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Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses
It appears that even after thoroughly dominating the US legislative, judicial and executive branches, the long tentacles of the squid have been no better than the Mongolian hordes at overcoming the Chinese Wall (which is ironic seeking how easy it is to ignore the same construct internally between the firm's prop and flow traders...and yes, we will be posting our response to Goldman shortly, we have not forgotten). In the meantime, half a world away, a small Chinese power generator, Shenzhen Nanshan Power, is blatantly refusing to honor contracts with Goldman Subsidiary J. Aron for $80 million in derivative losses, and it appears that China itself has decided to stand behind the small company.
Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a
"We will not accept the demand by J. Aron for all the
"We will try our best to negotiate with J. Aron and resolve
"J. Aron told us in one notice that if we do not pay the
The State Assets Supervision and Administration Commission
A Beijing-based Goldman Sachs corporate communication
statement that it received several notices from J. Aron &
Company, a trading subsidiary of Goldman Sachs (GS.N), for at
least $79.96 million as compensation for terminating oil option
contracts.
losses and related interests," said Nanshan, in line with the
stance it took last December.
the dispute peacefully...but the possibility of using a lawsuit
can not be ruled out when talks fail," it added.
money, they will reserve the right to launch a lawsuit and will
not send us any further notice."
said in September that it would back state-owned companies in
any legal action against the foreign banks that sold them oil
derivatives, which resulted in losses when oil prices dived
late last year. [ID:nPEK14474]
official declined to comment.
Not sure what Hank Paulson's former firm would comment: alas the Chinese communist party still has to be filled with Goldman alumni. That being said, this is precisely the track that Goldman has been focusing on for the past few years. At this point, the firm realizes all too well that dominating power politics in China in the near futures is far more critical than complete control over D.C., as there is little the world's most important company can do domestically in the context of taxpayer capital transfer without a full fledged revolution.
h/t Sean
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Perhaps Goldman simply countered this loss by purchasing loads of Fannie and Freedie during the week of December 21 right before Congress gave the blank Xmas check to Fannie and Freddie?
God sees all you know.
If you don't honor your gambling losses, people won't gamble with you anymore.
In a legitimate casino or game, of course. But if GS is selling, you are in a three card monte street game that is wholly rigged. You have the right to walk if the other guy is a thief and is trying to pick your pocket. The Chinese already figured that out, and announced that in September. GS just figures it will push until it meets resistance, then give up in a huff. Of course, only after the Federal Reserve and/or Treasury reimburses GS for its loss.
+100
'"then give up in a huff. Of course, only after the Federal Reserve and/or Treasury reimburses GS for its loss."
Exactly.
Forget making them whole. Borg de borg de borg them like a swedish chef.
bugs, whom are you fuggin kiddin? Golbitch busted at the table a long time ago and the house shook down the ladies at the slot machines and made up some chits on the fly so Golbitch could stay at the table til they tilted the shoe their way. About the dummest comment ever.
Its blissfully satisfying to see this story. Goldman is so entrenched here that in the example you provide, were Goldman the gambler and the US taxpayer the bookie, the gambler can stick the bookie with mountains of losses and the bookie will keep fronting money.
However China is too big and important for Goldman to do anything but whatever the Chinese demand. So the shoe is on the other foot there. China can stiff Goldman to the moon, lay on extra taxes, demand virgin sacrifices, and whatnot. Goldman will comply because they HAVE to be in China.
It just shows how far down we've slipped. The good ol US of A invented "no...fuck YOU" in all its forms, but it seems this is yet another thing we started and the Chinese now do better.
If a contract is based on fraud it is not enforceable. Just wondering when this would enter into the arena of a crime? Anyone?
Let's remember that GoldmanSachs is a hedge fund.
If a contract is based on fraud it is not enforceable.
true
It just shows how far down we've slipped.
Yep, it's a day or two early, but years from now, we might pick New Year's 2010 as the date that China surpassed the US as the most powerful country in the world.
So true at the end of the day Goldman will swallow the
trade no point in aggrevating their biggest client they
just want to bark a little to prove to everyone else they still have teeth. Speaking of slipped USA lost it's numero uno status as global exporter to China this year according to WTO.A tiger never changes it's stripes particularly ifit
is of the Asian variety when it has the upperhand in the global game. Since when is drug smuggling punishable by death
"If you don't honor your gambling losses, people won't gamble with you anymore."
Really? What if somebody else guaranteed they'd make you whole on any unpaid losses?
answer this question bugs. who is holding the cards on this deal? the squid or the Chicoms? What are they going to do to the Chinese? What exactly? Threaten to not sell them some more high risk triple A MBS bonds with high yields? Ha ha .
"If you don't honor your gambling losses, people won't gamble with you anymore."....
That's a bunch of crap. Millions of U.S. citizens gambled and lossed on housing, refused to pay, called themselves 'victims', and ...were given more money, a tax credit, and a mortgage re-write by Uncle Sam so they could get back out there and start spending.
