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TitaRusell 1 days ago [-]
America can't win this war nor admit it can't win. It will likely take the PRC to end this conflict. Xi winning the Nobel Peace Prize next year? What is "holding all the cards" in Mandarin.
tonyedgecombe 14 hours ago [-]
I doubt this will end whilst there is a Republican president in office. You have at least two more years of this to go.
anovikov 8 hours ago [-]
You guys probably miss how cheap oil tankers are vs oil they transport. Even if each and every tanker was hit as badly as the most badly damaged ones, it will still make a lot of money transporting oil. Unless they can not just damage, but sink a very high proportion (say >3%) of tankers, there's no stopping it. But so far not a single one has been sunk out of thousands that transited, they simply have no way of doing so. The longer it continues the more confident the sailors will be is simply shrugging off these attacks.
Hikikomori 7 hours ago [-]
With the other strait closed boats need to go around Africa taking an extra month, this is already causing a shortage as trips take much longer.
Edit: tanker hit a mine today in Hormuz, going great
klipt 1 days ago [-]
Expensive oil means more people buying Chinese EVs and Chinese solar panels. Good for the environment and good for China. Why would China want cheap oil?
mostlysimilar 1 days ago [-]
Their economy relies on exports that just got a LOT more expensive to ship, and the US economy destructing would likely take theirs down with it.
The US only represents about 3% of China's GDP. If the US economy declined 10 or 20%, it'd be basically just noise to them.
prewett 23 hours ago [-]
The US is 150% of China's GDP (in nominal numbers) [1]. AI claims that China's "purchasing power parity" GDP is $44t compared to $32t for the US. There is no way that the US, which has been the world's largest economy for decades, is 3% of China's GDP.
Exports to the US is about 20% of China's GDP [2].
Regardless of any of China's contingency plans, US exports are well above noise-levels.
I think he means exports to the US as a percentage of China's GDP is 3%
porkshoe 7 hours ago [-]
Exactly. I had incorrectly assumed that people would use context to make the correct inference, but it looks like prewett ran out of tokens, and failed to parse it.
NewJazz 19 hours ago [-]
Isn't [2] exports in general, not exports to the US specifically?
carefree-bob 22 hours ago [-]
That's not how you would want to measure this, as it doesn't much matter whether a good is directly exported from China to the US, or whether it is routed through a third country like Vietnam, or used as an intermediate input to a different good which is then exported to the US, etc.
What you should take note of, is that China's trade surplus tracks the US trade deficit extremely closely, and this has been the case for the last 20 years.
Said another way, most nations in the world run roughly balanced trade. There is only one nation on earth that can sustain large and prolonged trade deficits. Only one. That is the US. So if you are a nation whose entire economic strategy rests on running large and sustained trade surpluses, then you are going to be exporting your surplus to the US, directly or indirectly, and only to the US.
Now in practice, some of that will be direct sales to the US, some will be indirect sales to the US, but at the end of the day, if you want to run a 1.2 trillion dollar trade surplus, then you have to hope to God that the US is willing to run at least a trillion dollar trade deficit, because no other country is going to do that for you, the entire rest of the world may be willing to accomodate a hundred billion or so, but for everything else, you will depend on the US, directly or indirectly, to absorb your surplus.
mindslight 22 hours ago [-]
This is a good analysis, but coming full circle - having a trade surplus is not itself a vulnerability. Rather the actual vulnerability would be needing US dollars, to pay for imports (raw materials and whatever else they don't manufacture themselves). If China doesn't need more US dollars (because perhaps they are already holding plenty of treasuries), then they can simply prop up their internal economy with financial stimulus. And longstanding currency controls make it so they can manage this easily. Print yuan to buy that stream of goods that were previously being exported, and just bury them in a hole in the ground. Or more fruitfully, give that yuan away to their poor rural population to boost their standard of living, improving the country and shoring up support for the Party.
somenameforme 20 hours ago [-]
I don't think things are so straight forward because everything is connected in ways that are sufficiently complex to defy any sort of straight forward thinking; when you change one thing, 10 other things change and in ways that will invariably end up with completely unexpected outcomes. For the most straight forward example - those things that are exported are not just buried, but end up being used in various processes. And China itself is also heavily dependent on imports, importing upwards of $3 trillion in goods and services. When your exports are no longer available, you may soon find that neither are your imports, and suddenly everything starts breaking.
mindslight 7 hours ago [-]
I was merely responding to the implication that a having trade surplus is itself a vulnerability. There of course may be other constraints whereby China is reliant on external trade, but those are separate arguments.
carefree-bob 14 hours ago [-]
The reason why you need the dollar is because of the balance of payments identity: changes to the capital account + current account = 0
So to run a current account surplus against the rest of the world of $100, you need to accumulate $100 of financial claims belonging to the rest of the world. There are complexities, for example I switched from "trade surplus" to "current account" because things like interest payments also need to be added in, but with these adjustments, you cannot run prolonged trade surpluses without storing your money in some other nation's jurisdiction.
