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The Empire Strikes Back: China Daily Warns About Currency War, Blames Dollar
You didn't think China was just going to do the rockaway and lean back, lean back, lean back. Nope - China Daily says: "A currency war is spreading as the dollar's value against major world currencies has continued to decline in recent days" and calmly confirms what everyone esle knows: "It is the dollar that triggered the currency war. Seemingly a market move, the depreciation of the dollar is actually active." Check to you, Tim Geithner and your currency manipulation report. What is remarkable, is how simply and accurately CD writer Li Xiangyang captures absolutely everything that Bernanke is trying to achieve.
From China Daily:
A currency war is spreading as the
dollar's value against major world currencies has continued to decline
in recent days. Some developed countries have begun to intervene in
their exchange rates. The recovery of the global economy will suffer a
negative impact if this trend is not checked.It is the dollar that triggered the currency war. Seemingly a market move, the depreciation of the dollar is actually active.
The
U.S. Federal Reserve's statement that it might restart quantitative
easing — a policy central banks use to increase money supply — triggered
the depreciation of the dollar. The dollar's value against the basket
of currencies has decreased by 7 percent since the U.S. Federal Reserve
began talk of possible quantitative easing.The move nominally
aims to further drive down the interest rate in America to prevent the
occurrence of a double dip. But it will affect the value of the dollar
too, prompting the dollar's devaluation. In light of the history low
short-term interest rates in the United States, a further decrease in
the interest rate will drive the flow of short-term capital toward
markets of emerging economies, quickening the appreciation of their
currencies.Second, the U.S. government's strategy to double its
exports within five years needs the considerable depression of the
dollar. For America, boosting exports is a must in the post crisis era,
because it cannot pin its hope for economic growth on the prosperity of
its real estate market and consumption based on borrowing money.Obviously
boosting exports relying on the competitiveness of U.S. companies is
not realistic in the short term. Nor is it possible to be realized by
the strong demand of its trade partners. None of America's trade
partners — except those emerging economies — are able to achieve growth
independently. Judging from the course of history after World War II,
considerable depreciation of the dollar is the sole possible option that
enables America to realize the goal. In this sense, driving down the
value of the dollar has become an important choice in policy for the
United States to recover the sluggish economy..The last but the
most important point is that in the long run the considerable
depreciation of the dollar will help America to transfer its debts to
others. If we say the international financial crisis nationalized the
private debts, then in the post-crisis era, the United State sees an
urgent need to internationalize its debts.A great amount of bad
debts of American financial institutions have been converted to
government debt through government aid measures. In 2009, America's
fiscal deficit stood at 1.42 trillion dollars, 3.1 times the 2008 level.
The deficit ratio surged from 3.2 percent in 2008 to 10 percent to a
new high since World War II. The debt of the federal government
increased to 6.7 trillion dollars, representing 47.2 percent of its GDP.
In 2010, the fiscal deficit is expected to be around 1.32 trillion
dollars. How America retains economic growth while reducing the deficit
is a big problem for the country.Historic experiences show
debt-to-GDP ratio is not directly linked with economic growth and
inflation (even devaluation) in most countries. But the United States is
an exception because the dollar serves as the world currency. For
instance, the ratio decreased from 121.2 percent in 1946 to 31.7 percent
in 1974. Of that number, inflation accounted 52.6 percentage points,
economic growth contributed nearly 56 percentage points and federal
surplus contributed negative 21.51 percentage points. Even if the United
States denies its motives to transfer their debts, it will unavoidably
happen in reality.
Given a sluggish economy and huge amount of
debts, driving the value of the dollar down is in line with America’s
interests, both in short term and in long term. The international
community ought to stay vigilant about the strong motive for active
devaluation under the guise of a market-based move.
By Li Xiangyang, translated by People's Daily Online
Who would have guessed those Chineses know exactly what the Fed is doing...
h/t Geoffrey Batt
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Beautifully written. It doesn't rachet up the rhetoric one bit but it does inform emerging economies what is going on ahead of time.
The plot thickens. Or as the apocryphal Chinese curse so elegantly puts it, "May you live in interesting times" ...
Timmah is rumoured to be attending a oral sex seminar this weekend to refine his abilities in giving a proper blow job.
All kidding aside, this boils down to first to blink strategy and the last to react will be holding the party bag.
