Showing posts with label currency manipulation. Show all posts
Showing posts with label currency manipulation. Show all posts
Tuesday, September 11, 2012
Death by China Documentary Film - Official Trailer
Learn more: http://www.deathbychina.com
Facebook: http://www.facebook.com/deathbychina
Twitter: http://www.twitter.com/deathbychina
DEATH BY CHINA Documentary
From best-selling author and filmmaker, Peter Navarro, comes DEATH BY CHINA, a documentary feature that pointedly confronts the most urgent problem facing America today -- its increasingly destructive economic trade relationship with a rapidly rising China.
Since China began flooding U.S. markets with illegally subsidized products in 2001, over 50,000 American factories have disappeared, more than 25 million Americans can't find a decent job, and America now owes more than 3 trillion dollars to the world's largest totalitarian nation. Through compelling interviews with voices across the political spectrum, DEATH BY CHINA exposes that the U.S.-China relationship is broken and must be fixed if the world is going to be a place of peace and prosperity.
Premiering in Los Angeles on August 17, 2012 and in NYC on August 24th, DEATH BY CHINA will be touring cities across the U.S.
Visit http://www.deathbychina.com for screening locations and additional dates.
Friday, August 17, 2012
22 Stats That Show How The Emerging One World Economy Is Absolutely Killing American Workers
http://theeconomiccollapseblog.com
For decades our politicians have promised us that the "free trade"
agenda would bring us greater prosperity than ever before. They
insisted that merging our economy into the emerging one world economy
would cause millions upon millions of new jobs to be added to the U.S.
economy. Unfortunately, it was all a giant lie. Trading with other
countries is not a bad thing as long as the level of trade is fairly
equal on both sides. When trade becomes very unequal, the consequences
can be absolutely catastrophic. Since 1975, the United States has
bought more than 8 trillion dollars more stuff from the rest of the
world than they have bought from us. We are the only economy on earth
that could have had 8 trillion dollars drained out of it and still be
standing. Instead of leaving the country, those 8 trillion dollars
could have gone to U.S. businesses and U.S. workers. If we could go
back and have a "do over", how much more prosperous would we be today if
we had kept that 8 trillion dollars inside the country?
But instead of pursuing a balanced trade philosophy, our politicians were so enamored with the emerging one world economy that they threw all caution to the wind.
So we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth.
And this emerging one world economy is absolutely killing American workers. It lumps them into a global labor pool with workers in other countries where it is legal to pay slave labor wages.
Just think of it this way. Imagine that you are a giant corporation that makes "widgets". You can make them in the United States, but you would have to pay your workers about $10 an hour, provide them with a whole bunch of benefits, pay very high taxes, and comply with a dizzying array of laws, rules and regulations.
Or, you could set up shop on the other side of the world where you could pay your workers a dollar an hour. Those workers would receive no benefits and you would have to deal with very little red tape.
Which would you choose?
The "giant sucking sound" that Ross Perot once warned us about has become a reality. Big employers are competing with one another to see who can outsource jobs the fastest, and American workers are the big losers in all of this.
As I wrote about the other day, right now there are some American workers that are actually personally training their replacements from overseas how to do their jobs.
If nothing is done about this, jobs are going to continue to pour out of high wage countries such as the United States and into low wage countries on the other side of the globe, and big corporations are going to keep laughing all the way to the bank as unemployment in America gets even worse.
The following are 22 stats that show how the emerging one world economy is absolutely killing American workers....
#1 One professor has estimated that cutting the U.S. trade deficit in half would create 5 million more jobs in the United States.
#2 The United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.
#3 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975. That 8 trillion dollars could have gone to support U.S. businesses and pay the wages of U.S. workers. Federal, state and local taxes would have been paid on that 8 trillion dollars if it had stayed in the United States. This is one reason why our national debt is getting ready to cross the 16 trillion dollar mark.
#4 When NAFTA was passed in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. In 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#5 In 2001, American consumers spent 102 billion dollars on products made in China. In 2011, American consumers spent 399 billion dollars on products made in China.
#6 The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors. This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out of business. The following is from a recent Fox News article....
#8 The U.S. trade deficit with China during 2011 was 295.4 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#9 Back in 1985, our trade deficit with China was only about 6 million dollars (million with an "m") for the entire year.
#10 U.S. consumers spend about 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
#11 The United States has actually lost an average of about 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#12 According to the Economic Policy Institute, America is losing about half a million jobs to China every single year.
#13 The United States has lost more than 56,000 manufacturing facilities since 2001.
#14 During 2010 alone, an average of 23 manufacturing facilities closed their doors in America every single day.
#15 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.
#16 As I have written about previously, 95 percent of the jobs lost during the last recession were middle class jobs.
#17 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.
#18 The percentage of working age Americans that are employed right now is actually smaller than it was at the end of the last recession.
#19 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
#20 Due in part to the globalization of the labor pool, only about 24 percent of all jobs in the United States are "good jobs" at this point.
#21 Without enough good jobs, more Americans than ever before are falling into poverty. Today, more than 100 million Americans are on welfare.
#22 In recent years the U.S. economy has embraced "free trade" and the emerging one world economy like never before. Instead of increasing the number of jobs in our economy, it has resulted in the worst stretch of job creation in the United States in modern history....
You can get a really good idea of how nightmarish the manufacturing job losses have been in the United States over the past 40 years by checking out this map right here.
And if everything posted above was not bad enough, some U.S. companies even find themselves competing with slave labor here in the United States.
Seriously.
Prison labor is absolutely destroying some businesses here in America. The following comes from a recent CNN article....
If you are spending ten times as much on labor as your competitor is, it is going to be really hard to survive.
That is why it has become so hard to find products that are made in America.
Most of our jobs these days are low paying "service jobs", cushy government jobs or jobs where people push papers around all day.
