Yves here. Reader From Mexico often chides readers in comments who like try to depict Argentina and other Latin American states as failures, when the ones who have distanced themselves from American/neoliberal policies have made solid social and economic progress.
This piece highlights a tangible indicator of the wane of US influence in the Americas.
By John Daly, non-resident scholar at Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies and chief analyst for OilPrice. Cross posted from OilPrice
One of the most extraordinary stories of the past decade largely overlooked by the U.S. media is how Central and Latin America have quietly escaped U.S. control since 9-11, as Washington focused on its Global War on Terror.
GWOT diverted Washington attention long enough that progressive governments established themselves throughout the southern Western hemisphere, from Venezuela through Brazil, Paraguay and Bolivia, which were far less inclined than previous administrations to listen to advice from their giant “el Norte” neighbor.
A crucial element in this process has been Central and Latin America expanding their trading opportunities with states frowned upon by Washington, from Iran to China.
Now, in the latest sign that Washington’s sway over the region is diminishing still further, Nicaragua has announced that it will soon begin construction of a canal to compete directly with the Panama Canal further south, to be financed by – China.
As with the Three Gorges Dam, Beijing is not thinking small, as the proposed canal could take 11 years to build, cost $40 billion and require digging roughly 130 miles of channel. The Panama Canal, in contrast, is 48 miles long.
The ruling Sandinista National Liberation Front, which has 63 of the 92 Parliamentary seats, has introduced legislation to award the project to HK Nicaragua Canal Development Investment Co. Ltd. It is an extraordinary proposal for Central America’s poorest nation, which does not even yet have a highway connecting its Atlantic and Pacific coasts. Nicaraguan President Daniel Ortega hope to gain final approval by 14 June.
Planning for the project began in July 2012, when the Nicaraguan government announced the approval of a law for the construction of the “Great Inter-Oceanic Nicaragua Waterway Canal,” passing legislation that authorized the government to create a company whose state share would be 51 percent, while the remaining 49 percent would be acquired by a strategic partner. Daniel Ortega presidential adviser Paul Osquit, said that it was a project intended to send “a clear signal to the countries of the world” interested in investing in the mega project, which included Venezuela, Brazil, China, Japan, South Korea and Russia.
Notice that the U.S. is pointedly not on the list.
It will not be an insignificant undertaking, as the canal’s proposed locks will require 1.7 billion gallons of water per day, given that the channel will be 200 feet deep in places.
Furthermore, Nicaragua’s canal would have to be more than three times longer than the Panama Canal. A major advantage of the route however is that the massive Lake Nicaragua is separated from the Pacific only by a thin strip of land; accordingly, large oceangoing freighters could travel about 50 miles on Lake Nicaragua’s waters before going through a pair of locks, and into a waterway dug across the waist of the country to the Atlantic coast lowlands.
Nicaraguan advocates say that the channel is needed, arguing that inter-oceanic maritime freight traffic demand will outstrip the capacity of even the expanded Panama Canal by more than 300 percent within 123 years, and the canal’s construction create 40,000 construction jobs. Better yet, is could double the per-capita GDP.
The Panama Canal is currently restricted to tankers of up to 65,000 tons, known as “Panamax.” Passage restrictions now frequently produce lengthy queues of up to 100 merchantmen outside the canal’s Atlantic and Pacific entrances waiting to make the nine-hour passage. Since 1995 the volume of container shipping has tripled and since 2001 risen more than 50 percent. Maritime analysts now estimate that containerized cargo accounts for over 70 percent of international maritime trade, producing in 2006 almost 346,000 container shipments daily, a figure estimated by 2014 to exceed 600,000. About two-thirds of the cargo transiting the channel is headed to or from the U.S., with China Panama Canal’s second-largest user.
Since 2007 the waterway has been undergoing a major $5.25 billion expansion, with construction of a third lane of locks to augment the current two sets, that will double the capacity of the Panama Canal to handle 600 million tons annually, with completion scheduled for 2013.
As for the new channel and its Asian constructors, the reality is that the U.S. retains an overwhelming preponderance of regional military and naval power in the region and asserts its ability and right to intervene if it feels its interests are threatened, as emphasized in 1989, when Washington sent 27,000 troops into Panama to arrest president General Manuel Noriega after two U.S. grand juries indicted him for racketeering, drug trafficking and money-laundering. Last but hardly least, U.S. warships have retained their historic right of precedence of passage in time of war. In 2008 Washington re-established its Fourth Fleet, traditionally responsible for Central and Latin American waters, which had been moribund since 1950.
