Capitalism versus Debtism
Flawed Tax Law and Accounting Defects
is the Root Cause of US Debt Explosion
The most powerful economic competing forces in the universe are compounding interest and compounding debt. Compounding interest is a positive force, and compounding debt is destructive. China employs the former, and the USA and Europe the latter. ---John Koraska December 05, 2010
China versus United States
The Chinese are sitting patiently watching while we HANG ourselves. Balance of power is not just shifting it is accelerating. We either fix the problem now or we cede the mantle of global super power to the Chinese without them firing a shot. And right now they have the best hand.
US leadership is unaware of the imminence of the danger because they are unaware of the real exponential explosion of total debt (they fail to recognize the root cause of). China's leadership is more aware of our true debt exposure than we are. At some unpredictable time at their choosing they can dump US bonds and dollars and we will not be able to do one damn thing about it. One can only imagine the meltdown that will follow.
China uses trade surpluses to import US capital to build new factories and infrastructure at advanced paces, and US Dollar surpluses to buy natural resources around the world, The US borrows money to replace bridges.
The most powerful competing economic forces (Compounding Interest & Compounding Debt) in the universe are at WAR and the US is on the wrong side.
How to change that equation presents the most daunting challenge ever faced in US history!
The United States is already BANKRUPT; China just hasn’t called the notes yet!! (or dumped US Treasuries and dollars)
Dollar hegemony will be inevitably replaced with Chinese Yuan hegemony and the world will be changed for decades. Unless, US leadership changes policies, the outcome is predictable with mathematical certainty. The only question is WHEN?
John T Koraska aka SargeK December 15, 2010
Tyler, Texas