Luke

Thank you, at least you are replying with arguments now instead of just insults. Also, the text was 4 pages and you used 2 buzzwords in one post, a big difference. Long road ahead. There are many more factors that you don't mention, protectionist measures and corporate espionage are an important part of Western development. Of course, the US is not giving out freebies to other countries... And social market economies (that you probably understand as socialism) score higher on the development indices linked above. Social market economies ARE a form of capitalism. China HAS a form of capitalism. You can see how oppressive US capitalism is once you move up the value chain, hence the trade war.

Development Index results 23-24:

China is a post-communist authoritarian state with a state-capitalist economic system. We in the West have state capitalistic economic systems with parliamentary democracies. I really don't understand how anyone of you reads "communist" from the posts above. Especially China with Xi is not communist since communism advocates classless, stateless societies with total communal ownership of the means of production. China has a state with absolute power, the exact opposite. The private sector plays a huge role too and enables investing opportunities similar to us in the west, with the exception of a totalitarian government that has more power to regulate and control negative parts of market forces. So no, I am not a communist and neither is anyone in the CCPs current government. How you can come to this conclusion is not understandable to me.

This is an interesting article: Some have been surprised that the US is not focusing on its exchange rate to boost its competitiveness, as it has done before. In 1971, it ditched the gold standard and devalued the dollar by about one third, as the Japanese yen and Deutschmark strengthened. After the 1985 Plaza accord to depreciate the dollar, the US currency weakened by half against these currencies. The US is not devaluing its dollar now because its debt and deficit levels are very high. Should the dollar halve its value against the yuan, for instance, the resulting inflation will sharply force up interest rates, triggering a debt crisis. A revalued yuan would also mean a much bigger Chinese economy, likely to be larger than America’s. How would that be in America’s interests? The US economic strategy seems to depend on attracting money globally to feed its deficit spending and sustain its high costs. It would allow the US to have its cake and eat it too, maintaining support for domestic industries that require huge financial help, such as the semiconductor and green tech sectors. Many emerging economies have gone down this route, offering protection for domestic businesses in the hope that their success would raise the economy. But all too often, the result was crony capitalism, which caused inflation and low growth, trapping people in poverty. The same outcome could befall the US and Europe. This is not to brush aside China’s overcapacity, which has been around for two decades. Government subsidies exist in China as they do in other countries, but this is not the reason for China’s success. Solar panel prices, for example, have fallen by 95 per cent since China entered the industry two decades ago. Prices of lithium iron phosphate (LFP) batteries for EVs have halved in the past year and are expected to halve again this year. No amount of subsidies could have made this happen. The real story is China’s innovation and scale. The West did not complain about China’s overcapacity in the past because it was good for them. When Chinese companies were mainly making parts and products for global companies, their overcapacity meant customers could squeeze prices and fatten profit margins. Now that Chinese companies want to make and sell their own products, these easy margins are gone. And as Chinese companies rise up the value chain in the global market, a clash of business cultures is shaping up between the West and China. Unlike the cutthroat competition of a century ago, the big capitalists of the West meet in Davos and are not above colluding to limit competition. For too long, product prices have tended to go up; profits have been stable or rising. Corporate managers have been able to pay themselves enormous sums and become rich enough to join the global governing elite. But today’s Chinese capitalists, including the local governments that back them, are more like the Western capitalists of a century ago, when overcapacity, price wars, and government backing were common in the West. These Chinese capitalists want to crush their competition, not coexist over a bottle of wine. Terrified Davos capitalists are therefore demanding protectionist tariffs. One may argue that China, cut off from some markets, would collapse first, ridding the West of Chinese competition. But that is likely to be wishful thinking. Low prices tend to create their own demand. China’s trade in low-priced tech is likely to help many Global South economies break the so-called middle-income trap and this could lead to a self-sustaining boom. The good news is the East-West tensions are not likely to trigger a military war, as many businesses and investors fear. Recent developments in the Middle East and Ukraine have shown that the US does not have the resources to support a big war. Even if the US wanted an arms race with China, it would need to double, even triple, its defense budget – money it doesn’t have. The bad news, however, is that the trade war is going to be much worse. In 1987, US Congressional leaders smashed Japanese electronics on Capitol Hill with sledgehammers. It is a matter of time before they do the same to Chinese solar panels and EVs – but first, they need to find some US-made sledgehammers. https://www.scmp.com/opinion/china-opinion/article/3259939/western-protectionism-will-fail-chinas-success-isnt-down-subsidies

Its an economy with industrial decline that can not compete in manufacturing globally due to an insane amount of financialization. The privatization boosted rents so high, health insurance costs, energy etc...the US still does design but manufacturing is not coming except with strong subsidies (TSMC). The US doesn't even have the labor pool necessary to produce what is designed by few. On the latest 60min show, Gina Raimondo said "we have the best chips in the world". Then lesley stahl said "taiwan has them". And Raimondo said "fair enough". LOL! If increasingly half of your GDP is business services, absurd health insurance money collectors and rich banks and landlords, how does the real economy look like? Designed in California, made in China. Now when China designs in China and makes in China, the product is more competitive than what the US has and it is game over. Thats why you have the tariff discussion and other moves to slow china down from the declining economic reality in the US. So the US got into a position by killing, stealing, and committing genocide. Now that they have one of the largest controls in the world, nobody is allowed to do anything remotely similar because that would be...bad. Right... Which creates the opportunity today doesn't it? That capital went into US markets and left China with the pathetic valuation it has now

The EU also faces severe internal problems because of our economy's contradictions, too few job opportunities, and little to no wage growth for a large percentile that is radicalizing now and changed their voting behavior towards more radical politicians with increasingly violent language...

