IT’S OFFICIAL: America is now No. 2 – The puzzle is taking shape


A Bank of China branch under construction early this year in Guangzhou, Guangdong Province.

A Bank of China branch under construction early this year in Guangzhou, Guangdong Province.

By @ShaunyGibson – Used to be @ ShaunyNews

Chinese economy overtakes the U.S.’s to become the largest

Source: http://www.marketwatch.com/story/its-official-america-is-now-no-2-2014-12-04?link=sfmw_fb

The blog a few down regarding USA and Russia make sense now: I have been keeping up to date with this:

https://acenewsdesk.wordpress.com/2014/11/19/another-nail-in-the-us-petrodollars-coffin/

https://acenewsdesk.wordpress.com/2014/10/16/as-the-us-dollar-crumbles-the-world-is-set-for-war/

MAKES TOTAL SENSE NOW THIS: https://acenewsdesk.wordpress.com/2014/12/06/us-declares-war-on-russia-step-one/

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 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. I reported on this looming development over two years ago, but the moment came sooner than I or anyone else had predicted. China’s recent decision to bring gross domestic product calculations in line with international standards has revealed activity that had previously gone uncounted

These calculations are based on a well-established and widely used economic measure known as purchasing-power parity (or PPP), which measures the actual output as opposed to fluctuations in exchange rates. So a Starbucks venti Frappucino served in Beijing counts the same as a venti Frappucino served in Minneapolis, regardless of what happens to be going on among foreign-exchange traders.

PPP is the real way of comparing economies. It is one reported by the IMF and was, for example, the one used by McKinsey & Co. consultants back in the 1990s when they undertook a study of economic productivity on behalf of the British government.

Yes, when you look at mere international exchange rates, the U.S. economy remains bigger than that of China, allegedly by almost 70%. But such measures, although they are widely followed, are largely meaningless. Does the U.S. economy really shrink if the dollar falls 10% on international currency markets? Does the recent plunge in the yen mean the Japanese economy is vanishing before our eyes?

Back in 2012, when I first reported on these figures, the IMF tried to challenge the importance of PPP. I was not surprised. It is not in anyone’s interest at the IMF that people in the Western world start focusing too much on the sheer extent of China’s power. But the PPP data come from the IMF, not from me. And it is noteworthy that when the IMF’s official World Economic Outlook compares countries by their share of world output, it does so using PPP.

Yes, all statistics are open to various quibbles. It is perfectly possible China’s latest numbers overstate output — or understate them. That may also be true of U.S. GDP figures. But the IMF data are the best we have.

Make no mistake: This is a geopolitical earthquake with a high reading on the Richter scale. Throughout history, political and military power have always depended on economic power. Britain was the workshop of the world before she ruled the waves. And it was Britain’s relative economic decline that preceded the collapse of her power. And it was a similar story with previous hegemonic powers such as France and Spain.

This will not change anything tomorrow or next week, but it will change almost everything in the longer term. We have lived in a world dominated by the U.S. since at least 1945 and, in many ways, since the late 19th century. And we have lived for 200 years — since the Battle of Waterloo in 1815 — in a world dominated by two reasonably democratic, constitutional countries in Great Britain and the U.S.A. For all their flaws, the two countries have been in the vanguard worldwide in terms of civil liberties, democratic processes and constitutional rights.

http://www.forexfactory.com/news.php?do=news&id=516310

http://www.wnd.com/2014/12/its-official-america-is-now-no-2/

http://newsok.com/its-official-america-is-now-no.-2/article/5373118

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Another nail in the US petrodollar’s coffin


Russia and China have weakened the US economy badly

Russia and China have weakened the US economy badly

By @ShaunyGibson – Used to be @ ShaunyNews

Very hard to get documentation on this story, links below that I could find

Vladimir Putin won’t kowtow to the “dollar dictatorship” in world oil markets, the Russia president told state-owned Itar-Tass newswire. “We are leaving the dictatorship of the market where oil is priced in dollars and will increase the possibilities of using the ruble and the yuan,” Putin said in an interview with the news agency.

NOT ANY MORE

NOT ANY MORE

Russia recently signed a number of agreements with China after an official visit to the country by Xi Jinping, China’s president. The two countries are also linking up their securities exchanges in order to create hedge operations in both ruble and yuan.

Russia has been desperately trying to woo the Chinese over to its side, waving its oil and gas wealth like a golden carrot stick in front of the energy hungry Chinese.  Russia’s biggest market for oil and gas is Europe, but the European Union is trying to diversify away from Russia. Russian natural accounts accounts for over 30% of the E.U.’s foreign gas supply and Russia assumes that Europe will one day turn to the U.S. for gas, even though it will take years before Europe has the necessary infrastructure to import U.S. liquefied natural gas.

The man. The myth. The legend. Vladimir Putin says he hopes to price more of Russian oil and gas in rubles and yuans. But that depends on the Chinese, which remain a tiny part of Russian energy exports.

For political purposes, Putin may like the idea of pricing its oil in currencies other than the dollar. It shows Russia has alternatives. But China is light years behind other markets in terms of Russian energy consumption. In a speech at the Asia-Pacific Economic Cooperation summit in Beijing last week, Putin said that using the ruble and yuan would weaken the dollar’s influence on the global energy market. These claims have been floated around before, like when Iran said it would start pricing its oil in euros. Most of the world’s oil trade is priced in dollars and euros, not strictly dollars. And while China is a large consumer of oil, its currency is not fully internationalized. Only a few niche markets in goods and services are set up for pricing in the off-shore yuan instead of being settled in dollars.

Killing the American economy, leading to triple fines for no healthcare, this is the true impact

Killing the American economy, leading to triple fines for no healthcare, this is the true impact

Putin also said during the APEC Summit that Russia and China were discussing using their own currencies in bilateral trade, though energy is really the only trade going on between the two countries in terms of dollar value. While diversifying into yuan makes sense, Russia would be wise to keep the euro zone as a trade partner.  Despite sharing the same border with China, Russia has closer cultural and commercial ties to Europe. And despite an ocean between them, China has closer commercial and cultural ties — thanks to a large immigrant community — with the United States than it does with Russia.

So for the dollar haters, Russia’s pricing oil in rubles or yuan will have very little impact on the greenback’s future as commodity currency of choice.

http://www.forbes.com/sites/kenrapoza/2014/11/16/putin-says-country-will-be-selling-more-oil-in-yuan-ruble/2/

https://www.linkedin.com/today/post/article/20140828194739-6782688-the-nail-in-the-petrodollar-coffin-gazprom-begins-accepting-payment-for-oil-in-ruble-yuan

http://socioecohistory.wordpress.com/2014/08/28/the-nail-in-the-petrodollar-coffin-gazprom-begins-accepting-payment-for-oil-in-ruble-yuan/

http://www.whenthenewsstops.org/2014/08/the-nail-in-petrodollar-coffin-gazprom.html

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