Now the question is, which nation is willing to accomodate inflows of a trillion dollars a year? That's right, only a single nation is willing to do that. Most nations ban or severely restrict foreign capital inflows. Those that don't ban it, they don't have the necessary financial infrastructure to accomadate the scale of surpluses that China needs to run. This is why I laugh at all these reports of "China is dumping treasuries". China accumulated over a trillion dollars of dollar claims over the last year. That's in addition to what they already had. Why? Because who else would allow those levels of foreign capital inflows into their economy.
So once again, the US is the only nation willing and able to absorb these capital inflows.
Personally, I don't think this is sustainable, it's deindustrializing the US and is highly destabilizing, but since the liberalization of global capital flows launched by the Clinton administration, we have been doing this 30 year experiment in what happens when you let countries print money and use them to buy your bonds. The results have been, in my opinion, highly destabilizing, and it's not going to end well. But many of those who grew up in this period, think this is just how the world works and they can't imagine any other system, one in which capital inflows were highly restricted and as a result, no nation ran large trade surpluses against any other. Or they don't think about this at all and believe that China's hard work and industrial prowess is why they are able to run large trade surpluses, completely ignoring the whole money printing to buy US bonds that is happening in the background. When the US was the world's primary industrial power in the period 1870 - 1920, we ran current account deficits, not surpluses. What China is doing, industrializing while exporting capital -- that is truly unprecedented and possible only due to the combination of fiat non-convertible money combined with the US allowing unrestricted capital inflows. It's a truly bizarre state of affairs.
mindslight 8 hours ago [-]
> you need the dollar is because of the balance of payments identity
This is just tautological with the trade surplus. Yes, the two go hand in hand.
My point is that "trade surplus" is always trotted out as if it is some vulnerability of China's - that if we stop giving them dollars and they stop giving us goods, this would create an unsolvable problem for China's economy.
But this is merely fanciful fiction borne from western thinking where we don't have the political will to take sustained direct action to subsidize domestic industry. But China isn't bound by this! Rather it is merely wishful thinking as if we hold power here.
Hence my focusing on whether China actually needs more dollars (ie is reliant on exporting to get those dollars), or whether they could make do with what they've already saved up in treasuries (and other USD investments) while being unable to export as much to the US. My gut says their economy and industry is now large enough that they could weather it just fine. We're still looking at them as if they are the little kid from the 90's (who would have indeed been hurt if we had never started the arrangement), and failing to see that they are all grown up. The pump has been primed.
> the US is the only nation willing and able to absorb these capital inflows... The results have been, in my opinion, highly destabilizing
In my opinion, the destabilizing results were not inevitable. Rather they were the result of deliberate policies that were kept outside of the Overton window by the entrenched interests who were benefiting from them.
Having others say "I'm willing to accept IOUs from you rather than requiring payment in cold hard cash" (aka having the world reserve currency) is an inherently lucrative position! The downsides can only come from how you react to having that ability - a spendthrift might write IOUs without limit and spend all their cash, making the position itself look like a vulnerability. Whereas a frugal person who wants to avoid that fate but isn't very creative might keep a stack of cash that 1:1 corresponds to IOUs they've issued.
The two deliberate policies of which I speak are 1. USD must always inflate (which precludes the frugal option) 2. the legislature/executive government is prevented from spending the newly created money on (most) deliberate constructive activities (like the industrial subsidies I was talking about above).
So most of the wealth we received from having the world reserve currency (represented in-system by newly created money) was simply given away by the Federal Reserve directly to banks (as low-interest loans) to blindly "invest". This resulted in the everything bubble - unproductive assets as a safe haven, intemperate investment in new industries, but failure to maintain the industries we had (since mature industries don't achieve outsized investment returns).
In a different world the legislature would have spent some of that wealth directly subsidizing domestic industry to maintain it, backed up with laws about not being able to move production lines out of the country. But of course this was not in the interest of the corpo class as it would have meant less money going into their own pockets. Hence it remaining on the fringes of the Overton window. (the one place it did actually happen was the defense industry, of course)
Now that the deindustrialization scam has run its course, the corpo class is on to the next thing - economic consolidation to further cement their position. They're channeling echos of what would have been prudent decisions back in the 90's, which makes grassroots voters think they are finally being listened to. But it's nonsensical to talk of closing the barn door after the horse is long gone, right? So in reality they're pushing upside-down bizarro revanchist economics (like framing strong currency itself as a problem!), to destroy the economy that we actually did develop. Then they can mop up and further centralize.
> Last year, the daily cost of hiring an oil supertanker (known as a Very Large Crude Carrier, or VLCC) to sail from the Persian Gulf to China was just $65,000, according to Clarksons, a London-based research firm.
