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China Inflation Scramble Is Now Official As World's Second Largest Economy Prepares For Cold War With U.S.
Here comes the China liquidity post-sugar high crash. In comments published tomorrow (no, not an Art Cashin brain teaser), a senior government economist said that surging money supply is leading to inflation. Yet, since in China apparently you can be half pregnant (preferably with one and a half boys), the recommendation from the government is to increase reserve requirements instead of interest rates. The implication is that it is only a matter of time before both end up getting hiked.
Market News reports that National Bureau of [True and Unmanipulated] Statistics chief economist Yao Jingyuan said "Money supply is too big and that's leading to excess liquidity." Yet Yao Jing said he would "prefer reserve hikes to rate hikes because rate hikes could cause hot money to flow back."
Consumer price inflation ticked up to 1.9% y/y in December, only the second month since the outbreak of the financial crisis that consumer prices have been in positive territory.
The People's Bank of China raised the reserve requirement on January 18, the first time since June 2008 that it has done so, in response to the massive volume of credit extended by banks in the opening weeks of the year.
Another reserve hike is certainly imminent, very likely soon to be followed by an interest rate increase as well. Yet look for the dollar peg to continue until the bitter end: ironically, the Yuan lost value on Monday, as China set the parity from 6.8272 to 6.8273.
And as if this was not disturbing enough, in other news, the TimesOnline reports that "more than half of Chinese people questioned in a poll believe China and America are heading for a new "cold war."
The finding came after battles over Taiwan, Tibet, trade, climate change, internet freedom and human rights which have poisoned relations in the three months since President Barack Obama made a fruitless visit to Beijing. According to diplomatic sources, a rancorous postmortem examination is under way inside the US government, led by officials who think the president was badly advised and was made to appear weak. In China’s eyes, the American response — which includes a pledge by Obama to get tougher on trade — is a reaction against its rising power.
Yes, alas, this means war.
Almost 55% of those questioned for Global Times, a state-run newspaper, agree that “a cold war will break out between the US and China”.
An independent survey of Chinese-language media for The Sunday Times has found army and navy officers predicting a military showdown and political leaders calling for China to sell more arms to America’s foes. The trigger for their fury was Obama’s decision to sell $6.4 billion (£4 billion) worth of weapons to Taiwan, the thriving democratic island that has ruled itself since 1949.
“We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,” declared Liu Menxiong, a member of the Chinese people’s political consultative conference.
He added: “We have nothing to be afraid of. The North Koreans have stood up to America and has anything happened to them? No. Iran stands up to America and does disaster befall it? No.”
Apparently it doesn't end there:
“This time China must punish the US,” said Major-General Yang Yi, a naval officer. “We must make them hurt.” A major-general in the People’s Liberation Army (PLA), Luo Yuan, told a television audience that more missiles would be deployed against Taiwan. And a PLA strategist, Colonel Meng Xianging, said China would “qualitatively upgrade” its military over the next 10 years to force a showdown “when we’re strong enough for a hand-to-hand fight with the US”.
Chinese indignation was compounded when the White House said Obama would meet the Dalai Lama, the exiled spiritual leader of Tibet, in the next few weeks.
“When someone spits on you, you have to get back,” said Huang Xiangyang, a commentator in the China Daily newspaper, usually seen as a showcase for moderate opinion.
In retrospect, we have nothing to worry about: the amazing Hillary Clinton will make sure all shall be well... Until D.C. one day wakes up in a 3 foot snow blizzard mixed in with far more than the RDA of alpha, beta and gamma radiation.
h/t George
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You neglected to mention that whole chicken thingy. The slippery slope always starts with poultry.
that is actually true. without u.s. dark-meat dumping in china and russia the low-cost breast model becomes unsustainable, domestically...and poultry has indeed been a bellwether for international trade tensions. russia started down this road in 2003 and has continued protecting and subsidizing domestic poultry producers
when we have food shortages, those chicken feet we're no longer exporting to China will come in handy, good thing a friend of mine from Singapore got accustomed to them...
Since many doomsayers believe we will have a food shortage this year, may I recommend two ways of serving chicken feet? (a) Cantonese style ("dim sum"): steam after marinating in a soy sauce and hot sauce mixture or (b) Shanghai style ("drunken chicken"), stewed in a rice wine and vinegar broth. They're actually very good appetizers!
WOW...great recipes but my favority is chicken teeth and gums sauted in a bit of sesame oil,sea salt, and ginger. YUM.
Well now, since we Americans have sent all our high precision manufacturering to China (and 3/4 of the US Military electronics are made in China) why would the Chinese not think they are smarter, tougher, bigger than America (and can kick her butt if we get out of line)? THe Chinese web attacks amount to 10,000 plus an hour on the Department of Defense alone( so many, the head of the web attack/pervention is quitting because he can't keep up with it and the Chinese are getting thru before he can stop them).
Food, Goldman is in China setting up farms for pigs and chickens faster than than Lays can make Doritos. Gotta love them.
But After all, The US has never lost a WAR since WWII, but then again we have never declared any of our wars...WARS ( see the house and senate aren't so dumb). So if there is a war with China we won't declare it and thesefore we won't loose it. And all those boys in DC will hand out truck loads of fresh printed money to the military industrial complex to creat jobs to save America in one easy fix.
AS We dig our own grave, we will have riches in our pockets, as the gun is put to our head and we go to sleep.
Oh, but major wars always generate value and improve economies! Yay war! Who needs all those young people and wealth reserves anyway!
Naw, much as they bitch they can't touch us. (Hacking YES, military, no)
We have nuclear primacy with China and not to mention military supremacy.
So all they have to do is hack some General's home computer, upload kiddy porn, then make a phone call to the FBI.
We don't need no cybersecurity...
Except their army can be as large as our nations population, and they still have 1.2+ billion people to man the cash registers and sweatshops...ya know to build the tanks and planes at a 100x faster clip than us. (anyone realize our industrial production is that of the 1920's...let alone what it was during WWII)
Not to mention destroy our dollar with their reserves.