But those kinds of jobs do not create lasting wealth for a country.
Did you know that there are more tax preparers in the United States than there are police officers and firefighters combined?
Our economy is a giant mirage. We consume way more wealth than we produce, but we are able to keep the party going because we are riding the biggest debt spiral the world has ever seen.
But at some point the debt spiral is going to end and the crash is going to come.
Until then, however, those at the very top are still really enjoying themselves.
For example, one of the latest trends is for rich kids to show off pictures of themselves enjoying their enormous wealth on Instagram.
Something has gone very, very wrong with this country.
But instead of pursuing a balanced trade philosophy, our politicians were so enamored with the emerging one world economy that they threw all caution to the wind.
So we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth.
And this emerging one world economy is absolutely killing American workers. It lumps them into a global labor pool with workers in other countries where it is legal to pay slave labor wages.
Just think of it this way. Imagine that you are a giant corporation that makes "widgets". You can make them in the United States, but you would have to pay your workers about $10 an hour, provide them with a whole bunch of benefits, pay very high taxes, and comply with a dizzying array of laws, rules and regulations.
Or, you could set up shop on the other side of the world where you could pay your workers a dollar an hour. Those workers would receive no benefits and you would have to deal with very little red tape.
Which would you choose?
The "giant sucking sound" that Ross Perot once warned us about has become a reality. Big employers are competing with one another to see who can outsource jobs the fastest, and American workers are the big losers in all of this.
As I wrote about the other day, right now there are some American workers that are actually personally training their replacements from overseas how to do their jobs.
If nothing is done about this, jobs are going to continue to pour out of high wage countries such as the United States and into low wage countries on the other side of the globe, and big corporations are going to keep laughing all the way to the bank as unemployment in America gets even worse.
The following are 22 stats that show how the emerging one world economy is absolutely killing American workers....
#1 One professor has estimated that cutting the U.S. trade deficit in half would create 5 million more jobs in the United States.
#2 The United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.
#3 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975. That 8 trillion dollars could have gone to support U.S. businesses and pay the wages of U.S. workers. Federal, state and local taxes would have been paid on that 8 trillion dollars if it had stayed in the United States. This is one reason why our national debt is getting ready to cross the 16 trillion dollar mark.
#4 When NAFTA was passed in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. In 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#5 In 2001, American consumers spent 102 billion dollars on products made in China. In 2011, American consumers spent 399 billion dollars on products made in China.
#6 The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors. This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out of business. The following is from a recent Fox News article....
To keep Chinese products artificially inexpensive on US store shelves, Beijing undervalues the yuan by 40 percent. It pirates US technology, subsidizes exports and imposes high tariffs on imports.#7 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.
#8 The U.S. trade deficit with China during 2011 was 295.4 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#9 Back in 1985, our trade deficit with China was only about 6 million dollars (million with an "m") for the entire year.
#10 U.S. consumers spend about 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.
#11 The United States has actually lost an average of about 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
#12 According to the Economic Policy Institute, America is losing about half a million jobs to China every single year.
#13 The United States has lost more than 56,000 manufacturing facilities since 2001.
#14 During 2010 alone, an average of 23 manufacturing facilities closed their doors in America every single day.
#15 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.
#16 As I have written about previously, 95 percent of the jobs lost during the last recession were middle class jobs.
#17 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.
#18 The percentage of working age Americans that are employed right now is actually smaller than it was at the end of the last recession.
#19 The average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
#20 Due in part to the globalization of the labor pool, only about 24 percent of all jobs in the United States are "good jobs" at this point.
#21 Without enough good jobs, more Americans than ever before are falling into poverty. Today, more than 100 million Americans are on welfare.
#22 In recent years the U.S. economy has embraced "free trade" and the emerging one world economy like never before. Instead of increasing the number of jobs in our economy, it has resulted in the worst stretch of job creation in the United States in modern history....
If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.Sometimes a picture is worth a thousand words.
You can get a really good idea of how nightmarish the manufacturing job losses have been in the United States over the past 40 years by checking out this map right here.
And if everything posted above was not bad enough, some U.S. companies even find themselves competing with slave labor here in the United States.
Seriously.
Prison labor is absolutely destroying some businesses here in America. The following comes from a recent CNN article....
Unicor is a government-run enterprise that employs over 13,000 inmates -- at wages as low as 23 cents an hour -- to make goods for the Pentagon and other federal agencies.One company that tries to compete with Unicor has been forced to lay off 150 people over the years because they lose so many contracts to them....
With some exceptions, Unicor gets first dibs on federal contracts over private companies as long as its bid is comparable in price, quantity and delivery. In other words: If Unicor wants a contract, it gets it.
Wilson has been competing with Unicor for 20 years. He's an executive at American Apparel Inc., an Alabama company that makes military uniforms. (It is not affiliated with the international retailer of the same name.) He has gone head-to-head with Unicor on just about every product his company makes -- and said he has laid off 150 people over the years as a result.But this is also the kind of thing that U.S. companies are dealing with when they try to compete with big corporations that are exploiting cheap labor abroad.
"We pay employees $9 on average," Wilson said. "They get full medical insurance, 401(k) plans and paid vacation. Yet we're competing against a federal program that doesn't pay any of that."
If you are spending ten times as much on labor as your competitor is, it is going to be really hard to survive.
That is why it has become so hard to find products that are made in America.
Most of our jobs these days are low paying "service jobs", cushy government jobs or jobs where people push papers around all day.
But those kinds of jobs do not create lasting wealth for a country.
Did you know that there are more tax preparers in the United States than there are police officers and firefighters combined?
Our economy is a giant mirage. We consume way more wealth than we produce, but we are able to keep the party going because we are riding the biggest debt spiral the world has ever seen.
But at some point the debt spiral is going to end and the crash is going to come.
