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Pot Meet Kettle: China Blasts Bernanke For Promoting Another Asset Bubble Via Dollar Carry Trade
The dollar carry debate just got serious. Because when the biggest blower of liquidity-driven asset bubbles, promoter of casino markets, distributor of made up economic results, goal-seeked GDP data, erector of ghost towns and various other imaginary economic artifacts (i.e., China) accuses you (or in this case Ben Bernanke) of creating a "huge dollar carry trade" which is posing a "threat to the global economic recovery" you know we are past the pleasantries stage. Whether the accusation coming out of China's chief banking regulator is a preemptive bargaining chip to prevent discussion of renminbi appreciation (as discussed yesterday) or an objective realization that the global asset bubble inflation is occurring purely on the backs of whatever is left of US savers, which can only continue so long, the bottom line is that China is taking a direct stab at the extremely myopic American strategy to print at least one dollar for each dollar on the asset side of banks' balance sheets. One thing is for sure: when the soon-to-be-biggest world economy sees right through the only trick left in the Fed's hat, the time to unwind the carry trade is approaching.
The US Federal Reserve is fuelling “speculative investments” and
endangering global recovery through loose monetary policy, a senior
Chinese official warned on Sunday just hours before President Barack
Obama arrived in China for his first visit.
Liu Mingkang,
China’s chief banking regulator, said that the combination of a weak
dollar and low interest rates had encouraged a “huge carry trade” that
was having a “massive impact on global asset prices”.
And yes, China can return the favor of monetary criticism, especially when the Kettle (and especially its central bank) is the entity that taught not only the Pot but every other kitchen appliance in the fiat monetary system how to get out of each and every patch of sour economic conditions: print, print, print.
Mr Liu’s unusually blunt remarks underscore how China – the largest US
creditor because of its massive holdings of Treasury bonds – has become
a trenchant critic of monetary and fiscal policy in the US.
Yet as pointed out earlier, this is merely a lot of mutual blame which will likely end up nowhere fast, at least not before the imbalances in the monetary system become all too strong and scuttle the entire money printing structure.
However, Mr Liu’s criticism of the Fed comes as China’s own monetary
policy is attracting growing scrutiny at home. Critics say the massive
expansion in bank loans this year could cause asset price bubbles and
inflation.
The biggest winner out of all this (as we have claimed from day one): companies that make weapons-grade amounts of ink cartridges for currency printers.
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time to roast those USD shorters buttholes.
King Bear on the SPX lies in Wait
It will be interesting to see if Asia equity markets unwind as hard as Western ones (or nearly so).
Then we'll see just how strong a USD China wants.
Frankly, I still don't see anything on the horizon to dissuade me from my thesis: We will need an new, non-debt based currency in 1-2 years.
Why does ZH comments system double post sometimes? That, and whether a wet duck flies at night shall remain eternal mysteries...
All birds do not fly at night.
Tell that to the owl at the end of my drive.
Good point and pilot's are glad that there are few.
This is Bat country.
must see...
http://www.youtube.com/watch?v=XGxBizeiL3s
Let's get down to brass tacks. How much for the ape?
...two bags of grass, seventy five pellets of mescaline, five sheets of high-powered blotter acid, a saltshaker half full of cocaine, a whole galaxy of multicolored uppers, downers, screamers, laughers...quart of tequila, quart of rum, case of beer, pint of raw ether and two dozen amyls.
The snake eating its tail.
As all such of that particular type of the species eventually do. It is their nature.
Interesting. You think Chinise don't understand that they sold to the US value/products, and received back paper (we still call it 'money'), which will turn to paper officially later? I think they will not let US go that easy.
at some point the chinese have to face the conundrum of selling us securities and buying hard us assets
yes that will torpedo the bond market sending rates highe
but whats their choice...sooner or later rates will ris
either they turn the iou s into real stuff or get flushed down the toilet with the rest of the fiat ass wipe paper that uncle sam is mass producing
There's a difference. They know, the US has to pay. If they lose the money, they will not forgive. Such things are not forgivable on the East. They will revenge. It is a part of eastern (asian) culture to wait calmly, and then revenge. Japanese, for example, didn't forget anything.