This is the new 'douchebag chic'...refuse to pay a debt, have no honor, and call it cool.... an attitude of an entitled twenty something who wants the whole world on a platter from the results of a rigorous thirty hour work week.
In which case the world would be a greatly better place.
Do you think anybody will gamble with (buy from or sell to) GS anymore, after seeing the AAA rated toxic instruments they have been selling around for the last three years?
"If you don't honor your gambling losses, people won't gamble with you anymore."
Um, Goldman Sachs went bust when AIG went bust, and GS's response was to get the US taxpayer to prop up AIG, instead of accept the loss of buying insurance from a company that was obviously not able to provide it.
Who wants to play with Goldman Sachs anyhow? It's a completely crooked game with them. GS itself is bankrupt, just as much as Fannie Mae was back in 2004.
China does care about Goldman Sachs. They are not an investment company, they are a mafia.
If you owe Goldman Sachs a thousand dollars, that's your problem. If you owe Goldman Sachs 80 million dollars...that's their problem.
UK citizen execution in China today should send a strong message to the rest of the world..just saying...
http://www.rttnews.com/ArticleView.aspx?Id=1167524&SMap=1
Try getting caught smuggling nine pounds of Herion into any Asia country & see how you end up. Execution might be a blessing
the message is that the UK is finished, they are a completely insignificant little country, with a glorious imperial past. China dont give a shit.
+555... same true to US of A... China don't give a shit. FREE TIBET! MOTHER FUUUCKERS!
Perhaps they're just getting a little payback for the two opium wars brought on by the brits.
People who use drugs to control deserve NO leniancy whatsoever. There is no defense. Doesn't matter if your crazy, stupid, regretful anything. You get caught smuggling highly addictive drugs you should be put to sleep.
who's gonna come down on the cia afghan heroin operation?
LOL someone junked the entire comment section.
I will. Offer to sell me heroin. See what happens.
BLAM BLAM BLAM.
Lordy lordy. What aint addictive these days? Gambling (stocks), oil, free money, fast food, faster women, fastest vid-games, commenting on blogs?
The guy was executed because he could be. Others are too big to fail.
Oh, come on. Do you actually believe the British request for "clemency" was anything more than just for publicity? Do you really think the British government gives a crap about a single drug-dealing citizen by the name of Akmal Shaikh whose only defense was that he was mentally ill? I would even think that China would like this execution to be as public as possible.
Before the execution Philip Alston the special
rapporteur to the UN on extrajudicial executions said it
"would be a major step backwards for China" to
execute a mentally ill man. The issue is some silly
theory out there about human rights. Clearly if you
were the said executed drug dealer your take on
the matter would have been entirely different as you
stare down the barrel of a gun. Furthermore, what publicity
are the British after that you allude to? That's just
a plain stupid comment.
No, I dont think it's for publicity. How could this be any good for UK government to be losing face this way. It was pathetic really and the chinese got Gordon Brown humiliated again.
Yep. I think we learned that in 1956.
yes its true. The Rothschilds used the Brits until they didn't need them anymore and then the sun did set on the British empire. After them, they used the United States. Now it is coming time for them to blow us off. So it is happening. Perhaps the next play area will be China. So it goes.
China destroyed both its bourgeois and its upper classes long ago. China is a CCP dictatorship. Not happening. This is the end of the line for the rothschilds as well, they are too corrupt to admit it. This is the fall of western civilization as a whole.
Because of 4k grams of smack? What happens if you are caught chewing gum on line...............
Oh yes, agreed, UK done
No bro, 4,030 grams of heroin - 8.9 pounds
What I said, 4 k grams (as in 4,000) of smack.
The rest of us need to party you know. And putting someone to death for drug smuggling is pretty stone age.
How many people will 8 pounds of heroin kill? Selling that to kids is pretty stone age.
I think the Chinese prosecutor said it was enough to kill over 50K people
Who says kids are the only one's buying it.
You obviously support the "war on drugs"
Another giant pissing away of taxpayer dollars.
(By the way, they are showing "Reefer Madness" on IFC lately. You would probably want to watch and take notes)
Ever lived in SE Asia? You & Toto might wake up & realize you aren't in Kansas anymore.
It's in China's culture to see drugs especially bad. They lost against the Japs because everyone was stoned and they never want this to happen again.
Chinese people have different values and to properly understand them, you have to go there at least once.
#1: They also have rules, they are just different than ours
#2: Their rules are not better or worse. You can't govern a 1.3billion people country the same way you govern a 300millions one.
It also apply to business. Dealing with Asian, you think they want to rip you off, offering 10x the price for something. They actually quite enjoy dealing prices; it's like a game and is fun for both parties. If you're offended, you're not playing by their rules and will indeed not play nice with you.
