... at a probable cost of $1Trillion.....Air superiority weapon.

The Chinese have less than 200 of the unproven Shenyang J-31s, and don't appear to be building more.

If this piece has any validity, the Chinese are going to let us spend ourselves nearly to death on weapons we won't need while they crush the US dollar hegemony in the financial world.

I sent this info to a friend who is a lot more knowledgeable about China's finance than I am. I'll post his thoughts on this later.

Besides bankrupting ourselves with high-tech weaponry, we are bankrupting ourselves fighting asymmetric wars with Al Qaeda.

that Reagan caused the downfall of the Soviet Union by forcing them to spend huge sums of money on weapons and military misadventures...

.. but a lot of reasonable sources are now quoting $6 Trillion. http://www.thenation.com/blog/173589/6-trillion-wars

For example, veterans and disability payments in future years.

OTOH, if you include all the homeland security costs, many of which are cosmetic, feel good measures, the $6 trillion may have been spent.

It won't be pretty but if it does happen at least at some point we will regain our manufacturing.

But it was a road we should have never taken " Free trade" my arse..

Tariffs people-when we removed them we wrote the final chapter without knowing it.

But then, I'm one of those who believe that stable (diversified) national economies are less likely if local and region production-consumption cycles are missing from the economy.

If we remove one, other nations pledge to do the same, right?
[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]

He brought it up context of China dumping US bonds and the impact of that action

The US runs a huge trade deficit - we import much more than we export. So a cheaper dollar makes imports more expensive and exports cheaper.

In the long run, that should decrease the volume of goods imported and increase the volume of goods exported. However, in the short run, the trade deficit widens due to re-pricing before volumes are affected, and the cost of living goes up. Furthermore, there are whole sectors of the economy, such as consumer electronics, telecom, personal computing, etc. where the US has no domestic production capability and where prices would simply rise until demand fell.

You are right, we have to change that fact. Best way at this point is probably a slow, controlled devaluation of the dollar AND and an upward revaluation of the renminbi. I think this is the process that is currently in play by Chinese and American officials.

Such a devaluation would not remain unilateral. It would add fuel to the existing currency war fire. Competitive devaluations of currencies never have good outcomes. Just look at the 1930's and especially Japan's devaluation. The excess money had go somewhere and it went into militarization.

so china is willing to put their currency as the world standard?

anyone who thinks gold will ever be used again as a standard is living in the past.

Maybe this article is a way to strengthen the hawkers who advise on late-night TV to buy gold. And Glenn Beck.
[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]

However, most people do not fully realize what happened in 1971 when Nixon took us off the fixed rate gold exchange standard...aka Bretton Woods. The dollar and gold then became floating rate currencies. Gold now floats against all currencies, including the US dollar. We still have a gold standard in a sense. It is a floating rate system, which is the best way to handle the convertibility. The Chinese will eventually realize this and float the renminbi just like other major currencies.

Perhaps they don't care and are willing to make that tradeoff, but I kind of doubt it.

Thanks for the thread, FarCenter.

Look at the U.S.A. http://www.democraticunderground.com/10023851520

They have to float the currency and also float interest rates. Capital controls also have to be removed. They are on the way with convertibility agreements with countries such as Australia, but are not there yet.

It is true they are buying the crap out if the gold market. They are actively trying to lower their percentage of US Treasuries as foreign exchange reserves, but it has to be done slowly and without fanfare. They do not want to induce a financial panic.

As far as the Chinese going on a gold standard I highly doubt it. The upward revaluation of a gold backed renminbi would be something their economy could not handle. It is in their best interests to float the renminbi within the current floating rate currency system.

with their latest and why we as voters need to work our asses off to get them away from the reins of power as soon as elections will allow. I say this like I really get out and do a lot, which I have to admit I don't do nearly enough so I don't intend this to be cut to those of us who do already work their asses off for us. To those people I say I appreciate what they are doing.