Arcturius - what are they going to do? They gave us valuable products for worthless shit paper - they did it with their eyes open. They made a mistake. Learn from it and don't repeat it. We are not their "fellow comrades". Maybe they should stop trying to control everything, and let their people trade freely. They have no one to blame but themselves. The US is right in this case, IMO.
Disagree. They gave us cheap tools, rotten electronics. All the tools broke. The electronics are litering our landfills. They still have the dollars. Now who REALLY got screwed here.
"All the tools broke." sure they did bro, 100% of them.
"The electronics are litering our landfills." I dont know wtf you are talking about here, most consumer items are manufactuered in China and are sold in the US at an affordable price and work fine.
Anyhow, lets get back on topic: "ZOMG gold is teh only currency and is going to $5,000. USD gonna collapse so I can move into mah bunker"
And how did Japan get revenge? They may have not forgotten but they didn't do anything about it.
An righteous mercantilist rant.
Japan did this (carry trade/zero percent rates) as well in the 90's.. the Nikkei went up, as did other asian stock markets. In time, they all crashed, and the Nikkei has yet to really recover. With p/e ratio's out of whack on the S&P, we maybe nearing a top. Stay nimble my friends.
Time attempt a dollar rally so they can try to flush out silver and gold longs and let the boyz cover their shorts before December Comex deliveries show us how little silver is around to meet delivery obligations.
i know, i just added more charcoal to the pit, im looking to slow roast the bulls. Im calling the sirloins though....
:)
Just because it's a pot and kettle routine doesn't mean it isn't true.
FREE SERGEY MONDAY
Calls for Facciponti to be investigated
Why is Goldman allowed to possess market manipulating software?
http://www.crimeandfederalism.com/2009/11/aleynikov-hearing-on-monday.html
For past 18month FED start to play the same game PBC played for 10yrs. True losers are ECB, Japan and ASEAN nations. So, a bit longer and they will join in. BOJ probably will be next, then some ASIANs will follow, and after that ECB will have no choice but join the party... Good bye fiat, good bye...
However, Mr Liu’s criticism of the Fed comes as China’s own monetary policy is attracting growing scrutiny at home. Critics say the massive expansion in bank loans this year could cause asset price bubbles and inflation.
------------
Liu is a great comedian. The money printing in the US is all that is preventing a deflationary collapse in China. If the US government stopped running deficits and the US private sector deleveraged simultaneously, then US imports from China would collapse. And China would have riots in the streets.
Not that I'm a believer in Bernanke's printing, his and Geithner's plans are an abomination. They have shifted private sector debt onto the taxpayer, instead of eliminating it through the bankruptcy process. That is an evil redistribution of wealth from future taxpayers to currently rich bondholders.
Gee, I thought China was doing so great. You'd think a country with 1.3 billion people wouldn't need external demand for its economy to thrive.
Unfortunately for the Chinese, their brilliant leaders built far too many factories that barely break even selling to americans. They can't make money selling to local markets at prices local consumers can actually afford. They need to rework their production to have factories that can make money producing for local consumers.
or they could just let their currency float...
Nope, the Chinese just need to print more cash and get it into the hands of (underemployed) factory workers. They also need to convince the savers to start spending more.
The economy will be fine when everyone in the world is deeply in debt.
Right?
Liu has been free to de-peg his currency any time he wants to in the past decade or so.
As a taxpayer in the US how does a depreciating dollar help me? Doesn't one want their dollar to appreciate and not depreciate? Also,why manipulate the price of gold down?
What good does this do the average joe?
What makes you think they give a flip about the average joe? Have you seen any evidence of this?
+1000
Let me put it bluntly. They don't care.
1. USD low -> labor cost low -> more exports -> more jobs for Joe
2. RMB low -> labor cost low -> more exports -> more jobs for Chen
3. GOLD low -> makes Joe and Chen spleep well as they think USD and RMB is high...
Gold never change value its fiat goes up and down...