> Now? It costs $1.6 million per day to hire a VLCC for that route, according to Clarksons.
porkshoe 24 hours ago [-]
How would that represent victory?
Iran's leadership was replaced with more extreme leadership and America has spent countless billions.
Nothing is better.
Only a hyperpartisan brain could refer to that as any sort of victory.
rayiner 20 hours ago [-]
I was responding to the statement: “America can't win this war nor admit it can't win.”
Getting the oil supply back to prewar levels isn’t winning by itself, and I didn’t say it was. But it does open a path to winning, because holding the oil hostage is the only leverage the Iranian regime has.
porkshoe 7 hours ago [-]
[dead]
casey2 24 hours ago [-]
Iranian citizens couldn't handle their previous leadership, it's likely that after things cool down there will be some sort of rebellion.
Can the hyperpartisan brain not count past 113?
cr1895 23 hours ago [-]
>it's likely that after things cool down there will be some sort of rebellion.
Please support this statement.
Cyph0n 23 hours ago [-]
Dude thinks this a game.
Imagine that your country - whose rulers you do not agree with - is attacked by two states unprovoked in the middle of negotiations, not once, but twice in a single year.
And how do they initiate this attack? They strike a number of targets, one of which the compound your head of state is living in along with members of his family, including a child (his granddaughter). Mind you, your head of state was not in a bunker, but was an 87 year old man living his life as normal. After executing this amazing operation, these two states then call on your people to rise up and overthrow the government.
What would you do?
hollerith 21 hours ago [-]
Also, how do you think the average non-wealthy Iranian, who because of US sanctions has been eating meat about once a month for many years and undergoing other privations thinks about the US government?
rayiner 20 hours ago [-]
I strongly oppose the Iran war. But saying that any action against Iran is “unprovoked” is utter bullshit. Iran just gave Hezbollah $200 million while Iranians are in dire straits: https://www.reuters.com/world/middle-east/lebanons-hezbollah.... Iran has been doing this shit for decades. Their commitment to “fucking around” is truly epic.
Saddam, Maduro, Gaddafi, Assad—all those guys were mostly terrorizing their own people and shouldn’t have been taken out. I don’t think Khamenei should’ve been taken out either, but boy did he deserve it more than any of the others.
Cyph0n 11 hours ago [-]
Unprovoked here means that this was not a response to an attack by Iran on Israel or the US. It was also done during negotiations, which I hope you realize is a cardinal sin in diplomacy.
As for Khamanei, at the end of the day, he was a head of state. There are international systems in place for punishing people in power across state boundaries, which were setup because otherwise our world devolves into assassination and war.
rayiner 11 hours ago [-]
> Unprovoked here means that this was not a response to an attack by Iran on Israel or the US.
Are you defining "attack by Iran" to exclude attacks by proxies like Hamas and Hezbollah that Iran funds to the tune of hundreds of millions of dollars a year?
What's insane to me is that nobody actually has a beef with Iran. Tel Aviv is a thousand miles away from Tehran. The Arab countries don't like Iran, nor does Iran like any of the Arab countries. There's no conflict over land or resources. Iran is doing this shit purely for love of the game.
There's a perfectly plausible counterfactual history where Iran chooses to focus on economic development instead of antagonizing Israel and you end up with two technologically advanced developed countries in the region.
Cyph0n 10 hours ago [-]
But funding groups you oppose does not justify extraterritorially eliminating a head of state in response. So to me there was no valid provocation.
A provocation might have been Iran waking up one day and deciding to hammer Israel or US bases with missiles. Even then, targeting a head of state might be going too far. You would think Iran would have done this based on all the demonization targeted towards it, but instead it was the accusers who did just that :)
Iran has a “beef” with Israel because of Palestine. As for groups it cooperates with such as Hezbollah or Ansarallah, that is simply power projection and a way for them to gain influence, which partly is due to them existing in a region where Sunnis outnumber Shias.
And btw, it has been a while since Hamas was funded by Iran. But I think funding Hamas was a popular move and helped bolster Iran’s image both domestically and across the region.
rayiner 8 hours ago [-]
> A provocation might have been Iran waking up one day and deciding to hammer Israel or US bases with missiles.
That's what happened! Iran is just adding a layer of indirection by funneling money and missiles to Hamas and Hezbollah, who in turn launch the attacks. They don't even try to hide it. Why should acting through a middle-man insulated them from culpability?
> Even then, targeting a head of state might be going too far.
I actually agree with you on that. But I don't think it's fair to downplay the "fucking around" that Iran did before they "found out."
> Iran has a “beef” with Israel because of Palestine.
