Bitcoin Forum

http://online.wsj.com/articles/u-s-supreme-court-rejects-argentina-appeal-in-sovereign-debt-case-1402926119

Argentina is in serious trouble with it's debts, and may now default within the month. The last time this happened peoples bank accounts were frozen (cypress style), and they suffered hyperinflation (still are, currently estimated at 100%). They have a massive thriving very public black market in US dollars.

This default could be the Black Swan event that everyone is looking for. It's impact on Bitcoin could be massive given the generally high level of internet usage in Argentina witha  desperate middle class looking to protect themselves (or even make money!) this time around. If I was an argentinian I certainly would not be keeping my hard eardned peso's in any bank right now, and certainly keep them in bitcoin if I could.

Argentina is indeed in some serious currency crisis but I didn't know they were already that far down.

Either way due to the restrictive money laws it will be quite hard to sell bitcoins and get useful money out of the country I guess. So they would likely sell for a high price in Argentina just like the dollar which is traded for more than it is 'officially' worth.

Also I heard a lot of people in Argentina are not very technical so bitcoin could still be a bit problematic.

I still hope bitcoin will really take off in Argentina. At least it will provide a way out of hyperinflation for those who truly want change.

Jorge will save them.

Wow, great link.   

A few points:

1. Why a foreign country would allow a trial in the US when litigating against a US hedge fund is beyond me.
2. The size of these hedge funds show you just how distorted the capital allocation process has become when they can hold an entire country hostage.
3. rules can be bent but rarely is debt ever forgiven, especially for the big boys.  We saw this in the GFC of 2008 when most of the bailout monies were handed over to big boy creditors at the expense of debasing the dollar.
4. Finally,  and most importantly, you can see that the only practical solution for most of these crises, especially when they hit the US,  will be to print money. It's a one trick pony, the Fed. 

The more interesting takeaway from this is:

1) The U.S. Supreme Court is telling banks they must give access to Argentina's assets stored in their banks.
2) Bitcoin can be used by countries just as easily as it can by individuals to protect wealth from seizure.

If Argentina so decided, it could transfer all assets to Bitcoin and there is nothing their creditors could do, short of war (sending forces in to seize the private keys), to collect.

There seems to be a problem with the lax public attitude towards the government money system, money transfer controls and outright assfucking from the government.

There is also far reaching government spying on the public in Argentina, see panampost:

http://panampost.com/adam-dubove/2014/06/10/argentinas-orwellian-state-rises-with-public-apathy/ (http://panampost.com/adam-dubove/2014/06/10/argentinas-orwellian-state-rises-with-public-apathy/)

I wish someone from Argentina could tell me the opposite, that there are lots of people who will take action to defend their savings.

This entrepreneur, is from Argentina.  Lived through 2 liquidations of his family's wealth.

Edit: I'm too new to post links so just Google:

WSJ Bitcoin Price…to $1 Million

For those who are too lazy to Google:

http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/ (http://blogs.wsj.com/digits/2014/04/02/bitcoin-price-to-1-million/)

$1 million is a stretch, I recently calculated that if bitcoin was to replace all REAL money (ie hard cash and bank account deposits) commonly known as m0, that it would be worth about $450,000. Of course if it HAD replaced everything, then that sentance would be a nonsense, as we would need to compare it's value to something that still existed. See https://bitcointalk.org/index.php?topic=646186.msg7255495#msg7255495

That was a great thread (and nice calculations)

Because their credit rating was so bad the only way they could sell bonds was to agree to forgo sovereign immunity and agree to settle any disputes in the US court system.

If they win Mondial, then they will forget they are in crysis.

Using the M3 money supply would give a value of more than 1m$ since only M3 in USD is more than 10trillions and there is a bit shy of 13m bitcoins

If you want to speculate widely you can add the value of Gold as a reserve : a few trillions so a few hundred of thousands

Why thank you :)

If you read the above link you will see that opinion seems to favour narrow money, simply because money that is not doing anything (languishing on ledgers is not acting as a communicator of value). If Bernanke electronically prints up 100 trillion and sticks it on a govt ledger (or some other governments ledger as treasuries), it doesnt affect day to day scarcity of dollars so doesnt affect price. But you are right, if we used M3 the figure would be much bigger since M3 is actually running at about 100 trillion globally.

