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Behold The Deflationary Wave: How China Is Flooding The World With Its Unwanted Commodities

Tyler Durden's picture




 

Between commodity-backed financing deals and the centrally-planned mal-investment boom-driven excess capacity, China has a lot of 'liquidation' to do to normalize from a credit-fueled smoke-and-mirrors world to a painful reality. As Bloomberg notes, there’s no let-up in the onslaught of commodities from China. While the country's total exports are slowing in dollar terms (as we noted last night), shipments of steel, oil products and aluminum are reaching for new highs, flooding the world with unwanted inventories. China's de-glutting is now the rest of the world's problem as the deflationary tsunami grows ever higher.

 

Chinese trade data was ugly with exports down 5 straight months...

 

But, as Bloomberg notes, shipments of steel, oil products and aluminum are reaching for new highs, according to trade data from the General Administration of Customs.

That’s because mills, smelters and refiners are producing more than they need amid slowing domestic demand, and shipping the excess overseas.

 

 

The flood is compounding a worldwide surplus of commodities that’s driven returns from raw materials to the lowest since 1999, threatening producers from India to Pennsylvania and aggravating trade disputes. While companies such as India’s JSW Steel Ltd. decry cheap exports as unfair, China says the overcapacity is a global problem.

 

The flood of Chinese supplies is roiling manufacturers around the world and exacerbating trade frictions. The steel market is being overwhelmed with metal from China’s government-owned and state-supported producers, a collection of industry associations have said. The nine groups, including Eurofer and the American Iron and Steel Institute, said there is almost 700 million tons of excess capacity around the world, with the Asian nation contributing as much as 425 million tons.

 

Low-cost supply from China in Europe prompted producer ArcelorMittal to reduce its profit forecast and suspend its dividend. India’s government has signaled it’s planning more curbs on steel imports while regulators in the U.S. are planning to lift levies on shipments from some Chinese companies.

And finally, if offshore Yuan rates are to be believed, a devaluation looms (again)...

 

Finally, as The Automatic Earth's Raul Ilargi Meijer notes, there’s another side to this, one that not a soul talks about, and it has Washington, London and Brussels very worried. Here goes:

These large mining -including oil- corporations most often operate in regions in the world that are remote and located in countries with at best questionable governments (the corporations like it like that, it’s how they know who to bribe to be able to rape and pillage).

 

The corporations de facto form a large part of the US/UK/EU political/military control system of these areas. They work in tandem with the CIA, MI5, the US and UK military, to keep the areas ‘friendly’ to western industries and regime.

 

This has caused unimaginable misery across the globe, in for instance (a good example) the Congo, one of the world’s richest regions when it comes to minerals ‘we’ want, but one of the poorest areas on the planet. No coincidence there.

 

Untold millions have died as a result. ‘We’ have done a lot more damage there than we are presently doing in Syria, if you can imagine. And many more millions are forced to live out their lives in miserable circumstances on top of the world’s richest riches. But that will now change.

 

Thing is, with the major miners going belly up, ‘our’ control of these places will also fade. Because it’s all been about money all along, and the US won’t be able to afford the -political and military- control of these places if there are no profits to be made.

 

They’ll be sinkholes for military budgets, and those will be stretched already ‘protecting’ other places. The demise of commodities is a harbinger of a dramatically changing US position in the world. Washington will be forced to focus on protecting it own soil, and move away from expansionist policies.

 

Because it can’t afford those without the grotesque profits its corporations have squeezed out of the populations in these ‘forgotten’ lands. That’s going to change global politics a lot.

 

And it’s not as if China will step in. They can’t afford to take over a losing proposition; the Chinese economy is not only growing at a slower pace, it may well be actually shrinking. Beijing’s new reality is that imports and exports both are falling quite considerably (no matter the ‘official’ numbers), and the cost of a huge expansion into global mining territory makes little sense right now.

 

With the yuan now part of the IMF ‘basket‘m Beijing can no longer print at will. China must focus on what happens at home. So must the US. They have no choice. Other than going to war.

 

And, granted, given that choice, they all probably will. But the mining companies will still be mere shells of their former selves by then. There’s no profit left to be made.

This is not going to end well. Not for anybody. Other than the arms lobby. What it will do is change geopolitics forever, and a lot.

Charts: Bloomberg

 

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Tue, 12/08/2015 - 23:09 | 6897582 ebworthen
ebworthen's picture

China has Billions of people and soldiers to send to the Congo and other areas.

If it dries up for "corporations" and the West - it will be wet enough for China.

Tue, 12/08/2015 - 23:16 | 6897605 Manthong
Manthong's picture

Yes.

I don’t know if anybody else has noticed, but tools of all kinds are becoming cheaper by the day.

Tue, 12/08/2015 - 23:22 | 6897622 Buster Cherry
Buster Cherry's picture

If we didn't have the EPA to protect me, I'd love to get a few of those excellent small diesel engines the chinks make over there.