Plus all of their soldiers are in China, all of ours are inbetween here and china. Good luck trying to airlift them out of there during a war, and cut oil supplies. Also where would you send them..to china to attack? Or home to protect us?
Plus how many people will realize WE CAUSED THIS and are at fault. Make no mistake, if we get in a war with china....we'll be Germany, and china will be U.S. if we compared such a war to WWII. Anyone want to bet who wins? Not us.
Not to mention they'll just stop shipping everything over to us. Good luck buying anything when the shelves aren't stocked. At this point they're even feeding our dogs, literally.
Being an arrogant butthole to the world isn't an american birthright, it's an american tragedy. Selling the world a bill of goods about freedom when you're really pushing imperialism, has sullied our name.
Remember in Iran we are called the great satan. You know who they call the greatest satan? U.K. Why? imperialism.
This will not end nicely. It might not be over taiwan, it might be over Iran.
Why are things bad between US and China? Because WE'RE ACTING LIKE DOUCHE BAGS TOWARDS THEM AND TRYING TO SCREW THEM EVERY CHANCE WE GET. How do you think we'd react? To be honest, I feel they've been very nice to us while we've been slapping them in their faces. That very well could turn around any moment, and if we ever reach that moment, it won't be one you ever, ever forget.
But that seems to be the plan by the Brits. Get the U.S. and China to fight. Will we be such fools? Well yes, we will be.
Obama and his entire administration have botched things badly with the Chinese. He's so caught up in trying to impress sparsley populated, third world countries in the Middle East and South America he's ignored the country with almost 20% of the world's people, and the one holding all our debt.
ODrama really doesn't give a shit about anything that doesn't expressly offer him the opportunity to do something he claim as "historic". Even today, after all that's happened, the shithead is out there talking about ramming National Healthcare down people's throats. It's un-fucking-believable how little this guy cares about what the citzens of the his own country think, let alone how Chinese citizens and officials think.
It's still amazing to me that Hillary agreed to be on his cabinet as SecState--this is inevitably going to get pinned on her somehow for not keeping Obama on the ball with China, even taking the President's Bandung-inspired Third Worldism into account. Maybe she finally succumbed to the "rock star" gloss that the media had put on this guy, or she simply felt it was good politics to play along. After all, she pointed out repeatedly during the primary how inexperienced and out of his depth Obama was on nearly everything.
I'm not a fan of her politics, but I never thought she'd be foolish enough to hitch her political credibility to someone she didn't honestly believe could stay focused and do the job.
Fuck those shitty toymaking pussies. Turn that sweatshop into a mushroom garden.
Yes Blackbeard! 5 howls and one bark for you!
do they bruise blue and have you already eaten some?
Ya' think they'll loan us the money to keep our military machine? The path we're on will lead us to that.
Help Israel so that they can again sell more of our technology to China who in turn can sell more of our technology to our enemies.
While I understand the point of view of China, I do not believe any country on Earth wants to go to war with the US...I do not think the US loses a world war, poor financial situation or not.
This is true. China's military is just like its economy. Loads of people speculate that it's full of glory and win, when in fact it's full of holes and has risen up too much too fast. Their military is strong sure, but it's nowhere near ours and won't be for decades still. Just like their economy.
We won't go to war with China over dumb shit like this.
All of us would lose.
Agreed. War is always a lose/lose situation.
+1.
Considering that we have finite resources on this Earth, and our survival and prosperity depends upon using those wisely, the last thing that we need to do is to waste them upon mutual resource destruction.
Sadly, that's what we'll probably end up doing.
You can't loose a war if you don't declare it. Look at all the 'undeclared wars' we have had since WWII, and lost the all. But we didn't declare them so they don't count. So there.
Well nobody's gonna do a Hot War. But a Trade war... well it looks like it's coming down to "Show me what you got."
You write this as if the US Government would see this as a bad thing. They know exactly what they're doing.
"They know exactly what they're doing."
Sure thy do.....Where were you when they brought us to the bring of a depression...we still are not of the woods....stand by....
Hope and change
"Unhappy is the fate of one who tries to win his battles and succeed in his attacks without cultivating the spirit of enterprise; for the result is waste of time and general stagnation. Hence the saying: The enlightened ruler lays his plans well ahead; the good general cultivates his resources."
Sun Tse
The Art of War
Ya ya and in the mid-90s the rice eaters were threatening to nuke LA in revenge for America's support of Taiwan. Time for America to flood China with crack cocaine manufactured in Burma.
C'mon Blackbeard, tell us what you really think.
Dude, I say you have serious issues in life. Your article couldn't be farther away from the truth with regards to China/U.S. relations. Next time, don't write with so much obvious bias. Let me guess, you're a fat slob, lazy ass American ? That's what I thought.
Where is Kevin "Walstreetpro2" Rowland when you need him?
http://www.youtube.com/watch?v=ZaV2rNXtlXs
I don't think there was a way to avoid the war. At any rate, it just escalated - The US is charging a 231.4& duty on ribbons from China & 4.54% on those from Taiwan.
- Bloomy
LoL
Now, since our Comparative Advantage is in high end goods, WTF they are going for those low margin industries, escapes me.
Washington, WTF can't you do one thing right (wrong to a lesser degree) and start with food related & high end chemicals imported from there or some tech goods (solar panels)?
Please compare the defense spending of the US and China over the past decade and the past two years
Obviously we are not going to land there and obviously they cannot land here
Other than that its not an even fight if it were pursued on an all out basis.
Mostly its quotes from Chinese folks outside the main circle. We have hot heads who say war like things as well.
The moves on Taiwan were up for consideration, and the decision made and communicated to the Chinese leadership as far back as the Bush Administration.
I do think the troubles in Europe may lead them to throw up protectionist barriers against China before we do...one side benefit to Bernake slowing down the slide maybe that we have more options for awhile as other nations enter the last spirals before we do. That could at least help our people dig out a little bit faster in a decade or so. Who knows
Who knows?