Which makes no sense geopolitically. Iran has no dog in that fight. Iran has no sympathy to Palestinians--they host millions of Afghan refugees, but nobody from Palestine. The Arabs hate Iran too. If Israel wasn't there, Iran would be the primary focus of Arab antagonism. Israel and Iran had good relations with each other between 1950 and 1979, and that made logical sense from the perspective of what was most beneficial to the people of both countries.
I view Iran as a real tragedy. Not because of "human rights and democracy blah blah blah." I have no problem with Iranians having a theocracy if that's what they want. What blows my mind is that Iran has the potential to be a highly functional country, but simply chooses to waste it's money and political capital on irrationally antagonizing countries that it could have been allied with instead.
Cyph0n 47 minutes ago [-]
I have made my points, so I no longer have an interest in engaging further, but I will add two last things:
Iran does have a geopolitical, ideological, religious, and humanitarian interest in Palestine. If you don’t get it, I would recommend you do more reading.
Ukraine is essentially a proxy of the US and EU due to arms, funding, and support. Ukraine is attacking targets in Russia. Suppose Russia woke up one day and decided to fire an ICBM at the US or a major EU capital. Would that be an appropriate response?
porkshoe 7 hours ago [-]
America should not be fighting Israel's wars.
It's detrimental to America and the cause of peace on numerous dimensions.
BoggleOhYeah 24 hours ago [-]
You base this on?
Georgelemental 22 hours ago [-]
That's what Putin believed about the Donbas. But, it turns out, people really really hate being bombed!
pqtyw 14 hours ago [-]
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14 hours ago [-]
Cyph0n 24 hours ago [-]
Run through the objectives at the outset of this “war” (illegal and unprovoked attack on a sovereign state), and then compare that against “price of oil going back to pre-war levels”.
Trust me, by almost any metric you can think of, this was a strategic defeat for the US.
1 days ago [-]
codedokode 1 days ago [-]
I read today that US President temporarily lifted sanctions on Russia regarding diesel export. I hope it is just a part of a secret plan to persuade everyone that peace and trade is more profitable than war, and not US economy crumbling due to Russian sanctions against West. By the way, diesel in Russia is cheaper than in US, which means at least in diesel production Russian economy is more efficient (it makes more diesel per dollar spent).
porkshoe 24 hours ago [-]
> I hope it is just a part of a secret plan to persuade everyone that peace and trade is more profitable than war
It's never 4d chess. it's just a guy desperately trying to get diesel prices to temporarily decline _without_ having to admit that he's a fucking idiot for having dragged America into Israel's war on Iran.
And even then, it's only because of the mid-terms. The GOP does not give a single solitary fuck about the sorts of people who notice and are hurt by gas prices. The GOP despises American workers.
codeddesign 23 hours ago [-]
Change GOP to all DC politicians and I am in full agreement with you.
This is not GOP vs DNC. They are fully corrupted on both sides, and stopped representing their constituents a long time ago.
"Both sides" is bullshit. There's only one party that's exhibiting the level of corruption, narcissism, and warmongering that we're seeing today. It's Trump and Republicans that got us into this mess.
somenameforme 21 hours ago [-]
The US has been in basically never-ending war, and warlike actions, for most of its existence, and especially since the end of WW2. This isn't partisan. The only thing that's particular unique in this scenario is that drones have made the typical pattern of assassinate leadership + bomb the country into oblivion as being rather less than effective. Well that and we have a leader who no longer even pretends it's about democracy, freedom, and protesting students or whatever. But it never was. Look at the destruction and chaos in the places we 'bring democracy to'. It's always been, and will always be, about power.
TitaRusell 14 hours ago [-]
That's a dangerous game. If America no longer cares about freedom and democracy countries may very well choose to take their chances with Beijing.
BoggleOhYeah 22 hours ago [-]
You mean the Democrats are the same as the party that has members and their families openly taking bribes from Russian oligarchs, gambling companies, etc, doling out pardons for political favors, enabling insider trading?
0dayz 23 hours ago [-]
Everyone as in everyone in Russia considering they started the war?
And I'm curious which sanctions by Russia are crippling "the west"?
somenameforme 21 hours ago [-]
He's obviously referring to the Western sanctions on Russia which have had a far more detrimental effect on the West, and Europe in particular, than on Russia. And Russia is in a winning position in the war. They're not going to stop without concessions, but the West has bet everything on a victory which means they'd rather see it continue to the last Ukrainian. That's also probably just fine with Ukraine's leader, who has gradually turned into a classical dictator - paranoia, constant reshufflings and all, who will be out of power, and perhaps worse, as soon as it ends.
0dayz 14 hours ago [-]
How is it obvious when he wrote it in the opposite way?
What exports of tank components from Russia are detrimental to the west?
Since that is some of many things sanctioned?
How is Russia in a winning position?