Until then, however, those at the very top are still really enjoying themselves.
For example, one of the latest trends is for rich kids to show off pictures of themselves enjoying their enormous wealth on Instagram.
Something has gone very, very wrong with this country.
Saturday, October 15, 2011
Tuesday, August 30, 2011
Saturday, April 2, 2011
Wednesday, September 1, 2010
News
Waiting for WikiLeaks: Beijing's Seven Secrets
Organ Harvesting Worse Under Chinese Reforms
China’s Secret Satellite Rendezvous Suggestive of a Military Program
China's Eyes in the Skies
China: Rumors of the Central Bank Chief's Defection
Detained Woman Dies Eight Days After Arrest in China
Ending a Long Nightmare by Speaking the Truth
China Intensifies Build-Up Against Taiwan: Reports
Backlash over China curb on metal exports
Chinese Activist Emerges from Jail to Find Lake Still Polluted
Chinese 'Anti-Vulgarity Campaign' Targets Independent Artist
China requires ID to buy mobile phone numbers
Chinese Police Fire on Mine Protesters
Chinese Companies Target Journalists
Renminbi to Become a World Trade Currency
Hopeful Chinese Dissidents Petition for an End to Forced Re-education through Labor
Will intimidation win China the Yellow Sea?
China set to exert military influence abroad
China's Water Grab
Beijing's Petitioners Grow in Number and Indigence, but Not Satisfaction
US senators raise concern about Huawei-Sprint deal
Japan to Stage Drill in Response to Chinese Naval Buildup
Elderly Farmer Recaptured By Chinese Police
China channeling money through Chavez to drug cartels
Saturday, May 29, 2010
News
China’s Currency Manipulation: About to Cause a Global Explosion
China Killing Falun Gong Practitioners for Profit
Falun Gong Practitioner Involved in Changchun TV Broadcast Dies in Custody
China: The Next Ill Wind?
Worldwide financial crisis 2?
Credit Crisis Indicators
US military alert level raised in Seoul, 24 stealth fighters jets ready
U.N.: North Korea Is Exporting Nuclear Missile Technology
Europe heading for a meltdown
Iran hid equipment from inspectors
Syria arming Hezbollah from secret bases
China ban on fishing as tension runs high
Brazil and Argentina: China's Growing Foothold in Latin America
Tiananmen Massacre Memorial Blocked In Hong Kong
Parents of Kindergarten Killing Victims Silenced by Chinese Authorities
Chinese authorities still detaining Uyghurs without charge
Chinese Farmers Lie on Railroad Tracks to Protest Land Grab
China’s Use of ‘World Expo’ Tactical and Peculiar
The FSB Returns to Ukraine
Dark But Short: Russia’s Shadow on Georgia’s Elections
Maoist attack derails 13 coaches of Express train, 68 dead
French secret service fear Russian cathedral a spying front
UK ID cards to be scrapped in 100 days
What sites such as Facebook and Google know and whom they tell
USAF vehicle breaks record for hypersonic flight
Navy’s Drone Death Ray Takes Out Targets at Sea
Thursday, April 8, 2010
News
Is Greece at the Tipping Point?
Greece plunges deeper into crisis, banks, euro hit
Debt burden weighs on developed nations
Geithner Caves, postponing release of report on China currency
No peace unless China removes missiles: Ma
A Chinese ISP Momentarily Hijacks the Internet
Chinese Shadow cyber spy network revealed
Chinese hackers stole India's defence secrets: Report
Indian Army Warns of Possible Cyber Attacks
China’s Shadow Looms Over the Mekong
Chinese Regime Interferes in Law Practice
Amnesty Urges China to Disclose Execution Figures
Jointness a Threat To Beating China: Analyst
Obama's poor nuclear posture
Gaffney: Obama Nuclear Plan Takes 'Dangerous' Risks With U.S. Security
Obama’s Nuclear Revision: Simply MAD
Tulip Revolution Reloaded
Kyrgyz opposition says it will rule for 6 months
Iran is still holding at least 35 journalists after crackdown
Rights group says Caracas attacks judicial freedom
Failed Cyprus Talks May Scuttle Turkey's EU Bid
DoD To Seek Long-Range Strike Funds in '12 Budget
Public employee pensions burdening states, localities
Thursday, April 1, 2010
Political implications of China’s economic condition
There has been a lot of speculation lately as to whether China’s economy is in the midst of a bubble that may burst. To put the question in such simplified terms does not do justice to the importance of the events occurring right now. Policy makers must not only asses the current economic situation and plan for contingencies but re-asses our entire approach to China in light of the massive foreign policy failures suffered over the past 20 years. Large returns on select groups of private capital with out concern for the hidden costs is not the foundation for national policy. The way the west has conducted its relations with China during its rise has ultimately been detrimental to western interests. Without an understanding of the larger events and issues news of a possible Chinese bubble can lead to out of context assumptions regarding the implications.