"I do think the troubles in Europe may lead them to throw up protectionist barriers against China before we do"
a) Europe did put up some barriers prior to us.
b) China has used "unofficial" barriers for almost two decades. In that sense we are a bit late (should have blocked their WTO entry and bargain for better & fair deals.) In addition, we are putting barriers in a rather dumb manner, however once the process starts, the worst decision is going back to being SOFT.
c) FREE TRADE is good and benefits all, however in order for it to work, it has to be relatively fair. If it is not fair, it turns into ZERO SUM game, which took a crisis for our brilliant political & economic leaders to figure out.
I agree. I should have said more complete barriers or larger or more or all of the above.
China is a mercantilist piratical economy. So while free trade is a wonderful concept...how can your "free" trade with them? Its as dumb as claiming your best negotiating strategy is to be reasonable with Wal Mart.
But unfortunately for China, it is playing the mercantilist game with fiat currency that is ours. Whats more, as cheap labor fueled by cheap currency is its main competitive advantage ...that advantage is easy to defeat. Trade barriers and QE and its all she wrote when you consider the awful risks hidden in their banks and the shrinking aquifers and arable lands
On a separate note, I think they saw the recession we had as one we would come out of in 18 months and they tried to corner the market in goods (like semi-conductors) and commodities and raw resources so they could flip a profit in 24 months. Only now are they catching on that the silver tongued devils from Washington were blowing smoke and mirrors when they came calling
As the Chanos video said: "They send us things. We send them paper. Who would you rather be?"
One other thing to consider. The speed of the Chinese migration from the shrinking farmlands of Northern China up into the Far Eastern part of Siberia (where there is at least clean water, fish and food to be hunted ) will not go on forever before it is a huge problem for the declining population of the Russians. Already if you go to what used to be Vladivostock, the majority ethnicity is Chinese.
By no means is America their only looming potential conflict to consider
Agreed. In the long term rise of China might spell more trouble for the Russian Federation (Empire) rather than the US.
why has no one mentioned the easily dented pressure point of the u.s. government/economy: the huge stock of dollars and treasury securities that could be sold/not bought going forward? yes things are better than paper IF you can stop having to sell the paper (or find other buyers) but, re the crack cocaine item above, the u.s. shows no signs of realizing that it is powerless to resist its addiction to increasing debt, especially in current circumstances (essentially underwriting the u.s. residential mortgage market at current prices).
An economic/trade war with China seems almost certain. I would hope that the Americans on this board, regardless of their feelings about our government or actions, would wholeheartedly put aside those feelings and remember this is the nation we love and support against any foreign enemy. The easiest way to hurt China is to stop buying the cheap crappy goods made in China. Yes they are our biggest FOREIGN purchaser of treasuries, but they are not our biggest purchaser - that remains US institutions. And at the end of the day they hold roughly 5% of all our debt. Let's stop with the hysterics about how they "own" us.
I am not saying they are pure, innocent lil' victims. But to ask me to think of them as a straight up enemy when I know we have cheated them by buying cheap goods made by their slaves, and then borrowed money which is the surplus profit from those slaves' labor (which we won't pay back) is a little tough.
My get up and go kick ass sort of got up and went when I see that we are morally and ethically corrupt, too.
Give me an enemy that does not have a legitimate grievance against me, please.
Not to mention that we sold the chinese triple A
rated securities that was actually worthless crap...
My wife is from China, and I can tell you that
the Chinese truly admire us
I shared an office with a chinese CS PHD, same story
The truth is, we are more similiar than not.
This saber rattling is crazy and would be a real
tradegy if it comes to war...
Can't we all just get along???
They exist only in movies.
the easiest way to stop buying their "cheap crappy goods" is to erect trade barriers. it seems doubtful that the currently strapped american consumer will voluntarily change spending habits. wasn't that technique tried in a previous deflationary downturn? how'd it work out? if one holds 5% of the outstanding debt of an organization selling more debt, at an accelerating rate, as far as the eye can see, the potential for mischief is significant. and "wholeheartedly support against any foreign enemy"? really?
Nationalism is stupid. What is good for the State is not by any means necessarily good for you.
There is no "us" vs. "them" in this deal. The controversy over trade deficits is deflecting attention from the real problem your own government created when it tried to get its businesses and consumers to borrow their way to prosperity. It's not like China's an angel in this but it takes two to tango.
I've never laughed so hard...
Desperado, why don't you come to your senses
You've been out ridin' fences,
for so long - now.
Ohh you're a hard one.
I know that you've got your reasons.
These things that are pleasin'you
Can hurt you somehow.
I don't think Sun Tse counted on 72 nuclear warheads per nuclear submarine, of which we have about 80 deployed.
It'd only take one to end all memory of 'communist regimes' on this planet.
-MobBarley
and that's going to happen (barring error). but it would end all memory, of communist regimes and likely more. and the perpetrator erases the nazis (oops, sorry godwin) as history's villain.
We are already seeing clouds of pollution from China's industry drifting into American airspace. What do you think would happen to the radioactivity from a nuclear attack on China would do to North America, or even the entire Northern Hemisphere.
Using nuclear weapons on a large scale would seal our doom and our children's suffering. Be very careful what you ask for. It's a different world, where effective diplomacy is required, not mafia-style negotiations, or the war-mongers rattle of nuclear sabers. AIMHO
War? Naah. As long as our Dear Leaders stay cool regarding China, there will not be war, at least not for a LONG time.
China has a lot of problems. Even with our problems, WE are better off than they. Their demographics and dictatorship mean lots of rough sledding fro them.
Also, historically whenever China has gotten strong, they screw it up. Look at every one of their imperial dynasties.
Even with our bumblers in charge now, as long as we do not anything real stupid (that is a possiblity), we'll be fine vs. China.
Our decline, and maybe fall, would be due to our own internal deterioration. Internally and through decadence are how great countries always fall.
why wouldn't Russia end up in the driver's seat?? They have the resources.. and seem to be going through a lot of changes that America went through before they rose up. Also, they can be a late entry into the next war, just like the US was and then call the shots afterwards
Declining population is a huge problem.
They also have the only leader in the world with
balls (Putin, not the puppet)
We need a Putin...