What’s in it for Hong Kong based HK Nicaragua Canal Development Investment Co. Ltd.?
Niacaragua intends to grant the Chinese company a concession for 100 years.
Not everyone in Managua is happy with the project. Opposition congressman Luis Callejas told reporters, “I do not understand what the rush is. It’s such a sensitive topic that the population should be consulted.”
How Washington will react to the new canal remains to be seen, but for the penny-pinching maritime shipping, shaving 100s of miles off transit routes will undoubtedly been seen as a godsend.
And who knows, if the U.S. begins LNG shipments from its East Coast to Asian markets, some U.S. energy firms may come to embrace it as well.
And if there’s trouble well, there’s always the Fourth Fleet.
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Go vast environmental devastation!
jeez,
that’s the first thing i thought.
couldn’t they just refurbish the old erie canal?
Goodbye Lake Nicaragua.
Susan,
hello “Trans-Pacific Partnership”, which includes ports on both Mexican coastlines for container ships from Asia..and Asian co-owned corporations..
Earliest form of TPP I perceived during bushit, 2003, known as “NAFTA Highway”…showing deep water ports, Mexico, 200 yard fenced highway from, Mexican truckers, no customs stops till Kansas City…then branched east, west, north-Canada…
Of course TPP is also attempt to marginalize China…coincidentally, I’m sure-China’s interest in new canal…
By the way-there was no “Panama” till T.R. “invented” it, from Columbia-Nicaragua…to create a canal…
“within 123 years”: that’s what I like, precision.
Anyway, if the US gets to share the advantages but has to put up none of the capital, then rationally it should celebrate. Though I confess that rationality may not be an American strong suit in such matters.
I had the same thought – 300 percent in 123 years – there is a little exponential math for you! LOL
in 23 years they wont need any canal..the shortest route from the east coast to china is over the pole, which will be ice-free year round by then..
BazingA
If they really want to maximize the potential of this project they should start filling it in immediately after finishing digging.
And when theyre done with that they can build it again!
Keynes would be so proud! Someone would FINALLY decide to take his dig-holes-and-fill-them stimulus plan seriously!
Keynes wouldn’t be nearly so proud as neocons, whose profit$ come from Milton Friedman, “Chicago Boys” DEstabilization..(“Shock Doctrine”-Rise of Disaster Capitalism”..)
China is a major world-wide exporter. Shipping costs and access to routes is a major concern. First and foremost I think China is engaging in good business. They are also working with Israel to create an alternative to the Suez Canal by linking Eilat and the Mediteranean cost by rail.
By the very nature of these projects and China’s huge importance in the world, politically,economically and militarily it creates problems for the U.S. That said, I would not be surprised if Beijing was also sending the U.S. a message, perhaps not unrelated to our presence closer to China. It’s just not a slam dunk to rank the motives for China doing what its doing.
Axe unneeded and wasteful weapons such as the F-35 Jet, V-22 Osprey plane and the Abrams tank. Stealing is just wrong, however lucrative. The US is completely outgunned in other ways, no pun intended. If we can divert this enourmous theft into education we stand to inherit a much more peaceful future.
An interesting development in every respect. The precipitous decline of American influence in Latin America outside of Mexico has been near the top of my ‘to monitor’ list. This is a major change in power relations and the economic ties attendant upon them, of significantly more lasting importance than the ephemeral bloodstains of America’s cretinous War on Brown-skinned Dislikables, which will have few, if any lasting results.
The scheme for a transoceanic canal through Nicaragua predates the idea of building a canal through the Isthmus of Panama. The problem was controlling the territory. Britain, France, and the US in turn assessed, correctly, that dominating Nicaragua wasn’t going to work, particularly after a failed American power grab there in the 1840s; the territory was just too large to maintain security on the canal if the locals were hostile. Panama, by contrast, was successfully stolen from Colombia by the US, much as the UK carved Kuwait off from Iraq. Panama’s running dogs were _not_ going to oppose the US since the territory would have been isntantly reoccupied by Colombia if the US simply stod back. The US got it’s completely subsidiary canal territory easily, and has maintaned effective control ever since.