Speculation on risk in the Chinese economy is primarily focused on a possible credit fuelled real estate bubble. A growing body of literature published focuses on the statistics emerging out of china today. Admittedly there are some troubling but possibly misleading figures. In response to the global financial crises the regime in china implemented a program of stimulus spending equal to approximately 15 percent of GDP. Supplementary to that spending banks were ordered to massively expand lending. In 2009 bank lending increased by 30 percent to equal approximately $1.4 trillion. The strategy was to massively stimulate the domestic economy to compensate for falling exports. Supposedly GDP grew by approximately 8.7 percent in 2009 despite the fall in exports leading many to come to the conclusion that the stimulus measures had succeeded in keeping growth levels high. Property sales have increased 76 percent in 2009 in what looks to be a result of the increased lending and stimulus measures. As prices rapidly rise the assumption is that no increase this large and fast is sustainable, it must be a bubble. A quarter of properties bought are paid for in cash and it is common practice if a loan is needed to pay a 50 percent down payment. The minimum down payment is 20 percent and on investment properties its 40 percent. These practices have a stabilising effect on the market. The size of the population means demand for housing will be high supporting prices, however much of the population is priced out of the market. If there were to be a meltdown in housing the contagion would spread to the stock market and banks. Estimates from china state one quarter of the increased lending was used to play the stock and real estate markets. Keep in mind that many loans in china are to meet government mandates and are inefficient. Savings from workers are deposited in state controlled banks and lent on no consequence terms at below market prices to state controlled enterprises with the goal of increasing employment. There is no incentive for efficiency of capital and therefore waste is rampant. There is a lot of information that could be used to support an argument for or against the china bubble. This question is of secondary importance to wider trends. Anyone who knows china knows the numbers produced by the government are unreliable. Even the stated procedures for gathering economic statistics exhibit irregularities. The GDP is calculated with projected values of developments instead of the real selling price. Growth targets are set and officials strive to make those targets regardless of the real costs or the issues of sustainability. Regardless of all these traditional economic indicators used by economists to forecast future events one thing seems to be overlooked. A large volume of analysis does acknowledge the unreliability of statistics but regardless predicates their conclusions based on those statistics and disregards the political realities. Both economic and political events have mutual feedback on each other. I have yet to see an outlook that properly takes into account the influence that political actions have on economic events. All economic decisions involve an underlying often hidden political action of participation in the trade and acceptance of the implications of the terms. The less informed a participant in trade is, the more advantage the rival participant has over the terms. Trade is often a zero sum game as for it to be truly mutually beneficial both participants would have to exhibit a similar degree of altruism. Statistics charts and graphs are not effective substitutes for a logical reasonable understanding of the world around us. China is by no means in any way an altruistic political actor. It is a self interested unenlightened materialistic mafia state.
In order to understand the economic situation the political reality that the west has completely mismanaged its relations with China for the past twenty years must be acknowledged. It is debatable that the initial American engagement with china under the Nixon administration was necessary or a wise move. Of coarse the goal was isolation of the soviet union. However after the fall of the soviet union American policy failed to re-orient to the new world order. The theory behind Bretton woods was that America would open its markets and accept trade deficits in order to build up the broken economies of the allies after world war two. The cost to the American economy was rewarded by giving America a great deal of influence over the foreign policy of the states recipient of such favourable terms. The allies were provided security and economic recovery while the American led alliance was maintained beyond the war with the objective of countering the soviet union. In this way open markets were used to political ends, and the rejection of mercantilist policies were not based on economics but political considerations. Ironic that the new twisted ideology of open markets and anti-protectionism has taken on a life of its own in recent years, this is spurred on by the short term profit seeking of the industrial elite who have not concern for the triumph of the rights of man over the forces of savagery and barbarism. They see the philosophy of the enlightenment only as an obstacle to their power over their fellow man and in this way are no different than the communist regime in china. The greatest miscalculation in the history of American policy was to keep American markets open to china beyond the fall of the soviet union. By doing so America the greatest force for the advancement of human liberty in the world has created a vastly more powerful china, the greatest force for Orwellian control. After the fall of the soviet union America should have rapidly changed its focus to isolating china. Markets should have been closed and capital controls should have been enacted. New Marshall plans for Russia and the Eastern block should have been implemented and open market like Bretton woods agreements should have been given in exchange for our new partners participation in an expanded alliance whose goal would have been the economic isolation and implosion of the last authoritarian center of power remaining on the globe at the time, china. Instead Russia was left alone to stagnate and disintegrate into chaos in the 90s giving its citizens the notion that democracy and increased freedoms equal disorder and economic hardship. In the midst of this they abandoned their pursuit of freedom and turned to a new authoritarian power to take away their liberties in exchange for comfort. Much like Germany post world war one turned away from the Weimar republic and to the Nazi party, Russia post cold war turned away from democracy and to the KGB(FSB). This development only made matters worse for containment efforts with china. Instead of closing ties, under both the Clinton and Bush administrations trade with china skyrocketed and with it the wealth, power and technological prowess of the communist regime. The goal of American foreign policy should have been neutralising the china threat and bringing to justice the perpetrators of acts like the Tiananmen Square Massacre and countless others where people have been systematically imprisoned tortured and murdered to maintain the one party state. Instead the primary objective of American foreign policy was to massively enrich china and increase its power in the hopes that eventually it will be so wealthy it will become a more open and free society and less of a threat. It appears America got it backwards in more ways than one. With the increase in wealth china has become more oppressive and acquired the technology to monitor its citizens to a greater extent. This has given the state new tools to stamp out dissent. With the proceeds of the economic boom based in exports to America and American investment capital, technology and know how the regime has also spend a considerable amount on upgrading the Chinese war machine. New advancements in anti satellite, anti ship ballistic missiles (carrier killers) and cyber warfare have increased the china threat as these asymmetric capabilities can massively damage American assets. Furthermore weaponry can and has been proliferated to other problem states. After the cold war American policy makers got the equation wrong. Increased Wealth does not bring Increased liberty. This fallacy of the short sighted pursuit of wealth was no doubt helped along by the elite industrial lobby in Washington pressing for pro china policy orientation in the hopes of making a buck. While the American market has been kept open to Chinese goods china has manipulated its currency keeping it low to increase exports. On april 15 lets hope the treasury department does the right thing after years of denial and labels china a currency manipulator. This will hopefully spur congress to take anti china protectionist moves that would be massively beneficial to America and the world. A state that does not act in the interest of the freedoms of its people should not be given access to the largest market in the world. We have created a monster out of our own inability to manage the post cold war world. Much like our inability to manage the world post world war one which brought us world war two.
