collapse without understanding foreign investment; specifically Chinese credit and mortgage standards versus the USA credit and mortgages standards. It is literally the tale of two cities. The very wealthy receive credit, mortgages and banking from the USA and then there is the rest of us left to predatorial banking practices. For me it is a most difficult subject to write on as I have Chinese friends and I appreciate the Chinese culture. But when I consider the economic toll on the USA I have to say default on debt and isolate.

We will not be able to begin to stabilize our economy until China gets out of our banks. That includes all the Chinese Mortgages/Yen. Chinese mortgages which specifically sell homes to people who could never afford them. It is completely predatorial and it is in our national security interests to stabilize the housing market as it will eventually and I mean way down the road will stabilize our economy.

Actually all foreign business needs to be nationalized and those jobs be given to the nationalists.

As an investor with US treasury, it is my very humble opinion we need to default and isolate and embrace our brethren. Only when everything is nationalized can we begin to stabilize this country. It is an unpopular subject. No one wants to default with China not because of military options but because we just like the Chinese so much and yet it is inevitable. It is what needs to be done and yet there is this game in Washington DC of stalling. One could argue DC is not doing The People's work because they are putting their own economic interests first. I bet it does pay well to be in DC but DC has promised to change from being greedy cronies..


Defaulting on Loans

Do you think the USA should default on all foreign debt for national interests?

  • Yes
  • No
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Defaulting on China

Do you believe if we default on China we will eventually be in another world war?

  • Yes
  • No
  • It depends
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Deafulting with Other Countries.

I believe Isolationism is our only play. It isn't what I signed up for. I like free trade and world trade. World Trade has just been abused so badly that it is irredeemable. There are just too many bad players and too much nationalism for it to work. And while the USA has friends around the world, I doubt those friendships are as strong as they use to be. Isolationism/Protectionism is the only play left for the USA. Arguably the USA is already nationalized. Liberty is dead and so is free trade. It is now up to the government to default.

The Chinese have the ability to allow the USA to save face but it would be at the expense of their people. It is always at the expense of the people in all nations. And in a communistic society it grows every increasingly difficult to continue to line your pockets and the pockets of your allies and still maintain a populists position. Ask Obama. I often laugh when I hear references to Maoism since Maoism was born out of USA defaulting on Chinese debt.

But aren't all promises made to be broken? The People of the USA know this for certain.

In past times USA defaults on foreign debt and maintains its relations with its staple countries.

Nationalism a New Beginning

Nationalism as a new being means an old ending for world trade. Perhaps historians will get it this time that in the next 100 years world trade is an economically unstable endeavor that ultimately leads to war because John Nash was wrong about governing dynamics. Anthropologically we are incapable of succeeding without competition. I would have thought the USA would have understood that at the onset.

So the question is when will the next war begin and the answer is sooner than you think. I don't make predictions. I am not a guru but it is close at hand. I would think it would be a good tenet that if you don't have the war won you don't fight it. But that is not how those things go down. It is not atleast from a historical perspective.

It will begin when the USA recognizes its only play is for war. A conclusion which is rapidly evolving in the USA as people are homeless, jobless and hungry.

And of course we will as we always have remained loyal allies with China.

And the rich in this country will have to pay really really high taxes and wealth will have to be redistributed as the wealthy don't fight in wars nor do they allow their children to fight and the impoverished don't win wars and we hate to lose.. So the wealthy will have to pay a very heavy price. I believe the wealthy have been so informed because they have off shore accounts and all kinds of schemes to avoid being taxed. How unpatriotic?

And the cast system in America will be gone. Nationalism will be born.

Nationalism is the New Beginning

Do you believe nationalism is the new beginning?

  • Yes
  • No
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Tax the Wealthy

Do you believe the USA should tax the wealthy above $250,000 a year?

  • Yes
  • No
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Inevitable World War

Do you believe a world war is inevitable as defaulting on debt?

  • Yes
  • No
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Far Fetched?

I know you might think this is a far fetched article without references. I have them. Comment. The premise of this article is very simple. World Trade always results in World War and inextricably there can not be one without the other. But I respect everyone that disagrees with me and I am aware how unpopular this argument is.