The issue is due the massive fractionalization the FED enables, the ratio of "base money" M0 to circulated money M3 is much higher today than under a sound money system.

It is only the FEDs printing press that enables the banks to run at the 10x or 30x leverage ratio's today. This is possible because if any run starts the FED can provide liquidity on demand.

When the US was on a gold standard bank leverage never went above 2x and the ratio of base money to circulated money was much closer. Since bitcoin is a sound money system it makes a lot more sense to consider M3 as the target because significantly lower leverage in the system  is closer to what we'd see.

1. What makes you think they have a choice? Clearly they do not. The restructured bonds created after the 2001 credit event were written under New York law. Argentina can do whatever it likes within its own legal system, even declare that debt to be invalid. They don;t want to do that, what they really want to do is to continue to pay their restructured debt-holders, whilst not paying anything to the hold-outs that didn't accept the haircut back in 2001.

However because of the pari passu clauses in the (original & restructured) bond contracts, which guarantee 'equal treatment of all bond holders', they cannot legally under the terms of the contract they themselves wrote, pay the restructured holders and give nothing to the holdouts. The substance of the NY court decisions was to reinforce that interpretation, AND to bind third parties under it as well.

This means, for example, that if the Bank of NY (their current payment partner) continues to help Argentina pay its bond holders it will be in violation of the injunction and US law. It may even mean that bond holders themselves, if they accept interest payments without same going to holdout bond holders, may be in violation of the law.

2. Probably right, though supranational corporations are hardly a new thing, and Argentina is a relatively small player in global capital markets mainly because they are generally spurned due to their terrible track record of bad behaviour (this is a case in point!)

3. Debt is very often forgiven. You would do well to look at the history of sovereign credit crises. Hell, haircuts were given on Greek debt as recently as last year. A haircut is textbook 'debt forgiveness'. Also your statement about bank bailouts debasing the currency is a non-sequitur - please elaborate.

4. Yes, money printing is a great way to achieve a 'soft default' via monetary inflation, but only if the debt is denominated in a currency for which you control supply! This debt is USD denominated, so Argentina can print as much money as it likes and it will have no effect on this debt in real terms (but will create rampant inflation and probably reduce NGDP domestically!)

More news:
http://news.yahoo.com/argentina-says-wont-next-bond-payment-us-042325671.html

This could be a perfect storm black swan event.

People use to care if their bank was taking too much risk because there was no state guarantee of deposits

I think the potential for Bitcoin is in the hundreds of billions of dollars of valuation within a few years

When the value of bitcoin is high enough, there will be other coin to compete with it.

bailouts are achieved by the Fed printing money and buying up the toxic distressed assets from the banks.  that's debasing the currency.

yes, haircuts are given when no other option exists but never is the debt forgiven entirely.

In that case bank bailouts debase the currency exactly as much, no more an no less, than ordinary OMOs (open market operations) which are used by the Fed to target the interest rate path. In both cases the Fed 'prints' money and uses it to buy assets at market price. Since the bank bailouts are no different than OMOs in terms of debasing the currency, your focus seemed a little weird.

You could argue that the Fed was overpaying for the toxic assets, (ie not paying market price) in which case the currency is being debased not only in the same way it is by OMOs (which under Quantity Theory can cause inflation) but also by a reduction in backing of the currency by the Fed's balance sheet (which Backing Theory/Real Bills Theory claims is the only way inflation can arise).

However the Fed has since made a very healthy profit on those 'toxic' assets, which seems to suggest that they did not overpay for them.


Haircuts are debt forgiveness. Your claims was that debt is not ever forgiven which you have at least now admitted was bogus. As for the special case of 'debt forgiven entirely' yes even this happens, though less frequently since bondholders will always try and claim whatever is left after a default and that is rarely zero. But google Multilateral Debt Relief Initiative and you will see some recent examples of total debt forgiveness.

At the time, they overpaid. If not, a bailout would not be necessary. Maybe the risk disappeared and they gained again.