And so, let me get this straight as China violates
international law we are supposed to default going
forward to "they have different rules than the rest of the
world?" Does this default rule apply to everything played out on the global stage? Clearly your remark demonstrates
an attitude of with so many of us whats a million or two
here and there? Wasn't it Russia or was it China that
coined the famous phrase one is a tragedy a million
is a statistic.
Dude. America violates international law here and there as well. I say this as a conservative and a patriot, not to pick on the US.
As for that quote about the death of millions, that was Josef Stalin. Are you REALLY going to compare the 1 billion present-day Chinese to ... the single most murderous dictator of all time (yes, bloodier than Hitler) ... who happened to be RUSSIAN?
LOGIC FAIL!
Actually I believe drug smugglers in the U.S. can get the death penalty if the amount is large enough.
This is an old article, but it talks about Newt Gingrich lobbying for expanding the drug crimes punishible by death. The death penalty in the US was enacted in 94 and as far as I know has not been changed or repealed.
http://www.ndsn.org/oct95/gingrich.html
Ahh yes! Newt. One of our greatest congressional leaders.
All these guys have watche "Traffic" and the like way too many times.
"putting someone to death for drug smuggling is stone age..."
You'd have a hard time of convincing the late Barry Seal of that!
I just wish China would execute bankers rather than a drug smugglers.
China does execute bankers. White collar crime in china is often resolved by execution. None of this 6 months of "country club" jails and then onto the lecture circuit. Michael Milken and Henry Blodget would both have been executed if they'd tried that nonsense in China (barring proper connections that is LOL)
Miken, now there is a humanitarian! How long does he have to get even for before he will be satisfied?
They save the white collar criminals for organ harvest...Healthy liver to highest bidder...Ironic!..lol
And the bidders are American
> China does execute bankers.
Do you accept immigrants?
Please, teach me your ways.
they do.
!!!!!! Here here!
Another area where morally at least China is miles ahead of the USA, corruption is an executable offense there. If politicians in the US think the death penalty is such a great deterrent for poor people, surely it would work equally well as a deterrent for elected officials.
And yet, China clearly has far more corruption pervading its government at all levels than we do here (well, at least outside of the Northeast and DC).
To wit, could any among us declare in an unqualified way that China is more corrupt than the USA?
+10
Transparency International says they are far worse than the US:
http://www.transparency.org/policy_research/surveys_indices/cpi/2009
Although ZH is constantly, and appropriately, discussing corruption in the financial system and certain high levels of government, most parts of the US have very little corruption at the state and local level. In much of the US, you would be crazy to think about bribing a police officer, which is just standard business in much of the world.
I agree with you about the local level, but they may soon mimmic their big brothers of Washington. They have noticed that greed and corruption is working for them.
That's retail, grass-roots corruption and true it is rare these days.
But buying a candidate with unlimited funding to a sympathetic "issue-oriented" PAC -- or threatening to do the same for his opponent -- is a fact of political life these days. If this is corruption, it is also a requirement for holding public office.
You need to visit New Jersey
so Hank is next if he goes to China and testify against this company if case of a lawsuite? Mao Chao wearing a NRA t-shirt and COMMUNIST printed on back, holding the gun on Paulsons bald head.
that was a drug dealer not a hedge fund manager...just saying...
China Executes Securities Trading Executive
http://www.federaljack.com/?tag=human-rights
He tried to commit suicide with pills and gas, was saved, tried, and executed. Gotta respect the Chinese on some level.
Damn right. Makes me want to move there.
Well it tells us (westerners) of another form of corporate governance (that we are not used to). You will be held accountable for your actions with a bullet. Probably a very efficient way of getting everyone to stick to the rules.
The Chinese are applying this principle to the financial industry as well.
"UK citizen execution in China today should send a strong message to the rest of the world..just saying..."
Hummmm, you mean like if the Godman managers in China had been shot instead, would we have heard a peek from anyone about 'clemency'? Well, maybe Geithner would have had a hard time keeping still, but the rest of us would have been cheering YES!.
Them Brits has a history of running drugs into China.
Old habits die hard.
Decisions, decisions. Side with the US entity that has a legitimate contractual claim, but has been alleged to have manipulated the oil markets for its own benefit? Or the foreign entity that is clearly breaking its contract, but may have good reason.
I suppose it will all be irrelevant, anyway, when some "Al Kai-duh" type from Shenzhen tries unsuccessfully to blow up a US airliner, and China denies that "Al Kai-duh" is operating there, and we have to stage a massive invasion "to eliminate the terrorists." Did I get the script right?
Spot on. It's almost like there's a master plan somewhere that you're reading from. Old tricks are still the best tricks, aren't they?
Shhh! Not so loud, the sheep might hear you! But really no, USA in a war with China is bad hmm'kay. If/when the US wants to lash out at China it will be to try to cut off it's energy supply, which is oddly enough coming from central Asia, right around Afghanistan. So maybe a "terrorist" from one of the other Central Asia nations, but unlikely to be China.
