Eric Schmidt: China is the most dangerous superpower on Earth.

[gambit]

stop day dreaming man. I would be surprised if you own your own house. You live in a retirement house. That ain't your own house dude.

Actually, it would be your family's dream to live in a house like mine.

Grandma and grandpa would have their own cozy room in the finished basement. Your parents would have the master bedroom upstairs. You and your brother would have your own room across from your parents. Your little sisters would have their own room next to you. Some could gather in the theater room in the basement for TV/movies. Upstairs, some could entertain friends in the guest greeting room, some could be alone in the family room. Or some could sit outside in the backyard that has a stone fire pit to keep warm during the winter and enjoy views of the mountains, sipping hot tea or coffee. Or your pop could work in the family car in the 2.5 car garage complete with attached work/hobby room that has 220 volt outlets for power tools and air compressor.

Yup...What a sh1thole of a country am living in...

 

[Götterdämmerung]

Hahaha, that one was good!

Do you guys want to know what Germant techies think about Eric Schmidt and the USA in this regard?

Here, from Germany's most respected IT magazin:
Eric Schmidt: China ist der größte Hacker | heise online

The comments are even more interesting:
Eric Schmidt: China ist der größte Hacker | News-Foren

BTW, google tranlate is your friend!

 

[BigDaddyWatch]

to be fair. Interest rate and Inflation in the United States are not as bad as in China or you can say the Situation in China are not anywhere better than that in the United States, my family own homes in Australia, America, Mainland China and Hong Kong. No matter where you are, one thigns are always and ALWAYS ring true. You have to be able to afford your mortgage, if you cannot afford your mortgage before you take one on. Then doesn't matter where you are, you are doomed to fail

You cannot, look at it in a way where you live in one place then you think of an economy of another, yes, they do have a cheaper way and cheaper price in China but you do need to know, people in China earn less, A LOT less than that in the United States. On average, a average entry level clerk earn somewhere around USD 28,000 - 30,000 a year while the same job in China earn maybe some where about USD$ 1500-3000, of course for a Chinese person, who live and work in China would have no hope in buying a property in the United States. But for an American, this is a normal thing to happen.

When you look at the news and looking at how people losing their home in the United States, most of the case is not because the economy is that bad and they cannot afford it. But rather a case of "In over their head" . You need to know, before the second mortgage storm hit US. the lending requirment are VERY VERY VERY lax in the US. And a normal worker earn about 20k-30k per year can easily borrow 600k to buy a big house and live a suburban dream. But if you earn 20-30k a year, there are no way you can afford a 600k-800k hourse in 20-30 years. People are stupidly think they can pay off if they can borrow the amount. And the lax guildline mean there are no safety line to fall back on if the user is stupid. And hence many people lose their home. Simply they are in over their head. Not because of the economic downturn.

Again, failure owning a home has nothing to do with infaltion. In term of inflation, some post before already quoted US actually have a lower inflation rate than China, it's just people are either mislead into they can own a bigger home they can afford to. Or people are simply acting stupidly by borrowing more than they can repay.

I don't suppose you know the ins and outs of properties market in the United States, if this post looks like offending you, i am here to pre-apologise

You misunderstand my post. It has nothing to do with owning homes. It's all about American monetary and fiscal policies that's eroding the value of the currency and perpetuate the imbalances in the economy. Inorder to keep interest rate at that level the central bank has to expand the monetary base (print money). When you print money you don't create new purchasing power but rather redistribute the existing purchasing power. The FED is infact taking purchasing power away from the common people and giving it to the banks on Wallstreet. That in its own turn lend that money out to the US government. The FED system is now buying 70 to 90% of all long term treasury bonds being issued by the US government and they are doing that by printing money out of thin air. That's more or less the same situation as in Zimbabwe. of course America can keep this up much longer than Zimbabwe because its a much larger and richer country and has the luxury of having the world's reserve currency. I suppose Zimbabwe could have held out somewhat longer if they we're printing the world's reserve currency.

As far as the home prices in America is concerned the FED is now printing 45 billion dollars a month out of thin air to buy mortgage backed securities to prop up the housing market. Do you think that's a healthy and sustainable situation ?

 

[jhungary]

You misunderstand my post. It has nothing to do with owning homes. It's all about American monetary and fiscal policies that's eroding the value of the currency and perpetuate the imbalances in the economy. Inorder to keep interest rate at that level the central bank has to expand the monetary base (print money). When you print money you don't create new purchasing power but rather redistribute the existing purchasing power. The FED is infact taking purchasing power away from the common people and giving it to the banks on Wallstreet. That in its own turn lend that money out to the US government. The FED system is now buying 70 to 90% of all long term treasury bonds being issued by the US government and they are doing that by printing money out of thin air. That's more or less the same situation as in Zimbabwe. of course America can keep this up much longer than Zimbabwe because its a much larger and richer country and has the luxury of having the world's reserve currency. I suppose Zimbabwe could have held out somewhat longer if they we're printing the world's reserve currency.

