Why are we losing all these choppers in Iraq?

[nicky g]

Is anyone actually going to offer any evidence that Iran supplied these missiles to Sunni insurgent groups? Because it's pretty unlikely.

This question would sit better in the other thread, but the bombs Gates claims Iran is supplying - which groups is it supplying them to? No report ever seems to mention it. Iran's closest allies in Iraq are the main government parties that the US is supporting.

[Girchuck]

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I think China might have something to say about any US attempt to disrupt its energy security.

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First oil is a fungible product. China is not limited to Iran for their oil source.

Second what can China do if the USA bombs the Iranian oil field? Lodge a complaint to the UN? Big deal.... Attack the USA? Don't make me laugh. China may get mad but screw them. American security trumps their hurt feelings...

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China can hurt US plenty if they get desperate and scared that US will not stop attacking their suppliers.
China can stop buying US treasury obligations, and start dumping their considerable dollar stockpiles, precipitating financial panic and dollar crash. They will not do it ordinarily, because that would hurt them too, but if their suppliers are attacked, they might decide that US may not be allowed to cross the line without severe economic consequences. Bombing Iran may be that line.

[Felix_Nietzsche]

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China can hurt US plenty if they get desperate and scared that US will not stop attacking their suppliers.
China can stop buying US treasury obligations, and start dumping their considerable dollar stockpiles, precipitating financial panic and dollar crash.

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<Slapping forehead and shaking head in disbelief of what I just read>
I'm surprised so many people buy into this fantasy scenario... This is like someone saying they will cause the collapse of the gold market by selling all their gold at $1 an ounce. Please do. I will happily buy their discounted gold and grow rich in the process. The laws of economics are like the laws of physics. If the Chi-Coms want to slit their own throats economically then I for one will be quite happy because I consider the Chi-Coms to be an enemy of the USA...

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They will not do it ordinarily, because that would hurt them too, but if their suppliers are attacked, they might decide that US may not be allowed to cross the line without severe economic consequences. Bombing Iran may be that line.

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China has more to lose from alienating the USA than the USA has from alienating the Chi-Coms. Lucky for China, the USA usually elects presidents who a check/fold and check/call (Bush raises w/ AA then he checks it down to the river). Eventually we will get another Reagan to clean up their mess...

[Girchuck]

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China can hurt US plenty if they get desperate and scared that US will not stop attacking their suppliers.
China can stop buying US treasury obligations, and start dumping their considerable dollar stockpiles, precipitating financial panic and dollar crash.

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<Slapping forehead and shaking head in disbelief of what I just read>
I'm surprised so many people buy into this fantasy scenario... This is like someone saying they will cause the collapse of the gold market by selling all their gold at $1 an ounce. Please do. I will happily buy their discounted gold and grow rich in the process. The laws of economics are like the laws of physics. If the Chi-Coms want to slit their own throats economically then I for one will be quite happy because I consider the Chi-Coms to be an enemy of the USA...

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They will not do it ordinarily, because that would hurt them too, but if their suppliers are attacked, they might decide that US may not be allowed to cross the line without severe economic consequences. Bombing Iran may be that line.

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China has more to lose from alienating the USA than the USA has from alienating the Chi-Coms. Lucky for China, the USA usually elects presidents who a check/fold and check/call (Bush raises w/ AA then he checks it down to the river). Eventually we will get another Reagan to clean up their mess...

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But China will not sell its dollars cheap like that. It will simply start selling them at the Forex going rate. When supply of dollars will increase, dollar will go down relative to other currencies and precious metals into which China will presumably diversify. This is simple economics ofcourse. Other countries, whose central banks also hold a lot of dollars will see dollar going down and might panic and rush for the exit, precipitating a crash in dollar.
I see nothing fantastic in this scenario. American banks will be powerless to buy hundreds of billions of dollars that China holds, Federal government is currently running a huge deficit, financed mostly by foreign based entities, and our debt obligations are considerable. Surely you can see that dollar sell-off might hurt our ability to import cheap crap from China, and ruin our economy driven by consumer spending.
Continuing your poker analogy, China may or may not be able to afford to go all-in, but the US certainly lacks the will to do so. A move by China that will send our economy into recession will cost current administration dearly, and piss off a lot of powerful people.
War is not always good for business.

And I concede that China may lose even more from this move, yet some actions of US may be so strategically intolerable for China, that it will be willing to absorb the pain to make us stop.

[Jamougha]

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Are these Europeans trying to kill American soldiers as well?

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No. OTOH if you had invaded anywhere in Europe then Iraq would look like Disneyland.

