Sunday, January 30, 2011
Questionable data
american gdp and american manufacturing data is a hoax. They can make up any number they want. But there is no beef in that burger. So you have this questionable data and questionable numbers, but every time we leave the house, we are proven otherwise. The only explanation is that the data is not real.
I highly doubt that
It is an entirely false conclusion to draw. If that were true, the geopolitical balance would have already come to an end. The balance of power would have been broken. With more military weight shifted to the united states over China, there would have been nothing stopping them from moving its military influence into Korea, Vietnam, and into China itself. The fact that it stopped at the 38th parallel and evacuated from the rest of Vietnam is evidence that this was as far as america's military influence could carry it. That where america ends, Chinese influence begins. Why force a spy plane to land in Hainan until an apology was made? Why not rein in North Korea? Why fire ICBMs over Los Angeles?
This would have meant the end of history as fukyama put it. All other countries who could not balance out the us military would have fallen like dominoes. With the fall of the Soviet Union, the us did not attempt expand its influence into Asia to further confront China. Instead, it marched into the Middle East. If the us military was perceived to be great, it would have chosen a much more powerful enemy.
The us military is all but a facade. Smoke and mirrors. And as Mao put it, a paper tiger.
This would have meant the end of history as fukyama put it. All other countries who could not balance out the us military would have fallen like dominoes. With the fall of the Soviet Union, the us did not attempt expand its influence into Asia to further confront China. Instead, it marched into the Middle East. If the us military was perceived to be great, it would have chosen a much more powerful enemy.
The us military is all but a facade. Smoke and mirrors. And as Mao put it, a paper tiger.
Saturday, January 29, 2011
I honestly do not see how
J11 aircrafts already use the WS10A as its standard. And the J20 is using a super cruising engine with saw tooth edges in order to reduce its radar cross section. I could not imagine there being much else to offer that would improve China's combat efficiency.
While I am not a big fan of super cruise, that and the visuals we have of the engine would mean this is an entirely new turbofan.
Xu Yongling, one of China's top test pilots, told the Global Times that the J-20 possesses an advanced supersonic cruise ability and powerful air mobility that are technological breakthroughs for the country.
While I am not a big fan of super cruise, that and the visuals we have of the engine would mean this is an entirely new turbofan.
Wednesday, January 26, 2011
There is no lack of innovation
Job creation has zero to do with innovation. It is 100 percent money supply. I would think 80% of the articles on this blog help illustrate this very base point. By demanding X number of warships and air crafts, companies are forced to expand and employ laborers to meet the deadlines on those contracts. By subsidizing health care and education, it frees up personal incomes so that citizens would be able to use their personal capital for consumer purchases. This money does not come from taxation, otherwise no new money would be added to the money supply. It is simply created and given away. Taxation would only counteract the benefits of government spending because every Yuan that is taxed is a Yuan that can not be used towards private spending and investment.
Tuesday, January 25, 2011
Yea, I am still pretty sure that was no aircraft
I do not think it was american either.
Nah, I do not think so. The government refused to acknowledge it, the military even refused to acknowledge it. Previous missile tests were always acknowledged. Why tell the press that it was an aircraft, not a missile to now, yes it is a missile. But one of ours?
If the purpose is to generate a war, then there would have already been a war if they truly wanted one. The us navy would launch the missile, claim it was a Chinese missile instead of claiming it was an american missile. And then you have a war. Like remember the Maine or Lusitania. Instead, the Maine is sunk by the Spanish and it is being covered up to look like it was an internal engine failure.
Fairly dull
The J20 was an exciting revelation. For a very long time, there was nothing relating to the J20 except for some scraps of information being provided on the internet. At the time, the plane was called the JXX because people were still unsure what the PLA would name it. Most of the information released was purely rumor and photo shop. So it was quite interesting to discover that the actual J20 looked incredibly similar to all the fake images appearing on the net.
When the first pictures were shown, some people expressed doubt. Personally, the blurry pictures looked too amateurish to be fake. Then the pictures became clearer and the question was not whether the plane was real, but whether or not it was a functional battle ready aircraft. Some claimed it was a wooden mock up. But that would be pretty embarrassing for the CCP. To show off a plane that could not actually fly. And finally, the plane flew. And that pretty much closed the debate. Those were some exciting two weeks.
These days, there is not much to look forward to. Some new pictures of the WZ10 attack helicopter. But aside from killing journalists on the ground, what is the point? So until Shenyang responds to Chengdu's new aircraft. There is not much to look forward to until the release of the J16. Rumor has it, that the J16 is simply a modified stealth variant of the Sukhoi 27. Shenyang is the oldest design sector in AVIC and has always been pretty conservative in its air crafts. And that is not necessarily a good thing. Still, I would love to see what they come up with.