Don't really put to much stock into this. The progressive's are orchestrating the propaganda campaign.
Finally, capitalists we can belive in, the Communist Chinese.
Hey, the Brit's and us taught them.
this article is poetic in its truth and honesty - something we all know will never be seen from the bankster controlled media outlets.....all hail the chinese free press!
Am I the only one who thinks we've already had the currency/trade war with China, and lost? This shit is ten years too late. Look around your house....do you see anything that was made in America?
This is like a married couple that constantly bickers. They don't really like each other or have to be associated with each other but they can't make it alone. So they just bicker, bicker, bicker.
Not good for AAPL, Harry.
Frankly, it times like this that the forty-somethings in the Shanghai faction are going to tilt the China machine too early. All China has to do is publicly say they are suspending buying dollars and expand their capital markets for corporate debt denominated in CNY. 'Nuff said to everyone. The plan is to turn Shanghai into NY and the USD into CNY. Reserve currency is backed up by machines and people that make industrial goods. Not debt.
http://www.youtube.com/watch?v=iSL-chxmuEA
Stacking batteries ...
http://www.youtube.com/watch?v=IXThiC0D88Y&feature=related
Welding ....
http://www.youtube.com/watch?v=ao1lHLshAKc&feature=related
What happens if we start building mega factories filled with robots ??
Never gets hungry, no benifits, does not talk back ... China would have millions of factory workers idled by this, im sure they will be building all forms to perform all kind of task.
SkyNet?
Japan ...
What makes you think the wealth would trickle down from the automated-factory owners?
So now you have 300 million of idle Americans, and a small cabal of wealthy owners, and a bunch of tireless robots. What makes you think you won't be due some "pruning"?
I for one never understand why most people fail to appreciate their lack-of-value in a robot driven society.
The Chinese should be delighted about the weak dollar. Since the yuan is pegged to the dollar, a weak dollar automatically means a weak yuan. With no effort on their part. And a weak currency is what every government seems to want these days.
Internal inflation is killing them. I know people who visit there fairly often and they are stunned at how fast the prices move up. The way the system works is basically the US gets to export their inflation to other countries, such as China. It will come a time when it will be safer politically to let the currency go higher rather then deal with rampant inflation.
They send us consumer goods, and we export our inflation back in exchange. What a deal!
Perhaps chronic inflation might kindle a desire for PM's among the Chinese citizenry.
This is one of the best ZH post I have read. The chinese know what is happening. They will move and ask their trading partners also to move either from "dollar reserve" settlement to "mutual currency reserves"(based on trade volume or to outrigt "Gold reserve" for trade settlement.
Direct currency exchanges are what the Chinese have been putting together with their other trading partners over the last year and their efforts have been stepped up recently. I don't keep careful track, but I believe they're up to six such arrangements. It's only a matter of time.
The next step would be to settle trades in RMB with the trading partners in Asia, especially those with close affiliation, such as Singapore & Taiwan. Settling in RMB (rather than USD) would be less risky for both parties. I can see this catching on.
AAPL is in pretty much every portfolio there is. Everyone in the money world owns as a "key holding" or "top pick". So who's still buying it?? Who's left??
This ain't GOOG which had people on the fence before earnings. This is the 2nd largest company in the fucking world that everyone loves and expects to do great things. No short interest to be seen.
So if everyone's in it and there aren't any shorts and expectations are huge, isn't this setting up for one of the biggest disappointments in modern times?
Not going to bet against it but when something is too good to be true...it's too good to be true.
OOPS - posted under wrong story. Sorry.
What's strange about this picture, Harry? You could have edited it out if you REALLY didn't want it posted in the wrong thread, no?
+1 Bob - I take back junkin' you on that other post.
China has manouvered us into such a position that it's impossible to get out of without horrible austerity and pain.
That is total BS. Its like saying, "the drug dealer made me lose my job, my house, my marriage and my children." That attitude it THE problem with this country. WE maneuvered ourselves into this position through sloth, greed and corruption.
