China US Conflict And Dollar Demise


This cold war outcome with China was predictable. There are a few false stories told to keep people from realizing this outcome was predictable.
One is that America could survive as a service economy. This derives from the same concept of added value in manufacturing, where a country imports raw matertials and exports manufactured goods – like Japan. But, services aren’t added value.
To understand this, we need to look at the differences between service and manufacturing.

Manufactuing takes supply chains, infrastructure, hardware, factories, and skills to build and maintain production. Further, as a matter of optimization, manufacturing promotes improvements in manufacturing. Companies will atttempt to optimize their manufacturing to save costs or improve output.
It is hard to move manufacturing. You can’t move infrastructure. Hardward is hard to move. Factories can’t be moved, they must be rebuilt. Supply chains take time to form. And it takes a bit of time to create the skillsets in the workforce to support manufaturing.

Services, on the other hand, are easy to move. Most services only require easily moveable equipment. Not only is the service itself easy to move, but the knowledge is even easier to move. You don’t need to import a hair stylist into your country, you can just teach people in your country how to style hair.

Services follow wealth. Wealth is a product of raw materials, manufacturing, systems of organization (such as society and economy), workforce energy and workforce skillsets.

Manufactuing tends to be at the pinnacle of wealth formation. It pulls raw materials, it forms systems of organization, it demands workforce energy and workforce skillsets.

When you remove manufactuing from a country, you will get a diminishment of wealth. The US is in a unique position in that the dollar, something the Federal Reserve can create, is uniquely valueable. What we are seeing now, however, is a stress on that function.

In a sense, the world pays a tax to the US for using dollars. The world pays this tax so that they can have a stable currency to trade with. However, this system can be undone in a few ways.
The stability of the dollar is in part dependent on the stability of the US. The stability of the US is made up of a number of things. Primarily, political stability, military dominance, and economic productivity. If the stability of the US faulters, other countries will be less inclined to use the dollar.
Another way the system can be undone is if the tax on other countries becomes too high. Now, this is not an ordinary tax. It is a tax through money supply control and money creation. Not only can the Federal Reserve print dollars, but they can, through the member banks, control a lot about how much money is available and to whom it is available. If the Fed starts making too much money available to too many non-productive entities, like with this virus stimulus, this cheapens the dollar, and it devalues the dollar reserves other countries hold.

But, the path of downfall is complex. Even in looking at the response other countries can have to an over creation of dollars, their choices are not so great. A country could dump the dollar, but they still need it for trade, which requries they keep some minimum amount. They could seek alternatives, like other currencies or gold, but the US MIC conducts operations to make sure this doesn’t happen and so went Gadaffi. A country could inflate their own currency, but they get diminishing returns from doing this. To understand that, you have to understand a little about money creation and the value behind a currency.

If we look at something like Zimbabwe, they inflated their currency tremendously, and, yet, the total buying power of their entire money supply didn’t go up. The dollar is in a different situation. Because there is such a demand for dollars in trade, and becuase the dollar is used arond the world, when the Fed system creates dollars, they are actually temporarily increasing the total buying power of the entire money supply. This is, of course, and over simplication. In reality, you have to look at active money (that is, money moving around) rather than money in savings. And you have to look at who gets the newly created money first. But, suffice to say, when countries with currencies not as strong as the dollar try creating more money, they don’t get the same return from doing so as the US Government does by issuing treasuries.

What does this all have to do with China?

By exporting the US’s manufacting to China, the US has diminished one key factor in it’s own stability. Further, by using China as the primary country for exporting manufacturing, rather than spreading manufacturing across multiple countries, all that wealth that comes with manufacturing went to a single, competitive country.

China, has a history of power grabbing and has always wanted to be the dominant player in the world. It was so obvious there would eventually be a conflict people were speculating about this in the early 2000s. If the elites that control government and corporations didn’t want this conflict, they could have spread out manufacturing to multiple cheap labor countries, but, instead, they focused on China.

Even apart from China, the US has destabilized in a number of other areas. By allowing a profiteering medical monopoly, a majority of US citizens are unhealthy. By allowing cartels in so many industries and backing those cartels up with competition preventing regulations, the US has a divided workforce where one section is inflexible, bound to their licensed jobs, and one section is impoverished, doing part time or contract work with barely any savings. This is not the sort of citizenry you want for innovation or to be economically competitive as a country.

The various social justice efforts, including media and university promotion of social justice issues, has polarized political opinion in the US and reduced political stability.

These paths of destabilization of the US were known and the conflict with China was predictable. I estimated that globalists thought China would be a darling of globalists. If they could replace the US with China, China who’s population is so controllable and controlled, there would be no citizerny that would contest elietes, and they could could run freely in the world – organ harvesting, sex trafficking, etc. But, I guess they overestimated the controllability of the Chinese government. Just because the Chinese population is controllable doesn’t mean the power hungry people in government of China are likewise controllable.

The combination of the destabalization of the US along with the increased money creation by the fed in response to the virus has put the dollar in jeopardy. However, China has seemingly seemingly lost its position as the darling of globalists,
The destabilization of the world from a cold war with China makes the destabilization of the US look less extreme. Further, with the world unified against China, countries have little option but to continue to support the dollar system.

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