Every time you post about gold, God kills a Fiatsco. Please, think of the Fiatscos.
Alas, poor Fiatsco ! I knew him, Horatio
Meh.This is just Kabuki theatre.
China can blast Bernanke all they want for blowing another bubble.
The U.S. (and the rest of the world) can blast China all it wants for keeping the Yuan pegged and underpriced.
Neither of these things are going to change, until it becomes in the best interest of each country to change. Or unless the whole system comes crashing down.
“The best interest of each country” is not always how the power elites operate. They first operate in the best interest of themselves; in the case of the U.S. it’s the financial plutocracy; in the case of China it’s her totalitarian regime. Sometimes the interests of the financiers and/or dictators of a country are the same as the interest of the people and sometimes they aren’t. In the case of the U.S. at present, the Fed is operating in the financiers’ interests; the investment banks are driving the so-called national interest at the expense of the American people.
Goldman’s and the Oval Office’s political partnership with Red Chinese dictators, pretending that commerce without human rights doesn't matter, IMO, is a disgrace to every freedom loving American.
Funny how the Chinese are attempting to muscle around the U.S.
When the reality is that they are bagholders stuck with a trillions of worthless paper.
And the U.S. Consumer is the huge winner because it used China's financing to purchase the following hard assets:
- SUV's and RV's
- Flat screen TV's, entertainment systems
- Jet Ski's, motorcycles, scooters, golf carts
- PC's, iPods, Blackberrys, Droids, NetBooks, iPhones, etc.
And an abundance of soft assets:
- Botox injections
- Boob jobs and penile implants
- Face lifts, tummy tucks
- Personal training sessions
- Life coaching seminars
- Various and sundry Get Rich Quick seminars
And we are holding all the cards. Because we could end China as we know it by simply defaulting on all bonds sold to China.
We will still have the goods we purchased with their money.
They will have nothing. Zero, nada, zilch.
What a bunch of pin heads.
Obama has nothing to worry about.
It's Financial MAD (Mutually Assured Destruction)...even if we do have all the stuff they paid for, we have no Consumer demand anymore and no real way of maintaining living standards for the populace. So even if we did have all this stuff it wouldn't matter there would be no jobs and political instability would occur here too.
it's a lose lose for them both. Question is, who's got more to lose? I think the Chinese just because there is already some social instability. So they'd be the first to go if it were a game of stamina. Like the soviets.
I think Obama's braintrust of Bernake/Geithner/Summers are afraid that if they piss off the Chinese, then they'll sell dollars and then, either the dollar falls (spiking the price of oil) or interest rates rise (spiking borrowers and maybe banks), which would put a kibosh on a recovery.
But he has the chinese by the short hairs, their factories are designed to produce goods to expensive for their own people to consume. Until they retool to produce for local consumers, they is fucked without US consumers.
Only about 30% of Chinese exports go to the US. The rest go to countries in Asia and Europe. So I wouldn't say we have them by the short hairs in any meaningful sense. We don't even have them by one ball, let alone two.
But with the dollar falling to pieces, the rmb peg is putting everyone else out of business: think Japan, South Korea, Singapore, and Taiwan to name a few. As the dollar declines, so too does the rmb, and these countries are losing export share with every tick. Added, they will have ever-diminishing current account surpluses to put to use in absorbing the next wave of UST issuance. So Obama wants a weak dollar because it will help make US manufactured goods (think autos, autos, and autos) more competitive overseas, but he is also after a stronger rmb because China will eventually hit a saturation point with its dollar reserves and Lord knows somebody out there better be buying the next trillion or two of UST issuance.