I can only imagine China infusing the USA with all of its cash and forgiving USA debt. That is the next move on China's part. I wish the world could be a different place. I would refer you to some of my other Hubs but I am forbidden to reference them. But I have believed in Free Trade and open borders before all of this. I had thought the world would have learned from its own history and made preparations to hold these relations sacred and not be morally corrupt in business practices but I was wrong. I guess if you are in business, you can make money in both peace and war. And for the businessmen it is all about business. I just wish there could have been a world without war even though I submit we are anthropologically programmed to war for succession.

And it is not in my nature but I readily recognize I am not everyone.

And so Death begins.

Comments are appreciated.

 Any and all comments are appreciated and respected.  I know gthis is a controversial subject.  I am prepared to hear the critics.  All efforst apreciate by my audience.

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Comments 12 comments

ameliejan profile image

ameliejan 5 years ago from Alicante, Spain

I think you have some interesting thoughts but I definitely don't think the world debt will lead to a world war. China's transition to capitalism will undoubtedly affect the world, but I don't think it will be so extreme.


jt walters 5 years ago

Thank you for your comment. I appreciate it as it gives me hope fo a beter future between the USA and China. Funny, I thought China was a capitalistic society since they collect interest on our Treasuries regulary.

Thank you again for you input.


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

Interesting thoughts, make me smile.

So talking about default, what will be the effects? First, immediate poverty for all of America. If the economy does no more stand in for its dept, there will be no more international trade - with consequences.

I would estimate that world economic productivity allows for some 15% of producing industry. So all those economies run a long term deficit, who are below that rate and all economies above consequently have a surplus. Countries with 15% producing industry can be called lucky, because they run their economy self contained, those economies could afford isolationist measures, theoretically.

Not so with the US. The US has some 10% producing industry. That is well below world median productivity. America going into isolation will mean the national income has to drop to the level that the existing producing industry catches up with world standard. That is roughly 2/3 or the current GDP and a per capita level of Spain, Italy or South Korea.

There is another threat to the US. The US has not yet learned to be energy efficient. It consumes 10 times more oil than it produces. 2/3 of oil goes into transport and 1/3 into production. Doing a little maths and some assumptions and i estimate that only 1 out of 8 or 9 cars will be on the road after defaulting, a good thing though - no traffic jams any more.

What will happen to China? China is well above the magical 15% productivity. China is self contained. They don´t need the money lent in recent years to the US so the US could buy chinese products.

Of course any economic impact/default/crisis/depression.. leaves initial scratches and bruises. But the self healing forces of the economies above the median world productivity prevent from any lasting harm.

Other economies are in more trouble, that includes the US as much as it does include the PIIGS countries in Europe.

It is not a good idea to go national. It would harm the US magnitudes more than any little Lehman-Brothers-black-Friday. At least that is my opinion.


jt walters 5 years ago

But that is exactly the problem. Low GDP. Increase the GDP in the USA and we can be an isolationism country. Not that we would chose this but yes, the USA is in desperate economic straits.

As for the PIGS, I thought it was generally understood all of their currency is dependent on the USA economy?

There are really simple answers to the fuel crisis in the USA. We have that technology as does Sweden and Australia but we aren't allowed to us it because this executive branch is so dependent on middle eastern influences.

I really value your writing, time and opinion. I need to reflect upon it. You do have really solid points. In all my articles I try and take a position and argue it from a certain perspective always reserving the right to re-argue from another a new enlightenment.

You are probably absolutely right except if we go to world war over trade like we did with Germany in WWI and WWII and it saddens me to write this because I am German-American. America makes profits in War. Hands down we always profit from war. Germany and France don't do too badly in War ether.


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

JT - about the PIIGS economies and US fingers in it.

I am quite sure that the US is not heavily involved.

As far as i know, the greek public dept is held to 30% by private investors/foreign countries, another 20% by the ECB (European Central Bank) and 20% by the IMF. The rest is to greek people/institutions.

