So I heard yesterday that the PRC is finally unpegging its currency from the US dollar. For now, they're going to measure it against a bundle of world currencies (USD, Euro, Yen, and GBP, I believe)
This is the first step to allowing the Yuan to be exchanged at its actual value, and will essentially make Chinese imports in the West more expensive. This has two immediate effects:
1- Trade deficits with China, especially the US's, will shrink.
2- Domestic manufacturers will have a better chance of surrviving unfair Chinese practices. (production costs in PRC are lower due to no worker/environmental protection laws)
Long term, it will mean China will be able to dump its US currency in favour of other money, which will lead to a devaluation of the US dollar. This will make imports to the US less competitive - countries which depend on the US market to take their excess (almost every country EXCEPT China) will feel it in the yinyang.
So basically, China is one step closer to gaining super-power status. I'm reminded of the rise of Germany in the 1880'sw and 1890's. Britain had gone unchallenged for most of a century, and all of a sudden they had a rival who could match and beat them industrially and economically. Friedrich von Bernhardi saw what was happening and wrote his famous "Germany and the Next War", which accurately predicted that there would be a huge clash between the two super-powers, and both would be forever weakened because of it.
The US has gone virtualy unchallenged since 1945 (let's face it...the USSR was too incompetant to challenge the US. Most of the Cold War hype was engineered). Now they will have another power with which to contend, and the results could be very good or very bad.
Very bad scenario:
North Korea goes nuclear and China, naturally, gets worried. WOuldn't you be scared of a batshit insane little man who can destroy millions of people on a whim?
CHina invades North Korea, US builds up in the South and in Taiwan, and the two clash, precipitating a World War. The NATO-led West would be pitted against China and and Muslim allies of convience they could pick up.
Probable battle grounds: Korea, Siberia, Japan, Kashmir, and maybe even Australia.
It's doubtful if it'd go nuclear between the two, (Mutually Assured Destruction - MAD) but even a conventional war would kill millions. In the end, both powers would be weakened and a new emerging order would eventually achieve equal status - India, South Africa and Brazil would be my picks, if they ever get their acts together.
Very Good scenario:
Cmpetition is the source of all achievement. With nobody to challenge you, you have no motivation to improve. The new competition could bring back what America has steadily lost since the end of World War II - the 'can do' spirit which trekked across a continent, which invented powered flight, which put a man on the moon. The arrogance and complacency would be lost and replace with a more world-wide view of events.
Science and technology could prosper once more. Since there will be no chance of complete dominance in the Middle East by the USA anymore, they will NEED to find an alternative fuel. Solar, wind, hydrogen, ethenol, etc all could beocme viable alternatives with more research.
We might actually return to the stars! The possibilities are endless. In less than a single life time we went from not being able to fly through the air to having a human being walk on the moon. (Ponder the significance of that). Think about what that kind of spirit could do with today's technology.
I'm an optimist, and am inclined to believe the second scenario is more likely. bothe the PRC and USA have people far smarter than me working for them, therefore know all this already. Both know that it's in their own best interests to keep the peace. (Or so I pray).
All eras must end. The Pax Romana ended with barbarian invasions. The Pax Britannia ended with the most bloody and barbaric war in human history. Hopefully, Pax Americana will not 'end', but rather become the Pax Terra - The World Peace.
Duke.
This is the first step to allowing the Yuan to be exchanged at its actual value, and will essentially make Chinese imports in the West more expensive. This has two immediate effects:
1- Trade deficits with China, especially the US's, will shrink.
2- Domestic manufacturers will have a better chance of surrviving unfair Chinese practices. (production costs in PRC are lower due to no worker/environmental protection laws)
Long term, it will mean China will be able to dump its US currency in favour of other money, which will lead to a devaluation of the US dollar. This will make imports to the US less competitive - countries which depend on the US market to take their excess (almost every country EXCEPT China) will feel it in the yinyang.
So basically, China is one step closer to gaining super-power status. I'm reminded of the rise of Germany in the 1880'sw and 1890's. Britain had gone unchallenged for most of a century, and all of a sudden they had a rival who could match and beat them industrially and economically. Friedrich von Bernhardi saw what was happening and wrote his famous "Germany and the Next War", which accurately predicted that there would be a huge clash between the two super-powers, and both would be forever weakened because of it.
The US has gone virtualy unchallenged since 1945 (let's face it...the USSR was too incompetant to challenge the US. Most of the Cold War hype was engineered). Now they will have another power with which to contend, and the results could be very good or very bad.
Very bad scenario:
North Korea goes nuclear and China, naturally, gets worried. WOuldn't you be scared of a batshit insane little man who can destroy millions of people on a whim?
CHina invades North Korea, US builds up in the South and in Taiwan, and the two clash, precipitating a World War. The NATO-led West would be pitted against China and and Muslim allies of convience they could pick up.
Probable battle grounds: Korea, Siberia, Japan, Kashmir, and maybe even Australia.
It's doubtful if it'd go nuclear between the two, (Mutually Assured Destruction - MAD) but even a conventional war would kill millions. In the end, both powers would be weakened and a new emerging order would eventually achieve equal status - India, South Africa and Brazil would be my picks, if they ever get their acts together.
Very Good scenario:
Cmpetition is the source of all achievement. With nobody to challenge you, you have no motivation to improve. The new competition could bring back what America has steadily lost since the end of World War II - the 'can do' spirit which trekked across a continent, which invented powered flight, which put a man on the moon. The arrogance and complacency would be lost and replace with a more world-wide view of events.
Science and technology could prosper once more. Since there will be no chance of complete dominance in the Middle East by the USA anymore, they will NEED to find an alternative fuel. Solar, wind, hydrogen, ethenol, etc all could beocme viable alternatives with more research.
We might actually return to the stars! The possibilities are endless. In less than a single life time we went from not being able to fly through the air to having a human being walk on the moon. (Ponder the significance of that). Think about what that kind of spirit could do with today's technology.
I'm an optimist, and am inclined to believe the second scenario is more likely. bothe the PRC and USA have people far smarter than me working for them, therefore know all this already. Both know that it's in their own best interests to keep the peace. (Or so I pray).
All eras must end. The Pax Romana ended with barbarian invasions. The Pax Britannia ended with the most bloody and barbaric war in human history. Hopefully, Pax Americana will not 'end', but rather become the Pax Terra - The World Peace.
Duke.
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