When a company is bailed out, it will be profitable in the future, because they are now a part of the crony economy.

Does not follow. A necessary (but not sufficient) condition for a bailout is merely that the bank is insolvent, ie that liabilities > assets.

I'm not sure what conditions are "sufficient" for a bailout to become necessary, because I don't think we should ever bail out banks.

In any case I don't see why the government considering it necessary for a bank to be bailed out implies that it must overpay for the assets of the bank. Are you saying that it's because for a bailout to be necessary there must be no other buyers (as buying the bank's is a loss-making proposition, hence the insolvency), so there is no price discovery? I guess that makes sense.

And actually, if they sold the assets for profit later, it is not correct to say 'at the time they overpaid'. An asset value is equal to its discounted future cash flows. So a posteriori we know that they did not overpay, in fact they were just better (or luckier) at estimating the net value of the assets than the market.

What you really mean is 'they paid more than the equilibrium price in the market would have been were they not participating'.

while they both represent debasement of the currency, i'd argue bailouts are much more destructive and hence "inflationary" to the currency than POMO's.  why?  b/c the recipients of those bailouts should have been allowed to fail and "learn" from the follies of their actions.  what they learned instead was that reckless speculation is to be rewarded by their mother Fed and the American ppl who subsidize those bailouts thru inflation of the currency.  failures act to clean out the bad actors from the financial system and replace them with the more prudent and perhaps smarter actors.  bailouts represent moral hazard.  those "profits" as you call them were never guaranteed to happen.  to claim, in hindsight, that it was a good idea is ludicrous.  i could easily just argue the counterfactual; that letting those banks go would have resulted in a much healthier, more robust economy that would be functioning in a much fairer and healthier way for the average American.  plus, it's questionable whether profit was ever made given the shady accounting that has been given to those assets currently.  and how do the ordinary citizens benefit from any profits made?  they don't.  most of those assets have yet to be repurchased by those same banks at there newly inflated prices.  so in essence, we are stuck with a monetary base that is now 5-6x what it was prior to the bailouts.  

and why was mortgage principal forgiveness never an option for ordinary Americans?  Geithner argued it was "illegal".  my ass.  he just preferred to give the bailout money to his buddies at the banks that had been irresponsible for making those toxic loans in the first place.  he even admits that it was unfair yet is trying his best to rewrite history here:

http://thedailyshow.cc.com/extended-interviews/z9b8f1/timothy-geithner-extended-interview

all you have to do is listen to that video to know he's a snake.  furthermore, by your logic, since housing prices have recovered since 2008, he made a mistake in not bailing out ordinary Americans mortgages thru principal forgiveness at the time.


you should probably reread what i said:


doesn't it say "rarely"?  that's not the same as "never" as you've quoted me.

perhaps you can give me some examples of when debt forgiveness was doled out during a crisis in a "equally fair" way to both banks and citizens.  even if you find one, history shows that debt restructurings almost always favor banks at the expense of a sovereign or its citizens.

They would not consider it necessary. I never do that, it is illegal and immoral and therefore there is no point in considering it.


It the company has a future in the market, there will be someone to recapitalize it privately. If there were no buyers, because the market need some time to consider it, there would be a private company to supply the funds needed in the meantime. (... repeat)


No, this is a common fallacy. There was a low price at the time, due to the market conditions. Later, there was a gain.


Exactly.

Dude we are singing from the same hymbook, relax.

You are bending the definition of inflationary to try and make a point though. Don't. It's not necessary. The bank bailouts were undoubtedly destructive. That doesn't magically make them somehow 'more inflationary' than other asset purchases. Unless you have another theory of inflation you'd like to propose.

I don't claim that it was a good idea to bail out the banks, I agree with nearly everything you said. A few points though:

They bought some assets for x nominal dollars. They sold them for x + (strictly positive) y. What's questionable?

Via the reduction in the deficit that accrues to treasury from the profit they made.