Wed, 12/09/2015 - 00:40 | 6897890 38BWD22
38BWD22's picture

 

 

Chinese automotive replacement bearings seem to get cheaper every month now...  LCL ocean freight rates are lower for us as well (E Asia - Callao).

Definitely squeezing Korea and Japan..........

Wed, 12/09/2015 - 02:28 | 6898157 NidStyles
NidStyles's picture

While I commend cheaper, some of you must be welfare or SS recipients, I prefer something that doesn't cost me labor, that means anything except the Chinese garbage. 

 

Even the white undershirt I have gotten that were made in China were utter trash. They all stained very easily and let's not mention the holes after a couple of washings. I'd rather buy from Taiwan than China. I prefer made in the U.S. or at least Europe over anything though. 

 

I doubt I would use Chinese bearing outside of loose toelrance stainless. It's hard to mess up stainless. I don't trust Chinese bearing that much. 

Wed, 12/09/2015 - 06:04 | 6898357 White Mountains
White Mountains's picture

I've been a business owner for years, this is how I make my living.  Here is the problem: the majority of people WILL NOT buy quality, they go straight for the cheapest price.  They prefer cheaply made over made with care and quality.  Try to produce a quality product (which of course usually required more expense to produce) and you are likely toast, overwhelmed by cheap knock-offs that the masses will buy instead of yours.

And there you have it.  People demand cheap stuff that isn't durable, that's what they get.  Not the fault of the businesses, who are only responding to demand or go out of business.

Wed, 12/09/2015 - 06:06 | 6898363 Tyler Durderian
Tyler Durderian's picture

Those chinese goods are a HELL of a LOT CHEAPER.

And for being "trash" they know to do  lots of stuff. Without COMPLAIN.

http://goo.gl/0MTYgf

Wed, 12/09/2015 - 07:21 | 6898429 VinceFostersGhost
VinceFostersGhost's picture

 

 

But in their defense.....they are buying gold......like a bitch.

Wed, 12/09/2015 - 07:26 | 6898439 Squid-puppets a...
Squid-puppets a-go-go's picture

A bit OT, but this saker article blew my mind. Read to the very final paragraph

http://thesaker.is/the-imf-forgives-ukraines-loan-to-russia/

 

Wed, 12/09/2015 - 09:11 | 6898632 pods
pods's picture

Not really surprising, as these supranational organizations do the bidding of the status quo.

OTOH, since Ukraine needs gas and Russia has it, this measure has little teeth.

Gazprom can always watch some oldie but goodie movies and in learn some quotes:

"Who runs Bartertown?"

pods

Wed, 12/09/2015 - 16:42 | 6900986 Squid-puppets a...
Squid-puppets a-go-go's picture

indeed - if Ukr wants gas henceforth it will only come with 100% pre-payment

Wed, 12/09/2015 - 06:52 | 6898400 DontWorry
DontWorry's picture

An economics professor explained this to me.  You're a new MBA in charge of a division of a company that makes widgets.  You have to show increased profitability.  You can look at product R&D or business process re-engineering to try to improve your product to gain a competitive edge, which is expensive and difficult.  Or you can use cheaper materials and take manufacturing shortcuts, produce a cheaper product and sell it for the same price and make more profit, which is quick and easy.  Which do you choose?  In a few years you are pomoted and a new MBA comes in to take your place, with the same choice to make.  After a few generations of this, your company's products are crap.

Wed, 12/09/2015 - 06:05 | 6898360 Tyler Durderian
Tyler Durderian's picture

could be

Wed, 12/09/2015 - 06:06 | 6898361 Tyler Durderian
Wed, 12/09/2015 - 07:24 | 6898436 VinceFostersGhost
VinceFostersGhost's picture

 

 

I'd rather see Jeb screwing a gimp.

 

If Karl Rove isn't doing anything.

Wed, 12/09/2015 - 10:15 | 6898919 thestarl
thestarl's picture

Yeah I remember good quality Hanes T shirts made in the USA lasted long time

Wed, 12/09/2015 - 02:23 | 6898151 glenlloyd
glenlloyd's picture

Yes, tools are getting cheaper, but some are looking like they're really poorly made.

And who needs tools anyway? Now that it's become very 'low class' to work on your own car or heaven forbid wrench on an engine or engage in an automotive project of some sort. Also since it doesn't have much to do with a smart phone or gaming console kids will have nothing to do with. Besides, they can finance a new car with zero down and no credit for 144 months.

Yes, there are some cars and engines in other parts of the world that I'd love to get. Would love to import a Phaeton TDI but good lord we couldn't have that thanks to NHTSA / EPA / DOT rules. Also would love a 2000 Polo TDI.

Wed, 12/09/2015 - 03:11 | 6898207 scintillator9
scintillator9's picture

Frugal people are unconcerned about "class".

My wife's friend laughs at my lack of style, for I have none, she said.

At least when the SHTF, some of the frugal types will have an idea how to get things going again, or how to scrounge for parts in a junk yard.

Also, cash for clunkers really messed up the used car market, and more importantly, the used parts market.......