[cjmewett]

Back on point, the recent chopper losses have been due to small-arms fire, according to the military. So no, it's not Stingers.

[Felix_Nietzsche]

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But China will not sell its dollars cheap like that. It will simply start selling them at the Forex going rate.

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Any MASS selloff will result in the seller taking a bath.
If they divest their investments more slowly to maximize their selling price then there were be little impact to the USA. The $1 an ounce gold scenario was using exageration to make a point. The USA is one of the best countries in the world to invest in. Any China selloff of assets will not change this and others will line up to take their place.

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I see nothing fantastic in this scenario. American banks will be powerless to buy hundreds of billions of dollars that China holds, Federal government is currently running a huge deficit, financed mostly by foreign based entities, and our debt obligations are considerable. Surely you can see that dollar sell-off might hurt our ability to import cheap crap from China, and ruin our economy driven by consumer spending.

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Wow.....
You really buy into this doomsday scenario. First China would never do this and second China does not have the power to ruin our economy. This scenario is just a self-hating American wet dream.

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yet some actions of US may be so strategically intolerable for China, that it will be willing to absorb the pain to make us stop.

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China is pursuing their own interests and the USA should do the same. When it comes to leverage, China needs the USA more than we need them....

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And I concede that China may lose even more from this move,

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We are in agreement here.

[gholizad]

http://www.whittierdailynews.com/opinions/ci_5138602

[Felix_Nietzsche]

I consider Saudia-Arabia to be more an enemy than a friend.
We have common interest at times but they are in the forefront of spreading Wahabi Islam which is the most violent form of Islam in the world.

[Girchuck]

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But China will not sell its dollars cheap like that. It will simply start selling them at the Forex going rate.

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Any MASS selloff will result in the seller taking a bath.
If they divest their investments more slowly to maximize their selling price then there were be little impact to the USA. The $1 an ounce gold scenario was using exageration to make a point. The USA is one of the best countries in the world to invest in. Any China selloff of assets will not change this and others will line up to take their place.


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Why is USA one of the best places to invest? Probably because it is stable politically, has low levels of corruption and high levels of transparency. In other words, it is safe. The premium people pay to invest here is a cost of security. What happens when USA gets involved into a military conflict with a country that is theoretically capable of retaliating on a 9/11 scale. Do you remember what 9/11 did to the US stock market short term?
Imagine the uncertainty that investors would feel, if the US strikes Iran. After all, they were investing in US economy because of the security US provides, and now this security will clearly be diminished.
What will China be selling? China will be selling financial instruments of a US government, and not gold. Financial instruments of US government are only as valuable if their backing. But US government is a massive debtor. It has mutiple financial obligations, such as Social Security and Medicare, which are going to be difficult to fulfill long term without issuing more dollars. The risk that US will inflate its way out of its obligations is on the mind of most investors in US treasuries and US dollar. This risk is intensified by the hundreds of billions of dollars that Iraq campaign cost so far.
So, the security of US investments will be diminished, and their backing will also be diminished by engaging in another costly and unproductive military adventure that is by your admission very likely to increase oil prices by 30-50% (you said gas will go up a buck), which will hurt the economy even more.
Isn't it logical, that if all of the above transpires, the investments in US will be less attractive than they are now? So, who exactly will be buying all the T-bills that China would be selling, and at what price?

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I see nothing fantastic in this scenario. American banks will be powerless to buy hundreds of billions of dollars that China holds, Federal government is currently running a huge deficit, financed mostly by foreign based entities, and our debt obligations are considerable. Surely you can see that dollar sell-off might hurt our ability to import cheap crap from China, and ruin our economy driven by consumer spending.

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Wow.....
You really buy into this doomsday scenario. First China would never do this and second China does not have the power to ruin our economy. This scenario is just a self-hating American wet dream.


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Ofcourse, China would never do it under normal circumstances, but attack on Iran is not normal. It is extremely threatening to the interests of China, and they will try to prevent it or abort it by whatever means they find expedient. Perhaps it will not be threatening enough to trigger the sell-off, but the risks of an attack and the fall-out are bound to make USA seem like a less secure place for many foreign investors.

China has the power to hurt our economy very badly if it somehow acquires political will to hurt itself more in the process. We appear to be in a sort of economical MAD pact with China. We have outsourced a lot of our industrial production, and it will take a lot of time and money to rebuild it if we need to do it.
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yet some actions of US may be so strategically intolerable for China, that it will be willing to absorb the pain to make us stop.

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China is pursuing their own interests and the USA should do the same. When it comes to leverage, China needs the USA more than we need them....

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And I concede that China may lose even more from this move,

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We are in agreement here.

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