Many will look to possible economic calamity by way of the china bubble mentioned earlier as reason to dismiss the china threat. At this point no matter what happens economically the threat is real. We are faced with a number of scenarios some better that others but all containing risk. The worst and best are as follows:
1. The worst scenario is that china’s economy keeps humming along and does not experience a bubble bursting or a bubble bursts but does not have a significant impact on the wider economy leading to a fast recovery. America does not take protectionist measures and continues to let itself be exploited to the detriment of its interests. Over time china becomes the dominant force in the world and uses its significant economic and political power along with its military might and large population of single young males (due to the fact that through the one child policy many couples opt to abort females) to force its will on the world. By this time technological development will have allowed the regime to watch us all more closely. All political actors who pose a threat to the regime will be targeted. The spread of democracy will be reversed (a process some say is already under way). Under such a new world order the west and its values based in enlightenment philosophy of the rights of man will be systemically undercut and open to both soft and hard power attacks. The earth would descend into general barbarism as the few centers of political power left based on reason, decency, human rights and the rule of law would shift to base self interested groups of criminal demagogs who maintain their legitimacy not by ideals of morality but by force. The experiment of democracy would eventually implode and the world returned to the way it was before the enlightenment.
2. The best case scenario is that due to a change in American policy shutting china out of markets and controlling capital flows combined with a burst in the china bubble the Chinese economy destabilizes and wreaks havok on the regimes finaces. After an intiatal shock to some elements of the American economy due to a sharp drop in growth in china, the American Economy Rebounds strongly in the long term due to the loss of a jobs and capitol sucking competitor. Economic collapse in china would neutralize that last superpower threat to democracy and human decency and would be an ultimate foreign policy victory. Democracy and the values of enlightenment philosophy would reign supreme to the benefit of all mankind. Human rights abuse and the forces of genocide and injustice would be dealt a severe blow. Even after economic collapse brought on by the loss of exports and capital inflows the regime may or may not implode. This creates sub scenarios:
A. The best case: a rapid revolution based on discontent for conditions overthrows the regime before it can take action. A democratic government is installed.
B. The worst case. Either the regime stays in power or a revolution brings about the instalation of an unfriendly new dictatorship.
Either way China’s power and influence will have been greatly reduced and therefore the threat is reduced.
Of course the question of war must be addressed. If china gains dominance in the world it will wage war whenever it pleases on whomever it wants. China has made claims on many territories around it. In the words of Thucydides “the strong do what they will the weak suffer what they must.” China must not be allowed a position of strength. Hovever if china sufferes a reduction in strength it will be detered in the long run from waging wars and will be less capable of wining them. Innitialy after economic colapse the regime may start a war if it feels it has to in order to stay in power. It has spoon fed its children on a heavy deit of ultra nationalism and visions of racial superiority and glorius reclamaiton of territories lost at the hands of the west. Its propaganda has created a strong streak of hostile imperialistic nationalism. Nothing rallies the people behind the flag more that war. And to keep a populace disproportionately full of unemployed single young males without any political freedoms or outlets of expression from rebelling, war is a solution bejing will have no problem implementing if it means the party maintains its monopoly on power. If the facists declare war as a result of economic and political conditions so be it. It is not the fault of the west. America must stand up for its interests and not appease such a regime under the threat of force. We can give them everything that they want and still eventually, when they have us where they want us they will make war. We must reorient our trade policy to serve our interests and if that iks china to the point of making a move on Taiwan the responsibility for their actions will be thiers and thiers alone. Not ours for failing to crumble to their demands. Nothing can be gained by surrendering to the perpetrators of genocide.
The forces of justice find themselves in a precarious position. Even if we do not reorient our trade policy the burst china bubble alone could seriously damage the Chinese economy and be enough to prompt the regime to rally the nation to war in order to preserve its power monopoly. When we speak of war in the west we hold our leaders to account that they may make every effort to stop the outbreak of hostilities. We must understand that in this time it is not our leaders who have any control over war. We can appease china and let it continue to feed on us until it becomes strong enough to eliminate us. Or we can put up trade barriers and block them out of our markets. If they choose to attack the free world as a result of a fair trade environment that is their decision. To all those who would argue that we must maintain current policy in order to maintain so called “good relations” with china consider what is good about an economically damaged America acting on behalf of a hostile foreign dictatorship. The failure to respond to the post cold war realities has created the current situation of a hostile nation rapidly growing in power. We must not allow China under its current leadership to continue to grow.
Speculation on risk in the Chinese economy is primarily focused on a possible credit fuelled real estate bubble. A growing body of literature published focuses on the statistics emerging out of china today. Admittedly there are some troubling but possibly misleading figures. In response to the global financial crises the regime in china implemented a program of stimulus spending equal to approximately 15 percent of GDP. Supplementary to that spending banks were ordered to massively expand lending. In 2009 bank lending increased by 30 percent to equal approximately $1.4 trillion. The strategy was to massively stimulate the domestic economy to compensate for falling exports. Supposedly GDP grew by approximately 8.7 percent in 2009 despite the fall in exports leading many to come to the conclusion that the stimulus measures had succeeded in keeping growth levels high. Property sales have increased 76 percent in 2009 in what looks to be a result of the increased lending and stimulus measures. As prices rapidly rise the assumption is that no increase this large and fast is sustainable, it must be a bubble. A quarter of properties bought are paid for in cash and it is common practice if a loan is needed to pay a 50 percent down payment. The minimum down payment is 20 percent and on investment properties its 40 percent. These practices have a stabilising effect on the market. The size of the population means demand for housing will be high supporting prices, however much of the population is priced out of the market. If there were to be a meltdown in housing the contagion would spread to the stock market and banks. Estimates from china state one quarter of the increased lending was used to play the stock and real estate markets. Keep in mind that many loans in china are to meet government mandates and are inefficient. Savings from workers are deposited in state controlled banks and lent on no consequence terms at below market prices to state controlled enterprises with the goal of increasing employment. There is no incentive for efficiency of capital and therefore waste is rampant. There is a lot of information that could be used to support an argument for or against the china bubble. This question is of secondary importance to wider trends. Anyone who knows china knows the numbers produced by the government are unreliable. Even the stated procedures for gathering economic statistics exhibit irregularities. The GDP is calculated with projected values of developments instead of the real selling price. Growth targets are set and officials strive to make those targets regardless of the real costs or the issues of sustainability. Regardless of all these traditional economic indicators used by economists to forecast future events one thing seems to be overlooked. A large volume of analysis does acknowledge the unreliability of statistics but regardless predicates their conclusions based on those statistics and disregards the political realities. Both economic and political events have mutual feedback on each other. I have yet to see an outlook that properly takes into account the influence that political actions have on economic events. All economic decisions involve an underlying often hidden political action of participation in the trade and acceptance of the implications of the terms. The less informed a participant in trade is, the more advantage the rival participant has over the terms. Trade is often a zero sum game as for it to be truly mutually beneficial both participants would have to exhibit a similar degree of altruism. Statistics charts and graphs are not effective substitutes for a logical reasonable understanding of the world around us. China is by no means in any way an altruistic political actor. It is a self interested unenlightened materialistic mafia state.