It was.
Principal forgiveness is an element of the strategy that has been used to tackle the problem of underwater mortgages. See here (http://www.calculatedriskblog.com/2010/03/bofas-principal-reduction-plan.html) for an example of BofA forgiving 3 billion. I agree that they should have used it more, as does Calculated Risk. In the case of Freddie and Fannie, an FHFA analysis (http://www.calculatedriskblog.com/2012/01/fhfa-analysis-on-principal-forgiveness.html) indicated that principal forgiveness for that protfolio was less cost-effective (for taxpayers) than alternatives.

Wrong, as I previously stated I am against bailouts for the same reason you are (moral hazard etc). It was not a mistake not to bail out these mortgages, but had they done so the treasury would have made a healthy profit assuming they are no longer underwater (hint: many of them are!).

Geithner is a prick, plain and simple. Not sure what you think he has to do with the bailout though, which was passed by congress under Bush and implemented by Treasury.


Sorry, you're right you did say 'rarely' originally. The 'never' part came from:
However haircuts are not even rare, which is the implication of your original statement. Haircuts are relatively common. And your 'never' statement was also wrong - I pointed to examples of total forgiveness as well. However I think we are arguing past each other here, as I suspect the point you really wanted to make was:


Once you accept default, restructuring favours whoever has the most negotiating power. The default event inherently favours the debtor, and then it's up to the creditor to negotiate as much back as they can. You're probably right in some regards, but a it's a bit weird to think that a restructuring, which always result in less favourable conditions for bond holders than if there had not been a credit event, always favours bond holders.

Perhaps you are just against credit in general?

The Argentina government took loans and promise to pay it back by taxing your citizens and promise to tax their children and unborn

To take more loans they took loans in USD, loans they can't repay just by printing new money

They ask the loaners to suffer a loss and decide not to pay them back and they have the worse end in the deal??

Loans are supposed to be repaid, I think it should be illegal to take a loan taking the upcoming revenues of children and unborn as a collateral; I can't do it with my children, they shouldn't be able to do it with their unborn citizen; I prefer a restructuration than a devaluation because it is more straightforward and less harmful; Argentina did both

Perhaps its time to re-introduce the old english concept of debtors jail!

I love Argentina but it is very hypocrite to say you are in a bad situation because of the guy who loan you money and lost more than 50% of what he loaned you even if the loan was bought back and the guy who bought it back got it cheaply, you are responsible for your debt

It would be nice not to allow to run debts on the children and unborn's future revenues

Yeah, AND you cheat at football (or should we call it handball?)  :P

This thread title makes me think of the World Cup.

Just saying.

Argentina is practically a dictatorship. They can't move money out of the country.
Their little witch president practically made Repsol, a Spanish company, move out of the country (which means, no business will want to go there now if there's risk of expropriation).
Hope all this makes Argentinians invest in Bitcoin!

Usually when they get in real trouble they start drumming up nationalism over the British Falkland Islands to distract.

http://blogs.ft.com/beyond-brics/2014/04/04/fernandez-distracts-argentines-from-inflation-by-putting-falklands-on-banknotes-oh-wait/

And they wont even win the world cup so the only way to make happy their people is by adopting bitcoin as a currency

They may well win the Word Cup since they will not have play Germany or Brazil until the final

Bitcoin as a currency for Argentina will not happen with the current government

if you mean the world cup, i don't think they have a good chance.

They will most likely have to face the Netherlands even before the finals, and if they miraculously win that match they have to face Germany or Brasil most likely.

Argentinians should be smart and put everything they have in bitcoins. That's the only way to protect their wealth.

Exactly, the gov't isn't going to switch over to btc.  However, individuals very well may do so.  This wouldn't be terrible for bitcoin prices either.  However, i think that folks who put money in bitcoins in argentina probably aren't goign to do so for money they want to spend, but for money they want to save.  That's my guess.  I suppose it's probably hard to find a grocery store in argentina that accepts btc.

So people think this might cause a Cypress-like price rise like we saw in early 2013? Personally, I think the effect of that event was quite overplayed, and I think people's expectations for BTC that are based on economic turmoil may not be met in the future. But we'll see. :)

Will this push BTC up? If then I am all for it ;D

Prices have become boring, need some volatility.

i thought that was supposed to mean we've won?

Look like some countries/cultures never learn.

