US attacks China!! a scenario

[Bull]

You are not using the precise meaning of hedging, read a finance text book

i have read that for 9 years!!!

 

[sigatoka]

No, I don't trust you. PPP only works for nations of similar culture and size. You can't use PPP to compare a snow bound meat diet heavy country to a rice belt country. It just doesn't work.

China is way too different from the US and from the West to have any meaningful PPP comparison.

Comparing the relative size of nations is difficult i admit; but once the decision has been made to meausre the relative size of nations, using PPP is the more theoretically sounder basis for going about it.

What is PPP (Purchasing Power Parity)? It is simply saying what quantities of goods can be purchased in a nation.

For eg a haircut in a china would cost around $3.50 and in U.S. around $15. Using standard measure, U.S. economy is 15/3.5 times larger simply because haircut is more expensive. In reality if one haircut is produced in both economies (assuming that is the only thing being produced) they should have equal size of economy.

The PPP method is not super accurate, but all mainstream economists can without a doubt say that China's economy is larger than that of Japan in terms of output. Since japan is around 5trillion u.s. dollars it can be seen that 7 trillion figure is not unreasonable.

 

[sigatoka]

So, tell me how is it $7trl PPP dollars is going to buy an invasion force that is going to cost at least $100bil+.

To state that the Chinese economy is larger than the US during the Normandy Invasion is a downright lie in suggesting that they could afford such a force. In fact, pure hogwash.

The U.S. economy's has tripled since second world war. If we say its 14trillion now, then it was around 4.7 trillion ballpark figure around then. (gdp statistics have only been started compiled recently). China's economy is larger than japans of 5trillion. Since China's economy > Japans 5trillion > U.S. approx 4.7trillion in world war 2.

A 7 trillion economy can purchase a 100+billion plus invasion force, whether it chooses to do so is another matter. U.S. was spending around 40% of GDP on military in WW2.

 

[sigatoka]

So your notion that US needs China more is not true, coz China needs US to provide employment for their screaming people who will/may revolt against CPC.

In economics "Need" has a precise meaning. It means the minimum needed for human survival which would be a glass of water, two slices of bread and one set of clothes available in the day.

By this definition neither U.S. nor China "needs" each other. They want to trade because it is mutually beneficial, if it were not, trade would not occur.


Have a look at your clothes Jay, they must all be made in China in addition to a lot of consumer goods in your house. There are a lot of poor people in U.S. who buy "cheap" high quality chinese goods and have achieved a higher standard of living because of it.

There will be screaming Jay, but where and with what intensity needs analysis.

 

[sigatoka]

Yeah, but there is also something called population to feed.

All nations including U.S. needs to feed their population otherwise there would be no nation by definition if nations are defined as entities containing people.

 

[Officer of Engineers]

$7tril PPP dollars ain't going to buy squat.

 

[Officer of Engineers]

And again, PPP does not work for US and China. Hell, it does not even work for China and Japan

There’s nothing wrong with Purchasing Power Parity (PPP) per se, except that it adds a lot more confusion and error than it does clarity and insight.

The theory was developed post-World War I to figure out what the exchange rates in various European economies should be. They were all devastated, and since they were all highly similar before the war, it was opined that a basket of consumer goods in the capital city would be a good proxy.

A loaf of bread, a bottle of wine, etc, that cost 10,000 lira in Rome or 10 pounds in London would yield an exchange rate of 1,000 to 1. Consumer goods, so bread and wine are fine, but “thou” didn’t figure into the equation, since it is essentially a service.

It made sense, but only as long as the proper conditions were present. The key conditions are two: first, the two economies to be compared should be highly similar, so the US vis-à-vis Bangladesh wouldn’t qualify any more than Singapore vis-à-vis China would. Second, since the measurements are limited to an urban consumer basket of goods, any conclusions should be similarly restricted.

To recap,

Highly similar economies.
Urban sectors, so no mostly agricultural countries.
Consumer goods, so no industrial products (and, certainly no exports!).
Goods, not services.

So, once you get all that right – and it can be done – then you come up with an alternative exchange rate, say two euros to the dollar, instead of 0.9. That rate can tell you the difference in buying (purchasing) power between consumers in two different cities.

What’s wrong with that?
The main mistake is taking that exchange rate and using it to determine what the total size of the entire economy “should” be. That’s how you get China as the second largest economy in the world. It might work if you stripped farming, industry and trade out of two different economies (leaving mainly consumer purchases), but what would be the point?

The second mistake is assuming that the market exchange rate is “wrong”, because it doesn’t reflect preconceived notions about who should be the alpha dog. This is one of the reasons the UN has started using PPP -- it makes poor countries look better.

The third mistake is missing the main point about less developed or undeveloping economies: they have huge black markets. If you want to make a good non-market guess at the size of the economy, you’re far better off estimating the black economy (because, it is harder to refute).

The fourth mistake is assuming that PPP has any relation to the real world. A country with a stronger country under PPP cannot import a single additional item, because there is no tradable value in PPP. I will gladly give billions of PPP dollars for a single real one . . .

The worst mistake is not identifying that a number is PPP, rather than market-based exchange rate calculated. This is very common, and unless you know what the number should be, it is easy to get fooled.

Lastly, there’s the mistake of assuming that if the market exchange rate and the PPP rate are out of whack, the market exchange rate “should” or will move in the direction of the PPP rate. If the world were an urban consumer basket and there were no barriers to buying here or there, that might happen. It isn’t.