In order to understand the economic situation the political reality that the west has completely mismanaged its relations with China for the past twenty years must be acknowledged. It is debatable that the initial American engagement with china under the Nixon administration was necessary or a wise move. Of coarse the goal was isolation of the soviet union. However after the fall of the soviet union American policy failed to re-orient to the new world order. The theory behind Bretton woods was that America would open its markets and accept trade deficits in order to build up the broken economies of the allies after world war two. The cost to the American economy was rewarded by giving America a great deal of influence over the foreign policy of the states recipient of such favourable terms. The allies were provided security and economic recovery while the American led alliance was maintained beyond the war with the objective of countering the soviet union. In this way open markets were used to political ends, and the rejection of mercantilist policies were not based on economics but political considerations. Ironic that the new twisted ideology of open markets and anti-protectionism has taken on a life of its own in recent years, this is spurred on by the short term profit seeking of the industrial elite who have not concern for the triumph of the rights of man over the forces of savagery and barbarism. They see the philosophy of the enlightenment only as an obstacle to their power over their fellow man and in this way are no different than the communist regime in china. The greatest miscalculation in the history of American policy was to keep American markets open to china beyond the fall of the soviet union. By doing so America the greatest force for the advancement of human liberty in the world has created a vastly more powerful china, the greatest force for Orwellian control. After the fall of the soviet union America should have rapidly changed its focus to isolating china. Markets should have been closed and capital controls should have been enacted. New Marshall plans for Russia and the Eastern block should have been implemented and open market like Bretton woods agreements should have been given in exchange for our new partners participation in an expanded alliance whose goal would have been the economic isolation and implosion of the last authoritarian center of power remaining on the globe at the time, china. Instead Russia was left alone to stagnate and disintegrate into chaos in the 90s giving its citizens the notion that democracy and increased freedoms equal disorder and economic hardship. In the midst of this they abandoned their pursuit of freedom and turned to a new authoritarian power to take away their liberties in exchange for comfort. Much like Germany post world war one turned away from the Weimar republic and to the Nazi party, Russia post cold war turned away from democracy and to the KGB(FSB). This development only made matters worse for containment efforts with china. Instead of closing ties, under both the Clinton and Bush administrations trade with china skyrocketed and with it the wealth, power and technological prowess of the communist regime. The goal of American foreign policy should have been neutralising the china threat and bringing to justice the perpetrators of acts like the Tiananmen Square Massacre and countless others where people have been systematically imprisoned tortured and murdered to maintain the one party state. Instead the primary objective of American foreign policy was to massively enrich china and increase its power in the hopes that eventually it will be so wealthy it will become a more open and free society and less of a threat. It appears America got it backwards in more ways than one. With the increase in wealth china has become more oppressive and acquired the technology to monitor its citizens to a greater extent. This has given the state new tools to stamp out dissent. With the proceeds of the economic boom based in exports to America and American investment capital, technology and know how the regime has also spend a considerable amount on upgrading the Chinese war machine. New advancements in anti satellite, anti ship ballistic missiles (carrier killers) and cyber warfare have increased the china threat as these asymmetric capabilities can massively damage American assets. Furthermore weaponry can and has been proliferated to other problem states. After the cold war American policy makers got the equation wrong. Increased Wealth does not bring Increased liberty. This fallacy of the short sighted pursuit of wealth was no doubt helped along by the elite industrial lobby in Washington pressing for pro china policy orientation in the hopes of making a buck. While the American market has been kept open to Chinese goods china has manipulated its currency keeping it low to increase exports. On april 15 lets hope the treasury department does the right thing after years of denial and labels china a currency manipulator. This will hopefully spur congress to take anti china protectionist moves that would be massively beneficial to America and the world. A state that does not act in the interest of the freedoms of its people should not be given access to the largest market in the world. We have created a monster out of our own inability to manage the post cold war world. Much like our inability to manage the world post world war one which brought us world war two.