But, the more I read about this, the more I think a lot of the Administration's bluster on this issue is meant to change the subject. Rather than take responsibility for destroying the dollar, an activity which is upending global trade and destabilizing the economies of Asia and to a lesser extent Europe, Obama wants everyone to focus on the rmb peg as the proximate cause of exporters' woes. But the rest of the world knows all too well that we can solve all of these problems by actually implementing a 'strong dollar policy' instead of just talking about it, so I doubt blaming China is going to help much or for very long. Ultimately, a weak dollar is really, really bad for the world and we're only just starting to see the repercussions.
amen. and on that note its clobbering time.
The problem with having a first-strike capability is that it takes a real sack to use it quickly.
-We will still have the goods we purchased with their money.
and we have WMD - so they can't take goods away from us.If you study history, debt default among countries does not end as pleasenlty as you think.
Who ever insists that human conduct of its affairs is dependent upon rational behavior leading to pleasant outcomes does not appreciate the human condition in each other or ourselves.
But THIS TIME, it will be DIFFERENT! :)
Prescient analysis Robot. Xenophobia never felt so good.
+1
All you have is crap that will wear out soon. They have to much factory capacity. After your junk fails everything will be too expensive to buy abroad and you don't produce a lot of stuff. You think $4 gas is bad ... just wait.
Yeah you sure took those fools to the cleaners.
Bingo! You hit the nail on the head.
Not only did we send all of the factories to China, but we shipped over all those jobs, too.
China might be holding a bag, but at least they can remake the bag when it wears out. We in the US can't. Especially when credit disappears.
No problem while USD is world's reserve currency. It's just an ordinary inflation.
Big players (China, Japan) won't start dumping dollars, because it is even better to just start feeding a stoves with them instead. It, perhaps, would be a slow sliding inflation.
But who cares in financial world and upper class, when life is so short and there are so many luxury and young bodies around. =)
The winners writing the history.
Brilliant! Much public hullabaloo with no actual meaning or practical intent. Hear, hear Robo!
The Chinese did indeed get something from the US Robo; a lifetime supply of toilet paper.
It would behove you well to have a look at the facts before proclaiming China as the "soon-to-be biggest world economy".
Even believing the official figures, which is a far stretch in the best of circumstance, China has a nominal GDP of $4,400bn (for 2008). This means 8% of nominal GWP. The US, in comparison, has $14,400bn for the same year.
Let's assume China will be able to keep up their - alleged - annual growth of 7-9%. Even at that rate it would take about 20 years to reach a level of around 25% of the 2008 GWP. However, if GWP continues growing at 2-3 % p.a., it will take at least 30 years.
So if that is "soon" in your book, there doesn't seem to be much room for the "long-term" ::))
The way things are going, continual growth of GWP at 2-3% may be optimistic.
Also, GDP for US & other countries may in fact (if not officially) go down. China (despite its fluffy GDP number) may be poised for the most growth of any nation - savers, produciton capacity, gold reserves...
I agree with you, fb. Yet so is 7-9% annual growth for China.
In any case it will take a minimum of 20, but probably closer to 30 years before China could have the biggest economy of the world.
And so many things can and will happen in that time span that I for one am not willing to make a statement as to where things will stand by then ...
There will be blood.
Economic as opposed to literal but, the U.S. is trying to mop up the mess they made via the hand that feeds them...there will be blood.
100%
Nope. Just read The Grapes of The Wrath.
Ambrose Evans' new article deals with China:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6575883/China-has-now-become-the-biggest-risk-to-the-world-economy.html
Interesting article.
I think that much as Japan was viewed as the next world-dominating power in the 1980s, China may be a limping dragon in another decade. They will likely hit their working age demographic peak in the mid-2010's (the US recently hit its working age peak in the 2007-2009 time frame).
http://www.eastasiaforum.org/2009/06/22/bubbles-and-demographics-is-china-following-japan-and-the-us/
Longer term, Fortune may favor the Latin American countries, who have more favorable demographics and abundant natural resources and fresh water (unlike most of Asia). What should be boom years for China until the middle of the next decade from a demographic standpoint may be knocked for a loop due to the demographic and fiscal distress in the US and China's overreliance on exports.
If you board the wrong train, it's no use running along the corridor in the other direction. Dietrich Bonhoeffer
This is quite simple....