As far as the home prices in America is concerned the FED is now printing 45 billion dollars a month out of thin air to buy mortgage backed securities to prop up the housing market. Do you think that's a healthy and sustainable situation ?

What you say is possible, but not the actual case.

1.) Yes, the QE3 will deface the value of dollar and hence create an infation, but the truth is, QE3 is only 1 part of "Financial Cliff" solution and it's not a long term solution the US mended. The fact that despite QE3, the inflation rate are lower than the previous years is a proof of what it intented to be.

If the US only want to get out of debt, they could as always release the national bond and buy back all the short term loan. WHich we have been doing as an alternative financial policy for over, i don't know, 50 years.

The problem public sees is, yeah, the American are printing 40 billions dollar to flood the market blah blah blah, but they never get the whole picture.

With the money print out, the US used it to bail the mortgage backed finance and the loan and hence put the money back into the big bank. the problem is, the story did not just ended there. The QE 1,2,3) program are carefully planned so no "Liquid Asset" are to be bought under this program, every asset bought is current, thus lower the risk of inflation. The Liquid asset like Second mortgage left untouch. This is the first thing you need to know.

Then, the little known second phase scheme, where money would Continue to be lend out by the banks and stimulate the market. With the large supply of money, the bank are no longer as debt ridden as before and thus can ease credit and put a powerful injection of capital flow into the market. The reason it does that becasuse with the "Adjected" value (Avoiding the word inflated) of paper money, you need to come with a place to spend it and put it into recirculation. That's actually create more "Purchasing Power" on common hand. This part is VERY VERY IMPORTANT ON THE SUCCEESS OF QE PROGRAM, if the bank again become reluctant to lend out money, the problem will fail and inflation will hit sky high.

After the bank lend the money out and put the money back into circulation, the FED then tighten control of Federal Reserve and thus we now have a better Federal Reserve to handle this kind of problem later on. And with the market digesting the extra 40 billions. The "Adjusted Value" will be normalise over time. The only downside on this scheme is, if succeeded everyone's 401K will receive a 0% growth and may be scale down a little becuase of the future's adjustment. But i think this is a hack less to pay if the QE program fail or never put to place altogether. Which is the collasape of American Financial Market

That's how QE program work, it is not just printing 40 billions and put it in reserve, that would be a one way ticket to inflation paradise, dude, the American is smarter than that

If you are using a short term view to look at a long term project, of course it would seems unhealthy

 

[BigDaddyWatch]

What you say is possible, but not the actual case.

1.) Yes, the QE3 will deface the value of dollar and hence create an infation, but the truth is, QE3 is only 1 part of "Financial Cliff" solution and it's not a long term solution the US mended. The fact that despite QE3, the inflation rate are lower than the previous years is a proof of what it intented to be.

If the US only want to get out of debt, they could as always release the national bond and buy back all the short term loan. WHich we have been doing as an alternative financial policy for over, i don't know, 50 years.

The problem public sees is, yeah, the American are printing 40 billions dollar to flood the market blah blah blah, but they never get the whole picture.

With the money print out, the US used it to bail the mortgage backed finance and the loan and hence put the money back into the big bank. the problem is, the story did not just ended there. The QE 1,2,3) program are carefully planned so no "Liquid Asset" are to be bought under this program, every asset bought is current, thus lower the risk of inflation. The Liquid asset like Second mortgage left untouch. This is the first thing you need to know.

Then, the little known second phase scheme, where money would Continue to be lend out by the banks and stimulate the market. With the large supply of money, the bank are no longer as debt ridden as before and thus can ease credit and put a powerful injection of capital flow into the market. The reason it does that becasuse with the "Adjected" value (Avoiding the word inflated) of paper money, you need to come with a place to spend it and put it into recirculation. That's actually create more "Purchasing Power" on common hand. This part is VERY VERY IMPORTANT ON THE SUCCEESS OF QE PROGRAM, if the bank again become reluctant to lend out money, the problem will fail and inflation will hit sky high.