Many will look to possible economic calamity by way of the china bubble mentioned earlier as reason to dismiss the china threat. At this point no matter what happens economically the threat is real. We are faced with a number of scenarios some better that others but all containing risk. The worst and best are as follows:
1. The worst scenario is that china’s economy keeps humming along and does not experience a bubble bursting or a bubble bursts but does not have a significant impact on the wider economy leading to a fast recovery. America does not take protectionist measures and continues to let itself be exploited to the detriment of its interests. Over time china becomes the dominant force in the world and uses its significant economic and political power along with its military might and large population of single young males (due to the fact that through the one child policy many couples opt to abort females) to force its will on the world. By this time technological development will have allowed the regime to watch us all more closely. All political actors who pose a threat to the regime will be targeted. The spread of democracy will be reversed (a process some say is already under way). Under such a new world order the west and its values based in enlightenment philosophy of the rights of man will be systemically undercut and open to both soft and hard power attacks. The earth would descend into general barbarism as the few centers of political power left based on reason, decency, human rights and the rule of law would shift to base self interested groups of criminal demagogs who maintain their legitimacy not by ideals of morality but by force. The experiment of democracy would eventually implode and the world returned to the way it was before the enlightenment.
2. The best case scenario is that due to a change in American policy shutting china out of markets and controlling capital flows combined with a burst in the china bubble the Chinese economy destabilizes and wreaks havok on the regimes finaces. After an intiatal shock to some elements of the American economy due to a sharp drop in growth in china, the American Economy Rebounds strongly in the long term due to the loss of a jobs and capitol sucking competitor. Economic collapse in china would neutralize that last superpower threat to democracy and human decency and would be an ultimate foreign policy victory. Democracy and the values of enlightenment philosophy would reign supreme to the benefit of all mankind. Human rights abuse and the forces of genocide and injustice would be dealt a severe blow. Even after economic collapse brought on by the loss of exports and capital inflows the regime may or may not implode. This creates sub scenarios:
A. The best case: a rapid revolution based on discontent for conditions overthrows the regime before it can take action. A democratic government is installed.
B. The worst case. Either the regime stays in power or a revolution brings about the instalation of an unfriendly new dictatorship.
Either way China’s power and influence will have been greatly reduced and therefore the threat is reduced.
Of course the question of war must be addressed. If china gains dominance in the world it will wage war whenever it pleases on whomever it wants. China has made claims on many territories around it. In the words of Thucydides “the strong do what they will the weak suffer what they must.” China must not be allowed a position of strength. Hovever if china sufferes a reduction in strength it will be detered in the long run from waging wars and will be less capable of wining them. Innitialy after economic colapse the regime may start a war if it feels it has to in order to stay in power. It has spoon fed its children on a heavy deit of ultra nationalism and visions of racial superiority and glorius reclamaiton of territories lost at the hands of the west. Its propaganda has created a strong streak of hostile imperialistic nationalism. Nothing rallies the people behind the flag more that war. And to keep a populace disproportionately full of unemployed single young males without any political freedoms or outlets of expression from rebelling, war is a solution bejing will have no problem implementing if it means the party maintains its monopoly on power. If the facists declare war as a result of economic and political conditions so be it. It is not the fault of the west. America must stand up for its interests and not appease such a regime under the threat of force. We can give them everything that they want and still eventually, when they have us where they want us they will make war. We must reorient our trade policy to serve our interests and if that iks china to the point of making a move on Taiwan the responsibility for their actions will be thiers and thiers alone. Not ours for failing to crumble to their demands. Nothing can be gained by surrendering to the perpetrators of genocide.
The forces of justice find themselves in a precarious position. Even if we do not reorient our trade policy the burst china bubble alone could seriously damage the Chinese economy and be enough to prompt the regime to rally the nation to war in order to preserve its power monopoly. When we speak of war in the west we hold our leaders to account that they may make every effort to stop the outbreak of hostilities. We must understand that in this time it is not our leaders who have any control over war. We can appease china and let it continue to feed on us until it becomes strong enough to eliminate us. Or we can put up trade barriers and block them out of our markets. If they choose to attack the free world as a result of a fair trade environment that is their decision. To all those who would argue that we must maintain current policy in order to maintain so called “good relations” with china consider what is good about an economically damaged America acting on behalf of a hostile foreign dictatorship. The failure to respond to the post cold war realities has created the current situation of a hostile nation rapidly growing in power. We must not allow China under its current leadership to continue to grow.
Wednesday, March 24, 2010
News
China vows to escalate trade war if US does not submit
Google to phase out China search partnerships
GoDaddy Stops Selling Chinese Domains Over Censorship Concerns
China's satellite killer and BMD upgrades under way
Taiwan’s air defenses would not be able to fight off an attack by China
The Coming China-India Conflict: Is War Inevitable?
Tibetans detained for reporting on protests
Xinjiang Internet Still extremely Limited after riots
Riyadh mulls big Russian missile buy
How Iraqi Oil Is Changing the World
Satellite imagery suggests pakistan is building another large plutonium reactor
IMF warns of acute debt challenges for West
Alleged Private Spy Ring Prompts DoD Study
Monday, March 15, 2010
Days of Darkness
The rise of a Nazi Superpower:
“We have a rightful sense of superiority."
Ministry of Propaganda: "If you want to do something that disobeys Chinese law and regulations, you are unfriendly, you are irresponsible, and you will have to pay the consequences,"
China announced plans to force Western companies to turn over their most sensitive technology and patents to Chinese competitors in exchange for access to the country's markets.
Internet cafes to be taken over by the government and a declaration that all cellphones should be equipped with surveillance cameras.
Internally, it has carried out more arrests and indictments for endangering state security (thought crime) over the past two years than in the five-year period from 2003 to 2007
also reined in the news media and attempted to control the Internet more vigorously than in the past.
the closer China gets to a variety of firsts -- No. 1 exporting nation and even No. 1 economy in the world -- the more its government seems to exhibit a nagging insecurity and opposition to the West.
“We have a rightful sense of superiority."
Ministry of Propaganda: "If you want to do something that disobeys Chinese law and regulations, you are unfriendly, you are irresponsible, and you will have to pay the consequences,"
China announced plans to force Western companies to turn over their most sensitive technology and patents to Chinese competitors in exchange for access to the country's markets.