You only give assertions without any actual explanation nor facts and is apparently obsessed with Ukraine's leader.
codedokode 2 hours ago [-]
Yes I meant Russian decision to ban export of diesel abroad. Technically it can be considered a part of the counter-sanctions applied to "unfriendly" (official term) Western countries (other measures: taking over assets in Russia, such as factories, belonging to foreign companies etc).
> How is Russia in a winning position?
Because US is asking Russia to lift restrictions and not vice versa. If US is in a winning position why do they even need to ask anything from a "losing" side? Winner sets conditions, not asks.
somenameforme 10 hours ago [-]
The sanctions against Russian are regularly mocked as Russia sanctioning the West due to their outcomes. This [1] is a graph of Russia's real GDP. This [2] is the same graph for Germany. The cyclical nature of the Russian one is because it's not seasonally adjusted - the Fed stopped providing those data after the war began. You can't even see where the sanctions begin in terms of Russia's economy but you certainly can for Germany, which almost immediately fell into recession.
As for the war, it's turned into a war of attrition. Ukraine is facing an increasingly severe manpower shortage whereas Russia has not even carried out a general mobilization, yet continues to inch forward. That's the reason for Ukraine's various recent efforts to try to change the nature of the conflict, but I think that's mostly just opening a Pandora's Box that should have stayed closed. It certainly hasn't left Ukraine in a stronger position, to say the least.
> but you certainly can for Germany, which almost immediately fell into recession.
The graph doesn't show that at all.
codedokode 2 hours ago [-]
Maybe one should compare the slope of the line in 2010-2020 period vs 2022-2026 for Germany?
10 hours ago [-]
realusername 19 hours ago [-]
> sanctions on Russia which have had a far more detrimental effect on the West, and Europe in particular, than on Russia.
Considering we only see Russian bots talking about lifting sanctions nowadays and everybody else moved on to other subjects in Europe, it must have some effect of some sort, otherwise they wouldn't talk about it.
> And Russia is in a winning position in the war.
At best, even if they took the full country tomorrow, I don't think there's any way to save Russia from medium term collapse.
They would need a Marshall plan of somebody giving them 300 billions for free and I don't see that happening and who would do that.
> but the West has bet everything on a victory which means they'd rather see it continue to the last Ukrainian
You have it backwards, Ukraine and Europe want a victory so that Russia doesn't continue to kill to the last Ukrainian. (And for Europe more importantly, not being the next one in line).
That's what Russia's policy of destroying cities and killing civilians do.
somenameforme 16 hours ago [-]
Declare everybody that disagrees with you as a Russian bot and, lo and behold, apparently the only people that disagree with you are Russian bots. I think the German elections have been a rather more impartial poll on the views of people, to say nothing of the approval ratings of European leaders. Macron is at 16% and Merz has hit a truly impressive 10%. They've defined their leadership by their foreign policy, so what other conclusion can one draw?
And Russia is going to collapse after the war if somebody doesn't give them $300 billion, a small fraction of their GDP, and what Western media now claims they're annually spending on the war? How is that supposed to even make any sense? Similarly for a Ukrainian victory. The war in Ukraine has turned into a classic war of attrition with a small nation against a much larger one. The small nation is already having significant manpower issues, while the large one has yet to even turn to general mobilization. Again, how is a victory supposed to come out of this?
realusername 16 hours ago [-]
> Declare everybody that disagrees with you as a Russian bot and, lo and behold, apparently the only people that disagree with you are Russian bots
No, I mean actual Russian bots, either paid far rights politicians or online paid accounts. That's the kind of people left talking about sanctions, everybody else moved on to other subjects a long time ago.
It used to be a hot debate in 2022 / 2023, we're way past that now and the public opinion moved on.
> Macron is at 16% and Merz has hit a truly impressive 10%. They've defined their leadership by their foreign policy, so what other conclusion can one draw?
No they haven't, as for France, which I know very well, almost nobody cares about foreign politics on election day.
What's making Macron unpopular is the local debt, ineffective spending, retirement policies, reaction to local events (such as student protests right now), voters don't really care about Russia.
> And Russia is going to collapse after the war if somebody doesn't give them $300 billion, a small fraction of their GDP
GDP isn't government budget. And I was making a low ball estimate yeah, maybe they need 800 billions, I don't know. What I do now is that they dug themselves into a very deep hole and Ukraine is a very poor country (especially now) which is never going to help them make that back.
> The small nation is already having significant manpower issues, while the large one has yet to even turn to general mobilization. Again, how is a victory supposed to come out of this?
I don't know a single war in history which ended because they had literally no men to throw at it.
Russia to me looks to be in a similar position as Germany in 1917, they still had men to throw at the war (and were even making territory gains!) but the country was collapsing due to the weight of the war, forcing them to stop.
rasz 18 hours ago [-]
>somebody giving them 300 billions for free
Well, Iran was offered similar amount by certain somebody, so never say never
realusername 16 hours ago [-]
I don't think Trump was ever going to pay for real personally
tim333 8 hours ago [-]
I think it's more Trump being mates with Putin and Russia winning and giving Trump friends oil concessions is more profitable for him than justice. Not the best way to do things really.