Didn't they already do this last year? Ended up the UK took a vote; http://www.bbc.com/news/uk-21750909 (http://www.bbc.com/news/uk-21750909), not that it really has that much validity in Argentina's mind, as far as I understand.

Maybe this is actually the reason for the recent price move upwards.

I think you can add most countries in the world,Argentina are not alone

the economies are all drowning in debt, all they can do is print ;D

Not all; countries with natural ressources, hard workers, low taxes, and small governmnt will come out on top

don't worry, it's just the calm before the storm.

volatility will kick in once the next rally comes

and they are........?

Some have one quality, some two or three but probably none has it all; the more they have the best they will fair

USA has some natural ressources and part of its population is hard working but they have a HUGE government to support

and they are burning the night oil printing ;D

The states have a lot of positive but huge negatives and unsustainable liabilities that will sadly undermine all the potential greatness; it used to be the land of the opportunity, freedom and free market and it became something else

The fall of the USD will hurt most of the world but when the dust settles, China and other strong economies will come out on top; they will be the USA that used to be
In the 50's one good salary was enough to support a whole family, a full time nanny without any debts; in the 70's americans were going in Europe and lived like kings; now two good salaries are usually not enough to live really confortably

That is because people get lazy and provide sloppy service. On top of it, 9-10 people are now needed to do 1 person work because of large bureaucratic overhead.

The situation in the 50's and 70's that you describe was an unsustainable boom era post WWII where most of the world's manufacturing base was destroyed and the US represented over 50% of the world's manufacturing base. That was always going to self correct after a generation or two, and did.

The problem is that 50's to 70's boom era created a large sense of entitlement in the american mindset, and also created large government unsustainable great society programs. The hard work and self reliance mindset of the 1800's was replaced by an entitlement mindset.

After the 70's when the rest of the world caught back up, the US resorted to printing and the petrodollar to maintain an illusion of the 50's to 70's era. When what it should have done is realized the folly of the post WWII path and returned to it's roots of hard work and self reliance.

Now 3 generations have passed, and if the petrodollar falls the vast majority of the US will have no idea what to do. Everyone now turns to the government to fix everything, but if the government is no longer able to do so I seriously fear for what the government will turn into to do so. There are large pockets in the US that still try to do the right thing, but they will get swarmed in the post petrodollar crash.

I personally think Argentina is the US's future. Just 100 years ago Argentina was one of the strongest economies in the world. Much of the today's US political and academic direction takes the US straight down Argentina's path.

Your second paragraph explains it very well but you have a large percentage of the young generation in the US that understood everyone was worse off when the state was manipulating markets, growing too big and money was taken out of revenues and wasted : some hope is still possible for the US

There is a whole world out there that is not the US; they are working hard, innovating, booming and not taxing too much (yet); vote with your feet?

Please someone answer this!

I think natural resources is not a key point. Trade is what matters, taxes and tariffs means poverty. I guess the people of the land has to know this, and demand relative freedom, else they let the criminals to the top.

Singapore has quality worker and little to no natural resources. It seems to be doing fine.

China has cheap and hardworkers, low taxes. They are also doing fine.

Saudi, Iraq and Iran have huge natural resources. Population is not doing ok despite the oil wealth even before US invasion.

Don't think one quality is sufficient obviously like in real life! But my point was everyone will suffer of the USA collapse in the short term but a lot of countries will fair well and may even benefit of the end of the USD reign; the USA will probably not die without a fight and it's a giant so it will survive then hopefully shine again when it will be again the land of the freedoms

Why would everyone suffer? Only because of sudden changes that can occur. USA does not currently produce the wealth of the world and distribute it all over. After the first world war, maybe. Nowadays, USA mostly export money, and receive goods from foreign producers, stacking up debt in the process.

The world economy is very integrated so the wave of something as big as the reserve currency that collapses will hit hard many companies, banks and countries; there will be a period of adaptation : a few months for the lucky few, a few years for those who are well prepared and more for the other

In 10years, a middle class and even low middle class chinese will live like a King in holidays in the States

They already are.  You should see the Chinese students at a local University in my neck of the woods.  It's a fairly prestigious University, and costs a pretty penny to attend.  The tuition has gone up astronomically in the last 15 years.  Even as recently as 6 years ago there were very few non-Caucasians and minorities on campus.  Now it's completely taking over by rich Chinese and Korean kids, driving around in their (paid for) Mercedes, Lexus, and BMWs.  The campus is now unrecognizable, as Caucasians and all the other groups are now the minority there.  You'd think it was a school just for Asians.