I posted a link to this article - http://neithercorp.us/npress/?p=842 on another article earlier this week. Most germane to this conversation is the following section:
Don’t Bring A Penknife To A Gun Fight
China has replaced the U.S. in terms of export markets. The ASEAN trading bloc has been very lucrative for the Chinese economy, surging 55% in the first half of this year:
http://english.peopledaily.com.cn/90001/90776/90883/7080846.html
They have turned $100 billion in trade with Africa:
http://english.peopledaily.com.cn/90001/90778/90861/7157077.html
They have been expanding trade with Europe as well as political ties:
http://english.peopledaily.com.cn/90001/90777/90853/7157562.html
http://www.chinadaily.com.cn/china/2010-10/04/content_11377035.htm
I’ve said this a million times and I’ll say it a million more; China does NOT need the U.S. any longer. It astounds me that mainstream economists still spew nonsense about China relying on American consumer markets. This is in no way true.
+ 2,000,000 !!
The statement is complete bullshit.
Let them break their peg and float the CNY if they don't need the dollar
Chinese agit-prop comes to ZH.
Any news on how your 371 masters are deciding your fate over the next five years?
Why is this agit-prop? If you read the whole article, you would know that the author references tons of articles from different countries (including USA).
I understand why it is important to cast a critical eye on any article but not sure why this would be agit-prop. The articles cited are not Op Eds - they are reporting on some economic fundamentals that could be easily verified.
Try reading some accounts of news that do not come from Fox or CNN.
Brother believe me, if there's one thing I do too much of, it's reading. Those two sources don't really fit the Bill ... (ha ha).
Point taken though I am astounded quite often on pessimism turned inwards on ZH posts that, if given a critical eye, serves better from a propaganda perspective than anything the boys in Beijing can dream up.
On a note that only the paranoid can appreciate, It would surprise me greatly if Beijing were not already participating on ZH ...
Obviously boosting exports relying on the competitiveness of U.S. companies is not realistic in the short term.
Those last four words are kind of redundant.
Shit, they're on to us.....!
For a more comprehensive and illuminating examination of the currency issue, take a look at this piece that was posted at ZH on Wednesday:
http://www.zerohedge.com/article/why-imf-meetings-failed-and-coming-capi...
This gets seriously into the issues that the post above only alludes to. The currency wars are not only about exports of physical products--in the China-US case, those products are a minor portion of the balance of trade situation.
A great 2 page read.
I am waiting in vain for Tyler to announce that Stock market rallied 2% in Gold terms..
If China wants to get the US consumer back online they need to do the dirty deed and dump USTs. Poke the Fed in eye and help the US get it's head out of it's ass. The sooner this is done the faster things will turn around.
China only needs to state that it intends to accelerate its gold purchases.
This seems so asinine. Every goddamn central bank in the world is manipulating the dogshit out of their currency if they have enough to do so.
So Timmahs like "No fair China, Im thinking about calling you a currency manipulator!!
Then Chinas like "Whatevah, YOURE the currency manipulator".
Then Timmahs like "No way"!
So Chinas like "Dude for real, your such a currency manipulator"
Did Keynes ever envision the whole friggin world attempting to debase their currency at once? A debasing arms race? I guess it works better when just one superpower at a time prints their way out of debt.
Aussies are waiting for currencies to be so debased they can buy up the world.
Agreed, but china has what is important, the mighty industrial base of the United States. China could write off their treasury holdings, and still be money ahead. It will take us a generation to rebuild our mfg base, if we are lucky.
Maybe, just maybe, if China could get mom and pop back into equities we could continue buying their goods.
Ben / Timmy - you listening?
This article is both an explanation of what is going on and a cry for help. The PD produced a perfect synopsis of what Bernanke is doing, though it might be fun if they woiuld also produce an article detailing what China is trying to do. They won't, so I'll give it a shot.
China has a plan. China has very specific needs, not the least of which is for the CP to remain in power. Power is a kick, plus everybody in power and his family gets sinfully rich. This recent dollar debacle is throwing a (poorly made) monkey wrench into the works.
China's goal is to prosper so that the CP remains in power. To prosper China needs to control whatever is able to be controlled. No variable is too slight to at least give a shot at being able to direct it.
First, China needs a weak currency, at least vs. the country that represents 175% of its trade suplus (US). Domestic consumption is a longer term goal, but it cannot be achieved in a year or five. Thus, somebody has to consume all the shit that employed Chinese workers churn out. That responsibility falls on the US. Throw tens of millions of high expectations Chinese workers out on the dirty streets, and the CP may not live to see tomorrow. On top of that, China still has about half a bazillion peasant farmers who have photos of the Mercedes they hope to be driving one day hanging on the wall of their hut.