The engineernig of the Panama Canal was in fact far more challenging than buiding a transit will be through Nicaragua. And $40B? That’s dirt cheap. China has $1T sitting around, so funding the thing is trivial for them. China is well aware that the US is pursuing an ‘Anaconda’ strategy, threatening to choke off China’s external trade if the US doesn’t get it’s way and expected lion’s share of things. Could the US military stopper any eventual Nicaraguan canal? Of course—but that’s not the point. China is _buying in other partners_ around the world to Chinese econo-political presence and involvement. US pressure won’t just fall on China but upon China’s friends. And THAT has more leverage upon the US economy and policy than trying to ‘contain’ China alone.
The strategic vision of this scheme is bold; and excellent. Strategic vision inside the American Beltway?? “Who needs vision when we create our own reality?” Which is exactly why the US loses traction in ever successive month around the world: we have little to offer except short-term bribes to a corrupt .1% who are broadly hated by their own citizenries.
The Guardian has more. Including the information that this is very much still a blue sky project. No route has been determined. No environmental studies have been undertaken. No financing has been secured. Isn’t this akin to what Wall St. used to call a “red herring”? The Chicoms must be having a giggle.
http://www.guardian.co.uk/world/2013/jun/11/nicaragua-chinese-plan-canal-panama
Do you seriously think that the Chinese would ever do an environmental study whose outcome was not pre-planned? Seriously?
Seriously? No.
I followed the development of the Three Gorges Dam pretty closely. The environment was an afterthought. Just as it will be in the amazing plan to divert south China’s water 1,000 km to the north to re-water the Yellow River among other schemes.
http://en.wikipedia.org/wiki/South%E2%80%93North_Water_Transfer_Project
This, along with Iran to India “peace pipeline”; India to Myanmar from there; South China Sea to Myanmar, and then the big pipeline to Kunming sounds like China will be importing a glut of oil and LNG. So they are also interested in trading with Venezuela, Mexico and the US via a new canal? What happened to phasing out fossil fuels? And answer me this: How can China, which is an enormous country, not have any oil resources of its own? It will take 10 years to build the Nicaragua Canal. By then we should have clean energy. This sounds pretty nutty. Like trade gone wild.
Geology, Susan. In principle oil (more precisely petroleum) formed from marine plankton and algae, hence its almost invariably found in areas that were under the sea in the past, where the tiny corpses of these beings sedimented and eventually became petroleum.
The largest shallow seas where this process happened in the past (Cretaceous for example) were Thetys Sea (origin of the oil riches of the Persian Gulf, Caspian, etc.) and the Gulf of Mexico (in the past extended into the USA and even Canada all the way to the Arctic). China has been a single piece of land since the Jurassic, so any oil formed previously may have vanished as gas (my guess – or burned, or sank into the depths of the mantle).
China is a lot like the Eastern half or North America geologically, where there is no oil either (but lots of coal – different process of formation). The Asian equivalent to North American oil deposits are much further West: in West and Central Asia.
Partial ref.: http://www.scotese.com/earth.htm
Hi Susan,
China was a net exporter of oil from 1973 until 1993. They are producing flat out everywhere they can in the country.
Sounds like it will put a lot of people to work. What are house prices like down there? Are people nicer in Costa Rica than in DC? A former banana republic might offer a better life than a current one.
china exports their labor. check out the aussie mines an african oil fields…its cheaper & helps with their own unemployment.
China’s newest export: convicts
http://www.guardian.co.uk/commentisfree/libertycentral/2010/jul/29/china-export-convict-labour
http://chinalabourmarket.com/trends-explain-slowdown.html
wow i just backed into this paper…(sorry, a bit off topic)
“because of the tremendous economic benefits from exports of labor, some developing countries across the world, with excess labor, high levels of unemployment and under employment have positioned themselves to maximize benefits from labor exports. These countries have enacted policies to encourage temporary migration, institutionalized labor export mechanisms, established regulatory frameworks and undertaken bilateral and regional initiatives to enhance labor exports.”
http://www.trustafrica.org/documents/research_findings/Bakunda_Mpanga.pdf
Labor is now a commodity. It isn’t really a question of immigration.
Are people nicer in Costa Rica than in DC?
Lots.
I honestly find this project pharaonic and ecologically very dangerous. There are alternative routes via Southern Africa and Drake Passage and there is no objective need to move so much cargo through the world (a bit less globalization would harm no one).