So from the first 30% only 8% is held by the US and then there is the US share of the IMF. That´s it. I would estimate the total US involvement to be somewhere around 30 billion USD. That is actually peanuts compared to what the US needs to borrow to keep their own status quo.

One more word on productivity. To understand that is essential for the outcome of any future economic crisis. Low productivity (industrial production, manufucturing over total GDP) puts economies at extreme risk in crisis situations. That is why the US is still in trouble, same as the UK and the PIIGS and others like Northern Europe, China, India .. are in good shape.

So first you have to prop up productivity, then you could go into isolation, but probably then you wouldn´t have to go national any more.


jt walters 5 years ago

No argument from me. Although for some reason I still think the US investment in the Middle East is quiet substantial and in south western Europe although you would never know it traveling to those countries by what the citizens state. Even Germany is heavily dependent upon the USA. As for that fact isn't the EU the defacto currency of the USA?


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

JT - the only reason why the USA is important to other world economies is because the world relies on the USA to stand in for the credits taken.

In 2008 (before Lehman), the US investment in foreign countries added to some 15 Trillion USD. At the same time the foreign investment in the US was 20 Trillion USD. For 2011 i couldn´t google figures, but doing some extrapolation and digging into the US census for details on sovereign dept i would expect that all money necessary to meet the US public dept rise from 2008 til 2011 is coming from foreigners. That adds another 2 to 3 Trillion to the 5 Trillion of 2008.

If the US continues like that(no matter public or private/corporate) within few years the US will be owned by the fellow world in the neighbourhood.

The US can´t afford to do a number of things any more:

1. can´t afford to have no strategic economic policy.

2. can´t afford to go to war.

3. can´t afford to not produce (make things)

Please understand, this was written with passion for America, the country i grew up in. But reality is brutally different from what most people in the US think it is.


jt walters 5 years ago

I agree with points 1 & 3 and as for point 2 we have global leadership in this area so every economy ultimaely feeds into point 2. Nobody wants war but it is clear just from a historical point the USA will ultimately default where China wants us to or not ther is an arrangement. If you grew up in this country than you know this is an Asian Country. China isn't self sufficient as you say. If they were they wouldn't loan us money to buy things from them. We also have significant investments in Emerging markets which limits our exposure to the rest of the world's economic conditions.

And I agree the world is brutal to the USA and the citizens of the USA. It is unfortunate as we aren't a bad lot. American has significant resources committed to Europe or has NATO disappeared in the last 20 years? We manufacture the world's aircrafts. We provide the oil. We provide alot of the pattons for which China manufactures. We are the R & D center of the world.

The USA still has game. Don't worry. And for all the nay sayers well we shall see.


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

JT - the US has been playing the world police force. That can´t be afforded any more. Troups in Afghanistan is a good 0,4 Trillion USD per year. What for? Rare earth elements for cell phones?

Reality is that the US is in much worse shape technologically than you would expect. There is a good indicator for that. The US census keeps record of trade balances. There is a balance sheet for so called "Advanced Technology Products". 20 years ago the US ran a significant trade surplus on those products (airplanes, transport, electronics, capital investment products). Today the US has a huge trade deficit, some 25% of the total trade deficit and rising. The US is no more the provider of world´s aircraft and the world´s R&D center.

The US can come back to technology leadership. But only if massive changes are taking place in government policies and (very important) in the mindset of the people.


JT Walters profile image

JT Walters 5 years ago from Florida Author

What do you think the USA people should think?

We are still R&D. We just haven't put those projects on line for the erest of the world to see. Just because we don't write these things down for everyone to see any longer doesn't mean they don't exist. And I can guarantee we are still builidng the best aricrafts. That Luftansa airplane you are boarding was built in the USA.

No one in the USA wented war. You should know that but when war is thrust upon us we adapt and support our troops. And Germany and France have done quite well for themselves in these wars.

You seem to forget what happened to the USA on 9/11. I haven't seen a terrorist act to that scale in any other country in the world. Show me the country that has lost such huge monenuments, that there ministry of defence has been attacked and that planes where sent to destroy DC. Show me any other country on the planet that has endured that. I don't think you will be able to indicate anything to that level anywhere but here in the USA.