Internet cafes to be taken over by the government and a declaration that all cellphones should be equipped with surveillance cameras.
Internally, it has carried out more arrests and indictments for endangering state security (thought crime) over the past two years than in the five-year period from 2003 to 2007
also reined in the news media and attempted to control the Internet more vigorously than in the past.
the closer China gets to a variety of firsts -- No. 1 exporting nation and even No. 1 economy in the world -- the more its government seems to exhibit a nagging insecurity and opposition to the West.
Newly powerful China defies Western nations with remarks, policies
Chinese oil giant to buy stake in Argentine firm
Saturday, December 19, 2009
chinese Currency Manipulation
Published recently in Harvard Business School Faculty Research this article discusses in detail chinese currency manipulation:
The End of Chimerica
Link to PDF of paper
My thoughts:
If it was in china’s leaderships perceived interest to correct the value of its currency it would have done it by now.
For the most part a good article, however I disagree with Mr. Ferguson’s statement that it is in both America and china’s interest that proper revaluation take place. From a western perspective it is in everyone’s interest the trade imbalance be corrected, but from an eastern perspective this government policy of imbalance is in line with eastern interests, that being the collapse of the modern international financial architecture and by extension western dominance. Why else would the chinese maintain such a policy for so many years when it is obvious what the results would be. Mr. Ferguson lists china’s suggestion that the international reserve currency be changed from the dollar to IMF Special Drawing Rights as evidence that china is concerned about American fiscal policy, he fails to recognise the realist mercantilist worldview the boys in beijing subscribe to. To the chinese a devaluation of the value of their foreign exchange reserves and temporary increase in unemployment is a price they are willing to pay to severely damage the American economy and turn Pax Americana on its head. The chinese policy of unsustainable sustained global imbalances is intentional and the cheapest way to wage war in the twenty first century. For decades in chinese policy papers an emphasis has been made on asymmetric warfare, a strategy first outlined in the centuries old text the art of war. These people wrote the book on war and for thousands of years have been perfecting the methods of imperial conquest. In the past 60 years a small hand full of evil geniuses, the latest communist dynasty, has mastered how to control over a billion people with the realisation of the ultimate modern police state. Their ambitions are not restricted within their borders, but rather global. If it was in china’s leaderships perceived interest to correct the value of its currency it would have done it by now. They know exactly what they are doing, they have been doing it for years. You cannot compare their model of export driven growth with Germany or Japan because both those nations are American allies and are under the American security umbrella. They had incentive to correct imbalances to maintain stability of the international system. china has no interest in a permanent Pax Americana as America is their chief rival. The Chimerica marriage is an exploitation of western liberal naiveté. Instead of becoming a responsible stakeholder in the international political economy beijing has fattened itself at the expense of said institution in preparation for a great leap outward. The west over the years is one by one giving away the keys to the store. How long will our policy makers wait until taking decisive action to correct this global imbalance? Until the keys to the commanding heights are under new management? Let us hope Uncle Sam has one last ace up his sleeve. If not, our window of opportunity to turn things around is closing as history passes us by. We must cause an implosion of the communist state. Rising propaganda induced chinese nationalism and the all powerful modern police state apparatus make grass roots political revolution unlikely. Political instability in china must be brought about by external economic coercion. We must throw a wrench in the chinese economic machine.
The End of Chimerica
Link to PDF of paper
My thoughts:
If it was in china’s leaderships perceived interest to correct the value of its currency it would have done it by now.
For the most part a good article, however I disagree with Mr. Ferguson’s statement that it is in both America and china’s interest that proper revaluation take place. From a western perspective it is in everyone’s interest the trade imbalance be corrected, but from an eastern perspective this government policy of imbalance is in line with eastern interests, that being the collapse of the modern international financial architecture and by extension western dominance. Why else would the chinese maintain such a policy for so many years when it is obvious what the results would be. Mr. Ferguson lists china’s suggestion that the international reserve currency be changed from the dollar to IMF Special Drawing Rights as evidence that china is concerned about American fiscal policy, he fails to recognise the realist mercantilist worldview the boys in beijing subscribe to. To the chinese a devaluation of the value of their foreign exchange reserves and temporary increase in unemployment is a price they are willing to pay to severely damage the American economy and turn Pax Americana on its head. The chinese policy of unsustainable sustained global imbalances is intentional and the cheapest way to wage war in the twenty first century. For decades in chinese policy papers an emphasis has been made on asymmetric warfare, a strategy first outlined in the centuries old text the art of war. These people wrote the book on war and for thousands of years have been perfecting the methods of imperial conquest. In the past 60 years a small hand full of evil geniuses, the latest communist dynasty, has mastered how to control over a billion people with the realisation of the ultimate modern police state. Their ambitions are not restricted within their borders, but rather global. If it was in china’s leaderships perceived interest to correct the value of its currency it would have done it by now. They know exactly what they are doing, they have been doing it for years. You cannot compare their model of export driven growth with Germany or Japan because both those nations are American allies and are under the American security umbrella. They had incentive to correct imbalances to maintain stability of the international system. china has no interest in a permanent Pax Americana as America is their chief rival. The Chimerica marriage is an exploitation of western liberal naiveté. Instead of becoming a responsible stakeholder in the international political economy beijing has fattened itself at the expense of said institution in preparation for a great leap outward. The west over the years is one by one giving away the keys to the store. How long will our policy makers wait until taking decisive action to correct this global imbalance? Until the keys to the commanding heights are under new management? Let us hope Uncle Sam has one last ace up his sleeve. If not, our window of opportunity to turn things around is closing as history passes us by. We must cause an implosion of the communist state. Rising propaganda induced chinese nationalism and the all powerful modern police state apparatus make grass roots political revolution unlikely. Political instability in china must be brought about by external economic coercion. We must throw a wrench in the chinese economic machine.
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