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China Talks Tough to U.S.

Submitted by Roanman on Mon, 03/15/2010 - 07:55

 

From today's Wall Street Journal

 

China Talks Tough to U.S.

Premier Blames American 'Trade Protectionism' for Tensions Over Currency

By ANDREW BATSON, IAN JOHNSON And ANDREW BROWNE

BEIJING—Premier Wen Jiabao aimed sharp words at Washington on Sunday, ceding little ground on China's currency policy and suggesting that U.S. efforts to boost its exports by weakening the dollar amounted to "a kind of trade protectionism."

Link to the entire story here  

 

If anyone would know it when they see it ............

 

 

Two differing approaches

Submitted by Roanman on Sat, 01/30/2010 - 12:38

 

Taken from China Daily 1/28/2010

 

China’s $300 billion sovereign wealth fund is considering new investments in resource-related companies after bets on commodities producers from the U.S. to Kazakhstan paid off in 2009.

“China Investment Corp. increased spending on energy and minerals assets last year to profit as the global economy recovers. The Beijing-based fund avoided the worst of the credit crunch in its first full year in 2008 and may have had a return of more than 10 percent in 2009, said London-based Jan Randolph, director of sovereign risk, analysis and forecasting at IHS Global Insight. ‘They have timed the upside well both in market terms, but also to fit in with the longer-term diversification strategy,’ Randolph said.

“CIC has had ‘early’ talks for direct investments in Brazil, the world’s second-biggest iron-ore exporter, and Mexico, the No. 2 silver producer, CIC Chairman Lou Jiweisaid at the Asian Financial Forum in Hong Kong on Jan. 20. Jiwei pumped about $10 billion into commodity-related companies in the second half of 2009, according to data compiled by Bloomberg.

“With China’s reserves at $2.4 trillion and swelling by an average of $37.8 billion a month last year, CIC has asked the government for another $200 billion…” China Daily 01/28/2010

 

 Taken from the fine site, "Seeking Alpha".

Click anywhere within the body of the paragraph for the complete article.

Another site that I highly recommend for grownup reading.

 

Steven Gross, the Chief Actuary of the Social Security Trust fund wrote a letter* on 9/15/2008. In that letter he included this graph.

 

On 2/12/2009 Mr. Gross wrote a letter* to Senator Robert Bennet. That letter contained this graph.

 

 

Here is a link to a report produced by the Trustees of the Social Security Trust Funds (“SSTF”). http://justthinking.us/sites/default/files/image/Single%20Gear%20Down%20Left.gif
 
 
  

 

 

 

Two differing approaches

Submitted by Roanman on Mon, 01/11/2010 - 07:31

Random stuff to think about

Submitted by Roanman on Tue, 12/08/2009 - 08:24

 

From the Associated Press

The number of Americans unemployed for 27 weeks or more in the US is over 5.9 million.

The most on record from 1948.

18% more than 90 days ago.

Long-term unemployment 38.3%.

Americans out of work for 14 weeks or less is 6.3 million, down from 7.1 million in August.

An 11% decline.

 

I've taken the occasional Porter Stansberry newsletter over the years, and have found the writing and the research to be good, the investment ideas, meh.

Porter says,

"Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt."

Porter's analysis?  They're gonna print it.

 

From Monty Guild, Guild Investments

Facts Evaporate Myths 

 

Myth 1. China is dependent upon exports to the U.S.

Of total Chinese exports, 38 percent go to emerging markets, 21 percent to the European Union, 18 percent to the U.S. and 8 percent to Japan.

Additionally, exports have fallen to about 14 percent of China’s GDP if you include only the value added in China.

Total exports including those partially manufactured goods brought into China from other countries (and which have value added in China before export), make up about 30 percent of China’s GDP.

The fact is that exports to U.S. make up somewhere between 2.5 percent and 5 percent of China’s total GDP.

Infrastructure and consumer sectors have replaced exports as the main drivers of China’s GDP growth.

 

Myth 2. Very little is manufactured in the U.S. any more.

Merrill Lynch provides us with the following facts ‘…the U.S. is still the largest manufacturer by a long shot, making up 20 percent of the world’s total manufacturing output.

Furthermore, when focusing on the value added (as defined by the World Bank), the U.S. contributes more than double the production of the next largest producer, China.’

 

Myth 3: The U.S. does not export much except software and weapons.

Fact: The U.S. is the world’s third largest exporter (Germany is number one, and China is number two).

The U.S. exports value added industrial chemicals and supplies, capital goods like production machinery, computer and telecommunications equipment, motor vehicles and parts, and aircraft and aircraft parts.

The U.S. also is the world’s leading exporter of food, feed, and beverages.

Additionally, many billions of dollars in consumer goods, medicines, and media and entertainment products are exported by the U.S. each year.