Wed, 12/09/2015 - 04:21 | 6898276 Occident Mortal
Occident Mortal's picture

So your redeeming feature is that you will know how to scrounge for parts, in a dump, after some kind of armageddon societal collapse?

Wed, 12/09/2015 - 04:31 | 6898284 Inzidious
Inzidious's picture

Uh. Actually that's somewhat of an admirable feature. It means he's a resourceful problem solver, and as a business owner I'm able to say - that's a rare trait these days. Very rare.

Wed, 12/09/2015 - 06:55 | 6898404 DontWorry
DontWorry's picture

After the SHTF you'll be under the thumb of the local warlord, who used to be the local police chief.  He won't let you near his junk yard.

Wed, 12/09/2015 - 08:02 | 6898475 MalteseFalcon
MalteseFalcon's picture

If you are fixing his car, he will.

Tue, 12/08/2015 - 23:24 | 6897624 tarabel
tarabel's picture

 

 

In many cases, but there is one category of "tool" which is no doubt skyrocketing in price at this very moment.

Tue, 12/08/2015 - 23:34 | 6897640 ebworthen
ebworthen's picture

"Harbor Freight" should be re-named "Labor Freight" - what a bunch of cheap crap, and I mean crap tools - all from cheap labor and smelters in China.

The M.B.A.'s and corporate parasites have helped to kill Sears and Craftsman, but so has China.

Race to the bottom in many more ways than one...

Tue, 12/08/2015 - 23:36 | 6897651 DrZipp
DrZipp's picture

I have some tools that work really well from Harbor Freight.  A sawzall for $20 and a chipper for $100.

Tue, 12/08/2015 - 23:42 | 6897677 Never One Roach
Never One Roach's picture

If China cleans up its pollution and corruption, it would be a good place to live.

 

Crime free for a change and relatively low cost of living. Although they would have to stop blocking 80% of the internet..that would help. It's no wonder Rogers and many others moved to the freer, cleaner nation of Singapore.

Wed, 12/09/2015 - 00:09 | 6897782 secretargentman
secretargentman's picture

China would need to clean up a lot more than that. The communist party would have to go, for starters. I hate tyrants.

Wed, 12/09/2015 - 01:27 | 6898029 uhland62
uhland62's picture

I have experienced tyrants without a communist party. The German-Kohl Regime was one such and stole my land, no rights, no compensation, exactly like under the communists in East Berlin. They wore a Christian Democratic tag (CDU).

The tag does not matter, order and justice do. 

Wed, 12/09/2015 - 03:12 | 6898208 roddy6667
roddy6667's picture

I am a retired American living in China. I don't feel restricted or oppressed at all here. When I visit the US I notice large amounts of skin head Nazi wannabe cops everywhere. And everything is a police matter. Here the police don't bother you. They don't even patrol. They do traffic and public safety. I do feel oppressed when I am in the states. Don't knock China until you have lived here a while.

BTW, not all of China has bad air. You just read about Beijing and a few cities with pollution problems and you assume the whole country is like that. It's not. You wouldn't know that from the "free press" in America.

Wed, 12/09/2015 - 05:12 | 6898322 stacking12321
stacking12321's picture

thanks for the comment.

my understanding is that as a white guy in china you are often held in higher regard by chinese than they regard each other, do you find that to be the case?

Wed, 12/09/2015 - 07:54 | 6898463 Money Counterfeiter
Money Counterfeiter's picture

If you ae white in China you would most likely be educated and have money.  

Wed, 12/09/2015 - 09:08 | 6898620 Stuck on Zero
Stuck on Zero's picture

Hey, secretargentman, how's the melamine in the squid soup taste?

Wed, 12/09/2015 - 01:24 | 6898024 uhland62
uhland62's picture

That could still be more internet than you'd get under the Donald. If Donald blocks the whole internet, the 20 % you get in China would be more.

But the pollution is a big turnoff, so no need to learn the Chinese glyphs. Did you know that the languages can be quite different in China but the glyphs are the same? You can't just ring someone in a far away province and talk to them. But if you put it in writing they'll know what you want. 

Wed, 12/09/2015 - 00:18 | 6897804 DirkDiggler11
DirkDiggler11's picture

Harbor Freight buys their tools from China by the lb. Bunch of knuckle busting Chicom bullshit is what they sell.

Wed, 12/09/2015 - 01:19 | 6898011 cornflakesdisease
cornflakesdisease's picture

Yes, but the tools at harbor frieght are the same in house brands that many name brand stores sell.  Only the colors are different.

Tue, 12/08/2015 - 23:36 | 6897653 Salah
Salah's picture

my favorite store: HARBOR FREIGHT TOOLS

Wed, 12/09/2015 - 01:41 | 6898060 lasvegaspersona
lasvegaspersona's picture

HF TOOLS CAN USUALLY BE COUNTED ON TO MAKE IT TO THE END OF ONE PROJECT. You'll want a better brandif youwant something that will last longer. Most of their stuff is barely functional....but if cheap is what you need....

