Asia crows that America is a diminishing Super Power ! The absence of the President at APEC this weekend , Asia's observation as to how the US was " schooled " by Russia and China regarding Syria , further education coming soon with Iran , the embarrassing spectacle of the Government shutdown and another debt ceiling spectacle ( second since 2011 ) ....... is Asia correct in viewing the US is suffering " terminal decline " ?

http://www.zerohedge.com/news/2013-10-07/now-chinese-are-wagging-their-fingers-obama

Now The Chinese Are Wagging Their Fingers At Obama

Submitted by Tyler Durden on 10/07/2013 17:21 -0400

• Barack Obama
 
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Submitted by Simon Black of Sovereign Man blog,

“Diminishing Superpower”

This was the headline streaking across the weekend edition of the Jakarta Globe, one of the largest newspapers in Indonesia.

The photo beneath was of Barack Obama, his lips pursed and eyes steeled as if he was fighting back tears. Or perhaps staring off into the fiscal abyss.

The subheadline read: “Obama’s APEC absence symbolic of US waning influence in Asia.”

The article goes on to describe how the President’s conspicuous absence from this weekend’s summit of the Asia Pacific Economic Cooperation (a multinational trade bloc in the Asia/Pacific region) highlights the decline of the US as the world’s superpower.

It’s so obvious to everyone else that the US is in terminal decline.

(Granted, the Indonesians are a bit miffed given that they went to the trouble of closing the brand new airport in Bali for four days, partly because of the anticipated arrival of Air Force One… and then the President didn’t bother showing up.)

Russian President Vladimir Putin and Chinese President Xi Jinping stepped up in Obama’s stead, taking the world’s stage in yet another clear sign of where the real economic power and leadership is.

Putin himself was even nominated for the Nobel Peace Prize… for preventing a former Nobel Peace Prize recipient (Barack Obama) from starting a war Syria.

Meanwhile, China’s vice Finance Minister Zhu Guangyao has been wagging his finger at the US Treasury Department, warning that “the clock is ticking” and that Obama should “take decisive and credible steps to avoid a default on its Treasury bonds.”

All this comes at a time when the US has been caught red handed spying on the rest of the world, including its own people… and its allies. This prompted the Brazilian President Dilma Rousseff to cancel an official visit to the United States this month.

It’s amazing when you step back and look at the big picture.

The Russians are preventing a US military invasion. The Chinese actually have to step in and say something publicly to ensure that the US government pays its bills. The Brazilians are too disgusted to even visit Washington DC.

What a completely different world we live in, even compared to just 10 or 15 years ago.

Think back to the late 90s. The US really was the pinnacle of civilization. The government was beginning to pay down its debt. America’s reputation was unblemished. And to most foreigners, the US economy was the envy of the world.

What’s happening today would have been unthinkable back then. But it just goes to show how quickly things can unravel.

It’s tremendously important that the reputation of the US government is sinking to an all-time low internationally.

Remember, the reason that the US Federal Reserve can print trillions of dollars is because the rest of the world has for decades been willing to accept dollars for international transactions and sovereign reserves.

Nearly every government and central bank on the planet has a big pile of dollars stashed away.

The US government seems to think that this arrangement will last forever, and that their actions are without consequence. Nothing is further from the truth.

As the US government’s international reputation craters after one embarrassing episode after another, other nations are beginning to no longer trust the US, whether it comes to spying or managing a sound currency.

This puts the US dollar at even greater risk of quickly losing global reserve domination, and along with it, the ability to print money without damning ramifications.

As history has shown so many times before, this is exactly how the end begins.

http://www.theglobeandmail.com/report-on-business/top-business-stories/the-worm-has-turned-markets-cringe-countries-warn-us-on-debt-crisis/article14726087/

BUSINESS BRIEFING

‘The worm has turned’: Markets cringe; China, Japan warn U.S. on debt crisis Add to ...

MICHAEL BABAD

The Globe and Mail

Published Monday, Oct. 07 2013, 2:51 PM EDT

Last updated Monday, Oct. 07 2013, 4:09 PM EDT

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These are stories Report on Business is following Monday, Oct. 7, 2013.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

Markets twitch
As one market analyst put it today, the worm has turned.

Investors are anxious and other countries are warning the United States to tread cautiously as the debt stalemate in Washington shows no signs of ending and the warring factions move closer to a supposed drop-dead date.

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“Having been critical for so long of European politician’s response to the crisis in Europe over the years, it is now the turn of the U.S. to be at the beck and call of dysfunctional politics and politicians,” said senior market analyst Michael Hewson of CMC Markets in London.

