Comment by shipwreck [comrade/them]@hexbear.net on Why China’s Belt and Road Initiative is Failing

Someone watch this and lemme know how much is pure western c o p e.

these dollar-denominated debt is always at risk of being compromised by US financial institutions, if they so wished to.

How would this work?

even the US empire doesn’t fully realize the full extent of the power of dollar hegemony

Why would this be? I assume the economists and business people would know what is possible and they would be able to explain it to the politicians.

According to neoclassical theory, the answer is yes, nothing has changed, because you can still get 10 units of the same item, which is completely absurd that doesn’t pass even the slightest bit of scrutiny with common sense.

I think you need to elaborate more here to help me understand why this would be “completely absurd”. In your example, the person still has the same buying power one year later (assuming everything else is inflating at the same rate). I think I know where you’re going with it, but it’s not exactly apparent as you’ve presented here.

Clearly this cannot be true because debt exists

Ah, right, I think if you stuck this in the part that I quoted, it would have done the trick is all, thanks for the reminder lol

In a way, this gives me some comfort, because it seems like Chinese leaders aren’t this short-sighted. So they can plan and maybe even beat the capitalists.

When you double the income and prices, creditors can also change the interest rates (the price of the money), and increasing the interest rate (making money more expensive) hurts the debtors and benefits the creditors, and vice versa.

I know I’m late here but wanted to ask you, are you making a distinction between existing borrowers and new borrowers? if you already got the thing with the loan - the car, the house - and it’s a fixed interest rate, then the debtor benefits from inflation because the dollars they are paying back are worth less. Is that correct? In the other example you said borrow 200 but now is only worth 100, is that for more of a “liquid” loan, revolving credit kind of thing (not sure the terms) - but the kind of loan that backs biz- industry

I appreciate all your effort-comments on this topic.

Regarding 2008 housing

Obama could have bailed out the banks AND let homeowners stay in their homes by erasing the underwater portion, but nope that would send the wrong message. We were knocked out of out home with a short sale and some rando bought it for half what we paid. Literally zero economic difference. The amount was wiped out the same as if we had stayed. “Puritanical morality” for thee but not for me.

Yeah I’m also lost, if it takes me half an hour of work to buy an apple if doesn’t really matter if that’s $.10/hr and a 5¢ apple, or $100/hr and a $50 apple. I still worked half an hour.

But if you took out a loan for $100, suddenly your loan no longer buys 2000 apples, it only buys two. And since almost every industry in the U.S. is debt financed, that has some pretty large implications as to what the worth of that debt is, how much it can be traded for, and how much can be produced off of that debt. Which means that money shouldn’t be seen as a medium of exchange in-of-itself, but actually as a transformed form of debt that is basically created out of thin air.

It’s actually a very fundamental, but counter-intuitive concept, like time being a variable that slows down as you approach the speed of light. It’s a phenomenon that happens at a macro-level of the economy that has absolutely huge consequences on the behaviors of microeconomics.

Oh yes duh debt that’s what I was missing thank you it all clicks for me now

you can block their dollar transaction and there’s nothing they can do about it?

So… if I have $10m, and I use it to, uh, buy a bridge in Kenya…the US can say “no fuck off”? How does that work? Can they stop it in a way other than by pressuring Kenya to not accept it?

both scenarios are the same and nothing has changed about your financial position?

Maybe I’m being a dumdum. But…practically your situation hasn’t changed, right? If everything increases at the same rate, then only the numbers get bigger?

Unless there are things which money can buy that doesn’t increase in price. Like labour power, usually. Or when govts give big corpos $1 trillion in loans they use to buy real shit for essentially free.

Yeah crypto was only ever useful for two things: bad crimes and good crimes

The SWIFT system can block your transaction.

And if somehow the Chinese store the USD in their own bank and use their own transaction system, then the US will sanction them and Kenya to prevent the dollars from being used anywhere outside the two countries. At that point it’ll just be Monopoly money with the hopes of it being worth something if sanctions are lifted.

Then the US will block any companies doing business with the bank (or the entire country like Russia and Afghanistan or Cuba), any organization giving aid to Kenya, and that bank probably has a lot of customers who will be angry if they can’t access the American market. Not to mention, it’ll pressure other countries who claim to be sovereign and equal to bow down to their masters, and now China and Kenya is blocked off from the western world.

I assume the economists and business people would know what is possible and they would be able to explain it to the politicians.