Wed, 12/09/2015 - 10:42 | 6899125 Zero-Hegemon
Zero-Hegemon's picture

Not entirely true, their tools aren't bad at all for light duty use. Obviously if you're a contractor you'll want something better like Milwaulkie. But once you make your money from your first few jobs, you can buy whatever tools you want, at quadruple the cost. The worst I've found at HF is their specialized automotive tools use really soft steel. And don't even bother with their cheap tap and die sets, go to sears and get a real hardened steel craftsman set.

Rule of thumb, if your life or safety depends on it, don't buy it from Harbor Freight.

Wed, 12/09/2015 - 01:18 | 6898009 uhland62
uhland62's picture

We have noticed, and have often said we do not understand how that comes about. There's really only one explanation, i.e. the numbers that they produce. I looked into books once.

My book at amazon has a cost price of 15/16 $, I think, and like everyone else, I sell it for 30. If I get 5 million books printed it'll be like 47 cents each. As the survival rate drops to zero on a long enough time line, the price of an item in a big enough quantity is just by weight (it seems).

Buy a tool and it hardly costs anything, buy a bucket of paint and your eyes pop. It's completely irrational. A few years ago I thought I'd like a pair of really nice jeans, but turned away when I looked at the 300/400 $ price tags. What? Some months ago we bought jeans, perfectly wearable but to disappear into the crowd for 10 $. It's sschizo.  

But I don't think they flood the world with unwanted commodities. There's no limit to the wants of people. (just like Bush II said 'there's no limit to the greatness of America').

Tue, 12/08/2015 - 23:55 | 6897724 garypaul
garypaul's picture

These developments have me totally confused. Peter Schiff used to say that US dollars from China would come flooding back into the US from China since they don't want them anymore (they would rather have real goods than paper). But according to this, China is instead flooding others with actual goods because they want to accumulate more ... dollars?

Wed, 12/09/2015 - 01:21 | 6898016 cornflakesdisease
cornflakesdisease's picture

Your first mistake was listening to Peter Schiff.  I love him, but he just doesn't understand how the big game really works.  You'd have also lost your shirt investing with him.

Wed, 12/09/2015 - 07:01 | 6898414 RockySpears
RockySpears's picture

I am not sure they want the dollars, that is just a consequence of need to get rid ogf a lot of inventory/over production.

Wed, 12/09/2015 - 07:04 | 6898417 wanderer9641
wanderer9641's picture

Dollars still buy gold = empty the country of yard sale items and find some good stuff to take home.

Wed, 12/09/2015 - 10:36 | 6899080 ThanksChump
ThanksChump's picture

"Do you hear that, Mr. Anderson? That is the sound of inevitability." - Agent Smith "The Matrix"

Tue, 12/08/2015 - 23:10 | 6897586 Mr.Sono
Mr.Sono's picture

That's not the only thing they are flooding.

Tue, 12/08/2015 - 23:14 | 6897602 Omen IV
Omen IV's picture

Australia is soon up for auction

Tue, 12/08/2015 - 23:21 | 6897618 Nexus789
Nexus789's picture

The Australian economy is about to fall of a cliff and its a long way down.

Tue, 12/08/2015 - 23:47 | 6897688 Never One Roach
Never One Roach's picture
Perth house prices hit by record fall

 

Perth’s property market has hit a bleak milestone — its sharpest quarterly price drop on record.

Real Estate Institute of WA figures show Perth’s median house price fell from $545,000 in June to $522,133 last month — almost $2000 a week.

Cautious buyers had yet to meet an oversupply of 15,126 properties for sale in Perth.

 

https://au.news.yahoo.com/thewest/wa/a/29964289/perth-house-prices-hit-b...

 

But no worries, Mon. Realtors downunder, however, add, "it's contained." And they add, "There's never been a better time then now to buy a house overpriced by 400%."

Wed, 12/09/2015 - 00:20 | 6897812 DirkDiggler11
DirkDiggler11's picture

Time to sell your house and use the proceeds to buy goodies from the Perth mint. Cash in and get out while you can ...

Wed, 12/09/2015 - 01:07 | 6897984 uhland62
uhland62's picture

not my garden with my potatoes, no.

Tue, 12/08/2015 - 23:22 | 6897609 V for ...
V for ...'s picture

Capitalism with Chinese characteristics, as the Politburo said...best friend of globalists, socialism, communism, collectivists...the new world order, same as the old world order of greedy private banks; selling all under the cover of nicey new brand names.

China is captured by international financiers of no fixed abode who are currently trying to make WWIII, like a mobster burning down a building to hide evidence of crime. In this case, market rigging and 'derivatives', beyond their victims ability to pay. But they will collect on the insurance. They will have their pound of flesh. Shylocks always do. Ain't that right, Messrs Rothschild et al.

Enjoy your 'fight club'. Many of us will be pleased when you are gone, and we can enjoy our peaceful lives without your attention seeking show times, although you are amusing sometimes.