Anyone....anyone.....
Whoever chases asset valuations at forced 0% govt. induced interest rates.....WILL LOSE....
Those that keep their powder dry....and hold their cash
will enjoy much lower prices as interest rates move in a normal way....
The real surprise in interest rates will come when the US long bonds have to be purchased by US Fed monetization....
Then one will watch all valuations drop like a stone in thin air....as one experinces 15 to 20% long bond yields....
Why this ????
Is the US debt going away ?
Are conditions going to worsen with rates at 0%....before they get artificially better ????
Now....how about when the artificially imposed US 0% rate becomes real.....rises.....?
Want to visualize this certain future loss now ?????
Grab a bond calculator....
Put in a 20 year 3% bond at par....
Now change the interest rate to 15%....
There is your picture....
Now where does this compare with the 0% yield forced setup ???
Up or deeply down from the forced rates point....???
Look....anyone should be able to see this now...anyone...
Ok so ¨time¨is a factor.....can it be stalled ....???
Ask Japan....
What is the path of least resistance for the polys....Japan....
The point....this may be wishful thinking....
Why....? The US is no Japan....
The US cannot simple default on debt and laugh in Chinas face.
China would start off by blowing a few US satellites out of space (which they have shown are capable of doing) and finish it off with some cyber warfare.
If they use the same technology, time and effort that they put in building missiles that they did with my shitty fax machine, I'm not real worried.
Good thing we don't have germans mad at us, eh?
No. This type of approach would lead to WW3 in a day or two and everyone knows it. They blow satellites, we do some EMP over their coast, they go after a carrier, we start hitting major cities, won't take long for the northern hemisphere to be covered in radioactive soot. A nasty proxy war is far more likely. Perhaps something in the 'Stans when Pakistan collapses in 3-12 months. Maybe Taiwan, though that's close to a direct war. Maybe N. Korea gets told to do whatever they want by Beijing (but ditto). Oil drillign in the South China Sea? Harassing US ships at sea? Shame we don't have a president with balls right now.
mad max said "Shame we don't have a president with balls right now.
--
yeah balls like bush had
yeah then obama would attack north korea...yeah like bush did
and then he would attack iran...like bush did
too bad bush took the easy desert target iraq that had all the oil
but he did cause yeah he had the big balls
btw but what happened with bush and his big balls and afghanistan?
guess bush's balls werent big enuf to get bin laden
so much for bush's big balls
You made a silly assumption that is hardly even on target. I'm no fan of Bush either. But you don't seem to dispute that Obama lacks balls.
I'd like a president like Eisenhower or T. Roosevelt (but definitely not FDR). If you know your history this will make sense.
China and all tradeing nations need worl Unions for labor in all sectors MOTHER F### Wallstreet they have rape americas middle class. Tell Wallstreet to stuff there EPS and PPS and Corporate profits up there AZZ.
China is not like your local bank. They are more like your local drug dealer. They will shoot you in your face if you do not pay. They have a massive surplus of men without female companionship. How do you feel when you have no female companionship? Yep, you want to destroy things...
I don't think the men in power in China lack female companionship. And I don't think their elites care any more about the commoners than ours do.
"And I don't think their elites care any more about the commoners than ours do."
Well I'd say actually less so. With the Constitution and Bill of Rights, the US commoner has (in theory) the ability to supplant the US elite, whereas the Chinese elite have no such worry.
On paper, China's subjects have various rights:
http://en.wikipedia.org/wiki/Constitution_of_the_People%27s_Republic_of_...
So did, on paper, the subjects of the Soviet Union. It's all about enforcement, not just what's on paper. The US has historically been decent, though never close to what's on the paper of our Constitution, and lately we seem to be drifting farther and farther away from that paper. How do you enforce your rights when the elites rig the system against you?
