how does us rating will affect immigration?
- Thread starter GCman2005
- Start date
sanjoseaug20
Registered Users (C)
*** this is slightly hyper, but go by the sentiment, not the tone ***
check the markets. if you are invested in stocks, you are already impacted.
however, what you are seeing is a starting point (or is it already halfway) of the decline of the american empire and the rise of a chinese one. maybe it will not go that far, but you have to see the difference between a) on one side the chinese who are building capacity, working hard i guess, supplying such cheap goods, and their leaders in single-minded pursuit of growth b) on the other hand americans who are living on debt, mired in politics and hence unable to decide anything, controlled by big business to their own detriment ... the direct consequences of this will not be known for years, maybe decades.
but i was reading a report that china and japan hold 1.2 and 0.9 trillion USD worth of treasury notes, which is what essentially we borrowed from them. there was already a talk of china diversifying from USA, however, paul krugman calls it mutual destruction since china dumping even 10% of their holdings will bring down the dollar so much that they will lose the remaining 90%. but nothing stops them from making a 1-2% change every year and diversifying into other currencies. they will also start making yuan more of an international currency so they need less us dollars going forward. net result ... value of dollar falls (devaluation) and you have to pay more to import which means most of your clothes become expensive. on the positive side you can export more since the price is not so much in local currencies. however, what does US export nowadays (ignore canada and mexico which are neighboring countries) except technology and financial leverage models? and technology is moving to india and china.
so in 10 years (unless things change), you can not import as much as you do not have money, and you can not export as much as you do not have industry. while this creates opportunities for entrepreneurs to create some new business models, the big business will not let that happen. welcome to the league of "developing countries", in a few decades.
nothing is irreversible, but s&p is right, the gridlock is so bad that even after the next election and unless someone gets 90% of the vote, things ain't going to change.
check the markets. if you are invested in stocks, you are already impacted.
however, what you are seeing is a starting point (or is it already halfway) of the decline of the american empire and the rise of a chinese one. maybe it will not go that far, but you have to see the difference between a) on one side the chinese who are building capacity, working hard i guess, supplying such cheap goods, and their leaders in single-minded pursuit of growth b) on the other hand americans who are living on debt, mired in politics and hence unable to decide anything, controlled by big business to their own detriment ... the direct consequences of this will not be known for years, maybe decades.
but i was reading a report that china and japan hold 1.2 and 0.9 trillion USD worth of treasury notes, which is what essentially we borrowed from them. there was already a talk of china diversifying from USA, however, paul krugman calls it mutual destruction since china dumping even 10% of their holdings will bring down the dollar so much that they will lose the remaining 90%. but nothing stops them from making a 1-2% change every year and diversifying into other currencies. they will also start making yuan more of an international currency so they need less us dollars going forward. net result ... value of dollar falls (devaluation) and you have to pay more to import which means most of your clothes become expensive. on the positive side you can export more since the price is not so much in local currencies. however, what does US export nowadays (ignore canada and mexico which are neighboring countries) except technology and financial leverage models? and technology is moving to india and china.
so in 10 years (unless things change), you can not import as much as you do not have money, and you can not export as much as you do not have industry. while this creates opportunities for entrepreneurs to create some new business models, the big business will not let that happen. welcome to the league of "developing countries", in a few decades.
nothing is irreversible, but s&p is right, the gridlock is so bad that even after the next election and unless someone gets 90% of the vote, things ain't going to change.
sanjoseaug20
Registered Users (C)
WAS the most powerful country in the world ... that's what we will say in 20 years.
The above sentence as well as the root cause ... they all start with a "W".
TheRealCanadian
Volunteer Moderator
I recall hearing the same thing 30 years ago, replacing "W" with "Carter".
sanjoseaug20
Registered Users (C)
Sorry I was a kid during Carter days and did not live in US, so my memory is not as good as yours. However, do note that I qualify my commentary (at least the first one) by saying that this depends on the gridlock. If someone can fix it, you can take US to new heights.