It's a foreign entity they can break a contract and face the repercussions, which might be nothing at all. GS knew that going in, should have been priced into the contract. After all can they really threaten to use the US military to bludgeon every nation that does not accept being scammed?
If I were writing these contracts now I would get 100% collateral up front. Silly me.
This would be a great time for oil to just mysteriously rise in price, while so much glut is owned by western hedge funds.
And who is flagging 1/4 of the good posts as junk? Someone's kindergartner get on their account?
Why yes our nation can, should and (if things get bad) will. But it doesn't have to be at Goldman Sachs's request.
Not everyone is enamored by the despotics that keep going on in that part of the world.
I suppose it will all be irrelevant, anyway, when some "Al Kai-duh" type from Shenzhen tries unsuccessfully to blow up a US airliner, and China denies that "Al Kai-duh" is operating there, and we have to stage a massive invasion "to eliminate the terrorists."
Sorry, dude. My wife is Chinese. I once asked her what it was like knowing that 1/4 of the world's people are Chinese.
"Well," she replied "We know we'll never lose a war of numbers."
+1 for sure. Exactly what Ho and the North VietNam Regulars said in 1967. And they were absolutely right.
Now let's move on to Afghanistan.
So, why would the US play a war of numbers anyway? Sheer numbers became largerly irrelevant with the introduction of the Maxim Gun. You might be aware that there have been some unpleasant developments in military weapons since that time.
In any event, I'm not saying that the US will actually invade China, only that the geopolitics could get both interesting and silly.
Well said! And, lets not forget that MOST, and I mean MOST of the bits and pieces of our MILITARY hardware is now MADE in China. Thanks Raytheon, Level 3, Lockhead, and the rest of you patriots...NO thank you Uncle Sam for for allowing this to happen other wise we might be paying $1,000 per toilet seat instead of a mear $650.00 per. The 'game' has been in play since the end of WW11 to make sure the USA never wins another war by the military/industrial complex , there is to much money in it and all this new terror as well. Got shorts anyone? Bet Goldman does on tomorrows "news"..
I am wondering if this is not an indication of the extent to which :froeign" interests will scoff and the "legalities" and expectations of these "legal" entities when so much of the problem we have is a direct function of the loss of trust and confidence in the system .... another excellent post.
Let's recap: the State Assets guys said in September, "No dice, GS, if you come a-calling on those bullshot derivatives you sold us" and now they are saying that they were serious and meant what they said. The lack of GS plants in the Chinese government is definitely something Lloyd is going to have to work on. Of course, in China, they just take out traitors and shoot them, which no doubt has had a chilling effect on ongoing recruitment efforts. This business of risk management via surreptitious regulatory capture and control, aka "God's Work," just never ends, it seems.
Gee, I wonder if the Chinese meant it when they said "no way" recently to the notion of doubling their US Treasuries purchases. Maybe these commies mean what they say. Will wonders never cease?
I wonder if the crippling of the global economy through the CDS garbage foisted upon the world was part of a Geopolitical plan to cripple/stunt/co-opt the Western led partnership which accelerated the growth of China towards it's goal of being a superpower.
Probably not a plan, no. But that's an interesting thought.
More likely a "hey look what else we caugh in the net" moment. Bouncing the hot money out of China and EM and into UST would be a windfall and greedily harvested.
cougar
No. If anything, the opposite. Despite the drop in exports, China has been hurt much less than other nations by this. Seen the Chinese stock market lately.
Heads we win; tails we rescind.
GS sent Obama and Timmy over there this year to get the money or else. China took the "or else" part of the deal, packed both their butts with toxic exports and sent them home.
Now where is all that talk about Chinese companies walking away from their "moral" obligations?
Oh, sorry, only wage slaves have a moral obligation to pay their bills.
To an extent this decision amounts to a strategic default by China. There will be repercussions. Very interesting.
Goldman will eat these Chinese losses.. and then find itself eating MORE chinese losses an hour from now....
And then it will get a massive MSG headache..
I think ZH needs to have an in depth analysis of how the oil market was pumped up last year. It turns out that traders were just bidding prices up.and obviously the sell side was selling hedges to unsuspecting(stupid for that matter)Chinese companies(I think Singapore or Malaysian Airlines lost to the tune of 300 mill in those hedges). So all of that is fine and danddy since obviously BB let them go on the speculative binge without draining liquidity(2008 and not the 2 tri that is in now). And I guess BB was thinking, let them get some recap from the Chineses because they gonna need it. Now here comes the problem. How much the choking oil prices contributed to the down fall of the economy ?And what will be the limit(or no limit)that the FED will let GS and others take the country down through the path of economic destruction?. The most important question:Since the game is practically over now,and Chinese and other trading partners know better than to trust anybody else,but their god and gold,what is the new game plan for GS and others?