There have been times in my life when I've wanted to destroy things because of female companionship.
oi. get on with yourselves. why would china remove the peg when we are busy devaluing the dollar? rmb appreciation will begin again once we stop destroying the dollar. god bless the chinese for calling our bluff. the biggest voice speaking for folks worried about dollar devaluation is in mandarin.
As someone who knows a little bit about communism, I will tell you a little secret. China is 2-3 years away from a total collapse.
PS. Selling western products through the back door is not what I would call great biz., and I don't give a fu@k what commie idiots like Krugman say.
The Chinese are questioning whether America's defenses against deflation in the form of banks of printing presses are sufficient, and waiting for the "all-clear" signal to go back making trim-trimblers and tum-tumblers for WalMart. They have enjoyed the ride up as much as we have, but it is they who have the factories and peasant workers who are idle if the American consumer does not return to his or her freespending ways, and given the constraints in consumer credit right now, I think its safe to say that the consumer is not returning to fund the business model Chimerica has become. Therefore, our side of the bargain, consumption, is failing, and their side, production, is now busily producing stuff no one needs, like empty shopping malls and vacant skyscrapers, which looks remarkably like a booming economy and a hearty GDP. But, in reality, they are paying guys to dig holes and guys to fill them. This is something you can do when you are sitting on a sizable surplus, so they have time to wait this thing out. Or so they hope. But the notion that this is a conventional post WW II mere "dip" recession, and not a debt crash depression-with-a-small-d, is false, and that may be what they are worried about. What to do, what to do. . . .
China has an increasing imbalance between males and females. Each year it gets worse. Millions of Chinese men with no jobs and no chance of boom-boom can become a real problem real fast. Eventually the government is going to have figure out something to do with them. And there's really only one thing to do with millions of healthy, disillusioned men aged 18-24.
Land war in Asia.
I am afraid you are dangerously correct.
At this point in the game, I think all parties are just starting to do political posturing as much as they can before TSHTF. They all know it's going to hit, they just want to try to blame someone else. I call it preliminary finger pointing. We'll know we're close if we see a frenzy of it occuring.
Blasted so bad that S&P's are up 6.
From the Constitution of the United States of America:
"The Congress shall have power to...regulate commerce with foreign nations...to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures."
"The President...shall have power, by and with the consent of the Senate, to make treaties..."
..Or we could just outsource the governance of this nation to the Fed.
"The more complicated the situation, the sooner and more catastrophic
the eventual screwup."- The Cynics Book of Wisdom
The unspoken assumption in this thread and many others like is that the Chinese govt can do whatever it likes. After all, it's a dictatorship right? Anyone who has any decent time in China would know how much time their political leaders spend on consensus building.
The CCP is not a omnipotent sovereign as Plato envisioned, calmly and philosophically making the right choices and the hoi polloi be damned. Very few have made it that far, Stalin, Hitler and Mao come to mind, and the results have not been good.
Everyday the party leadership deal with myriad vested interests just like politicians everywhere. The most important of which is the middle class who bought their homes in the boom.They will not take deflation laying down.This is the wicked thing that this way comes.Laid off workers can be bought off.Cheaply. Millions of urban professionals who are underwater is not so easy, but doable.
How does one get off this tiger without being eaten?
Probably best not to ask Ben.
LongMarch, surely the Chinese oligarchs need not worry unduly about the middle class, or any class. When a single group controls the executive, judicial and legislative branches, as does the CCP, it can act with impunity. As lawyers in China have pointed out, the CCP even dictates verdicts and rulings to the judiciary.
Canadian member of Parliament and former Minister of Justice David Kilgour, on August 7, as well as other nations, continue to charge China with human rights violation, including torture, arbitrary arrest, persecution of religious groups, “Re-education Through Labour” (slave labor camps), rape as torture, harvesting of organs from live individuals…
But you do make a point. Apparently Red China is establishing a niche for itself in the international corporatist/socialist quest for a global plantation that provides at least subsistent wages for the masses. According to the Metropolitan Corporate Counsel, a comprehensive Labor Contract Law (LCL) was passed on June 29, 2007 by the Chinese Standing Committee of the National People's Congress,” and took effect starting January 1, 2008. Although the LCL included some provisions that have appeared in the previous legislation, what made the new law different, says the MCC, was “the Chinese government's willingness to enforce mandates to protect employees' rights,” i.e., written labor contracts, restrictions on temporary labor, more difficulty and costs in firing employees, and collective bargaining for wages and benefits.