People constantly say war is good for the economy.That is simply insane.War destroys wealth.WW2 put the US in a good place for a very simple reason: the rest of the world's production capacity was destroyed.The US was then in the driver's seat.
Those that think war is the way out this time are insane and dangerous.Even so called conventional weapons today are far more effective.The Chinese are outmatched, to a degree that is alarming.Suffice it to say, robots are here in a BIG way.Visualize swarms of AI controlled attack aircraft...followed by the terminator on the ground.It will be horrific, and will likely go nuclear if these maniacs are not stopped.
So much military industrial intelligence banking insanity....so little time.
Remember...these lunatics have interests which are now inimical to those of good people everywhere.The Chinese are pissed....they are insulted and angry.We must not let it get further than that....or WW2 will seem quaint and pleasant compared to the dogs of war to be unleashed this time.
So when you tell your special girl that she's glowing, you'll mean it literally.
Yes.Imagine how many nukes would get launched.Russia would probably launch as well.The Malthusians would be pleased with the outcome.Then the famine would begin.Just an absolute nightmare.
The economic conditions today certainly do not speak to stability.And the lunatics are increasingly desperate.
The Chinese hold so much paper.Talk about screwed.
just think of the great super mutants that will emerge from it all!!
Aw, man. How the hell am I going to be able to keep Dogmeat alive in an ironman game? Those fuckers have miniguns and rocket launchers. Can't be done - certainly not unless someone invents some doggy power armour. On the bright side, my experience of real life leads me to believe that getting trapped forever because someone won't move out of a doorway is in fact a comparatively rare event.
You're pulling an Obama here; you're arguing with no one. No one said that nuclear wars are good for the economy.
Stop shipping Chickens, Pork, Rice and Grain to the buggers and see what kind of fight they they can mount...
last time the u.s. stopped selling scrap iron to japan and it still managed to sink most of the pacific battleship fleet (good thing they were obsolete and the aircraft carriers were at sea and we invented the atomic bomb because the nazis were anti-jews and einstein was a jew and we broke the german and japanese codes and hitler attacked russia in the winter and the brits invented radar). but you have to ask yourself, do you feel lucky?
WW 2.0 in a sentence
hitler attacked russia in the summer, not that it matters, but i think this time just like with the soviet union there won't be a direct military confrontation - neither us nor china are really ready for that. cold war means assymetrical warfare by proxy - in the middle east, africa or wherever else it is necessary. notice that in between 1945 and 1990, us and russia never went into a direct confrontation, cuban missile crisis or the situation around missiles in turkey were scary enough not to go into full scale war. in the end soviet union collapsed under its own weight, this time around both sides will count on the same outcome for each other.
Precisely. The nukes won't fly (though there's a good chance that sooner or later a Pakistani or Russian-made device will fall into the hands of terrorists and be detonated in a major Indian city, the prevention of which eventuality is the most powerful moral justification for a military presence in Afghanistan), but proxy wars in Africa, the Taiwan Strait and the 'Stans are very likely. Moreover, while physical Armageddon will not be unleashed due to both the certainty of obvious and devastating retribution and powerful public antipathy to the idea, we may well see attempts by both sides at inflicting upon the other and economically catastrophic cyber-apocalypse, which would be politically acceptable due to the non-obviousness of the manner in which it could cause death and suffering on a massive scale.
As for World War II, the US may have benefitted from some serious good fortune at crucial moments, Midway in particular (Tone's catapault malfunction, VBD-6 spotting Arashi) but these accelerated the inevitable rather than causing it. US superiority in certain aspects of doctrine (pilot preservation, submarine strategy) was significant, but ultimately the disparity in industrial capacity was too vast for the Axis powers to overcome. If Germany ever had a chance, it was gone before Pearl Harbour, and if Japan did it was over when operation MO failed to take Port Moresby.
Eye for an eye
blind much?
If you are in charge of China's huge foreign exchange reserves, what can you do about it?
And, what can you do about those US debts?
I guess there's no good answers
Since the Lehman BK, I've been doing my own research on what happens to a debtor nation that cannot repay its creditors. Surprisingly, there is not a lot of authoratative information readily available on it but I did find out this much. It either ends up in very high (like 20%) interest rates or war. Anyone we know or care about forecasting higher interest rates?
1. Stop buying crappy junk from China.
2. Flip em the bird about their debt.
What are they going to do, really? They can barely feed their people, especially if we take away their economic viability.
In addition to our best military on the planet, can you imagine if they sent troops to invade us? We have well armed ghettoes on each coast that have more weapons in them than all of China.
Let them try to take us house by house like we do in Iraq. There's no way that they could even come close.
Boycott China!!
I still can't figure out how you can have 10%+ growth yet keep inflation to 1.9%. That in itself is a bloody miracle.
China can hurt the US most deeply and quickly just by banning exports of rare earth metals. No more high tech missiles, cutting edge aircraft engines, Prius cars, wind generators, cellular telephones, computer monitors, or most green innovations could happen without these materials needed in small quantities by all of them.
The US government, Defense Department, Energy Department, and banks providing funding have all ignored this issue for too long, and it is a disaster waiting to happen. There simply is no other source worldwide which can immediately provide these materials. China is the Saudi Arabia for these materials.
Perhaps something will happen to make the scales drop from their eyes and to finally do something about this lack of refining and alloy to supply US industry's needs.
America has a good supply of rare earth metals just waiting to be extracted. Goldman Sachs predicted (or was privy to inside info?) a supply problem from China and recently invested in a rare earth venture in California.
Break In Case Of Emergency
DoD's 78-page report to Congress on China's military.
http://www.defense.gov/pubs/pdfs/China_Military_Power_Report_2009.pdf
Michael Pettis has (as usual) another good piece on his site:
http://mpettis.com/2010/02/never-short-a-country-with-2-trillion-in-reserves/#comments
China can hurt the US most deeply and quickly just by banning exports of rare earth metals. No more high tech missiles, cutting edge aircraft engines, Prius cars, wind generators, cellular telephones, computer monitors, or most green innovations could happen without these materials needed in small quantities by all of them.