After the bank lend the money out and put the money back into circulation, the FED then tighten control of Federal Reserve and thus we now have a better Federal Reserve to handle this kind of problem later on. And with the market digesting the extra 40 billions. The "Adjusted Value" will be normalise over time. The only downside on this scheme is, if succeeded everyone's 401K will receive a 0% growth and may be scale down a little becuase of the future's adjustment. But i think this is a hack less to pay if the QE program fail or never put to place altogether. Which is the collasape of American Financial Market

That's how QE program work, it is not just printing 40 billions and put it in reserve, that would be a one way ticket to inflation paradise, dude, the American is smarter than that

If you are using a short term view to look at a long term project, of course it would seems unhealthy

Actually the FED is printing something like 85 billion dollars a month to support both the mortgage markets and the treasury bond markets. The FED has already increased its balance sheet to 3 trillion dollars from just a few hundred billion dollars before the crisis hit in 2007. And the FED is going to increase that number with another trillion dollars just this year. The FED use to sit on high quality AAA government bonds now no one knows what kind of assets the FED is sitting on because the FED has been busy in recent years buying all sorts of distressed assets and won't allow its books to be audited. And the US government has signed guarantees to the FED that the US government (hints the people) will pay for whatever losses they may incur. Exposing the American people to trillions of dollars of liabilities.

It really doesn't matter rather the money that's printed out of thin air will end up buying liquid or illiquide assets. If you print money to buy assets you will creat a artificially high price for that asset ie a bubble. And all bubbles will sooner or later burst.

The Americans simply don't learn. The reason why America has a housing bubble was because of the artificial low interest rate being set by the FED to counter the bursting of the Nasdaq or dotcom bubble in the early 2000's. The US economy was already entring a recession that then was exacerbated by the attacks on 9/11. The response of Alan Greenspan was to lower interest rate to just 1% and kept it there for 13 months and then raise the interest rate to slowly. It was this cheap money that has help to fuel the housing bubble and other malinvestments and malfeasance in the US economy. And the reason for the dotcom bubble was that Alan Greenspan in the 1990's has simply allowed the interest rate to drop and print more money in respons to major international financial crises like the Russian default, Argentinian default and the Asian financial crisis all happening at the end of the 1990's. All those internet companies don't have any customers, revenue streams, business plans or even a viable product. But they have money, to hire staff buy equipment and rent office space. All those money that Greenspan printed needed to fine a home there was then a lot of loose money floating around. And alot of them ended up with those dotcom companies.

So the Americans created the housing bubble in respons to the bursting of the dotcom bubble. And now they are creating a new bubble in respons to the bursting of the housing bubble. This time its probably be a sovereign bond bubble. All created by the same tools too low interest rate to much printing of money. And each time they double down. And create a bigger problem for them selfs and the rest of the world.

If the housing bubble that nearly destroyed the US and the world economy comes from just 13 months of 1% interest rate what kind of crisis do you think 50 months and counting of 0,25% interest rate will cause ?

 

[jhungary]

Actually the FED is printing something like 85 billion dollars a month to support both the mortgage markets and the treasury bond markets. The FED has already increased its balance sheet to 3 trillion dollars from just a few hundred billion dollars before the crisis hit in 2007. And the FED is going to increase that number with another trillion dollars just this year. The FED use to sit on high quality AAA government bonds now no one knows what kind of assets the FED is sitting on because the FED has been busy in recent years buying all sorts of distressed assets and won't allow its books to be audited. And the US government has signed guarantees to the FED that the US government (hints the people) will pay for whatever losses they may incur. Exposing the American people to trillions of dollars of liabilities.

First of all, it is not open ended like you say, they are going to buy 40 billion mortgage security and 45 billion long term investment until 2015. That's 36 months.

FRB: Press Release--Federal Reserve issues FOMC statement--October 24, 2012

Well, you still don't know what QE and all other FED program are intented. They are NOT BAILING OUT program, instead, they are market stimulate program designed to work against deflation (Low purchase power) and put the buying power back into the American Market.

Yes, the American people will be in debt during the period of QE and FED, but the thing is, they are in debt ANYWAY (Don't forget why the Federal Reserve bank roll out such program in the first place) Well, compare the other option, which is let the debt roll and depending on the 0 or near 0 interest rate market to pick back up, it's only logical for the Government to put the money back where it started. The bank

Ok, i am not saying it 100% works, nor does it don't have any risk, but when you look at the event and the solution, if you dont do this, America will ended up in a dead end anyway. You better use one gamble to put the curve back on. If it fail, it fail, we are down the financial cliff, but the same will happen if we do not do anything.

Up until this point, we see the program is actually succeding, because we are neither in Deflation nor have a high inflation, which is the clear indication that the program are failing

It really doesn't matter rather the money that's printed out of thin air will end up buying liquid or illiquide assets. If you print money to buy assets you will creat a artificially high price for that asset ie a bubble. And all bubbles will sooner or later burst.

Why would it not matter??'