Said that, the other point I must make is that it’s not totally correct that “Central and Latin America have quietly escaped U.S. control”. The USA still occupies Haiti and Puerto Rico, as well as Guantanamo (Cuban national territory) and other small islands in the Caribbean Sea. The USA has plenty military presence in Colombia, is building a super-base in Honduras, and has other troops posted out all around Venezuela (Surinam, Netherlands Antilles, etc.), having sponsored recent coups or otherwise irregular power takeovers in Honduras, Mexico (repeatedly rigged elections) and Paraguay. It also has bases in Paraguay, Peru, Panama and the Dominican Republic, keeping strong influence on Chile, Costa Rica and Guatemala, as well as in a large part of the former British Antilles (a few have slipped towards Venezuela however).
US major allies in NATO, Britain, France and the Netherlands all have military presence in the Caribbean area, where they still have colonies.
Besides, the policies of Brazil and Argentina (core of Mercosur) are only weakly opposed to US influence and mostly limited in this aspect to South America. BRICS are not that heavy after all.
The Northwest Passage will also start taking more traffic in the summer:
http://en.wikipedia.org/wiki/Northwest_Passage
Earlier this year I was in a window seat on a flight that went right over Panama City, giving a birds-eye view of the canal from Balboa on the Pacific Coast to Colón on the Atlantic. It took six minutes to fly from the Pacific coast to the Caribbean coast. Let’s see, 8 miles/minute x 6 minutes = 48 miles. Yep, the map don’t lie.
When the French had the first go at the canal in the 1880s, they planned a sea level cut all the way across. But the volume of excavation simply overwhelmed them. The Americans completed the 51-mile canal with locks, so that ships cross Gatun Lake at an elevation of 85 feet above sea level. For comparison, Lake Nicaragua is 105 feet above sea level, and the Nicaragua crossing is about 170 miles.
Two massive challenges confront this megaproject. One is financing: $25 billion is no minor sum, even for a sovereign entity such as China. The other is nature: despite Bill Gates’s best efforts, insect-vectored diseases such as yellow fever and malaria are still dismayingly effective at grinding down tropical dreams into ruin.
My guess is that none of us live to see the opening of a Nicaragua canal.
@dearieme:
“if the US gets to share the advantages but has to put up none of the capital”
Not likely. Has anyone yet asked who will pay for this?
The answer is – YOU will.
Without doubt, the Chinese will finance this through major
US banks, whose executives are already slobbering all over
themselves at the fees to be collected and the massive
derivative possibilities. The Chinese will let them do
all this because it costs them nothing. Those instruments
will be sold to us in one way or another. Moreover,
Chinese US Treasury holdings will be used as collateral
then end up having to be bought by the Fed.
It’s all well and good to say the US can continue to
have massive “debt” regardless of which theory you use
to look at it but they are going to shove this one down
our throats.
I would say that the projections used for determining how much traffic will go through the canals have not been rectified. The graphs just keep going up without consideration of changes to trade. Of course, finance supports these graphs because they know they will get a bigger income stream from which they can leverage debt to the detriment of the local population.
It is, if ya haven’t noticed, the same thing that happened with the housing bubble….prices always going up – refi, buy buy buy ….oooops – to f234ing bad.
Opposition congressman Luis Callejas told reporters,
“I do not understand what the rush is. It’s such a sensitive topic that the population should be consulted.”
The rush is: get the financing in; in order to impoverish the local folks so they have to let go of their control of the land while the deal makers pocket the cash.
These projections of global shipping volume don’t consider things like – war, famine, floods, diseases, changing geopolitics etc. that would alter trade patterns.
It’s just another predatory capital gambit – so you can be sure this project will get stuffed in without proper foreplay.
Sweet, competition is good. The majority of Americans will be better off in a multipolar world.
Long before the first shovel hits the ground on this project the Chinese economy
will have collapsed under a mountain of export driven debt.
Haven’t you read anything this blog has had to say about Modern Monetary Theory?
The debt level means nothing. China doesn’t actually have any external debt, and it never has to pay back the internal debt.
So are these Latin American governments actually more independent now, or are they just free to be beholden to someone else?
That’s not nothing, but having two gangs fighting over your protection money is a dubious sort of liberty.
I would think that good port facilities at both ends and a railroad would be more practical than all the digging and locks. Most ships are container vessels and the loading and unloading of containers could be done quite rapidly. But that is just my musings.
A dozen or so years ago I coined a plan called “China for World Domination.”
This handy little plan called for China to secure port assets in the US, secure the railways on either side of the panama canal, build up its nuclear puppet state, North Korea, stage the destruction of the panama canal in a sectacular way, then use NK to nuke the major naval bases and port cities in the US and related island posessions. This would make US operations in the pacific more difficult, put china in control of shipping ports that might replace us Naval bases, increase transit time for Atlantic fleet assets to get to the pacific, and maintain the ability to transship cargoes by feeder rail across the former canal.