Edit: tanker hit a mine today in Hormuz, going great
https://www.youtube.com/watch?v=OETnuwwsv9U
Exports to the US is about 20% of China's GDP [2].
Regardless of any of China's contingency plans, US exports are well above noise-levels.
[1] https://www.statista.com/statistics/268173/countries-with-th...
[2] https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?location...
What you should take note of, is that China's trade surplus tracks the US trade deficit extremely closely, and this has been the case for the last 20 years.
Said another way, most nations in the world run roughly balanced trade. There is only one nation on earth that can sustain large and prolonged trade deficits. Only one. That is the US. So if you are a nation whose entire economic strategy rests on running large and sustained trade surpluses, then you are going to be exporting your surplus to the US, directly or indirectly, and only to the US.
Now in practice, some of that will be direct sales to the US, some will be indirect sales to the US, but at the end of the day, if you want to run a 1.2 trillion dollar trade surplus, then you have to hope to God that the US is willing to run at least a trillion dollar trade deficit, because no other country is going to do that for you, the entire rest of the world may be willing to accomodate a hundred billion or so, but for everything else, you will depend on the US, directly or indirectly, to absorb your surplus.
So to run a current account surplus against the rest of the world of $100, you need to accumulate $100 of financial claims belonging to the rest of the world. There are complexities, for example I switched from "trade surplus" to "current account" because things like interest payments also need to be added in, but with these adjustments, you cannot run prolonged trade surpluses without storing your money in some other nation's jurisdiction.
Now the question is, which nation is willing to accomodate inflows of a trillion dollars a year? That's right, only a single nation is willing to do that. Most nations ban or severely restrict foreign capital inflows. Those that don't ban it, they don't have the necessary financial infrastructure to accomadate the scale of surpluses that China needs to run. This is why I laugh at all these reports of "China is dumping treasuries". China accumulated over a trillion dollars of dollar claims over the last year. That's in addition to what they already had. Why? Because who else would allow those levels of foreign capital inflows into their economy.
So once again, the US is the only nation willing and able to absorb these capital inflows.
Personally, I don't think this is sustainable, it's deindustrializing the US and is highly destabilizing, but since the liberalization of global capital flows launched by the Clinton administration, we have been doing this 30 year experiment in what happens when you let countries print money and use them to buy your bonds. The results have been, in my opinion, highly destabilizing, and it's not going to end well. But many of those who grew up in this period, think this is just how the world works and they can't imagine any other system, one in which capital inflows were highly restricted and as a result, no nation ran large trade surpluses against any other. Or they don't think about this at all and believe that China's hard work and industrial prowess is why they are able to run large trade surpluses, completely ignoring the whole money printing to buy US bonds that is happening in the background. When the US was the world's primary industrial power in the period 1870 - 1920, we ran current account deficits, not surpluses. What China is doing, industrializing while exporting capital -- that is truly unprecedented and possible only due to the combination of fiat non-convertible money combined with the US allowing unrestricted capital inflows. It's a truly bizarre state of affairs.
This is just tautological with the trade surplus. Yes, the two go hand in hand.
My point is that "trade surplus" is always trotted out as if it is some vulnerability of China's - that if we stop giving them dollars and they stop giving us goods, this would create an unsolvable problem for China's economy.
But this is merely fanciful fiction borne from western thinking where we don't have the political will to take sustained direct action to subsidize domestic industry. But China isn't bound by this! Rather it is merely wishful thinking as if we hold power here.
Hence my focusing on whether China actually needs more dollars (ie is reliant on exporting to get those dollars), or whether they could make do with what they've already saved up in treasuries (and other USD investments) while being unable to export as much to the US. My gut says their economy and industry is now large enough that they could weather it just fine. We're still looking at them as if they are the little kid from the 90's (who would have indeed been hurt if we had never started the arrangement), and failing to see that they are all grown up. The pump has been primed.
> the US is the only nation willing and able to absorb these capital inflows... The results have been, in my opinion, highly destabilizing
In my opinion, the destabilizing results were not inevitable. Rather they were the result of deliberate policies that were kept outside of the Overton window by the entrenched interests who were benefiting from them.
Having others say "I'm willing to accept IOUs from you rather than requiring payment in cold hard cash" (aka having the world reserve currency) is an inherently lucrative position! The downsides can only come from how you react to having that ability - a spendthrift might write IOUs without limit and spend all their cash, making the position itself look like a vulnerability. Whereas a frugal person who wants to avoid that fate but isn't very creative might keep a stack of cash that 1:1 corresponds to IOUs they've issued.