The US government, Defense Department, Energy Department, and banks providing funding have all ignored this issue for too long, and it is a disaster waiting to happen. There simply is no other source worldwide which can immediately provide these materials. China is the Saudi Arabia for these materials.
Perhaps something will happen to make the scales drop from their eyes and to finally do something about this lack of refining and alloy to supply US industry's needs.
Actually, the US had a rare earth industry that was under priced by China. American companies are bound by environmental and labor laws that Chinese companies are not. Were there a shortage, the prices would go up and American mines would again be competitive.
See http://www.molycorp.com/
its more like a coldcash war...
Ya an arms race!!! See the economic recovery is real. Just like bigfoot and God's mercy.
Tyler,
I guess the Chinese aren't buying as many Treasuries as Turbo Tax Timmy wants, so now the US can amp up the rhetoric.
However the guys who really benefitted from the whole China trade have now retired and are paying their Bush Tax cut rates.
Looks like the American people, as well as the Chinese people have been had by a few rich Americans.
No need to get upset( on both sides).
Just admit you have been had.
I'm in favor of a trade war with China. They have more to lose than we do. Their excess production capacity will create chaos among their population when millions lose their jobs creating shit we don't need. But the longer we wait to kick China's Government (not their people though) back down where they belong, the harder it will be. When we opened up trade with China it was with the hope they would move towards freedom and democracy. It's now certain they are a far greater enemy than the Soviet Union due to their Government. We better start acting smart, fast.
"They have more to lose than we do."..
Wrong. Their people can hunker down for years in tough conditions without complaining. That society doesn't know saftey nets. Americans are entitlement receiving sissies with the political and personal will for exactly zero pain.
You need to get out more often. Americans are quite different as you move inland from the coasts.
Sissy's in New York, LA and San Fran are useless in the face of no government entitlements. But not the people in "fly over country."
http://www.youtube.com/watch?v=I4s0nzsU1Wg
We have no tolerance for inconvienience.
Inconvienience us, and its all over!
P.S.
Just in: " Eastern Jiangsu province, which exports more than Brazil and South Africa combined, raised its monthly minimum wage rate 13 per cent to Rmb960 ($140) last week. It was the first time the rate had been adjusted in two years." - FT
China's chatter about war is just that, chatter. The US continues to posses a vastly qualitatively superior military and as far as economics they need us more than we need them. Assuming we can get rid of Obama in 2012 and get the deficit under control, that isn't going to change.
The protracted wars in Iraq and Afghanistan showed that the US was ill equipped and poorly trained to fight an asymmetric, guerilla campaign. Few nations are prepared for such adventures. However, it says nothing about the ability of the US military to successfully engage other nation states in conventional wars. Any one drawing parallels between the two would be very foolish, and the Chinese are anything but foolish. Few people realize the vast qualitative advantage the US possess over China in military equipment. For example, the F-22 recently defeated a force of nearly 100 US fighters (themselves equal or better to China's best fighter) in an exercise in Alaska without any losses. Most of China's advanced equipment is imported from Russia, and they've had limited success copying Russian gear - especially critical engine and electronic components. And anyone concerned with China's nuclear weapons should be mindful that the US continues to deploy a vast arsenal of nuclear weapons itself.
Any conflict instigated by China would be a disaster for China as soon as the first shot is fired. There would be great pressure to enact punitive economic measures in response to any Chinese attack on Taiwan or elsewhere. Yes, there would be an initial huge hit to the US economy that has become dependent on Chinese imports, but there would be a powerful renaissance of manufacturing in the US thereafter. Talk about solving the jobs problem and putting millions of Americans back to work! Oh, and don't expect Congress to keep making interest or principal payments on any of those Treasuries held by China's central bank.
exchanging nukes between these 2 countries shall be interesting.
China actually has relatively few deployed nuclear weapons capable of reaching the US proper - small comfort if you live in Guam or Japan I suppose. Those that they have require a lengthy launch prep making them vulnerable to a first strike (which might be considered if the threat of a nuclear exchange became imminent). Their ICBMs are mostly high yield single warhead types, relying on the logic that even just a few hits are sufficient deterrence - ICBMs are surprisingly expensive to maintain in a deployed, usable condition, way more than actually constructing them. China has no bombers capable of reaching the US, or surviving even if they did. China's two ballistic missile subs are very noisy and easy to track. They rarely deploy in any case, and would need to be very close to their targets as their SLBMs have short ranges.
Of course in conventional wars, US can beat any country. But the question is, will it be wise?
Unless US can destroy their nuke launchers in ONE shot, any war is a dumb idea.
2009 DOD Report to Congress
China's Military Power
http://www.hsdl.org/hslog/?q=node/4772
Interesting Reading
Agreed. People have no idea of the advantage involved in controlling both the Atlantic, Pacific, Poles and having a vast coast. The United States of America is impossible to invade and has unlimited access to the seas. Even when the Soviet was actively attempting to keep pace with our military when the wall came down they trailed us significantly. In the interim The United States has continued to advance exponentially militarily and be assured that their is warfare technology we would not even reveal unless a third world war developed. The United States could wage and win a conventional war against every nation in the world simultaneously and win. Not a nation in existance would attack us with nuclear weapons unless their sole goal was to attack the U.S. with the knowledge their country would have population zero an hour later.
This is what makes rogue terrorist attacks so destabilizing. It could be argued that 9/11 caused America to spend itself into near bankruptcy, aided in creating the housing bubble, 2 costly wars, divided citizens and one terrorist attack away from crisis. Since I was a teen I have been concerned about the day bombers begin boarding subways in NYC and buses similar to Tel Aviv. If something like this occurs it will paralyze the American public temporarily and people in la la land who do not understand we have enemies are not helping matters. Before the attempt on Christmas I was telling people something was up since I saw a massive increase in subway security. In the past 2 weeks the security and police presence is the most I have ever seen. An enemy with faces but no name is frightening. How do you kill a ghost?
The US is decidedly less inviting these days for tourists, less inviting as a place to live and work, less stable, more xenophobic...........definitely the terrorists have been contained and beaten !
the only terrorist are the british, american and israeli governments.