“I wonder if any of these Democrat and Republican politicians currently bickering amongst themselves, with the fate of the world economy in their hands, can see the irony in how the worm has turned, and how their behaviour damages the credibility of the U.S. in the eyes of the rest of the world.”

Mr. Hewson’s comments came as global markets slipped and as countries such as China and Japan pointed fingers.

With the partial government shutdown entering its second week, markets have made the leap from that dispute to the possibility that the stalemate won’t be resolved in time to raise the U.S. debt ceiling before what the Treasury Department says is an Oct. 17 deadline.

That’s when the government will be tapped out, according to officials, though some observers believe the Administration has more leeway than that, and options to pursue.

The fear is real, however, with concerns that the debt ceiling issue won’t be resolved and, in the extreme, the U.S. could default.

“The partial government shutdown heads into its second week and investors are linking this confrontation to the potential for the debt ceiling to be breached,” said chief economist David Rosenberg of Gluskin Sheff + Associates.

That means, he added, that investors no longer see a technical default as “a zero-per-cent prospect.”

China’s vice-minister of finance, Zhu Guangyao, urged the U.S. to remember the events of 2011, when markets shuddered amid the downgrade by Standard & Poor’s, which stripped the government of its triple-A rating.

“We hope the United States fully understands the lessons of history,” he told reporters in Beijing, according to Reuters. In Tokyo, according to The Financial Times, a senior official also cited the worry of the finance ministry over how the Washington crisis could hit currency markets.

Japan fears a rising yen should the U.S. dollar sink on a default.

“While default seemed unthinkable only a few weeks ago, it appears to the outsider that something drastic will need to happen to avoid a scenario dubbed ‘worse than Lehman’s,'” said market analyst Alastair McCaig of IG in London, referring to the collapse of the U.S. bank that triggered the financial crisis.

“Drawing on historical comparisons, a fracturing within one of the parties seems the most plausible catalyst, so who might blink first and decide they are not comfortable with being accountable for such grave economic consequences?”

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Obama’s optionsBank of Nova Scotia’s Derek Holt and Dov Zigler today examine President Barack Obama’s emergency powers, which have “far-reaching ramifications.” And it’s not entirely clear what he could use where the debt ceiling’s concerned.

“The U.S. is also courting another downgrade on what amounts to a political process that is in a state of disrepair,” the Scotiabank economists said.

“At issue is the legitimate concern over the previously unquestioned assumption that the U.S. government will honour its debt payments at all costs and this strikes to the very heart of the world’s financial system in ways that make the 2008 crisis pale by comparison should things really skid off the rails,” they added in a report.

“Our base case scenario remains that a debt ceiling agreement will materialize and default will be averted, but it’s clear that the shutdown will linger for a while yet and perhaps to the eve of when the ceiling becomes binding.”

Here are some of the president’s options, as they see it.

1. He could “unilaterally act” under the 14 Amendment, which says that “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

That’s a weird thing that dates back to 1868, and one which the White House has already rejected trying to interpret and use.

But, said Mr. Holt and Mr. Zigler, “one way in which this could be utilized would be to issue bonds into social security funds and other social safety net programs as they count outside of the public debt to which the debt ceiling applies.”

2. “The president can choose least damaging violation of the Constitution. An article that was authored by two law professors and published in October 2012 in The Columbia Law Review … argued that since by failing to raise the debt ceiling Congress is essentially saying the government cannot issue debt but must spend and cannot raise additional tax revenues through further means, and therefore the president ‘has to decide which of Congress’s orders to follow” and must “choose the least unconstitutional option.’”

3. The government could issue ‘premium’ bonds: “The thinking here is that because the debt ceiling applies to the face value of bonds issued and not the total funds raised, that new bonds can be sold at a premium interest rate and thus raise greater funding than the par value of the bonds. Such issues could be used to roll over other previously existing debt without violating the debt ceiling while simultaneously raising more funds.”

4. Issue a platinum coin worth a lot of money, an idea that has been tossed around a lot, but few see happening: “Because of a loophole, the U.S. Treasury has the option of issuing platinum coins with no limit. Jack Balkin, a professor of constitutional law at Yale was the first to suggest this option. It would amount to exploiting a loophole that was designed to allow the issuance of commemorative coins and turn it into a funding instrument.”

5. Hit up the Federal Reserve: “The Federal Reserve is not a direct option for funding the U.S. government because the Federal Reserve Act prohibits buying bonds at issue as opposed to the secondary market. Some speculate, however, that in desperate times the U.S. government could write an option to the Federal Reserve to purchase government property for a specified amount and the Fed would then credit the government’s account.”

All of these measures, however, would “risk legal challenges, risk impeachment proceedings and a full-blown political crisis,” the economists added.