The two deliberate policies of which I speak are 1. USD must always inflate (which precludes the frugal option) 2. the legislature/executive government is prevented from spending the newly created money on (most) deliberate constructive activities (like the industrial subsidies I was talking about above).
So most of the wealth we received from having the world reserve currency (represented in-system by newly created money) was simply given away by the Federal Reserve directly to banks (as low-interest loans) to blindly "invest". This resulted in the everything bubble - unproductive assets as a safe haven, intemperate investment in new industries, but failure to maintain the industries we had (since mature industries don't achieve outsized investment returns).
In a different world the legislature would have spent some of that wealth directly subsidizing domestic industry to maintain it, backed up with laws about not being able to move production lines out of the country. But of course this was not in the interest of the corpo class as it would have meant less money going into their own pockets. Hence it remaining on the fringes of the Overton window. (the one place it did actually happen was the defense industry, of course)
Now that the deindustrialization scam has run its course, the corpo class is on to the next thing - economic consolidation to further cement their position. They're channeling echos of what would have been prudent decisions back in the 90's, which makes grassroots voters think they are finally being listened to. But it's nonsensical to talk of closing the barn door after the horse is long gone, right? So in reality they're pushing upside-down bizarro revanchist economics (like framing strong currency itself as a problem!), to destroy the economy that we actually did develop. Then they can mop up and further centralize.
> Last year, the daily cost of hiring an oil supertanker (known as a Very Large Crude Carrier, or VLCC) to sail from the Persian Gulf to China was just $65,000, according to Clarksons, a London-based research firm.
> Now? It costs $1.6 million per day to hire a VLCC for that route, according to Clarksons.
Iran's leadership was replaced with more extreme leadership and America has spent countless billions.
Nothing is better.
Only a hyperpartisan brain could refer to that as any sort of victory.
Getting the oil supply back to prewar levels isn’t winning by itself, and I didn’t say it was. But it does open a path to winning, because holding the oil hostage is the only leverage the Iranian regime has.
Can the hyperpartisan brain not count past 113?
Please support this statement.
Imagine that your country - whose rulers you do not agree with - is attacked by two states unprovoked in the middle of negotiations, not once, but twice in a single year.
And how do they initiate this attack? They strike a number of targets, one of which the compound your head of state is living in along with members of his family, including a child (his granddaughter). Mind you, your head of state was not in a bunker, but was an 87 year old man living his life as normal. After executing this amazing operation, these two states then call on your people to rise up and overthrow the government.
What would you do?
Saddam, Maduro, Gaddafi, Assad—all those guys were mostly terrorizing their own people and shouldn’t have been taken out. I don’t think Khamenei should’ve been taken out either, but boy did he deserve it more than any of the others.
As for Khamanei, at the end of the day, he was a head of state. There are international systems in place for punishing people in power across state boundaries, which were setup because otherwise our world devolves into assassination and war.
Are you defining "attack by Iran" to exclude attacks by proxies like Hamas and Hezbollah that Iran funds to the tune of hundreds of millions of dollars a year?
What's insane to me is that nobody actually has a beef with Iran. Tel Aviv is a thousand miles away from Tehran. The Arab countries don't like Iran, nor does Iran like any of the Arab countries. There's no conflict over land or resources. Iran is doing this shit purely for love of the game.
There's a perfectly plausible counterfactual history where Iran chooses to focus on economic development instead of antagonizing Israel and you end up with two technologically advanced developed countries in the region.
A provocation might have been Iran waking up one day and deciding to hammer Israel or US bases with missiles. Even then, targeting a head of state might be going too far. You would think Iran would have done this based on all the demonization targeted towards it, but instead it was the accusers who did just that :)
Iran has a “beef” with Israel because of Palestine. As for groups it cooperates with such as Hezbollah or Ansarallah, that is simply power projection and a way for them to gain influence, which partly is due to them existing in a region where Sunnis outnumber Shias.
And btw, it has been a while since Hamas was funded by Iran. But I think funding Hamas was a popular move and helped bolster Iran’s image both domestically and across the region.
That's what happened! Iran is just adding a layer of indirection by funneling money and missiles to Hamas and Hezbollah, who in turn launch the attacks. They don't even try to hide it. Why should acting through a middle-man insulated them from culpability?
> Even then, targeting a head of state might be going too far.
I actually agree with you on that. But I don't think it's fair to downplay the "fucking around" that Iran did before they "found out."
> Iran has a “beef” with Israel because of Palestine.
Which makes no sense geopolitically. Iran has no dog in that fight. Iran has no sympathy to Palestinians--they host millions of Afghan refugees, but nobody from Palestine. The Arabs hate Iran too. If Israel wasn't there, Iran would be the primary focus of Arab antagonism. Israel and Iran had good relations with each other between 1950 and 1979, and that made logical sense from the perspective of what was most beneficial to the people of both countries.