Tue, 12/08/2015 - 23:38 | 6897662 Salah
Salah's picture

hey, why the fuck can't we import some coolie labor in from India & China, preferably decent females who can fuck & bear children? ...without all the Nigger hassles (like Trump's 2 fat-ass coons: "Build that wall!") 

Tue, 12/08/2015 - 23:46 | 6897690 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Suffice to say, you don't sound like someone who has something worth passing on to the next generation.

Wed, 12/09/2015 - 08:43 | 6898550 VinceFostersGhost
VinceFostersGhost's picture

 

 

EBT baby......what did you expect?

Wed, 12/09/2015 - 01:45 | 6898073 lasvegaspersona
lasvegaspersona's picture

troll...we tolerate some anti-whoever shit but you are just here to really make ZH look bad.

I'm guessing you are black and have the belief that all whites hate you so you thought you'd prove the point.

Wed, 12/09/2015 - 04:35 | 6898289 Inzidious
Inzidious's picture

Does the bold text mean you're serious this time?

Wed, 12/09/2015 - 07:09 | 6898424 wanderer9641
wanderer9641's picture

Better yet, find out why Western women have such terrible attitudes and values - then fix it - the answer is never bring in more femles to be infected by problems.

Tue, 12/08/2015 - 23:55 | 6897722 assistedliving
assistedliving's picture

Salah is a muslim name.  He's just ranting.  Clueless as his world disintegrates.  Meanwhile, read this article again. corporations most often operate in regions in the world that are remote and located in countries with at best questionable governments (the corporations like it like that, it’s how they know who to bribe to be able to rape and pillage).  One of those rare truth to power moments.

Wed, 12/09/2015 - 00:14 | 6897787 Soul Glow
Soul Glow's picture

I went into Sears the other day, everything was on sale.  50% anything you could dream of.  Mittens, slippers, luggage, perfume, anything and everything.  There is so much crap at the box stores, but nobody is buying.  Christmas glut to hit January 1.

Wed, 12/09/2015 - 00:38 | 6897880 38BWD22
38BWD22's picture

 

 

I just got back to the USA from over three weeks abroad, thanks SG for that tidbit.  I'll start dropping by some stores soon myself to see what's around and how much...

Wed, 12/09/2015 - 02:49 | 6898180 pilager
pilager's picture

Yeah me too, I laughed shaking my head on how much of a joke it was. No one..... No one to help me... Not even a check out person.... I left. Really just left.

At least best buy I have 10 geeks and one babe cruisin up to me. I always wondered if the light in the refrigetor goes out when the door shuts.l.l how do those 50% off signs get out there? Hmmm.

Wed, 12/09/2015 - 03:49 | 6898246 bigkahuna
bigkahuna's picture

When I feel the urge to buy shit I don't need to impress people I don't like, I go to Goodwill.

-there are also really nice books there for 2 or 3 dollars each. 

Wed, 12/09/2015 - 06:55 | 6898405 Odegaard Falls
Odegaard Falls's picture

It's the only place you find items made from japan found a sweet camera, switzerland found a espresso maker, czechslovakia an amazing meat grinder and too many hardy things made for Canadians by Canadians.  Canadian manufactuers made the shit out things so much we stopped manufacturing in 1994.

Wed, 12/09/2015 - 00:17 | 6897799 ZippyDooDah
ZippyDooDah's picture

Geopolitics needs to change forever, a lot.  All these world powers should stay home and manage only their own affairs.

Wed, 12/09/2015 - 01:04 | 6897978 uhland62
uhland62's picture

Thank you for saying that. It cannot be said often enough. 

Where I come from, and probably where you come from, we were told 'sweep your own doorstep before you point finger at neighbour's doorstep'. Not sure how the change of mindset can be achieved, but maybe the populations need to demand more loudly "it's our turn now! and sing it "OUR TURN NOW".

Wed, 12/09/2015 - 00:18 | 6897807 nosam
nosam's picture

All this dumping that China is doing... basically selling below cost... at some point dont they run out of money?

Wed, 12/09/2015 - 00:32 | 6897853 Make_Mine_A_Double
Make_Mine_A_Double's picture

They been losing 100's a ton on steel for years and they will (are) flood the planet to buy social peace at home.

Conversely it's utterly destroying Beijing area (where most are) with pollution and they will have to close as the price goes thru the floor.

But that will be by the time ever mill and steel worker outside the PRC has been pink slipped.

Wed, 12/09/2015 - 00:40 | 6897885 sschu
sschu's picture

As long as they sell above variable cost, they export their unemployment. Of course their bankers need to cooperate. No problem when your lenders are the government. Sschu

Wed, 12/09/2015 - 00:40 | 6897886 sschu
sschu's picture

As long as they sell above variable cost, they export their unemployment. Of course their bankers need to cooperate. No problem when your lenders are the government. Sschu

Wed, 12/09/2015 - 01:50 | 6898082 lasvegaspersona
lasvegaspersona's picture

yes but...Your all in cost may be $100 per item. that includes development and management. then you get into trouble and loans are due. You fire everyone and find you can make the next tool for $25. you keep selling until the price of the next piece exceeds the price to just produce it.