They really don’t. Maybe they have a better understanding now, but Michael Hudson’s book was most popular with the CIA back when it first came out because even they failed to grasp their own system. He was also scheduled to explain the concepts to the POTUS at the time.

Why would this be? I assume the economists and business people would know what is possible and they would be able to explain it to the politicians.

michael hudson did at one time say that people in the government had to read his book to understand just how powerful and insidious the US system is at recycling the rest of the world’s surplus

think about how you’d go about actually arguing for policy one way or the other with the basis of superimperialism. ‘look we literally are the world government right now, everyone who wants access to the world market needs dollars, we could easily print 10 trillion greenbacks and cover this miserable world with cutting edge infrastructure’ is not something you can formulate that easily. the internal logic of american political systems haven’t caught up with US power. it still thinks in terms of balancing budgets that others pay for and starving beasts that others exist to feed. it was called the end of history and it wasn’t just out of arrogance, the US won extremely hard. so hard that it can’t really believe when someone says that student debt is dumb and can easily be waived off or that the economy runs on printing, inflation and financial allocation rather than labour and investment.

so what you’re left with is the easiest possible way to channel that financial power: military build up. if the world is on fire and there’s a terrorist in every corner then you can’t simply NOT cut those checks to the pentagon.

we could easily print 10 trillion greenbacks and cover this miserable world with cutting edge infrastructure’

I would guess this would still depend on having enough labor and means of production to actually develop the technology and infrastructure, right?

But, say the USA was actually the USSA, then they can give everyone enough money to buy the necessities of life, and allow them to spend time doing what they want? And this wouldn’t increase inflation to the point where buying the necessities get out of reach?

Man, I really need to go read that book to understand how this bs works.

ofc i’m not giving you real figures but just consider this: the wars in the middle east have cost the US, each, a trillion dollars. the much lauded Belt and Road Initiative totals in the tens of billions of dollars. the US could easily dwarf chinese investments everywhere and it would still leave enough money for several wars. China actually has to earn dollars with their labour and by fulfilling US economic needs. the US can just print the money that everyone else has had to pay into since before any of us were born.

the US is ideologically committed to private companies being their interface to the rest of the world’s economy. it is ideologically committed against developmentism of any kind. america has capable construction companies but none of them are competing in Africa, South America, or anywhere else. instead that game is left for china, japan, france, maybe spain. at most what american elites want is to move in after china builds all the roads and open a starbucks down the street. if the country stopped drinking it’s own cool aid for a second and curbed on the libertarian propaganda it would still be the uncontested behemoth. it’s like the entire country woke up one day and got tired of winning.

Ok that makes a scary amount of sense. Huh. It…it doesn’t even seem sound for capitalism. Like…,why is the US being such a big dumdum. Wild.

Through the cold war, the US positioned itself and its allies for the ultimate goal of giving private capital as much access to peoples, land, and resources as possible. Capitalists supported this because not only because they benefited, but also because they saw any socialist experiments as a threat. Today, it’s stagnating for the same reason – the end goal is still empowering capitalists. Only, now those capitalists see the existential threat as coming from the US, not from outside nations. Throw in a declining rate of profit and a myopic fixation on short term gains, and there really is no other way this could play out.

i think it’s just the sheer levels of financialization that the US reached warping the whole policy making process.

the US’s real form of government is political lobbying behind the scenes. it’s always been this way, wether if you had unions, political dynasties, mobsters, or corporations. it’s neither unique to the united states nor was it unsuccessful at all. it’s just that the priorities of an industrial capitalist country and those of a financial empire are different. 100 years ago it was the US setting up steel mills and breaking european monopolies in south america. now it’s india and china doing it in their spheres of influence, with maybe japan and some euro countries competing here and there. not because the US doesn’t have manufacturing - even when the US is someone’s #2 trade partner that often involves high value stuff like plane parts - it’s that, financially speaking, the entire thing is extremely lopsided in favor of financiers, pyramid schemes, and the printing machine.

maybe it’s not possible to harness the dollar. maybe the power that comes with reserve currency status in a globalized world just corrupts political culture from within and the rot ‘breaks’ capitalism.

Giving dollars to small countries also allows them to settle debts in USD. China gives DRC $50M, Congo funds infrastructure projects in their native currency, and applies that $50M to their debt thus reducing their debt to the US and gaining some independence. This will eventually allow China to step in and propose trading with RMB as the need for dollars to pay off IMF loans goes away.

Both China and Russia have stopped adding net treasury purchase since 2014

There’s that :ukkkraine: date again

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Why China’s Belt and Road Initiative is Failing(youtu.be)

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