Said MCC, “Despite the foreign investors' complaints that the new law makes it more difficult to do business in China, and that it erodes the mainland's low-cost labor advantage, the Chinese government has pursued this new law as its latest step in its campaign for a ‘harmonious society.’"
Joel Hirschhorn, author and full professor at the University of Wisconsin, writing in late 2006 in U.S. Corporate Mafia Fighting Chinese Efforts to Help Workers, also acknowledged efforts by “greedy and powerful American companies not content with using economic inequality to devastate working- and middle-class Americans, to use their clout to fight efforts in China to combat economic inequality there. They want to keep wages low there, so they can drive wages down here and everywhere else.”
Hirschhorn said that big-time American corporations threatened to shut down their extensive Chinese operations if China's top officials adopted the new law. Major U.S. companies, he said at the time, generate two-thirds of the products China exports to the rest of the world.
“As to working-class Chinese, in 2005 there were 87,000 ‘mass protests’ inside China involving over four million workers, up from just 10,000 protests in 1994.”
Along with the U.S.-China Business Council that represents 250 US companies doing business across all sectors in China, the American Chamber of Commerce in Shanghai, a powerhouse that includes 150 Fortune 500 companies, including Dell, Ford, General Electric, Microsoft and Nike, fought the new law.
And as the march toward one big global peasant family morphs on, the administration of President Barack Obama gave permission to raise the Chinese national flag on September 21 behind the White House in Washington alongside America's Stars and Stripes, to celebrate the 60th anniversary of the founding of New China by Chairman Mao.
“It was always my dream to raise a Chinese flag in the center of Washington, D.C.," Chen Ronghua, chief of the U.S.-Fujian Association, told the Global Times. "This year, my motherland's 60th birthday, is the perfect time for it."
"True enemies are as rare as true friends." -CBW
Oh yes, I remember all those foreign businessman crying about how they thought China was capitalist now.Ha Ha the Party plays a better game than them.They can, in theory, do what they want.The problem is should/could they risk it? Switching to a non fiat currency is what's needed.Most of the worlds elites know this. The problem is getting from here to there with their skin intact.
BTW Global Times is the best international affairs tabloid around.
Theory: You can't inflate 3 bubbles in 1 generation unless you double down (or quadruple). Why? Even morons have a primitive learning center. Burn the herd twice and they get a bit reluctant, even unruly. So this time sugar-Ben will really have to pour on the "charm" to get another bubble going.
This unnatural peg of the Yuan to the Dollar is almost unconditionally one of the leading causes of today's imbalances.
http://www.planbeconomics.com/2009/03/17/market-crisis-do-we-blame-china/
Well, that would be the US.
If you are old enough to know who Ross Perot is then you have seen this unfolding for 15 years. NAFTA was the great opening of the Mexican market, so we were told. It was only an opening of the $1 an hour Mexican labor market. Jobs were lost here, but not enough to notice. 1 dollar being too much for the corporate chieftains to pay the Clinton White House was bribed (anyone remember the whole Lincoln bedroom visits) to keep MFN status for China. Next was WTO with none of the rules of membership required (currency peg anyone ?). Now we crack the sub $ dollar an hour barrier. With no equivalent tariffs or WTO rules enforced (do we want to discuss EPA or child labor too ?) jobs started to disappear. No outrage at the job losses... I've got a $30 DVD player..
Somehow we (most of the nation) got distracted by 9/11 and the great real estate (equity/asset) bubble to notice what was going on.. It's all over..
"Seven years of power
The corporation claw
The rich control the government, the media the law
To make some kind of difference
Then everyone must know
Eradicate the fascists, revolution will grow"