GS and the others have the 401k Cash Cow that never dies no matter how many times the sheeple get rapped...Dow has gone no where in a decade, you would think these poeple would wake up and ask hey all this money for the last ten years is going into this bucket where did it all go? Add to that .gov is in bed with them basicly forcing poeple to stay at the casino till they die or loose and GS and company have no problems...A violent revolution is not required just a mass exit from all of wall streets products to cash and then physical gold and silver and then it's game over for the gangsters and .gov, won't happen sad that poeple don't even realize they are enslaving themselves and there kids when they put money into the 401k ponzi scheme...
Agreed. Note that even the crappiest 401k plans have a "guaranteed income"/GIC and/or MM fund, with usually the lowest fees. That's where I always put mine. Did my actual trading and investing elsewhere.
My bet is that, after a little public posturing, Lil' T-Tiny Tim announces the need for an emergency 900 billion dollar "stimulus" package to offset a whole slew of such upcoming offenses against his real bosses.
Way to go China. Fuck em in the ear. Fuck em in the other ear.
You see, this is the moral hazard playing out. There is no honor among thieves. GS has had its turn at the trough. It has profited from the fraudulent web of CDS contracts. Uncle Sugar won't be able to help it here. Contracts will be repudiated. More fortunes will be lost and the global economic unwind will accelerate. Good luck to all.
+100
I love the smell of moral hazard in the morning. It smells like...
Deflation.
China thinks they're above the law, above basically everything.
Right now they are behaving as if they run the world and really are the "Middle Kingdom." The Party leadership has been infected with yesman bullshit about how great they are.
Everybody let them play the developing nation game while it was profitable, but it wasn't Chinese ingenuity that built China nor was it a Chinese currency ponzi (yuan was and is pegged) nor Chinese "capital."
Like how it wasn't the Arabs that drilled up all that oil. We need to tell China to pay up on the IP they steal, unpeg their stupid currency, cut the mercantilist predatory bullshit, and pay their contracts or fucking else. Let's see who else they have to peg their stupid people's currency to.
Or else what? We won't borrow any more money from them?
double post
nah... or else we default... This what we should do. DEFAULT. its United States of America... i.e. "united" part can default. We let federal government with president with Federal Reserve happy go under. Let them default, let Union collapse. Its useless with its debt... Let States print money, as per our constitution (they can mint gold and silver coin). And we see what chinese can do, with all this 2trln of United States Federal Reserve Notes... and United States Treas... Last time i checked State of Georgia did not own any money to Chinese and never will...
All for this, but our leadership in the Fed Gov is 100% against it. But they have not been for the American people since at least 1913.
Earlier post speculated about a hot war with China. Perhaps you should consider the fact that from an economic warfare point of view, all China has to do is blatantly stop buying US debt. It could cost them a big chunk of $1.7 billion (in rapidly depreciating USD), but it would tip the US economy over, completely. The inability to pay the debt back would be undeniable. Alternatively, that much in freshly printed bank notes would also prove to be somewhat destabilizing (you think?). $2 trillion is a small cost to mortally wound the US economy, while Chinese ‘war casualties’ would be minimal. And using US military to attempt to persuade China they don’t really want their money back definitely sends the wrong kind of message to other lenders.
China has already just about stopped buying our debt. The flip side is that if China isn't financing us, why should the US care what they think? We could be in a lukewarm economic/cold war pretty shortly. Don't be surprised if one of our ships gets attacked by China somewhere close to their maritime border - and which side it was will be the main point of dispute.
Why would the US economy tip over? The three things that are the biggest draw on the federal budget are medicare, social security and dod. Red China has stacked its whole economy on building even more export oriented crap.
Incidentally, the last time they had to wade through all the non-performing loans from their soe was during the 2000s, probably one of the most benign periods in Chinese history, with Clinton/Bush bending over backwards to let them export junk into the US. Well that meal ticket has run out.
No, China's exports only account for one-third of gdp. Whereas america's consumption based imports account for more than two thirds of gdp. You see the dilemma?
China has an internal economy that has been booming, even without clinton's help for the export market china still would have grown internally and still will. Whereas america's real gdp in terms of production has been declining. Of course america is still the largest manufacturer in the world, but much of that manufacturing is due to the MIC which is dependent upon a strong dollar. The amount of production in the US cannot support consumption levels and living standards. This is why the us will collapse not china.
Don't worry your little head inflation in the US is going to devalue their portfolio of tsy holdings anyway.
"Let States print money, as per our constitution (they can mint gold and silver coin)."
Absolutely bass-ackwards wrong.
Article I, Section 10, Clause 1: "No State shall * * * coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts"
"Bills of Credit" are paper money. Colonies printing their own unbacked currency in the mid-1700s got themselves into the same sorts of problems we have now, which is why the framers kept them (and the Federal government) from being able to do it.