Building your own canal is a nice touch on that idea.
This just seems like a bad idea.
The environmental damage will be enormous and capital costs will likely never be fully recovered. The arctic is also opening up so that may take away a large portion of the projected increase.
This sounds like politics more than good economic sense.
I’m somewhat dismayed by the NC commentariat’s response to this attention-grabbing story. Read the story, yes. But take it seriously? Let me count the ways you’re being snookered (sorry, my margin’s too small). BTW, has anyone heard about the new fusion-powered airplane?
I have always thought it’s easier to drill a tunnel under the Pacific to go from Shanghai to Big Sur.
Present day[edit]
Nicaragua has let contracts to Korean developers to construct a deepwater port and facilities at Monkey Point on the Atlantic coast to improve capacity there.[when?]
In 2004, the Nicaraguan government again proposed a canal through the country—large enough to handle post-Panamax ships of up to 250,000 tons, as compared to the approximately 65,000 tons that the Panama Canal can accommodate. The estimated cost of this scheme may be as much as US$25 billion, 25 times Nicaragua’s annual budget. Former President Enrique Bolaños has sought foreign investors to support the project. The scheme has met with strong opposition from environmentalists, who protest the damage that would be done to the rivers and jungle.The project will be like the original plans only in the fact that the US government would buy the land for investors to start building the canal.
In addition to the governmental waterway canal proposal, private proposals have been based on a land bridge across Nicaragua. The Intermodal System for Global Transport (SIT Global), involving Nicaraguan and Canadian and American investors, proposes a combined railway, oil pipeline, and fibre optic cable; a competing group, the Inter-Ocean Canal of Nicaragua, proposes building a railway linking two ports on either coast.
In 1999, Nicaragua’s National Assembly unanimously approved an exploration concession, Ley 319, for the construction of a shallow-draft waterway along the San Juan river, known as Ecocanal. This would connect Lake Nicaragua to the Caribbean, but would lack the inter-ocean link to the Pacific Ocean. This project is loosely based on the 1939/40 study.
In 2000, the government of Nicaragua granted a concession to Canal Interoeanico De Nicaragua. S.A. (CINN), a company formed and led by New York attorney, Don Mario Bosco to build a railway “dry canal” connecting Nicaragua’s coasts. However, CINN has been unable to obtain financing to begin construction.[8]
It is possible that these schemes could exist in parallel to the proposed inter-ocean canal.[9]
On October 2, 2006, President Enrique Bolaños, at a summit for Defense ministers of the Western Hemisphere, officially announced that Nicaragua intended to proceed with the project.[10][11] Bolaños said that there was sufficient demand for two canals within the Central American isthmus. Bolaños proclaimed that the project would cost an estimated US$18 billion and would take approximately 12 years to construct. It could take one of six possible routes at approximately 280 km, reduce the transit time from New York to California by one day and a total of 800 km, would considerably reduce transit costs from Europe to China and Japan, and have capacity for ships of up to 250,000 tons.
The construction of the canal would more than double Nicaragua’s GDP based on the canal alone (exclusive of other investments which were estimated in Nicaragua as a result of the canal’s construction). Some sources suggest that construction of the canal would enable Nicaragua to become one of the wealthiest countries in Central America, and one of the wealthiest countries in Latin America in per capita terms.[12] The government has been studying proposals for such a development. Supporters believe that all Central America would benefit from the construction of the canal. If a Nicaraguan canal were built, “it would bring an economic effervescence never seen before in Central America,” Bolaños said.[13]
In 2009, Russian President Dimitry Medvedev suggested that Russia would be interested in pursuing the construction of the inter-oceanic waterway canal. However, no progress has been made to date and the construction of the Third Set of Locks for the Panama Canal has apparently dampened Russian enthusiasm for the project.[14][15] Khalifa bin Zayed bin Sultan Al Nahyan of the United Arab Emirates has also expressed interest in sponsoring an inter-oceanic canal project.[16]
On July 27, 2012 engineering services provider Royal HaskoningDHV announced[17] that the Nicaraguan government has commissioned a feasibility study to be completed early 2013 at a cost of $720,000. The contract has been awarded to a consortium of Royal HaskoningDHV and Ecorys.