Oh, and don't expect Congress to keep making interest or principal payments on any of those Treasuries held by China's central bank.
I would be pretty certain they have thought that one through ! Masters of The Long March are going to know the exact recipe for slow cooked frogs.
See this is the problem. People who think they can tactically figure it all out. The banks believe they can wrestle society into a position where one person won't lift a finger for another person unless they are given the banks writ of action decree in the form of a federal reserve note coupon or a stupid implanted credit chip.
Military believes they can win wars.
CIA declares that waterboarding is ok because it works because they waterboarded a guy for 12 seconds and he told them everything, then they admit they waterboard him 48 times and he may have been telling them bullshit just to make it stop from time to time.
All you need to be in power here is to be mean and crazy and unwilling to change either. Why go to work and make bullets or twinkies or tank parts for mean and crazy and immutible. If you thought the 60's was dropping out just wait and see what people do.
glad you're confident about fighting a war with china, in china one would imagine, on top of the several we already have going (badly, as you note), based in part on an exercise in alaska. maybe before they risked actual soldiers they might try saying they want to be paid for their barbie dolls, etc. in gold. not actually do it, just say it. once.
"Oh, and don't expect Congress to keep making interest or principal payments on any of those Treasuries held by China's central bank."
Under the Trading with the Enemy Act, the US can, if conflict appears imminent, easily seize all Chinese assets in the United States, including Treasury Bonds. There is certainly precedent: During both world wars, the US seized the US assets of the German government, German companies, and of German citizens and used them to help defray the cost of the wars they started. An obscure branch of the Justice Department, the Office of the Alien Property Custodian, was used to seize everything from patent rights to bank accounts.
After WW I, we even kept, as war reparations, all of Bayer's intellectual property relating to aspirin, selling it off to American companies, and making the US one of the few places where aspirin is not a trademark of Bayer.
http://en.wikipedia.org/wiki/Aspirin#Trademark_in_most_countries
Under this and subsequent legislation, such as the International Emergency Economic Powers Act, China's bonds could be seized with the flick of pen.
(For those who think this would result in absolute financial disaster, I would point out that foreign governments have continued to buy treasuries despite the above and many subsequent asset freezes.
See http://en.wikipedia.org/wiki/International_Emergency_Economic_Powers_Act...
)
We should have encouraged a "powerful renaissance of manufacturing in the US" before now, as a matter of national security and national interest.
Duh.
The Taiwanese stock market went limit up on the news that China was allowed to invest in Taiwan last year. The current president was voted in on the platform that he wanted closer ties to China.
I don't think this arms sale is a bit deal at all. Taiwan will rejoin China in our lifetime.
However, it is taught throughout China that the capitalists eventually need to destroy production in order to keep capitalism growing. This means they need to create a war, so that demand is reestablished. We'll see how correct they are, but I doubt the US has any power anymore to conduct any further wars. We are too debt-ridden at this point to do much of anything.
China is already heavily invested in Taiwan. Military blow harding is just that.
Look. Why would China want military action with the USA? Float the yuan and watch US real estate look like Bowling For Dollars. Why fight what you can buy?
I'm just an idiot. But why fight what you can buy?
We are so greedy, we will sell them our buildings, our land, and our soul. That much is clear. I see your point.
The butterfly already flapped his wings in Peking in Sept of 2008. The rain instead of sunshine well on its way to Central Park. When it happens nobody knows however many events have been put in play that will suprise even the most optimistic. And frighten even the most pessimistic to their core.
There is nothing you can say that will spook me. The summer of 2006 did that. Now we wait for impact.
These are the enemies that keep me up at night concerned for America's safety.
http://www.southparkstudios.com/clips/155546
I think Chinese should just stop buying US treasuries. Will US force them buy then? LOL
China should stop buying US treasuries. Will US govt force them buy?
LOL
i can't believe that the fake indonesian president made a good decision in approving arms exports to taiwan......i am no fan of the imperialist communist tianamen square chinese nor am i a fan of america's imperialism....
Think Obama is a good wrestler? We could do a pay per view smack down with China, winner controls all.
War in 6 years. (my estimate on the time for rhetoric and military build-up)
Let's face it. No superpower has ever handed over the baton peacefully. Furthermore, I’m sorry to say, but there is no known cure to deflationary debt recessions other than war. WWII is what solved the Great Depression.
Let’s look at it in cold practical matters:
1)China is a rising power threatening Western hegemony. Traditionally already a strong reason for war
2)There are deep rooted un-reconcilable economic disputes between both parties (US Treasuries, Renminbi, trade barriers, etc)
3)It would allow to eliminate the single largest creditor so the war would pay for itself
4)It would destroy excessive productive capacity so US & its allies would see an immediate sharp rise in demand for their goods. Plus a Marshall Plan for China would be the cherry on the cake.
5)Additionally, a stimulus war must meet several conditions which meet the China criteria
a.It must be long and hard enough as to justify the mobilization of all of the economic resources (maximum production frontier & savings from GI’s). This requires a very strong enemy so Iran and North Korea are off the list
b.It must generate enough fear as to polarize political opinion and to convince rational investors to provide funding for “patriotic reasons”. Again a puny 1 month war in Iran or Korea would not suffice.
c.It must be winnable without destroying the planet. That eliminates Russia with its sophisticated and numerous nuclear arsenal. China on the other hand has a very limited nuclear capacity that could credibly be neutralized by the United States (those interceptor missles in Hawaii are there for a reason. It’s not for North Korea. They have 8 warheads and missiles with guiding systems that make Prius brakes look reliable)
I’m very sorry, but I do believe millions will have to die to solve the problems generate by this idiotic monetary/fractional reserve lending system. The only other alternative would be to do away with the current monetary system, which essentially would mean eliminating all existing money supply (and therefore debt). That solution is less savory for politician than war.
Exacly where will this war occur?
China cannot project its power much beyond its borders. It will likely still lack this ability in 6 years.
Are you suggesting that we will invade China?
I suspect that as long as we have nuclear weapons, military engagements will be relatively small scale regional conflicts.