The problem is that Congress reneged on its *inalienable* (i.e. un-delegatable) power in Article I, Section 8, Clause 5 "To coin Money". It also delegated a power it DOESN'T EVEN HAVE (i.e. that of "emitting Bills of Credit", which Article I, Section 8 says *NOTHING* about them having the power to do -- so they F-ING DON'T HAVE IT) to a private cartel of banks, the 12 Federal Reserve Corporaziones.
"Let States print money, as per our constitution (they can mint gold and silver coin)."
Absolutely bass-ackwards wrong.
Article I, Section 10, Clause 1: "No State shall * * * coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts"
"Bills of Credit" are paper money. Colonies printing their own unbacked currency in the mid-1700s got themselves into the same sorts of problems we have now, which is why the framers kept them (and the Federal government) from being able to do it. States coining unregulated (i.e. lightweight, shaved, salted, or otherwise substandard) Money would have been the same problem.
The problem is that Congress reneged on its *inalienable* (i.e. un-delegatable) power in Article I, Section 8, Clause 5 "To coin Money". It also delegated a power it DOESN'T EVEN HAVE (i.e. that of "emitting Bills of Credit", which Article I, Section 8 says *NOTHING* about them having the power to do -- so they F-ING DON'T HAVE IT) to a private cartel of banks, the 12 Federal Reserve Corporaziones.
"Let States print money, as per our constitution (they can mint gold and silver coin)."
Absolutely bass-ackwards wrong.
Article I, Section 10, Clause 1: "No State shall * * * coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts"
"Bills of Credit" are paper money. Colonies printing their own unbacked currency in the mid-1700s got themselves into the same sorts of problems we have now, which is why the framers kept them (and the Federal government) from being able to do it.
The problem is that Congress reneged on its *inalienable* (i.e. un-delegatable) power in Article I, Section 8, Clause 5 "To coin Money". It also delegated a power it DOESN'T EVEN HAVE (i.e. that of "emitting Bills of Credit", which Article I, Section 8 says *NOTHING* about them having the power to do -- so they F-ING DON'T HAVE IT) to a private cartel of banks, the 12 Federal Reserve Corporaziones.
Sounds like the states could start using gold and silver to settle debts between themselves.
Hmm...
YANKS! RTFM (or rather C) ..."make any Thing but gold and silver Coin a Tender in Payment of Debts; " I.e. states have rights to MAKE FUUCKING GOLD AND SILVER COINTS! this what i said, did i? (they can mint gold and silver coints)... ok ok, i did not mean PRINT...
Actually the colonial scrip was a great success. It worked in financing the revolution didn't it? Printing money worked for lincoln, hitler and is now working for china in terms of sovereign lending.
Printing money by itself is not bad, printing money in excess of production causes inflation.
Congress does have the right to coin money. That is a fact. The definition of money on the other hand is another story. IE. remember when blacks and native americans did not have the same inalienable rights as white men? The Constitution is open to free interpretation. Gold standards, in terms of gold backed currencies are inherently deflationary, the value of an economy does not come from a piece of metal it comes from industrial production. A gold-fixed exchange rate as bretton-woods had is another story.
V
Earlier post speculated about a hot war with China. Perhaps you should consider the fact that from an economic warfare point of view, all China has to do is blatantly stop buying US debt. It could cost them a big chunk of $1.7 billion (in rapidly depreciating USD), but it would tip the US economy over, completely. The inability to pay the debt back would be undeniable. Alternatively, that much in freshly printed bank notes would also prove to be somewhat destabilizing (you think?). $2 trillion is a small cost to mortally wound the US economy, while Chinese ‘war casualties’ would be minimal. And using US military to attempt to persuade China they don’t really want their money back definitely sends the wrong kind of message to other lenders.
I didn't borrow from them. Did you ?
Their funding of Federal government largess, spending and expansion worked against my interests.
I did lose a good paying job to them though.
without our borrowing, they have nobody to sell to!
the accounts balances HAVE to normalize.
The dollar is a gigantic circle-jerk basically. They have to recycle just like we have to borrow just like they have to lend and peg.
The Chinese are not the boss in this scheme; they just think they are.
They don't need to sell to anyone. Exports only account for 1/3 of their gdp. Whereas imports dependent upon a strong dollar account for 2/3rds of america's gdp.
America is broke. China is strong and rising.
Last I checked, governments were above the law... that is perhaps the key feature that makes them governments rather than corporations or fraternal societies.
Nonetheless, China has its own danger of collapse from economic stagnation and civil unrest.
Totally agree.
I'm no expert in China but anyone can see that have civil unrest issues. Not talked about much but it's there, look at the riots they have. The CP will have a rough time of it unless they can find jobs for all those workers, and at the same time keep prices stable so as not to cause food riots. I happen think China as a nation has a lot of potential but there is loads of downside just waiting to happen too.