Best,
David O'Rear

 

[Jay_]

In economics "Need" has a precise meaning. It means the minimum needed for human survival which would be a glass of water, two slices of bread and one set of clothes available in the day.

"Need" differs from country to country. A glass of water and 2 slices of bread may work in 1950's China not these days. Reason? Chinese have started enjoying the luxury and they dont want to go back to the old hell hole.

By this definition neither U.S. nor China "needs" each other. They want to trade because it is mutually beneficial, if it were not, trade would not occur.

Yeah, so the notion that USA needs China does not makes sense now, does it ?

Have a look at your clothes Jay, they must all be made in China in addition to a lot of consumer goods in your house.

Actually, most of the clothes I wear are made in India/Pakistan/Thailand/Srilanka. But I do agree about other stuff, they are invariably made in China.

There are a lot of poor people in U.S. who buy "cheap" high quality chinese goods and have achieved a higher standard of living because of it.

Bleh, if its not Chian there will be some other nation selling it. You think China will keep on selling cheap goods for ever?

There will be screaming Jay, but where and with what intensity needs analysis.

You should ask a Chinese about their threat perception, for them, the biggest threat for their nation is not from outside but inside.:wink:

All nations including U.S. needs to feed their population otherwise there would be no nation by definition if nations are defined as entities containing people.

Which population is easier to feed with a fixed amount of dollars? 250 million or 1.15 Billion?

 

[sigatoka]

And again, PPP does not work for US and China. Hell, it does not even work for China and Japan

The reason that Market Exchange rate is "wrong" is because labour is very immobile. Should labour restrictions be lifted, PPP and currency exchange rate method of measuring economy would quickly converge.

Accounting for black market would boost the relative size of china's economy vis-a-vis U.S.

What this guy is saying is not what mainstream economists believe to be the truth.

 

[TexasJohn]

String or pearls...ha ha. PRC does not have a decent surface fleet to start with. What are they gonna do with extra bases?? At this point they cannot afford sending a part of their surface fleet to Gwadar or Coco Islands or any pearls for that matter. They dont have enough ASW assets, nor do they have any CVBG's that can act as a high seas command center. Anything that China can field in Arabian Sea/Gulf countries has to face US Fleet based in Diego Garcia. FYI, the entire PLAN/IN cannot withstand US 7th Fleet.


US Senate/Congress.

No decent surface fleet?? I urge you to read more!! Start here:

http://www.fas.org/man/dod-101/sys/ship/row/plan/index.html

Or you can live in denial. Are you stuck in the 70s too!! come on man, a lot has changed

 

[TexasJohn]

That's how you read it?

FYI, the crew completed their OPSEC procedures before they surrendered the plane. The Chinese learned nothing. As for cutting up the plane, what did you expect? The thing barely landed. It had to be taken apart to be repaired.

The Chinese demanded an apology. They've got none. They demanded that the US admit were spying. Zilch. They demanded that the US admit that they were violating Chinese territory, aks the Chinese EEZ. The US and Australia sent warships through that EEZ while ignoring Chinese demands. They demanded the surveillance flights stopped. They continue and is continuing.

We demanded a more professional intercept. We got it.

Please read more - We DID apologize, the damage to the plane was propeller on Engine #1, and damage to the radome. Technicians established it could be repaired and flown out. The Chinese would not let us do that. OPSEC procedures involve driving metal nails through drives among other things to damage platters and make it unreadable. Being in the IT field - I know for a fact any number to data recovery companies here in Dallas can take something like that and glean the data in a clean room. It's not that hard. We don't know what classified info they have.

Sorry about your perception, but the reality is different. Here is a link to assist you:

http://www.findarticles.com/p/articles/mi_m0EPF/is_25_100/ai_74692671

We ALSO compromised on how to avoid future incidents with them.

 

[Jay_]

No decent surface fleet?? I urge you to read more!! Start here:

http://www.fas.org/man/dod-101/sys/ship/row/plan/index.html

Or you can live in denial. Are you stuck in the 70s too!! come on man, a lot has changed

Seriously, are you comparing one of the Arleigh Burke class with DDG-170?
Are you comparing USN's ASW ability with that of PLAN. Once can live in denial, but cannot be a paranoid.

Sorry, I fail to see how PLAN's surface fleet can stack up with USN or even for that matter other Asian navies like JMSDF and IN.

 

[TexasJohn]

Seriously, are you comparing one of the Arleigh Burke class with DDG-170?
Are you comparing USN's ASW ability with that of PLAN. Once can live in denial, but cannot be a paranoid.

Sorry, I fail to see how PLAN's surface fleet can stack up with USN or even for that matter other Asian navies like JMSDF and IN.

I don't ever remember comparing the Arleigh Burke with DDG-170 in this thread. But the Sovremenny Class destroyer is very comparable. Are you saying this destroyer class is inferior to say India's Delhi class?

http://www.naval-technology.com/projects/sovremenny/

 

[TexasJohn]

Also regarding the superiority of Arleigh Burke - Jay, do you remember this incident when Russian fighters buzzed the desk of the Kitty Hawk? Where were the Arleigh Burkes with Aegis???

http://www.worldaffairsboard.com/showthread.php?t=10665

This story was verified btw and NOT an urban legend!!

 

[Jay_]

I don't ever remember comparing the Arleigh Burke with DDG-170 in this thread. But the Sovremenny Class destroyer is very comparable. Are you saying this destroyer class is inferior to say India's Delhi class?

http://www.naval-technology.com/projects/sovremenny/

Are you comparing an AEGIS class ship with Sovremenny and Delhi class??
http://www.naval-technology.com/projects/burke/