War with China will be economic, not military.
If you blast them out of existence, would you still owe them money?
Nope. Losers pay the winners money. Even if the winners owed the loser money to begin with. Ka-BOOOOMMM!!
Who thinks that Iran's surprise for the west on Tuesday is 'The Bomb'?
China easy to hurt by blocking low cost goods? I wonder who will give up first. The whole US social contract is based on Chinese low cost goods. What happens when the US consumer does not have its daily dose of consumption?
One could surmise that Chinese low cost ammo would be smuggled in the US no matter what to fuel the ethnical cleansing on the way, just as it happened during the 1920s.
Ummmmm, and the US should avoid sending too much red necks when trying to control strategical resources in Africa. Any reputation, even as bad as bad, can still worsen.
China is already selling weapons to countries that are not our friends. So what they propose is nothing retaliatory. US can arm Uighur and Tibetans splitists and watch China crumble and become destabilized. May be post some missile silos in Mongolia, arm Taiwan to the teeth with nukes.
Cuba, Venezuela, North Korea don't pose a threat to USA. These are minor irritants with all bark and no teeth.
Start campaigning internally to stop using chinese goods and devalue the dollar overtly and China is kaput. Their new found gung-ho ness will mellow down.
Ha! This will only make a generation of mutant US children raised on radioactive toys and costume jewelry more powerful! Fools!
The gold bugs have already got the jewelry industry so screwed up they are putting cadmium in jewelry to poison and kill people for all the horrible wrongs they have done to them.
Once the system fails .. China will be in Alliance with Japan in a new Asian order, with the worlds communist.
Sorry, Chinese rabidly hate the Japanese
See "rape of Nanking"
the problem with china is the unusually high ratio of boys to girls who have grown up to make a society filled with men who have no chance of finding a wife. historically, when this has happened government has always chosen war to reduce the excess of males in their society so those males do not become a threat to the state
Consider the US postion during the late 1960s - it was fighting a very hot cold war with serious resources deployed in Europe , there was half million men in the rice paddies of Vietnam and the Apollo program was reaching its apex. This was US power at its most dominant.
40 years of monetarist policies and now the US would have a tough time engaging in a protracted cold war with a enemy , it seems incapable of fielding more then 200,000 soldiers on counter insurgency campaigns and it has abandoned its manned space programme that had such a positive effect on its prestige.
While I still believe that the US would win a limited war with China in such places has the Korean Peninsula or Taiwan , the Chinese military doctrine is changing and in a conventional war with the USA it might not play cricket or maybe baseball.
The Chinese navy is rapidly expanding its diesel submarine force both in quality and in quantity - while most readers would consider nuclear hunter killers superior , for inshore coastal conflict diesel subs are better as they are much quieter when underwater.
Large numbers of Chinese subs surrounding taiwan would make life very difficult for the US navy and the temporary isolation of Taiwan would make its invasion possible.
Interesting thread.
imho, I doubt we have a hot war with China, but protectionism in pursuit of creating jobs for Americans plus the politically cowardly option of QE will be an easy choice for politicians under the gun to produce or else in 2012.
My quess is that the current crisis ends up in trade zones supported by currency zones. And the Americas, with Venezuela warmly back in the fold as an ally after Chavez's accident becomes a militarily impregnable trading zone...self sufficient enough to hold on as Middle Eastern, European and Asian land wars over water, disease, resources and food take place
Then after that phase slowly the world gets put back together again
meh, sounds like political theatre to me
Good luck doing business with Tibet. Dalai Lama could have a lot of FX reserves to buy Treasuries.
How about "Our God is Bigger than theirs" or "Our member is bigger than theirs" :)
The US deserves what it gets ....in return for perpetuating useless bullshit war materials....
The US and others need to concentrate on true enterprise that actually supports healthy enterprise that serves the purpose to make all human lives better....not worse....
What goes around....comes around....
All the US has to do to make China bow down ...
is to shut down a few retail boxes....
ie COSTCO....Walmart....
Internal rioting in China would be just a few months away....
Sad part is.....Americans would be rioting in the streets because their most beloved retailers and only shot at having some stuff in their houses...was shut down by the govt....
In fact ....may be the next cause of the new US revolution....
A raging mad middle/low class housewife is truly the core boss of the US....
Sorry is the only thing that can be said about the anti-Americanism that is showcased in this post. America does have problems, not the least of which is the corruption on Wall Street, but China is still a much worse place for the average person. If there is a "cold war" between China and the USA, the biggest beneficiary will be the American economy, which has been hollowed out by Chinese currency manipulation and American complacence. However, fear not...China is a bubble that is about to burst.
i got a solution.
let's fire our government. problem solved.
Cold war? My arse. This means nothing. The US corporate relationship with China is so strong, it could almost be considered as an extension or an offshore manufacturing facility.
What should concern the Americans is if China falls into civil war. This may result in the liberation of the Chinese people and set itself up for a new, modern style constitution. This after all is what created the US.
All this warmongering on this MB is a total BS.
Any war is very unpredictable. Just ask GWB, Obama, Hitler, Stalin, etc., If someone think that America could not be invaded just look at a continuous Mexicans invasion. Their gangs will soon control most of US urban centers.
Unfortunately, too many Americans are too ignorant, poorly educated, lacking adequate intellectual capacities to think things through.
As for American military technological superiority, well, it cannot afford many items it has already developed. Look at a 5th-generation aircraft Raptor, Obama cancel any further procurements since America has no money for it anymore.
"Unfortunately, too many Americans are too ignorant, poorly educated, lacking adequate intellectual capacities to think things through."
It appears, based on your writing, that you are the poorly educated dumb ass.
We could take care of the gang problem in about 15 minutes if we just let some Seals loose in the inner city.
Gangs couldn't take on one swat team, let alone our military.
Master Bates, I am sad to inform you that the gangs
are well armed,organized, high in number
and now have military training, as many gang members
are ex military and have instituted military training
within the gangs. Its a very serious situation, that
we have allowed to go on for too long.
The police and swat are no match for our gangs.