"China thinks they're above the law, above basically everything"
I guess it's a case of who's more above the law GS or China or Obama when he raped GM secured bond holders and stole there money and gave it to the UAW...Contract law is now dead it's the wild wild west and the fed/GS/obama dream team have no body to blam but themselves for it...
#176974
Ditto on the Obana's treatment of secured GM bond holders. The unions didn't deserve preferred treatment.
Took a job with DDC after Penske took it over. Union boys sleeping on fork lifts in dark corners people stealing parts for resale. He got the Unions interest through a program of retraining and promotion to more inportant jobs. Daimler bought it in 2000 for gradual converson to Daimler Diesel. Today (a friend in quality data acqusition reports) the union guys in more important work (i.e. measuring parts for quality standards have found out how to save the data for a good sample part so that it can be applied to every sample's serial number.
Faking it? Yes, but if our financial leadership in DC is allowed to "fake it" why shouldn't the average working guy be allowed to "fake it"?
The unions did not deserve the preferred treatment that they got. The other employees were workers to.
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It's time for TTT Geithner to get serious and tell them he'll give them a US taxpayer funded grant to cover their losses.
China shows not so little teeth.. Moment when all Western World shut up in face of extermination of nations by Chinese bastards, future of western "free" world was sealed... its over. Chinese are coming and western world doesn't stand a chance. But they have to take M60 from my cold hands... FREE TIBET!
Sadly, this is true. The West led with their wallets and not their principles. Karma is happy to balance the books on whatever level we choose, and we chose wealth.
If you're lucky enough to have an M60... well, you're lucky. But if you really picture Red Dawn, I hope you have something that can take out incoming mortar rounds.
I am sure AIG will payout Goldman's loses 100% on the dollar... Timmay says so.
Well if AIG doesn't the US taxpayer will since the Squid can write the losses off on their 2009 taxes.
No need to waste money on litigation.
Doesn't AIG pay and then send us the taxpayer the bill?
I thought Timmay said so?
Can Goldman Sachs(given their ties to the government) ask for an 'accident' with these individuals?
Use their corruption against them and then smile at the news.
I’d be totally interested to see what exposure the Chinese have to shorts in the silver market.
Interesting.
This will be some good theatre, slapping Goldman in the face isn't exactly the best way to help the stock market. But then again the Chinese refusal to pay off derivatives story broke out awhile ago.
Let's see how wide the grip of Blankfein's iron fist truly extends.
O I C
Turn off the trading bots for three days, and by the end of the week Obama has another "diplomatic mission" on a plane for China, and proposed trade tariffs on imports of Chinese sneakers.
We need to come up with a name for this kind of warfare.
cougar
Maybe China is going to "call out" the US on all the intervention in the markets? They don't like the way the game is played anymore so they take their ball and go home. Sooner or later somebody gets pissed and flips over the checkerboard.
The World Governace crew wants China onboard.
It whispers to China join us and you will get alot of buisness building wind-mills and solar grids.
China says she has waited patiently. She wants to be the next super-power not part of the Global Governance.
Is/Was the game rigged for this outcome the whole time ? Perhaps a series of plots/sub-plots head fakes and double crosses?
So what motivates the Chinese authorities more: 1) fear of their own disaffected masses facing unemployment and another generation of digging irrigation projects by hand, or 2) missing the best shot at world domination since the Kangxi emperor?
I don't think anyone can know, and it is tempting to say "well they fear both" but I bet they are more worried about #1.
If they can manage their people a little while longer, then they can still take a shot at reestablishing the next Chinese dynasty. To manage their people they need a strong middle-class. This requirement really binds their hands; you do not dictate a strong and vital middle-class -- you build it -- and that takes time. The only shortcut to building a middle-class is to import it, which is what they have been doing by accepting manufacturing jobs from the West; those jobs build modest wealth, improve economic outlook, and encourage risk taking. When people have an investment in the system they can be relied on to protect it from assault from without or within, and learn the value of blind patriotism. From middle-class patriotism is imperialism born.
So I don't see how China can rise as a super-power without a strong global economy. Afterwards it wouldn't matter, but right now they are still importing a middle-class and without that accomplished their ascendancy is hardly guaranteed.
Though if they get close enough they might just risk it, thinking the people will see that brass ring of global power glittering in the distance and be willing to go where the ride takes them.
cougar
ok...super power status in last century. USSR and USA. #1 and #2 world oil producers for the entire time.
China is not resource-rich and they are not anywhere NEAR the level of technology even of the Russians.
China just did manned orbit, ok? They don't have a bluewater navy. This is not a superpower. It's a low-cost manufacturing center trying to do what Japan did. Did Japan end up a superpower? No.
Maybe China's technology will improve...it took the japs 20 or 30 years to go from a joke to considered top-shelf. The world is different now, though; this isn't a growth climate anymore. There won't be a next superpower.