The local high-end car dealerships say that they sell about 80% of their cars now to the Asian kids attending this University, and have even started to market directly to them.

Just goes to show, you need to work harder.

The reserves being eroded doesn't matter, they just disappear. Most countries never touch their reserves, not even their gold, they prefer to use debt creation and bank regulations to stabilize their exchange rate. At worst we will have the other fiat currencies more unstable. Maybe they go down the drain all of them, simultaneously.

Actually these Asian kids didn't work for this money.   It's their parent's money, they wire it to them to spend in the States.  Mommy and daddy didn't do anything amazing either, they simply bought real estate in China 10-15 years ago (really the only investment the Chinese gov't will allow their citizens to invest in), sat on it, and made a killer return.  It was easy money.  All of it fake wealth of course, because their real estate market is now in a bubble.  Also the Chinese gov't artificially devalues the Yuan so that they can keep exports high and keep in-sourcing work.  

But they can't keep this up forever, and when it all implodes then their citizens will be royally fked.  So will their kids.

It is the same in touristic cities, most people in old countries don't know countries like bangladesh are booming and already matured in terms of demography


Chinese save in Yuan and Gold as well which will increase in value compared to the USD, their salaries are going up tremendously every year, one billion of chinese came out of poverty and they are working hard, saving a lot, their state is planning for years ahead not like in the US where they plan a week in advance or until the next election and they are accumulating so much human capital and other forms of capital than they will be the first world economy very soon and the US will fall from first place to second third ect.

Works for me: USA imports stuff, exports quality (with democratic, bill of rights and women's liberation bias) education

Did they really come out of poverty, or did their Chinese Gov't 'engineer' them out of poverty?  

20 years ago, the Chinese citizens were at the lowest point.  They were focusing hard on trying to overthrow their Communistic form of government, because they felt that it was holding them down while the rest of the world prospered.  The Chinese citizens HATED their government and wanted a revolution.  They wanted Democracy, and capitalism.  The Chinese government was worried, and they needed something to distract their citizens away from hating the government control so much.  So what did they decide to do?  The made their economy better.  A brilliant move on their part.  By better, I mean that they engineered the Chinese economy to have the veneer of real change and improvement.  The Chinese government used it's Billions of funds to invest in its own economy and infrastructure.  It put restrictive capital controls in place to make sure money stayed in China, and suppressed the value of the Yuan to keep export of Chinese goods high.  It started offering cheap, high quality education for it's own people. A Chinese shadow banking system arose, that started to offer cheap credit to entrepreneurs to be able to invest in just about any Chinese-related business endeavor.  Incentives were offered for the people to invest in local real estate, which rose in value.  

Suddenly everyone's salaries magically went up, poverty went down, and the people thrived.  The people were making money and it appeared that their lives were improving, so of course they slowly started to shift their viewpoint away from hating their government to a form of Nationalism.  The next generation or two of children of the people who lived through the Cultural Revolution had forgotten all about the horrors that their government had put their parents and grandparents through, and actually started to have National pride instead.  It's amazing what having an abundance of money and better living conditions will do to an entire nation's psychology.  The young people there are quite oblivious to their country's dark history.  But you have to understand, it's all a fabricated facade, fabricated by their government.

And yes, the Chinese traditionally have been good savers, and always have been compared to the U.S. and the rest of the world.  But just saving alone won't save your entire country.  You have to continue to produce valuable stuff that the rest of the world wants, or your own country wants.  If either or both of those things slow down or grind to a halt, then your country's economy is going to have BIG problems moving forward.

Couldn't agree more about moving with your feet, and yes I did that for many years. Lived & worked in Asia and made the base of my savings out there.

