China is Winning the Trade War

May 24th, 2005

The United States currently owes China over $650 BILLION in debt. That number is expected to grow to over $1 Trillion during the next 2 years.

How is this possible?

In order to pay for its two recent wars in Afghanistan and Iraq, the Bush administration has been forced to loan money from, you guessed it, China.

Meanwhile the US Economy is slipping, and small wonder why. They are currently locked into a $162 billion/year trade deficit with China. The Chinese keep manufacturing products that Americans NEED and Americans keep on buying them. The problem is that the United States isn't manufacturing much in return and sending it back to China. In fact, they're manufacturing very little these days.

The airplane industry took a huge dive ever since September 11th. So the US isn't selling very many planes to China.

The automotive industry has went sour in the United States too. The major car manufacturers have moved out of the States. The funny fact is that Canada now builds more cars/trucks/SUVs than the United States does. And in the future, China is going to be building even more than Canada, the US, and Mexico combined.

So just WHAT is driving the US economy?

War profits.

When the war in Iraq eventually ends (and it will end someday), the US economy will fall flat on its back.

The only solution will be to have another war.

Which will mean more national debt, and more loans from China. The United States is currently $7,782,816,546,352.00 in debt, and much of that debt is owed to China.

On a business level, this is very RISKY business.

Imagine for a moment, a risk board... but only instead of armies, you have banks and manufacturing companies.

These banks/companies duel it out in the markets, and whichever ones don't go bankrupt win.

Now the United States has an almost $8 trillion US debt. When push comes to shove, the United States is in serious financial trouble. They are pinned down by that debt. They are carrying it with them. Which means their banks and their companies (neither of which are doing so hot) are carrying a portion of that debt because the American people are also carrying a portion of that debt. Per person, that debt is roughly $26-27,000 US, which includes every man, woman and child, regardless of whether they are an infant or already retired.

Combine that with the debt many Americans already face from credit cards, bank loans, mortgages... if these people lose their jobs suddenly, they are going to lose EVERYTHING.

Which is what will happen when the war in Iraq ends. The war profits can only keep the United States boosted above par for a short while. Eventually the US will have to have another war in order to keep things in the green, or they will have an economic depression.

And even during an economic depression, China will continue to send the United States more toasters, more DVDs, more fine china, more cars, more everything.

And if the United States raises tarriffs on Chinese imports, the result will be an inflation rate that will knock most of the middle-class into the lower-class, and many of the lower-class onto the street.

So right now, the United States is basically SCREWED.

Anything they do, whether they continue to make war, don't make war, their economy is so far down the toilet its already in the septic tank.

So after its officially in the septic tank, then what will happen?

Well, its quite simply, the United States will basically be slaves to the new order of things: Namely, China as the central world power instead of the United States; Americans hugely in credit card and mortgage debt and basically slaves to their debts; China will end up owning all the banks and all the credit card companies.

And thats how you win a trade war. When all the banks and major companies are owned by one country. The RISK game of the 21st Century won't be played with armies anymore. It will be played by bankers, accountants and lawyers.