 

 

China, history repeating?

Submitted by Roanman on Sat, 11/21/2009 - 14:41

 

From The Daily Reckoning

Bill Bonner

11/20/2009

“In the early 19th century, traders from Britain and America bought porcelain (china), silk and tea. Trouble was, they could find nothing to sell in exchange. The trade balance with China went negative, with China building up substantial monetary reserves (in silver). In 1830, a Chinese merchant, Hao Gua, who enjoyed a near monopoly on trade with the gweilos [foreign devils], was said to be one of the richest men in the world. Then, the English found something the Chinese would buy - opium. The fruit of the poppy was popular in many countries but, as usual, the Chinese over-did it. First, it was a favorite of the leisure classes. Then, it trickled down to ordinary workmen. Soon the coolies were neglecting their labors and China was in crisis. When the authorities tried to stop the drug trade, the English opened fire, humiliating the government and almost bankrupting it. People lost confidence in Manchu rule. By mid-century, nearly half the country was in open revolt. A Christian revolutionary had set up the ‘Heavenly Kingdom’ in Nanjing. He raised armies and challenged the Qing Dynasty to battle. For a time, it looked like he might win.
 
“In the north, meanwhile, infanticide of female babies had become common in Nien territory - a reaction to famine and scarcity. By mid-century, one out of four young men in the region couldn't find a bride; ‘bare branches,’ they were called. By 1855, these bare branches were ready to break. They armed themselves and organized. They drove out government forces and controlled a large part of the country before they were finally put down. Between natural calamities and war, some experts put the 19-century death toll at an unimaginable 200 million. And then came the 20th century! The Middle Kingdom staggered forward, from error to accident to catastrophe! From the Taiping insurrection to Mao Tsetung. Then, 30 years ago, Deng Tsaoping announced the new line: ‘To get rich is glorious,’ he said. Suddenly, the Chinese began saving every penny. Building factories. Cutting prices. And beating the barbarians at their own game.

“Again, they exaggerated. While Americans built too many shopping malls, the Chinese built too many factories. Then, in 2008-2009 came the ‘greatest collapse in world trade in history,’ says Nobel-winning economist Paul Krugman. Americans - their biggest customers - rediscovered thrift. You might think China would realize it had too much capacity and back off. Instead, it rolled more steel. It built more factories and offices...entire cities.

“If stimulus spending is a measure of stupidity, the Chinese are three times as dumb as Americans. Both governments respond to correction by doing more wrong than they did before. Loans in China are rising by about 40% of GDP annually. The money supply is soaring at nearly 30% a year. ‘We estimate that [fixed capital formation] accounted for 70% of China's growth in 2008 and close to 90% of China's first half of 2009 growth,’ says a report from Pivot Capital.

“It is just a matter of time until this capital spending bubble blows up. But China is full of bubbles. In another example of its central planning, it made the ancient practice of infanticide state policy. One couple/one child was the rule. Missing girls was the result. Then, when the boys grew up, they discovered that their brides were missing too. The working age population of China is collapsing. There were 7 workers to every old person in 1990. Now, there are barely 4. By 2035, there will be only 2. What happened to the workers? They are the missing children of the missing girls who then became missing mothers. And by 2040, 397 billion old people - more than the total populations of France, Germany, Italy, Japan and the UK combined - will be missing the support of those missing workers.”

Bill Bonner, The Daily Reckoning, 11-20-09
 
 
 

 

To quote Sun Tzu

Submitted by Roanman on Mon, 05/04/2009 - 18:05

Opportunities multiply as they are seized.
 
There has never been a protracted war from which a country has benefited.
 
Let your plans be dark and as impenetrable as night, and when you move, fall like a thunderbolt.
 
All warfare is based on deception.  Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near
Thus, what is of supreme importance in war is to attack the enemy's strategy.
 
Know your enemy and know yourself and you can fight a hundred battles without disaster.
 
Can you imagine what I would do if I could do all I can?
 
The art of war teaches us to rely not on the likelihood of the enemy's not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.
 
For to win one hundred victories in one hundred battles is not the acme of skill.  To subdue the enemy without fighting is the acme of skill.
 
The opportunity to secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself. 
 
If you are far from the enemy, make him believe you are near.   If you are near, make him believe you are far.
 
The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.
 
Pretend inferiority and encourage his arrogance.
 
He who is prudent and lies in wait for an enemy who is not, will be victorious.
 
Be extremely subtle, even to the point of formlessness.  Be extremely mysterious, even to the point of soundlessness.  Thereby you can be the director of the opponent's fate.
 
It is essential to seek out enemy agents who have come to conduct espionage against you and to bribe them to serve you.  Give them instructions and care for them.  Thus doubled agents are recruited and used.
 
If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete.

  

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