I view Iran as a real tragedy. Not because of "human rights and democracy blah blah blah." I have no problem with Iranians having a theocracy if that's what they want. What blows my mind is that Iran has the potential to be a highly functional country, but simply chooses to waste it's money and political capital on irrationally antagonizing countries that it could have been allied with instead.
Iran does have a geopolitical, ideological, religious, and humanitarian interest in Palestine. If you don’t get it, I would recommend you do more reading.
Ukraine is essentially a proxy of the US and EU due to arms, funding, and support. Ukraine is attacking targets in Russia. Suppose Russia woke up one day and decided to fire an ICBM at the US or a major EU capital. Would that be an appropriate response?
It's detrimental to America and the cause of peace on numerous dimensions.
Trust me, by almost any metric you can think of, this was a strategic defeat for the US.
It's never 4d chess. it's just a guy desperately trying to get diesel prices to temporarily decline _without_ having to admit that he's a fucking idiot for having dragged America into Israel's war on Iran.
And even then, it's only because of the mid-terms. The GOP does not give a single solitary fuck about the sorts of people who notice and are hurt by gas prices. The GOP despises American workers.
This is not GOP vs DNC. They are fully corrupted on both sides, and stopped representing their constituents a long time ago.
And I'm curious which sanctions by Russia are crippling "the west"?
What exports of tank components from Russia are detrimental to the west?
Since that is some of many things sanctioned?
How is Russia in a winning position?
You only give assertions without any actual explanation nor facts and is apparently obsessed with Ukraine's leader.
> How is Russia in a winning position?
Because US is asking Russia to lift restrictions and not vice versa. If US is in a winning position why do they even need to ask anything from a "losing" side? Winner sets conditions, not asks.
As for the war, it's turned into a war of attrition. Ukraine is facing an increasingly severe manpower shortage whereas Russia has not even carried out a general mobilization, yet continues to inch forward. That's the reason for Ukraine's various recent efforts to try to change the nature of the conflict, but I think that's mostly just opening a Pandora's Box that should have stayed closed. It certainly hasn't left Ukraine in a stronger position, to say the least.
[1] - https://fred.stlouisfed.org/series/NGDPRNSAXDCRUQ
[2] - https://fred.stlouisfed.org/series/CLVMNACSCAB1GQDE
The graph doesn't show that at all.
Considering we only see Russian bots talking about lifting sanctions nowadays and everybody else moved on to other subjects in Europe, it must have some effect of some sort, otherwise they wouldn't talk about it.
> And Russia is in a winning position in the war.
At best, even if they took the full country tomorrow, I don't think there's any way to save Russia from medium term collapse.
They would need a Marshall plan of somebody giving them 300 billions for free and I don't see that happening and who would do that.
> but the West has bet everything on a victory which means they'd rather see it continue to the last Ukrainian
You have it backwards, Ukraine and Europe want a victory so that Russia doesn't continue to kill to the last Ukrainian. (And for Europe more importantly, not being the next one in line).
That's what Russia's policy of destroying cities and killing civilians do.
And Russia is going to collapse after the war if somebody doesn't give them $300 billion, a small fraction of their GDP, and what Western media now claims they're annually spending on the war? How is that supposed to even make any sense? Similarly for a Ukrainian victory. The war in Ukraine has turned into a classic war of attrition with a small nation against a much larger one. The small nation is already having significant manpower issues, while the large one has yet to even turn to general mobilization. Again, how is a victory supposed to come out of this?
No, I mean actual Russian bots, either paid far rights politicians or online paid accounts. That's the kind of people left talking about sanctions, everybody else moved on to other subjects a long time ago.
It used to be a hot debate in 2022 / 2023, we're way past that now and the public opinion moved on.
> Macron is at 16% and Merz has hit a truly impressive 10%. They've defined their leadership by their foreign policy, so what other conclusion can one draw?
No they haven't, as for France, which I know very well, almost nobody cares about foreign politics on election day.
What's making Macron unpopular is the local debt, ineffective spending, retirement policies, reaction to local events (such as student protests right now), voters don't really care about Russia.
> And Russia is going to collapse after the war if somebody doesn't give them $300 billion, a small fraction of their GDP
GDP isn't government budget. And I was making a low ball estimate yeah, maybe they need 800 billions, I don't know. What I do now is that they dug themselves into a very deep hole and Ukraine is a very poor country (especially now) which is never going to help them make that back.
> The small nation is already having significant manpower issues, while the large one has yet to even turn to general mobilization. Again, how is a victory supposed to come out of this?
I don't know a single war in history which ended because they had literally no men to throw at it.
Russia to me looks to be in a similar position as Germany in 1917, they still had men to throw at the war (and were even making territory gains!) but the country was collapsing due to the weight of the war, forcing them to stop.
Well, Iran was offered similar amount by certain somebody, so never say never