Longer term China can let the yuan go, and even now they can take small steps to begin to establish it as an international currency, as they are doing in side deals with places like Indonesia, some SAmerican countries, and some eastern European ones with swaps.
China has spent a lot of money and political capital trying to prop up the yen and euro, so that even if the yuan rises a little vs. the dollar, they don't lose any competitiveness. China makes statements about "diversifying" into euro instruments, and makes a very publicly display of its loss leader in Greece (buying Greek debt). That supports the euro. This is less a vote of confidence in the euro, or lack thereof in the dollar, then it is a policy aimed at keeping China and its dollar pegged economy competitive.
With the yen, China has been bidding for everything the BOJ tries to intervene with, rendering that activity useless, and they have been keeping a tight and rising bid on the yen for at least the last year.
China runs trade deficits with Japan and Germany. Why? Part public relations (see, if you try really hard, we'll buy from you), but more importantly they are cherry picking technology which they hope to reverse engineer. Germany and Japan, both now falling prey to short-termism, are letting their competitive advantage walk away. This will come back to haunt both. A side goal is to take Japan down its last notch, leaving China King of the Hill in Asia.
To insure that it is the main or only provider, China is accumulating as much of the world's resources as it can get its hands on, concentrating particularly on energy and rare Earths. High tech runs off rare Earths, as does the modern military. It is no coincidence that China knows where Japan's "Uncle" button is, as during the recent Chinese-initated sea incident, the threat that won for them was cutting off Japan's supply of these elements. China's hubris got the best of them, however, when the welcomed this "fishing boat captain" back to the Motherland as a conquering hero after he purposely rammed the JSDF ship near the disputed islands. This hubris might well be their downfall, as it has served to put all of Asia on edge.
China also knows its main competition might come from India, so China is getting everything that India might need to grow and keeping it out of India's hands. Neighboring Myanmar (Burma) is a good example of this policy, as China has pretty much colonized Burma and has left mere crumbs for Burma's western neighbor India. China has also bookended India by establishing ports and military stop-off points in both Burma and Pakistan. China also has a hand in making sure Paki-India relations stay on a low boil, particularly as regards Jammu and Kashmir.
So short term China needs a weak yuan vis-a-vis the dollar. Longer term, after China has reverse engineered everybody else's bread and butter, hacked into corporate and military research databases for that which they cannot develop locally, and found a way to get the domestic consumer to be able to afford stuff that now goes out the docks to Walmart, they can let the yuan go. And never will they open their markets, WTO rules notwithstanding.
Along the way, when there are the occasional hiccups, China is expert at dragging out a bogeyman at whom anger and frustration can be directed, rather than at the CP. Japan usually fills this role, though the US takes its turn, too. It is sometimes tough to use the US, because the face of the US in China is little Timmy Geithner, and he is such a comic figure in China that it is easier to laugh at him than get angry. Still, when in need....
The US approach has been as foolish as it is unsuccessful. China is quite good at making people dislike it, perhaps better than anyone. Asia is fearful of a dominent China, and represents a natural ally to the US, who is increasingly viewed as the (incompetent) lesser of two evils.
The US should increase its dialogue with ASEAN, and at the very least open some sort of dialogue with Myanmar, where the next generation of leaders is already aware that they will rule in name only and answer to Beijing (Anyone who has a moral problem dealing with that regime should be reminded that China is guilty of every single thing of which the Myanmar government is accused, save for the fact that China never held an election the results of which it could ignore). India is also a natural US ally, and if Obama has a single success in his woefully inept Administration, it is that he has strengthened US-India ties.
If the US wants to fight currency and trade issues, it should concentrate on enforcing WTO rules so that China is pressured to more fully open its markets and respect intellectual property rights. With currency, both nations are manipulators, so the US' complaints fall on deaf ears. With markets and intellectual property, it is a different story.
actually, its much more simple than that. China, Han China, is an exansionist power. Its leaders think ahead on a time scale of centuries. There is nothing that they do from the moment they awake until they sleep but think of strategy.
Eventually, it will all come down to islam vs. china - winner keeps all.
This is potentially the dumbest post ever.
don't be so hard on yourself
13 nice post, how do you view:
1. Russia in the mix
2. Korea -as a flash point of conflict
3. protectionism as a tool against China
4.possible food shortages as USA witholds it's production from China
5. Impact of default of US and EU debt
6. Return of Nationalism in the west.
China walks a tight rope it's progress is built on egg shells that can also collapse into old policy
of hard line tyranny..