What you know is only German Propoganda. Inside the USA we know there are plenty of things in the pipeline to be invented. And most of those patents go tot he Chinese ecause they manuafacture thinsg much cheaper and they don't pay their people well.

Americans even question whether 9/11 was an inside job. We are an enloghtened people despite what Europe has to say about us. Just because we don't show everyone what we are working on in R&D doesn't mean it isn't there. The computer you are writing me from is run by Windows and Microsoft is a USA company or has Germany forgotten that as well? Did Germany ever pay the USA back for all the reconstruction after WWII. Or for the missile Defense Program that protects your country? Yes, Missiles. Or did you not know about this as well?

Only so much can be expected of the USA. We can't protect all of Europe and as you call it police the world and still be expected to do everything for the rest of the world to sit on thier behinds and live large. And that has been going on for a decade now. USA is feed up with it.

And if you don't know why the USA is really in Afganistan it isn't about the ores. You have underestimated the USA for a long time.

I value, respect and appreciate your comments and the time you took to share your opinions.


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

RT - of course the US is in R&D. My point is that the US is constantly loosing ground. And the people are not willing to take note and do something against it.

It happened that i was in Seattle, Wa. on 9/11. So i know what had happened and about the sentiments of those days.

A word about propaganda. Noam Chomsky gives good explanation of how manipulation works and what to do against it. Having the privilege to be fairly fluent in a couple of languages and going different places on this planet, i think i have a balanced view on what is going on. And especially the refreshing discussions with my wife on world politics do help. She is from Soviet Russia.

My inside knowledge of my professional life in the aerospace business only confirms that the US is no more on top. I Wish they were though, because that would only be beneficial for my business.

The time of the cold war is over. About 10 minutes driving from my place used to be a large Pershing II missile base. Was operated by NATO, Germans didn´t even have the key but payed for everything, missiles, troops. What is more interesting is that the base was turned into a modern windfarm with 30 MW power.

And the repayment of reconstruction - that is a good one. The yearly interest rate for the US-tresuries bought by German banks is higher than the Marshall plan funds were, even if inflation adjust from the 1950ties.

We all have to look forward and we have to try to find out which way to go is best. The problem of the US is its loss of sense for economic reality. The problem of Germany is its ageing society.


jt walters 5 years ago

I'm from an aerospace community as well and I know we are not shy on development. If anything aerospace is all connected and beyond borders. The world is aging and the burden of all the elderly lies upon a small portion of society but this is international.

I'm pretty fluent in other languages as well. I lived in Europe for a bit. I didn't always like what I heard but I did awaken to the political reality that I lived in a state of propoganda as all people of all countries. Actually I always have Russian friends. It is a German thing we all know we are cousins to the Russians. OUr languages are similar. We all love Germany over here in America.

You don't know that NATO troops include Germans? Aerospace filled with Germans internationally.

I agree forward looking but I watched the morning news shows and our politicians are al calling for isolationsim/protectionism. They alos want to default on the Chinese Debt. You can probably pull the TV show it was Meet the Press with David Gregory. And while I submitted to you it would be an unpopular hub topic it is a political reality of our country in this election cylce. The longer the seperation of classes and wealth continues the more probably a civil war. And I agree we must look forward but it is very hard to do in a coutnry that is starving.

I really appreciate and vaklue your comments. It helps me grow as a person and as a writer. You should know I a only writing one side of my opinion in each article. I wait for the coutner arguments and you have been the first perosn to comment and to provide good counter arguments which I appreciate it. Because I am an academic and I am associated with Aerospace communities I knew the short comings of defaulting on Chinese Debt but I still wrote the article because it is a national debate.

Aerospace superiority by Europe hasn't been established although I apprecite your comments. http://www.bloomberg.com/news/2011-05-26/air-franc... - 78k -

I think there are flaws with the Airbus and we still have aeropsace projects in development over here that no one knows about.

As always I really appreciate your help as it makes me grow as a person and as a writer.

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