On September 26, 2012, the Nicaraguan government and a newly formed Hong Kong-based company have signed a memorandum of understanding that commits HKND Group to financing and building the Nicaraguan Canal and Development Project.[18][19] HKND Group is a private company not associated with any government besides its joint partnership with the Government of Nicaragua.[20] HKND Group has now entered the study phase of development to assess the technological and economic feasibility of constructing a canal in Nicaragua as well as the potential environmental, social, and regional implications of various routes.[21] The Canal and other associated projects will be financed from investors from throughout the world and would generate jobs for Nicaragua and other Central American countries.[22]
On June 10, 2013, The Associated Press reported that the National Assembly’s Infrastructure Committee unanimously voted in favor of the project, with four members abstaining.[23] – wiki
skippy… one way or another… there’s money to be made… built or not…
1. The Nicaragua government is on the eve of approving it, or did you miss that part?
2. Even if they just get to lots of feasibility studies and then don’t advance further, it’s still a big chunk of change pumped into the local economy to high level people, which buys you LOTS of friends.
…any guesses as to whose currency is “pumped in”??
Believe it or not, I remember reading this article from Popular Mechanics (1946) about a Nicaraguan Canal.
http://www.panama-guide.com/article.php/20080821074644913
Will the Chinese create a new country for their canal to run through?
The original Panama Canal project considered Nicaragua (1895-1900), but the thinking was that the earthquake and volcano risks were too high. Nothing has changed. They are still very high.
The Colombians, the only country down there with coasts on both oceans, have a rail link from a Pacific container port to one of their ports on the Atlantic side (about 200 km). Bearing in mind that 95 percent of trade is containerized, and loading and unloading containers is highly automated this could easily be made much faster and more efficient at much far lower cost than a canal. They could easily stop complaining and belly-aching about recent legal territorial losses (island waters to Nicaragua) and just do it.
High speed and efficient rail from Long Beach/LA to the US East Coast is active now, efficiently carries most current cargo, and can easily be made faster, right here in the good ‘ol USA.
The Nicaraguans and Chinamen (and maybe Colombians) could easily end up holding the bag for a white elephant that might never pay off!
I agree, the economics look silly. But the Iraq war had much worse economics and we’re still paying for it.
This will buy lots of influence in the region (unless it is an environmental disaster, that’s the part the Chinese may be underestimating). So it has broader strategic benefits.
And the Chinese are apparently willing to pay a BIG premium not to be hostage to transit though the US. That’s also an interesting message.
This article has got me thinking about the Panama Canal expansion again. Apparently the completion date has slipped to early 2015. Here’s an article from Seeking Alpha with an associated and fascinating slide show discussing the implication of the greatly expanded capacity of the third set of locks at the Panama Canal and the developments at Atlantic ports in the U.S.
Article:
http://tinyurl.com/l2wtv85
Slide Show:
http://tinyurl.com/mgpuaur
Ray, good article and slide presentation. And when you consider the BDI for the last ten years ( here: http://investmenttools.com/futures/bdi_baltic_dry_index.htm ) and the statement in the article, “maritime freight traffic demand will outstrip the capacity of even the expanded Panama Canal by more than 300 percent within 123 years”, it seems to me that this is probably a pipe dream on the level of the U.S. Gov’t repealing the Patriot Act in my lifetime :)
America has become a backward country except for its war machines.
Very happy to hear that needed development will go forward, I don’t believe that China will be worse than us on environment, ie, see “Gasland”.
We have nothing to offer the world except war and killing. There isn’t even money for our own people, but still lots created for the 6 big domestic TBTF banks to make bets with. China understands investment far, far better than the US government since sometime in the ’70’s.
We could increase our domestic product and living standard by double building up our infrastructure with a $7.5Trillion money printing for that purpose, mostly around high speed rail, other transportation and super-phoenix breeder type energy. China’s built it’s last freeway system and is turning to high speed rail for travel and shipping. What are we doing? Uh, running a casino..hmnn…
Compared to our Fed’s $30Trillion (thus far, more to come) “printing” to cover the insolvent 6 TBTF banks, Nicaragua and China look like investment geniuses to me. No, wait, they are doing with their money only what the US used to do…
It will be a nice fishing spot after peak oil makes shipping most goods long distances uneconomic. Can you imagine what a gallon of fuel oil, or diesel fuel will cost in thirty years? That is, if you can even buy any. I suspect the governments will be saving what oil is left for growing and transporting food.
You can use hydrogen, solar, etc. Even dirty coal as in old times… Oil is not that important.