China is one rice bowl from starvation if the world is impacted by a change in weather (think cooling) ..
if everything turns out as you have outlined without the above hiccups It would be hard to disagree with you on the outcome.
I'll give it a shot, at least on a couple of your items, though I suspect there are some Russia experts lurking here.
1) Russia has traditionally been closer to one of China's long time rivals, India. I would guess Russia is confused. They would like to help push the US down, but they are no doubt also fearful of a powerful China. To some extent they have distanced themselves from India (though they have, by necessity, some long term maintainance contracts on all the military equipment they have sold over the years. If I had to guess, I'd say they would like the US and China to get into a pissing contest and weaken each other, then step in and pick up whatever pieces are worth picking up.
2) North Korea is a thorn in the side of China. Myanmar is a much better ally, because they are pliant, easy to please (money), not especially bright, but not batshit crazy. Yes, Myanmar wants nukes and is actively pursuing them through North Korea, Russia and the Ukraine, but the Myanmar regime's goal in acquiring them is part macho driven and part a desire to be left alone by appearing too tough to mess with. Though China does not particularly want Myanmar to be a nuclear power, China knows the regime is extremely unlikely to ever use them even if they could acquire them. With North Korea, China cannot be sure. The Dear One is not completely rational, and he has elements within his own military on which he needs to keep an eye, or act tough to appease the more hawkish amongst them. His young son and apparent heir is the sort of person who spent his youth torturing cats, and it has been reported that he was the one who initiated the recent sinking of the South Korea warship to prove he has what it takes to play hardball. He also does not have the power base that even Kim Jong-il has, so when he does take over, China probably suspects that one element in the military or another will try to remove him. If a hardline element takes over, it would only compound China's problem of being a kind of baby sitter to the silly and unpredictable regime.
3) Protectionism as a tool: Unilaterally this will fail, but if addressed within the framework of the WTO, China will have to do more than issue a harsh rebuke. If WTO members alligned to press China on market opening and intellectual property, the CP would lose some face domestically, and may be forced into making some sort of concessions. They would probably try to drag it out within the WTO grievance framework forever, but it would still be a slight embarrassment. Anyway, as my post above opined, China is trying to buy all the time it can to remake its own economy.
Excellent post your prior one, and this one, one China's real agenda.
I'd like to add the only (long-term) way for both sides to be happy, is removal of the CNY peg.
Chindit13's comments are exactly correct (I have 25 years on the ground in China & life long Chinese National friends for you noobs).
I wanted to emphasize a couple of points.
1) The power in China is help by the Communist Party. There is no discussion about any sort of "trilateral commission" or Rothschild’s family. The power clock was reset when Mao came to power. The CP is Opaque, there is no audit, no review, no "investigative journalism" no FOIA. What they say goes & you will never know the truth. The CP holds the power & they are the 2nd largest economy in the world.
Anything that threatens the CP will be neutralized or controlled, whether it is a peasant uprising, or a monetary attack on their currency. They are focused, purposeful and they need not answer to an electorate or justify a budget. If you are foolish enough to take on China head on. You better be loaded for bear.
2) China will NOT open its markets to the outside unless it serves them. They have been accumulating strategic resources, globally, with their huge war chest (oil leases in Texas now). If China “closes its doors on the world” again (as it has when it has historically suited them) it will not mean that it closes its borders, it will mean that they have enough trading power and resources to tell the rest of the world “it’s our way or the highway”.
3) You do not know how the Chinese think. The historic background is 180’ to western way of thinking. The entire construct of the language & interpersonal communication is beyond your understanding.
I "think Chinese". I can “get it right” most of the time. But, after 25 years of almost daily interaction (& I started in my early 20’s) I still have “Damn….” moments when I realize I had an assumption about a cultural viewpoint that was way off base, because you can not extrapolate from your western background, or extrapolate based on your Chinese and western background…the western background does not work there.
Finally, Chindit13 suggests it would be in our interests to try & make an end run around China by engaging its neighbors. That is exactly correct. Read Sun tzu. Read it a dozen times until you get a feel for the mindset. This “Western Cowboy diplomacy” will not be successful in China.