.....then you can declare insolvency. Works the same for a barrel of oil. Tons of cost in R&D but in extremis you just worry about small profits....not the future.

Wed, 12/09/2015 - 00:31 | 6897850 Catullus
Catullus's picture

So the US won the currency war.

Wed, 12/09/2015 - 00:56 | 6897953 Implied Violins
Implied Violins's picture

No, it won the battle. We will ALL lose the war.

Wed, 12/09/2015 - 01:06 | 6897982 conraddobler
conraddobler's picture

We could win we just have to destabilize China to the point their people get hungry then watch the fireworks.

China reminds me a lot of the miracle of Japan and seeing how they just blew the most massive leverage bubble in recorded history from nearly zero to trillions lent I can't see how they can avoid a veritible shit storm.

Our own great depression came in an era when people were not that far removed from the farms and where everyone was a rugged individualist and kept a sort of American stocism that does not exist anymore as their outward persona.

In China or the US if things break down I think it'd get pretty ugly pretty fast.

Wed, 12/09/2015 - 01:03 | 6897971 conraddobler
conraddobler's picture

First comes a tidal wave of deflation then a tidal wave of inflation after all the supply capacity is nearly destroyed.

That's how it works.

Pretty much from this point on it's a wolf wave of ever increasing disasters with shorter respites in between that suck almost as much as previous labeled disasters.

Then she will blow sky high at one point when all faith is lost.

Wed, 12/09/2015 - 01:08 | 6897985 yogibear
yogibear's picture

"wave of ever increasing disasters with shorter respites in between"

Yep, notice the stimulus size is larger each time as well as the bubbles.

Because it takes larger and larger amounts to get a GDP boost.

Wed, 12/09/2015 - 01:05 | 6897979 yogibear
yogibear's picture

Round-robin currency devaluation,

Round-robin economic destruction.

The US implosion is delayed. We'll get to see the results of this bankster game.

Finally the US unless there is a World War first.

Wed, 12/09/2015 - 01:05 | 6897980 Buillygoat
Buillygoat's picture

the flooding of our country with cheap commodities that are subsidized by the communist government of China has to be stopped. It is a strategic weapon for China as much as a way to keep there people working while destroying our industries and making our people unemployed.

Wed, 12/09/2015 - 04:05 | 6898248 YuShun
YuShun's picture

So America’s power elite is “generously” negotiating trade pacts
that will increase American unemployment, while China’s power
elite is “selfishly” working to reduce Chinese unemployment?
Something is wrong here.

 

Wed, 12/09/2015 - 01:17 | 6898007 ihatebarkingdogs
ihatebarkingdogs's picture

If you don't believe the old yarn "the Chinese will steal anything that is not nailed down" walk through the power tool section at China Freight. (Harbor Freight). All these tools are knock-offs of known high end equipment like Skill, Makita, Ryobi, etc. ALL OF IT!.

I look at the prices and wonder how they cover the cost of bunker fuel for the ships that bring that crap to the country. Then add in the other costs of selling product at retail, the margins must be thin as hell, or the workers in china are working for nothing except 2 bowls of rice a day and a place to sleep between shifts at the factory. Oh wait.....

Wed, 12/09/2015 - 13:12 | 6900098 DrZipp
DrZipp's picture

We're talking power tools not turbine jet engines.  FFS your average guy uses the tool a few times a year.  IT breaks buy a new one.  SUre for contractors, the high end stuff is the way to go.  But I have a belt sander that works fine when I need to sand a door that is sticking.

However all battery powered tools suck balls. May be the high end worm drive does OK.  I go strictly for corded tools now.  My grandma gave me gramps Craftman skill say.  It is probably 30 years old.  With a new blade it works awesome.  Good tools will last a long time, like America used to build them.  And Ryobi is crap btw.

Wed, 12/09/2015 - 01:55 | 6898093 lasvegaspersona
lasvegaspersona's picture

Real world economy should be based upon the ability to produce goods and services that people want. the price should be based on actual costs. This first plunge into globalism has really screwed that process up. It is the dollar that is ultimately at fault. the US has managed it for the benefit of the USA. As the rest of the world deals with huge dollar based debt, they will deal with the dollar.

The world came close to getting rid of the dollar in the late 1970 (remember the oil crises?)

This next time aroound we will lose the dollar and it will be good for all the world. The US will experience pain but we will behave ourselves after the initial pain passes.

Wed, 12/09/2015 - 06:34 | 6898390 MisterMousePotato
MisterMousePotato's picture

" ... we will behave ourselves after the initial pain passes."

Why on earth would you think that?

Exhibit A: The U.K.

Wed, 12/09/2015 - 01:58 | 6898097 DaveA
DaveA's picture

Too bad we don't have a free-market economy anymore. Markets always clear when they aren't clogged up with regulations. Surely some entrepreneur would think up a good use for all that cheap steel/aluminum/etc., but he'd never get a building permit.