Thinking back 20 years of India. Those days India probably was in much more dire straits. The IMF forced reforms and it put the country on a path to progress. Similarly an S&P ratings cut should force reforms, but first we have to discuss whether the agencies are being spiteful because they were blamed for the housing crisis (no one talks of credit default swaps these days), then because their maths is wrong (isn't the government math of a perennial deficit equally bad), then ignore the problem saying that the other rating agencies do not have an issue (the key point is YET) and yes this happened during congress's vacation ... I wish this was an election year so that someone could rush back from an election campaign to make a speech or cast a monumental vote. Unfortunately, that drama is scheduled for next year, and until then ... we slide.
Thinking back 20 years of India. Those days India probably was in much more dire straits. The IMF forced reforms and it put the country on a path to progress. Similarly an S&P ratings cut should force reforms, but first we have to discuss whether the agencies are being spiteful because they were blamed for the housing crisis (no one talks of credit default swaps these days), then because their maths is wrong (isn't the government math of a perennial deficit equally bad), then ignore the problem saying that the other rating agencies do not have an issue (the key point is YET) and yes this happened during congress's vacation ... I wish this was an election year so that someone could rush back from an election campaign to make a speech or cast a monumental vote. Unfortunately, that drama is scheduled for next year, and until then ... we slide.
skp19722003
Registered Users (C)
Why would it affect only US? Globally, the downgrade wiped $2.5 trillion. Similar downgrade can happen to any other G7 countries too in the future. I don't think US economy is that weak which would instantly wipe out No. 1 spot in the world. It would take another 10+ years.
sanjoseaug20
Registered Users (C)
Why will it affect US? US has not dealt with adversity for quite some time. European and many (but not all) Asian countries have been living with (potentially) hostile borders, multi-lingual cultures, high unemployment for quite some time. They still have retail business to a greater scale than US. US unfortunately thinks only of scale, and when scale does not work, they do not know how to work in that environment. A lot of things in life happen because of "citizen confidence" and when the going gets tough, it is going to be such a new thing for the citizens that ... you take your own guesses as to what will happen.
sanjoseaug20
Registered Users (C)
Your guess is as good as mine. If someone can break the gridlock in washington (where people are unwilling to compromise because they will be labeled as traitors by the fringe elements on either side) ... great things can happen. But the signs of that happening are so remote ...
sanjoseaug20
Registered Users (C)
Near future ... nothing is going to change.
For a change to happen, people have to be so frustrated that they are willing to go beyond the law; or defy the government. We are not there yet. Well, the tea party is challenging the government, but it is from the wrong side of the spectrum ... the union movement has to get stronger and fix all the BS about tax cuts. It will probably be a decade before a long-term change comes. However for short term, maybe in 2-3 years things might bottom out.
For a change to happen, people have to be so frustrated that they are willing to go beyond the law; or defy the government. We are not there yet. Well, the tea party is challenging the government, but it is from the wrong side of the spectrum ... the union movement has to get stronger and fix all the BS about tax cuts. It will probably be a decade before a long-term change comes. However for short term, maybe in 2-3 years things might bottom out.
this is not the country who can withstand prolonged crisis..it has not cohesion nor able political mainstream movement who will lead in particular direction..all the bad things are surfacing and politicians have no clue where to turn or go ..its same as with communism 20 years ago ..good idea got perverted and destroyed by they greedy few ..so this country will go down for a very long time and along the way all kinds of trouble can happen ..secessionism ,civil unrest ,uprising of poor etc...or at very least crime would soar..like its already happening ..
sanjoseaug20
Registered Users (C)
I always tell people about the difference between a manager and a leader. One does things which he can sell to his management, the other does things. The problem US got into over the past decade is that the first president in this century was a leader but of the wrong temperament (values might be better word), and the second one is a manager of the right temperament (oh the congress is not buying my plans ... what do i do? W would have water boarded the congress by now). The end result is the same ... disaster. The "dynasty" can continue ... and I think it will continue in the 2nd place after China, but that will only happen when we get a leader with the right temperament. Despite all the talk about "you are the change you want to be", it is very hard for a single person to affect some change unless the so called leader is also willing to play ball.