The difficulty is its not like the US where anyone from anywhere can come, adapt, assimilate and become integrated as part of the people. In China/Korea if you're not Asia you'll always be an outsider/foreigner. You can live well, make friends, but you can never really be Korean or Japanese or Chinese. (In the end I think this closed aspect is what will ultimately cause the recent successes there to fail)


Fully agree. In Korea/China there is a large emerging population of middle class people who worked hard and generated solid US style middle class wealth. But that's at the middle.

Above that are the ones described above who come from families politically connected and abused the corruption in their respective countries to obtain stupid wealth. In Korea every kid I met who drove a family paid for BMW, after understanding the system there better, I saw as coming from families with grossly unfair advantage and not deserving of that wealth compared to those below them who are the real backbone of their economies and who are making their country's success. They're also spending this easy money like crazy, if the easy money stops coming in I'm sure it won't last long.

China will be better off producing and consuming; the chinese will consume as well as the americans, it is not the hardest part!


The Communist Party knows it needs to deliver economic prosperity to stay in power; the Central Politburo Standing Committee in China have the smartest guys that take decisions to maximise China's (and the Communist Party's) utility in 10years, 20 years 30 years or even more

How did a thread about argentina turn into a thread about china?

You can only talk about failures for so long, at some point you have to compare them to the success stories, and the US is no longer a success story.

What makes you think the USA can keep importing stuff forever without exporting nearly as much?

Once the petrodollar fails (which should be soon as America is starting to get a lot of resistance both internally and externally) you can say goodbye to your wealth if it's in dollars.

You summarised it well, the USD will collapse if the oil producers abandon it and if the bond market stop loaning the money

China will benefit of the USD collapse, the question is when the collapse be brutal (more likely) or slow and when will it happen? Within a year? Two years? Or can it still go for as long as 5years??

When everything collapses like in Argentina, the politicians leave office and are replaced by extremists or they don't accept their mistakes like in Argentina and say it is the fault of external forces that want to destroy the country, and people believe it because it reinforces what they still believed and they don't have to challenge their ideas

China is not a total success story either. There are stories of success, but there is a huge amount of hidden malinvestment that has yet to fall out. There are plenty of insolvent companies and investment schemes being held up by the government.

1 Billion people going out of extreme poverty in a few decades, average hourly salary going up 5-15% every year, hundreds of millions of people living as well as in Europe or USA (same average salary after tax) and the number is growing by 5-12% a year when it wasn't a few millions that were living as well as in Europe or US a few decades ago

Does that feel like an economical failure?? No, it is a huge success, the best success story of the last 30years in terms of magnitude

What you're describing is what happened in the U.S. from about 1946 - 2000. The most vigorous, sustained periods of growth, took place from early 1961 to mid-1969, with an expansion of 53% (5.1% a year), from mid-1991 to late in 2000, at 43% (3.8% a year), and from late 1982 to mid-1990, at 37% (4% a year).  After the financial crisis of 2008, it's been all downhill for the U.S. 

But this doesn't change what PirateHatForTea said about the Chinese economy.  The shadow banking system there is hiding billions in bad investments and ponzi schemes.  It's like a house of cards, just waiting for a few bad apples to fall.  Once the whole thing starts to snowball, the Chinese government won't be able to bail them all out.

China is big creditor nation to US. If a crisis happen there, it will be worse in US as money will be repatriate back.

Whilst i agree that the main fiat currency problems are western based some bigger hitters are  trying to get this tipping point message across. (www.philanthropyandphilosophy.com) Argentina along with Iceland and maybe Cyprus or even the Ukraine may be a country to adopt bitcoin as a national currency. This would be huge for btc and turn these countries dire prospects on their heads. One example is all thats required to show real real growth and a more equal distribution of wealth once the banks and government and corporate leeches are thrown of the backs of wealth craters- thats my hope.

You are talking about growth of GDP that doesn't take into account increasing debts and fake government inflation number; give me the variation in revenue after taxes in real terms or in Gold from 1940 to now and 1970 to now and the median capital in real terms or gold...

It is the same when US in the early development stage. Land were given away freely for anyone willing to develop it and add value to it.

Same story in China regarding real estate. And China wealth is backed by real labor and real production, not just real estate.