Wed, 12/09/2015 - 01:59 | 6898102 Global Douche
Global Douche's picture

There are two commodities which the Chinese are storing away and will make them wildly rich, even if Harry D doesn't think it will mean a damn until decades from now. I continue stacking the Phyzz!

Wed, 12/09/2015 - 02:33 | 6898167 starman
starman's picture

Corporate America killed American laborers! With it they killed the economy!

Wed, 12/09/2015 - 05:01 | 6898310 bunnyswanson
bunnyswanson's picture

This endeavor has been a life long project with hundreds of thousands of people focused entirely on destroying America.

Here is another comment from "I Was a Paid Internet Shill"

Grim

January 9, 2013 at 2:08 AM

 

"Here are the methods the “self-chosen” and their slaves, like you, employ when confronted by facts which they cannot handle and facts which they cannot afford to be unleashed on the public:

Hear no evil, see no evil, speak no evil

Regardless of what you know, don’t discuss it — especially if you are a public figure, news anchor, etc. If it’s not reported, it didn’t happen, and you never have to deal with the issues.

Become incredulous and indignant.

Avoid discussing key issues and instead focus on side issues which can be used show the topic as being critical of some otherwise sacrosanct group or theme. This is also known as the ‘How dare you!’ gambit.

Create rumor mongers.

Avoid discussing issues by describing all charges, regardless of venue or evidence, as mere rumors and wild accusations. Other derogatory terms mutually exclusive of truth may work as well. This method which works especially well with a silent press, because the only way the public can learn of the facts are through such ‘arguable rumors’.

If you can associate the material with the Internet, use this fact to certify it a ‘wild rumor’ from a ‘bunch of kids on the Internet’ which can have no basis in fact.

Use a straw man.

Find or create a seeming element of your opponent’s argument which you can easily knock down to make yourself look good and the opponent to look bad. Either make up an issue you may safely imply exists based on your interpretation of the opponent/opponent arguments/situation, or select the weakest aspect of the weakest charges.

Amplify their significance and destroy them in a way which appears to debunk all the charges, real and fabricated alike, while actually avoiding discussion of the real issues.

Sidetrack opponents with name calling and ridicule.

This is also known as the primary ‘attack the messenger’ ploy, though other methods qualify as variants of that approach.

Associate opponents with unpopular titles such as ‘kooks’, ‘right-wing’, ‘liberal’, ‘left-wing’, ‘terrorists’, ‘conspiracy buffs’, ‘radicals’, ‘militia’, ‘racists’, ‘religious fanatics’, ‘sexual deviates’, and so forth. This makes others shrink from support out of fear of gaining the same label, and you avoid dealing with issues.

Hit and Run.

In any public forum, make a brief attack of your opponent or the opponent position and then scamper off before an answer can be fielded, or simply ignore any answer.

This works extremely well in Internet and letters-to-the-editor environments where a steady stream of new identities can be called upon without having to explain criticism reasoning — simply make an accusation or other attack, never discussing issues, and never answering any subsequent response, for that would dignify the opponent’s viewpoint.

Question motives.

Twist or amplify any fact which could be taken to imply that the opponent operates out of a hidden personal agenda or other bias. This avoids discussing issues and forces the accuser on the defensive.

Invoke authority.

Claim for yourself or associate yourself with authority and present your argument with enough ‘jargon’ and ‘minutia’ to illustrate you are ‘one who knows’, and simply say it isn’t so without discussing issues or demonstrating concretely why or citing sources.

Play Dumb

No matter what evidence or logical argument is offered, avoid discussing issues except with denials they have any credibility, make any sense, provide any proof, contain or make a point, have logic, or support a conclusion. Mix well for maximum effect.

Associate opponent charges with old news

A derivative of the straw man — usually, in any large-scale matter of high visibility, someone will make charges early on which can be or were already easily dealt with – a kind of investment for the future should the matter not be so easily contained.) Where it can be foreseen, have your own side raise a straw man issue and have it dealt with early on as part of the initial contingency plans.

Subsequent charges, regardless of validity or new ground uncovered, can usually then be associated with the original charge and dismissed as simply being a rehash without need to address current issues — so much the better where the opponent is or was involved with the original source.

Establish and rely upon fall-back positions.

Using a minor matter or element of the facts, take the ‘high road’ and ‘confess’ with candor that some innocent mistake, in hindsight, was made — but that opponents have seized on the opportunity to blow it all out of proportion and imply greater criminalities which, ‘just isn’t so.’

Others can reinforce this on your behalf, later, and even publicly ‘call for an end to the nonsense’ because you have already ‘done the right thing.’ Done properly, this can garner sympathy and respect for ‘coming clean’ and ‘owning up’ to your mistakes without addressing more serious issues.

Enigmas have no solution.

Drawing upon the overall umbrella of events surrounding the crime and the multitude of players and events, paint the entire affair as too complex to solve. This causes those otherwise following the matter to begin to loose interest more quickly without having to address the actual issues.