[There won't be a next superpower.]
That's an interesting projection. You made me stop and think.
I will submit only that technology ain't all that. China was a superpower and cultural center of the world when Europe was just coming out it's own Dark Ages. We Westerners got a jump ahead (an allowance I use this with some reservation) when we discovered the power of steam and the interesting possibilities inherent in high explosives. The ensuing 300 years of mechanised warfare really isn't anything to be proud of. Nothing "super" about it if you ask me.
I maintain the Chinese will be a superpower, but not on the model we currently know. That model has played itself out. New game, new rules. Not sure what comes next, but I think (perhaps I fear) it will come from the East.
cougar
eh...China was a placeholder in between Rome and Europe post-Renaissance. Sure, they kept it together but Rome was light years beyond them. May as well call the muslims a superpower while we're at it.
As for "superpower," that's global dominance. Rome had it. China did not. Ever.
China will always be a regionally significant nation. As it has been. But, there's no room for superpowers in a future that holds contraction. Empires grow one upon another to zeniths and then things collapse.
I don't see how China's emulation of a western model of growth will make them to a superpower. I'm not persuaded by their ascent during an era where everybody did.
I mean, China? Puhleaze...look at what WE did. In the span of the time it took China to drag itself out from basically the opium wars to having some cities on par with the west if you hold your breath and have a gas mask, look what we did.
We went from the onset of the computer age to Folding@home and shit. A supercomputer costing zillions in the 1980s has less power than my son's PSP. We networked the world. I mean, sure, China went from a backwaters to some semblance of modernity, but the US was not standing still and neither was anyone else.
All boats were lifted by the tide.
The ERROR here is projecting China's past into its future. We don't do that with our own, nor Europe's, nor Japan's. People did do it with Japan and we saw where that ended - in the supply-side wall.
As for "superpower," that's global dominance. Rome had it. China did not. Ever.
The latter part of your statement is true - China never held world dominance. But the first part is arrant nonsense. Rome's empire extended to parts of continental Europe (you might read up on the Germanic wars to find out where their dominance ended), parts of Northern Africa and parts of the Middle East. If Rome ever held domination over Persia, or all of Africa, or any of India, or any of Southeast Asia, let alone China, it would be complete news to millions.
Read some history, dude. You keep posting nonsense.
Haha. I'm glad I'm not the only one that noticed.
I am Chumbawamba.
lol... anybody know (yeah right) what GS cds exposure id to China... I predict GS will lower exposure to zero Wednesday.
Goldman knew very well what would happen to oil prices, because they were going to help orchestrate it. They took "bets" from others on oil prices. Surprisingly, the bets work out in Goldman's favor.
My question is why anyone would play ball with this company period. Why would anyone take the opposite bet with these guys?
The misconception is that Goldman is just another player in a great and unpredictable free market. No. They take a bunch of "bets" against "opponents" and then they make the outcome they want.
Capitalism is a good system. But our version of capitalism has become complete and utter bullshit.
It's a game of Monopoly where one player gets control over the bank out of everyone's eyeshot, gets to know what the other player's rolls are before they roll, and gets to reroll when they don't like what they see on the dice.
Good for China. As soon as my mortgage is underwater, I'm next.
Well said, and agreed.
As time goes on I find myself siding with China against the positions taken by my own socialist/globalist government more and more often. China saved Americans from themselves first in Kyoto and again in Copenhagen. Now if we can just get them to stop buying our bonds we can work on starving the beast that our federal government is becoming.
Go China!
China made a mockery of Copenhagen deliberately and solely for its own benefit. An excellent story on Copenhagen is here:
http://www.guardian.co.uk/environment/2009/dec/22/copenhagen-climate-cha...
Yes, I've read that article. As I said above, thank God for China. Without China's intransigence, Obama and the Eurocratic global warming enviro-fascists would have rammed a global carbon cap and trade system down the throats of their peasants--oops, I mean subjects, or maybe citizens. Not surprisingly, the squid stands to profit handsomely as a market maker and trader in carbon credits. Government enforced scarcity does not build wealth; it simply transfers declining wealth from the many to the few.
It's a weird world in which China, a nominally communist government halfway around the world, is better at protecting the economic interests of American citizens than our own government. Now if we can just get China to stop buying our bonds . . .
You may like the result (and I didn't want some poorly thought out crap treaty from Copenhagen either) but don't kid yourself that China cares one iota about US consumers or the economic interests of US citizens. Like most nations, China is looking out for itself, and only itself. To think otherwise about them is childishly naive.
Wait a minute! How so in your mind did China save the US
in the climate debate? First of all the present climate
debate is a classic conflict between data and computer
programs. The computer programs are the source over
the climate change and global warming, not the data.
Data are measurements, computer programs are artificial
constructs. That is the core of that issue. How in the
world did you come up with this China nonsense?