While one is a loan WITH SECURITY, and the other is a LOAN ON CREDIT.....
Dude, if we again bet on the unsecure loan, then why would we do this in the first place. Yes, it would be the same if the QE3 is merely a bailing out program, but it is not.

You print money to buy back the loan of an Actual properties. The bank then clear those properties and that become "Equity" on the bank. With those equity, they can have security to giving out credit again, yeah the properties will be on empty growth as an equity as we speak until the loan mature but at least that's some equity. If we bet on the unsecure loan, then we are really printing money on paper out of thin air, that did nothing and we are back to square one, we just prospone the crisis for 3 or 4 years.

The Americans simply don't learn. The reason why America has a housing bubble was because of the artificial low interest rate being set by the FED to counter the bursting of the Nasdaq or dotcom bubble in the early 2000's. The US economy was already entring a recession that then was exacerbated by the attacks on 9/11. The response of Alan Greenspan was to lower interest rate to just 1% and kept it there for 13 months and then raise the interest rate to slowly. It was this cheap money that has help to fuel the housing bubble and other malinvestments and malfeasance in the US economy. And the reason for the dotcom bubble was that Alan Greenspan in the 1990's has simply allowed the interest rate to drop and print more money in respons to major international financial crises like the Russian default, Argentinian default and the Asian financial crisis all happening at the end of the 1990's. All those internet companies don't have any customers, revenue streams, business plans or even a viable product. But they have money, to hire staff buy equipment and rent office space. All those money that Greenspan printed needed to fine a home there was then a lot of loose money floating around. And alot of them ended up with those dotcom companies.

As i explained, the reason america have a housing bubble is not because of the low or high interest rate, but PEOPLE IN OVER THEIR HEAD. And also the bank are not strictly regulated. Let me twell you this, i can apply for a 10,000 USD credit card back in 2000 when i have no jobs, no education, no asset. The only thing stopping me from getting that credit card is filling in the form.
Nobody does any credit checks, nor employment check nor even risk assessment in the old days and you can simply apply for a credit card, max it out and then some, then disappear.

Now, if you want a credit card in the US, it's the same but at least they run some background check and Risk assessment and you need to show you are able to repay a certain amount of money, if they think you can only at most repay 500 per month, you will not get a card with 10,000 limit in it.

Same thins goes to buying a mortgage. In the old days, it's about paper and formality. Even if you have 0 credit score, as long as some how you can produce the 10-20% magic nnumber for deposit, there are no bank, or credit company will refuse your application. They do not look at your affordability, nor your credit rating, nor plan a loan for you that actually make sense.

So people will think, ok, buying a 600,000, i only need 120,000 for deposit and if i got it, then i will be able to afford it. Little do they know if they only earn 3000 a month, there are NO WAY they can afford a 500,000 mortgage. 3000 a month can''t even handle a 300,000 mortgage with ease, let alone 500,000. Then they fail to make payment, the creditor pressure, they took a second mortgage, and you know the rest.

Is american economic down? Yes, not as much as outside purchase. Otherwise our debtor will already pull the plug on our bond and our coutnry will just sink.

Interest rate/Inflation/Deflation have nothing to do with the housing bubble burst, it's people stupidity. There are many lost their hom in America, but there are also many who can keep it by sensible planning. Many more can keep it than those who lose it actually.

As for the interest rate now, am already explained above, not gonna repeat again.

So the Americans created the housing bubble in respons to the bursting of the dotcom bubble. And now they are creating a new bubble in respons to the bursting of the housing bubble. This time its probably be a sovereign bond bubble. All created by the same tools too low interest rate to much printing of money. And each time they double down. And create a bigger problem for them selfs and the rest of the world.

No, as i explained, the housing problem is not a bubble created after the dotcom.

And US did not enter recession in 2000. Infact the only negative growth in 2000s are during the second mortgage crisis (Or called Subprime Mortgage crisis in America) That crisis almost bring down america and it's that idiocy i am talking about contributing to the housing bubble.

Here are 2 graph from wikipedia

I don't know where your data came from, but it is simply, not true........

If the housing bubble that nearly destroyed the US and the world economy comes from just 13 months of 1% interest rate what kind of crisis do you think 50 months and counting of 0,25% interest rate will cause ?

No, the interest rate will rise, not during the duration of the QE3 still in effect, the interest rate will maintain a rate of .25-.4 for the duration, the goal of the whole QE program is to lift interest rate and maintain a uptrent of inflation. You cannot comment on their failure or success until the program clearly run out on 2015. So, i don't want to get into a discuss of what i might happen or might not in the future, but right now, the plan seems doing ok.

 

[sixnerdy]

Exactly!

I was really shocked when I saw how proficient the U.S media is at fabricating lies on some foriegn affairs issues.