Alice in Wonderland Logic

Avoid discussion of the issues by reasoning backwards or with an apparent deductive logic which forbears any actual material fact.

Demand complete solutions

Avoid the issues by requiring opponents to solve the crime at hand completely, a ploy which works best with issues qualifying for rule 10.

Fit the facts to alternate conclusions

This requires creative thinking unless the crime was planned with contingency conclusions in place."

http://consciouslifenews.com/paid-internet-shill-shadowy-groups-manipula...

Wed, 12/09/2015 - 06:13 | 6898370 Lucky Leprachaun
Lucky Leprachaun's picture

Excellent.  One other ploy they use is to conflate genuine consipracies with seemingly lunatic theories. So WTC 7 is equated with the theory that Hitler survived and lived happily in Argentina.

Wed, 12/09/2015 - 03:15 | 6898215 roddy6667
roddy6667's picture

China is "flooding the world with unwanted commodities" If nobody wants them, why do they buy them? Nobody is forced into Harbor Freight or Walmart at gunpoint.

Wed, 12/09/2015 - 04:08 | 6898260 bigkahuna
bigkahuna's picture

Sawsalls, jigsaws, hammer drills for 20-30 bucks? The stuff at Lowes and Home Depot also comes from China, but they want 50 to 150 for them. I have no problem with Harbor Freight. It gives access to some neat tools for people that dont have money to throw around.

So far the things from Harbor Freight are holding up just fine. None of the tools from any of these places would I trust to be "professional quality". The tools work fine for home use - they probably would not last long at all in a "professional" capacity but I do not know, perhaps they would do fine. You break it, there is another new one for 20 dollars rather than buying the "indestructable" one for 400 dollars. 

Wed, 12/09/2015 - 05:22 | 6898329 falga
falga's picture

If China uses all of its quota for oil product exports for rest of year, it will be export +200% more oil products than last year.  Jan- Oct exports of gasoline, gasoil, jet fuel was close to 20 Mil MT to end of Oct. Still 10 mil MT to go until Dec. They seem to be desperate to export...  

Wed, 12/09/2015 - 05:48 | 6898349 sTls7
sTls7's picture

Well, someone has to pay to have the materials i.e. oil, aluminium etc. exported?  Who is buying the oil, aluminum etc? 

China is not just exporting these materials out of the goodness of their hearts... Come on folks, use your heads.

Wed, 12/09/2015 - 07:05 | 6898418 Wahooo
Wahooo's picture

That oil is being used to make Star Wars toys. All is good.

Wed, 12/09/2015 - 06:04 | 6898358 Lucky Leprachaun
Lucky Leprachaun's picture

Yeah, if it wasn't for those dastardly Western corporations the Congo would be an advanced and thriving liberal democracy.

Wed, 12/09/2015 - 07:58 | 6898466 Last of the Mid...
Last of the Middle Class's picture

And, just like that China's bullish economy that pollutes everything, pays slave wages to workers, and produces cities that are empty is done. Stick a fork in it. They can devalue, dump commodities, whatever, but it's done.

Wed, 12/09/2015 - 09:07 | 6898523 FX223
FX223's picture

US possibly best seat on the titanic right now...Canada being next door maybe second best seat although I am tasting saltwater I'm pretty sure. 

Went into the depot to buy package of sandpaper...package same as I always buy, grit, namebrand and price same as always but noticed it's 3 sheets in the package and before it was 5.

Of course, the numb skull at cash had now idea what I was talking about  when I mentioned that they had raised the price 20% under the radar.  Sure enough back at the shop I found old 5 pack and the price was the same a year ago for 5 as it is bow for 3.

Not just sand paper, it's everything getting smaller packages, less quantity, price sameish... No one noticing hyper inflation already happening right before our eyes.

 

Wed, 12/09/2015 - 10:10 | 6898890 DYS
DYS's picture

If you think a 5 to 3 quantity drop is only a 20% increase in price, I got some shit to sell you.

Wed, 12/09/2015 - 11:52 | 6899599 conraddobler
conraddobler's picture

Original value 1 new value .6 original minus new divided by original should be 40%

Wed, 12/09/2015 - 09:31 | 6898716 MoHillbilly
MoHillbilly's picture

China is not as interested in profit as they are jobs ( social stability)

Just as Saudia Arabia is willing to lose money to ensure market share, China is willing to lose money to keep the plant runn ing and the people working

Wed, 12/09/2015 - 09:54 | 6898808 Dominus Ludificatio
Dominus Ludificatio's picture

China is not content with a smaller share of the pie .Their gain always comes at the expense of other countries . The poorer the ohers get ,the more they get hooked on Chinese products.Wealth is still being shifted to  China even if the pace has slowed a bit. The pie size is not growing and no one wants to loose their portion. There is absolutely nothig free in Free Trade when it comes to China.

Wed, 12/09/2015 - 11:19 | 6899382 voxpopuli
voxpopuli's picture

Exports in USD terms are unfortuantely somehow irrelevant, with prices of most commodities dropping by 50 %. One should look at evolution of export VOLUMES ...

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