+1.3 billion (except I don't believe any of China's neighbours -- even Japan -- would trust joining America in any such end run).
Also, Burma is out of the equation for any changes any time soon ... the oligarchs already have that one locked up and they support the military junta as a protector of opium/heroin for their tax-free income (the same reason they have US/NATO continuing in Afghanistan fighting a few stone age tribesmen).
The drug trade is an increasingly small part of Burma’s economy. They now account for only 10-15% of total worldwide opium/heroin production, vs. as much as 85% ten years ago.
Burma is incredibly resource rich, not quite up to Canadian or Australian levels, but rich nonetheless. They have SEAsia’s largest proven natural gas reserves, and gas sales now account for upwards of 80% of all government revenues. All production forever has already been sold, or at least is under contract. All to that copper, nickel, tin, gold, platinum, molybdenum, antimony, chromate, iron and rare Earths, and drugs become somewhat inconsequential. On top of that, there’s hydroelectric power rights to be sold to China, 85% of the world’s remaining teak, about 95% of the world’s quality jadeite, conveniently, and not so coincidentally located next to the world’s main buyers of such, and decent exports of beans and pulses, seafood, and some meats.
China controls just about 100% of everything, save for a few crumbs tossed to Malaysia, Vietnam, India, Russia and Singapore, and the long standing contract between Total/Chevron and Thailand for gas.
What remains of the drug trade is controlled by ethnic groups like the Wa, various Shan militia groups, Kokang Chinese, Kachin, and the neighboring PLA of China.
Thanks for the update. Looks like the Chinese will keep the junta in place then rather than the euro-thugs. As you know, the Chinese are not big on 'democracy' or 'sharing'.
Another thought: Burma would almost be China's first imperial 'conquest' in a few thousand years (since they consider Tibet, part of Kashmir and N.Vietnam as part of their historic home turf).
I think they are going to “Tibet” the place if and when the junta decides that the money they get does not overcome the loss of face for only the thinly veiled appearance of sovereignty, and takes exception to China‘s neocolonialism. In fact, the only thing holding China back now might be that the ink has yet to dry on the recently discovered “ancient” document that grants the Middle Kingdom rule over Ava/Pegu/Amarapura/Burma/Myanmar. So in China's eyes, this will not be a conquest, but rather a repossession, in keeping with the times.
Just correcting my previous post (was blocked by your reply before I could get to it): China prefers "suzereignity" (puppet local ruler owing allegiance to the Dragon Throne) to direct conquest and direct rule ... which is how they treated N.Vietnam for 1,000 years (and, in all likelihood -- I don't know for sure -- the whole of Vietnam now). If the Burmese junta behaves, they can stay forever.
That is also why the CCP are quite happy with the "one country, two systems" for Hong Kong -- soon to be expanded to "one country, three systems" when America can no longer afford to support Taiwan.
In Asian culture direct confrontation is avoided. Its not what you say, its what you do that matters. American politicians are totally pathetic. Its all bombast. There is no big stick because our economy and lazy entitlement minded slugs (look at the deficits for proof) make us look pathetic in the eyes of the rest of the world. Its all going to collapse in the next 5 years or so.
Dear Chinaguy...You raise a very important point "You do not know how the Chinese think."
I know I don't. I have an Iranian friend who used to say essentially the same thing "Americans do not know how Persians think."
She related a story that demonstrates this in a small way. It's about what happened in Tehran when her parent's Persian carpet was stolen. It was a giant room-sized carpet that was custom made and cost a small fortune. It was stolen shortly after it was delivered. Within about a week, my friend's father got a call from the police telling him that the carpet had been recovered. He went to the police department to reclaim it. He met with the police chief and told him he would like to offer him a reward for finding the carpet. He offered the policeman (I'm estimating) $1,000. The police chief refused the money. "Thank you very much, but I couldn't possibly accept. I was just doing my job." My friend's father made another offer. This time $2,000. Again, "Thank you very much, but I couldn't possibly accept." My friend's father made another offer. This time $10,000. "Thank you very much. I will find someone to help you get the carpet back home."
MW, I also spent 2.5 years living in India when I was a pup. The Indian mindset is entirely fathomable compared to the Chinese mindset.