Added to 3x Kweb

If you are not here to discuss arguments, please refrain from posting simple one-liner comments that reduce complex political and economic realities to buzzwords. It adds nothing to the conversation and topic. Thank you.

I think economies that are in denial about the negatives of late-stage capitalism and refuse to regulate against it will not survive the next 50-100 years and will collapse under internal stressors.

Did we read the same text? He is talking about a mixed public and private economy, that's pretty much the case already in China and also in the European social market economies like Germany, Sweden, Finland, etc. There is no state planning for production but state planning around production so it becomes more efficient and effective. If you understand mixed economies as socialism then yes, I am a socialist. But I am this because it is a system that works better over the longterm, achieves higher prosperity for society, and even higher investment returns over time.

Pretty good summary of the geopolitical situation in 2024

Adding to 3x KWEB

Yeye, i like the setup here, didnt play around with this kind of product before and will gain some experience...no investment advice

Starter in 3x KWEB ISIN:XS2399370043

It is, look at Trump and what his impact was on German discussion around NATO and our military. Right after he said "Russia can just go, we won't defend Europe because they didn't pay 2%" we had a public debate about how reliable the US as an ally is. Shared values with current leadership...we had 16 years of Angela Merkel and relative stability, but now things look a lot more unstable because leadership changes, and with that the countries set up. Well, I think that every country has a common belief that "development together" and "peace" are good values. China says that, we say that...but then it comes down to interest again...territory...economic advantages...better jobs...having manufacturing...having patents and the right on specific technology... The fundamental human and political world is driven by interest and not by some "alliance". With that mindset you lose sight on what really matters--> Your own interest and that of your country. I don't think they have a common enemy as their only shared interest but its of course one point. They both take care of their interests, which align today but could misalign tomorrow. Always have the option to leave and change partners because nothing is forever and it's better that way. Well, those cultures grew up separate for a long time. Because US citizens and Canadians literally came from Europe, that doesn't mean our economic interests align necessarily, especially with changing leadership.

Yes, the terrible energy policy from Germany is a major driver and Russia cut off was extra dry firewood on top I agree.

What values do we exactly share with the senile man Biden and Trump and this government? How can the US call itself a democracy when the same two candidates come up AGAIN after how ridiculous their presidency was and the election process? I mean, it's a South Park episode and I am highly skeptical of the state of leadership in the US. It's a very very limited democracy with the same two parties again and again and the same few client oligarch possible presidents up for choice that come from the same backgrounds, Ivy League, close contact to corporate America, running the same political line again, and again, funded by the same elite...this is what China sees, what Russia sees, what Iran sees but what can not be said publicly or you are a conspiracy theorist, Chinese spy or whatever. Then you have a media sector that receives funding by the same clientele that sponsors the presidents and parties, very strict ideological line that you are not allowed to cross or you will receive a public shitstorm by some randoms...Musk says it regularly but then he will get cut from advertising and blocked...alliances are based on mutual interests and I see a lot of differences in interest.

I wouldnt be so sure about that: There is a lot of industry that thrived on cheap russian NG, the impact on GDP is not huge (10%+) but significant enough for our economy to stall. Chemical industry is 10%+ of GDP. Individual households had to pay huge sums to US and other NG producers pushing down domestic demand. https://www.washingtonpost.com/world/2022/10/14/germany-economy-recession-energy-exports/

https://www.usnews.com/news/best-countries/articles/2023-10-10/how-much-aid-does-the-u-s-give-to-israel The United States has given Israel more aid than any other nation since World War II, granting it more than $260 billion.

Yeah I mean that's nothing really, Israel received 250b since its founding? But also, yes, they can not be made partners or stabilized. Not worth spending money on, especially with radical Islam, etc.

I specifically wrote "little" and those companies do not have "little innovation". Agree to disagree. The eurasian axis is a threat to the US which is why it has to be stopped and why Northstream was bombed by the US. Europe will be drawn into the war between US and China too and its not in our interest. Europes economy compared to the US is not fair, we have very weak countries here...greece was weak, east was and is weak. I agree that there is too much regulation, Europe can be a powerhouse. Especially with russian resources and open Chinese markets. Still, we don't have "little innovation". Most of these tech companies in the US quite literally literally depend on European engineering and innovation.

Doesn't make sense to support the religiously and culturally completely different poor peasants in Gaza that have pretty much nothing to offer to western countries. Its understandable that many then come to the conclusion that gaza lives don't matter and that there is some sort of bias happening.

I mean, it has significant foreign reserves, has a reasonable economy, is Western orientated... A lot of things to like for us so it makes sense to support them. There are African regions where millions day and nobody gives a shit, nobody sends them money and they just die and starve alone in the woods sooo...our support is selective.

Russian trade was perfectly fine with a nato 8 years before the special operation You said there is little innovation. 1. ASML 2. Novo Nordisk 3. SAP 4. SIEMENS 5. AIRBUS (quite better than Boeing now...;-)) 6. Lots of medical companies that are very innovative...merck etc 7. Atlas Copco 8. Very high quality automobile producers. 9. NXP semis 10. BASF 11. Infineon I don't think that's an accurate statement and its also not relevant to the discussion honestly.