It will require military force to dispose of
our gangs, should it come to that...
"shoot on site tats"
Bring it on China Man!
A major war is something that the U.S. needs. Not only for economic reasons, but also for patriotic reasons. It will be as ugly here at first as it will be on the front lines because the draft would immediately go into effect and corporations will be nationalized to produce the supplies needed. There will be mass resistance at first until everyone has money in the game (sons and corporate wealth). Whatever the outcome, we shall emerge as as one people, or die. If not the former, then we deserve the latter.
Volunteer War Vet
US will lose, no china spare-parts, no more china products.
And who is buying the new deb? Is anything working in the US without china?
US will relapse in the dark age.
My theory for the last year is that, at some point not too distant, the Mandarins will turn from making Western consumer goods for sale, to creating weapons of war for stockpiling. China has something like 1.5 trillion in foreign reserves, and if it were to redeploy this money to military Keynesisim, it could really bouy the economy, keep its masses employed and create a signficant military threat. How significant?
Short of nuclear, China could flat out win the next war. If I were the Chinese, I would invest all military spending into an order of battle set in the 1960-80s command-and-control technology. In other words, no satellite-dependent tech. Massive numbers of cheap, effective weapons systems to match China's massive population. On the first day of war, as the Chinese commander, I would blow up a couple dozen satellites, which would in turn become a sort of asteroid storm in the upper atomosphere. Within a few days, no satellites of any nation would remain (and there'd never be satellites again until the debris field cleared up, which could take decades, even centuries). Goodbye cell phones. Good bye long range communications. Goodbye eyes in the sky. Goodbye satellite directional systems, predator drones, accurate smart bombs, you name it. The world would be pre-Sputnik again. For America, we'd have a greatly reduced fighting capability, with much of our equipment at least temporarily, if not permanently, grounded. How would our units even communicate with one another, without the extensive array of satellites? And, since we have almost no manufacturing capability, in a hot shooting war, we would not be able to rearm with lower tech gear very quickly at all, since first we'd have to build the factories to build the weapons and that would take at least a year, maybe two. Meanwhile, the Arsenal of Totalitarianism would be producing three 'Authority' ships a day to withstand our wolf-packs preying on the oil lanes from the MiddeEast. They'd produce a hundred B-25 Enslaver bombers, built by Rikyu the Riveter. You see where this is going? We have cut off our own balls to feed a ruinous financial system, but in times of war, banks can't build bombs.
America is a hollow giant. And the Chinese warlords are beginning to take notice. You don't think they haven't already strategized along the lines of what I say above? I wonder if we have. Give me access to China's industrial machine and fascist society and inside ten years, I could build a military to whip America.
Sorry to disagree:
Your assumption is that the US would invade China proper. Never happen.
Your second assumption is that manufacturing cannot be rebuilt very quickly under full mobilization...and that was not true in WWII so why would it be slower now? Why would it be any slower than China's ability?
We should also remember that the spending gap is closer to a recent increase of 50 billion in defense spending for China to 600 Billion per year for decades for the USA...not including wars we are fighting.
Next, our military communications do not depend on civilian networks and have many levels of redundancies. Most especially, Submarines and ICBM's do not need satellites...the codes already are programmed...they just need one of the many redundant modes of a trigger signal (which include underwater signals, hardwired telegraph and telephone, radio, etc).
The answer to your question about our degree of war gaming for war with them is yes and a hundred times over.
We need to remember your plans require oil....less of a problem for us next to Mexico, Canada and Venezuela than it is for them
Their planning, without a navy has to recognize the vulnerability of our closing the waters near Hong Kong, Indonesia and the Straights of Malacca...where their raw materials are transported
We should not forget they have an ever tougher time feeding themselves.
We should not forget that between Diego Garcia, our bases in several Stans and Afghanistan, and Mongolia and Japan and Okinawa and Samoa and Australia and Alaska and our subs and aircraft carriers we have them surrounded by planes and cruise missles.
There are many things for us to worry about in the world...but our military strength is not one of them...nor is our war fighting capacity when we put our mind to it (not a good thing...just is)
I think we are the enemy who will defeat us...not China. Ends with a whimper not a bang. imho
Good points. I still think a fight to the death with China would not go our way, if for no other reason than your last point: we are the enemy that will defeat us. America is fractured and feckless, just as the Germans erroneously believed us to be in 1941. Do you honestly think the narcissistic, face-booking, party kids of today would fight the good fight. Maybe, but I'm not willing to be the ranch on it.
Here is a counter thought to the war with
China scenario. China has woken up and
does seek to regain its manhood by taking
on those that abused it in the past. But
now awake - they look and see a seriously
weakened Europe. Their former imperialist
overlords are no challenge. But wait
there is a foe that can be challenged and
a victory that might satisfy this need.
Unfortunately this foe also had to fight
those same colonial imperialists. This
foe spilled its blood on Chinese soil
in its defense. This foe has many Chinese
immigrants living within and contributing
to it. Generations.
Would it be right to channel all that
angst at the European imperialists at
this kind of foe? Will their heart
really be in a fight with this foe?
Will the foe really have its heart in
a fight with China?
Is there truely a basis for a fight?
We don't really want to fight them.
They don't really want to fight us
but there isn't anyone else left to
fight. They woke up too late.
What Europe did to you we understand
but it wasn't us.
Another delusional US citizen, I suppose, who cant but picture his nation as a benevolent one. The US was deeply involved in Chinese poor shape at the beginning of the 20th century. Without counting that the US mocked torture on Chinese at the hands of Japanese during WW2 by offering Japanese war criminals amnisty for their crimes if they handed down the results of their biological researches.
Solve global warming - Nuclear winter!!
Funny they get riled over a measely 6.X billion in weapon sales to a nation they trade with a on a daily basis while accumulating a 30-50 billion a mointh trade surplus with us, if we really worried them they could always stop giving us an extra 30-50 billion a month in additional credit.
“We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,”
Its nice to see that the Chinese media favors idiots too.
Iran, North Korea, Syria, Cuba and Venezuela all suck and are shedding population like fleas leaving a dead dog.