What I liked in India was when you were going to bribe a bureaucratic office (for an export stamp or something), the price of the bribe was known, practically published quarterly, but for style and smoothness of transaction....you first walked past the office door & noted how many guys were inside...then you made sure that you had the amount of the bribe equally divided by the number of officials inside...When those guys saw a) you had the correct amount of the bribe and b) you had the savvy to have pre-equally divided it...You got the stamp and a smile. Got to love that bureaucracy left over from the British.
Moving further NW into Afgan & Iran, things got more tricky.
Fragrant grease for sure.
Yes, as much as we like to hum along with that irritating Disney classic "It's a Small World After all", we are not all the same and think quite differently. I also think that what we term "logic" is most often dependent on an underlying group of assumptions to which everyone does not necessarily subscribe. So my logic is not someone else's, and vice versa.
Three examples. I spent a number of years in the Middle East, where we are now trying to impose democracy. It's a hard sell because most of the inhabitants have only known monarchs and strongmen, and many of the people actually take a certain comfort in the knowledge that there is someone "better" than them, or more powerful, in charge. I try to view it through the same prism as religious people, who feel much better thinking that rather than exisiting in a random and out of control Universe, there is somebody in charge. Sometimes even malevolent is better than complete randomness, as it has a certain predictability.
Another example is Japan. Japanese colleagues would often get into a discussion of Western decadence, which usually referred to the high divorce rate, multiple sexual partners, and general infidelity. If I ever commented that---other than divorce---those behaviors are even more rampant in Japan, so Japan must also be decadent, the response usually was, "but we Japanese do not consider this behavior as wrong as Americans do". In other words, in Japan it is not the behavior per se, but whether the behavior violates a particular societal rule, sort of the equivalent of me eating a pork chop vs. a Moslem or Othodox Jew eating a pork chop. Decadence is not an absolute.
In many Buddhist countries, there is a view that possession of something like great power or great wealth is okay no matter how it was acquired, since the mere possession of it is proof of a karmic reward for good behavior in a past life. For Westerners who adopt Buddhism, it is a philosophy, but for the locals, it is both a religion and a way to define society. Thus, when some American politician tries to shame the corrupt leaders out here, it carries little weight and actually leads to a kind of confusion, as in, "How can Hillary Clinton say we are evil; can't she see how rich we are?".
US policy fails a lot because policymakers do not appreciate the cultural differences, instead assuming we all think the same.
Backenegeenring techology is not sustainable. What you are saying is that if someone cheat on a math exam in first grade because he is sitting with a good student this guarantees success through his life. The good student might not be there in the 2 or 3 grade or might protect himself.
Cheers to command planing economy ! Karl Marx books on increased sales after the crises.
I can't help but think that both Hu and Wen have signs on their desks "The Buck Stops Here."
Finally an intelligent comment. Carry on.
I think opium is the answer
i think cannabis is an answer, but not for china. and not for what everyone thinks.
i also think there is no THE answer.
Just when I think you can't get any funnier Tyler you gotta go and reference Fat Joe.
* moved
When AAPL rolls over, look out below. That will start the Correction. QID.
So traders are by and large rampant idiot nationalists. Good to know. Have any of you genisus done an evaluation of who runs out of what when were there to be a trade war. We run out of consumer goods (stuff like lightbulbs and diapers), printed circuit boards, medical equipment, auto parts, aircraft parts, all electronic supplies and all consumer goods within three months. All they run out of is dollars and they already have enough of those to last longer than we will. Yeah sure - let's pressure them. Regan and the politicians who followed his lead converting us to a "service economy" were such dildoes. Time to pay for our mistakes.
GOLD updated chart showing parabolic move.
http://stockmarket618.wordpress.com
The only certain way to avoid deflation? Print USD and buy foreign currencies (respectively assets denominated in foreign currencies).
In his speech on October 15, 2010, Ben Bernanke implicitly endorsed this (very straight-forward) policy recommendation by referring to a paper, which prominently features this deflation-fighting tool-kit. Link:
http://dss.ucsd.edu/~jhamilto/zlb.pdf
Granted, this is not, and will never be, the official policy of the FED. But why is it, that the market action exactly follows this playbook? At least until last Friday, when the trend was hit by a bumper in the road (USD up, commodities down). And the bumper was - surprise, surprise - Ben Bernanke's cautionary tone in his speech of 15 October 2010. This paradox is something the markets will have to chew on for a while.
What a mess.
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Yes sir