Economic War Of The Pacific - 6

The M.V. Usetowas

Background

This series began in 2009.

It began when Dredd Blog came across some concerns of Lee Kuan Yew, a statesman from Singapore (Economic War Of The Pacific, 2, 3, 4, 5).

A related post was also begun in 2009 to help describe and detail dynamics taking place in the Pacific Basin (First Shots Fired In The Currency Wars).

Dynamics that focus on international trade and competition among various nations.

The U.S. is one of those nations.

These dynamics concern and impact national and international economies and currencies.

It may also be that the Trans-Pacific Partnership (TPP) is related to this international competition since it is a classified matter  ("the text of the TPP agreement remains classified information").

Concerns Involved

The overall concern pointed out in Dredd Blog posts mentioned above was economic, which has turned out to have been a realistic view:

“The 21st century will be a contest for supremacy in the Pacific because that’s where the growth will be,” Lee said. U.S. President Barack Obama, he said, must understand this.

“If you do not hold your ground in the Pacific you cannot be a world leader,” Lee said, “That’s number one.”

“Number two, to hold ground in the Pacific, you must not let your fiscal deficits and dollar come to grief,” he said.

(Economic War Of The Pacific, 2009). That may have been ignored, because the results expected were confirmed:

Hang on to your hats, America.

And throw away that big, fat styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just

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overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.

(Economic War Of The Pacific - 5, 2015). That eventuality sets the stage for the next concern, the "reserve currency" used by international commerce and intercourse.

Here is what Dredd Blog posted concerning that issue:

China’s central bank governor has issued a bold proposal to overhaul the global monetary system and one day replace the dollar as the world’s main reserve currency with the International Monetary Fund's (IMF) Special Drawing Right

(First Shots Fired In The Currency Wars, 2009). This is a concern because, we would be impacted more so than other players in this game:

One of the concerns of US financial experts is the removal of the dollar as the "reserve currency" of the world:

The United States of America, if we didn't have the dollar as the de facto reserve currency of the world, we'd be Greece. I mean, we are broke, bankrupt. Really bankrupt.

(James Baker on GPS with F. Zakaria). James Baker was a former Secretary of the Treasury of the U.S.A. for Bush I.

(Phase Five Of The Currency Wars? - 2). That dynamic has grown stronger over the past few years, with the U.S. losing a lot of ground:

Russian Prime Minister Vladimir Putin accused the United States on Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin told a Kremlin youth group while touring its summer camp north of Moscow.

"They are living like parasites off the global economy and their monopoly of the dollar."
...
"If over there (in America) there is a systemic malfunction, this will affect everyone," Putin told the young Russians.

"Countries like Russia and China hold a significant part of their reserves in American securities ... There should be other reserve currencies."

(Phase Six Of The Currency Wars?). That talk has been converted into one significant action after the other:

The group of emerging economies signed the long-anticipated document to create the $100 bn BRICS Development Bank and a reserve currency pool worth over another $100 bn. Both will counter the influence of Western-based lending institutions and the dollar.
...
“BRICS Bank will be one of the major multilateral development finance institutions in this world,” Russian President Vladimir Putin said on Tuesday at the 6th BRICS summit in Fortaleza, Brazil.

The big launch of the BRICS bank is seen as a first step to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both US-based institutions BRICS countries have little influence within.

(BRICS vs Western dominance). It could be that the secret, classified TPP is a reaction to the ongoing success of BRICS nations.

It is sometimes called "the pivot to Asia" which one documentary journalist sees as part of the preliminary dynamics of The Coming War Between America and China.

Surrounded

Another concern of mine, in this international trading scene, is sea level rise (SLR), even though it is mostly ignored.

The secret, classified, TPP is not immune to the SLR problem, even if it bolsters economies in the short run (The Trans-Pacific Partnership (TPP) and Sea Level Rise (SLR)).

Conclusion

The only thing absolutely certain in this matter is that SLR cannot be defended against by the use of military force (Why The Military Can't Defend Against The Invasion).

Thus, the gunboat diplomacy of recent decades has been a waste of "blood and treasure" (the warmonger description).

We should have been addressing the unstoppable threats, which no international agreement can resist successfully (unless it is a comprehensive international agreement to halt civilization's burning of fossil fuels as a source of energy).