When the first pictures were shown, some people expressed doubt. Personally, the blurry pictures looked too amateurish to be fake. Then the pictures became clearer and the question was not whether the plane was real, but whether or not it was a functional battle ready aircraft. Some claimed it was a wooden mock up. But that would be pretty embarrassing for the CCP. To show off a plane that could not actually fly. And finally, the plane flew. And that pretty much closed the debate. Those were some exciting two weeks.
These days, there is not much to look forward to. Some new pictures of the WZ10 attack helicopter. But aside from killing journalists on the ground, what is the point? So until Shenyang responds to Chengdu's new aircraft. There is not much to look forward to until the release of the J16. Rumor has it, that the J16 is simply a modified stealth variant of the Sukhoi 27. Shenyang is the oldest design sector in AVIC and has always been pretty conservative in its air crafts. And that is not necessarily a good thing. Still, I would love to see what they come up with.
Monday, January 24, 2011
Lots of dishonesty
Here is a list of recessions and depressions before Keynes was even a subscribed as an economic model.
The boom and bust cycle is not attributed to Keynes. Boom and Bust is simply inherent in capitalism. Keynes and state bureaucrats who had similar thoughts, simply believed they could organize a theory that understands why there are recessions and depressions. And instead of behaving like a Mormon by saying: "It's ok, this is how god intended". They would employ policies that would promote economic growth the same way you root out a cancer.
A classical economist or Austrians would choose to not give their children medication if they were sick because they would claim the medicine would make their children even more sick. Boom and Bust is natural. Let the market do its own work the same way you would let god fix the world's problems. And if god does not answer us, well, its no one's fault than the child's. Because he just was not strong enough thus does not deserve sympathy.
The Great depression was a severe depression that finally forced central governments to take action. They no longer just sat back and let the classical system do its own work. Its a real shame that the only way that most governments around the world could end the Great Depression was through war. That if it was argued that spending should be increased to improve social welfare, such a thought would be shot down. Instead, hundreds of billions of dollars (which was considered a lot back then, inflation adjusted) was injected into military spending to finally end the depression. Production that was not used to put smiles on people's faces but simply to hurt one another.
Sweden was the first country to come out of the great depression through deficit spending and operating a welfare state. Nazi Germany was the second country to come out of the great depression through deficit spending, social welfare, and military rearmament.
Since I am an english speaker (random chance), I would not understand data written in other languages, but here is data relating to the united states.
During the new deal, some modest improvements in the economy took place. But it was still terrible as unemployment was still in the double digits. With the beginning of the second world war, american exports increased. European nations were experiencing significant economic growth through military spending, but still not enough to meet the necessary military demands. Thus american military and civilian exports helped mitigate the american malaise, but the economy was still terrible. In 1941, like Nazi Germany, this would be the decisive moment the great depression ends. All out military spending as a result of the bombing Pearl of Harbor. Like the day, Hitler came to office in Germany, absolute deficit spending began. About 50 percent of the national economy was due to government spending. And on that same year, unemployment dramatically fell, and by 1944, it was practically abolished.
Unemployment rates and economic growth did not begin to slow down until the end of the war. Growth and low employment did not begin to resume until the Korean War. And when that war ended, unemployment slipped again.
This is not to imply the the second world war was a godsend. Because unfortunately, the government spending that helped end the Great Depression did not go to health care and education or consumer goods and services but was instead used to end millions of lives across the united states to Europe. People lived on ration tickets and soup kitchens. You are talking about ending unemployment and creating economic growth by sending out young men to die. It did not matter what the money was spent on. Millions of European and american young men could have been sent to the beaches of Brazil to just lay about. Instead of storming Normandy they could have stormed Copacabana to the horror of Brazilian locals. But that government spending was crucial. Without it, the Depression would not have ended.
Panic of 1797
1802–1804 recession
Depression of 1807
1812 recession
1815–21 depression
1822–1823 recession
1825–1826 recession
1828–1829 recession
1833–34 recession
US recessions, Free Banking Era to the Great Depression
1836–1838
late 1839–late 1843
1845–late 1846
1847–48 recession
1853–54 recession
1860–61 recession
1865–67 recession
1869–70 recession
Panic of 1873 and the Long Depression
1882–85 recession
1887–88 recession
1890–91 recession
Panic of 1893
1899–1900 recession
Panic of 1907
Panic of 1910–1911
Recession of 1913–1914
Post-World War I recession
Depression of 1920–21
1923–24 recession
1926–27 recession
The boom and bust cycle is not attributed to Keynes. Boom and Bust is simply inherent in capitalism. Keynes and state bureaucrats who had similar thoughts, simply believed they could organize a theory that understands why there are recessions and depressions. And instead of behaving like a Mormon by saying: "It's ok, this is how god intended". They would employ policies that would promote economic growth the same way you root out a cancer.
A classical economist or Austrians would choose to not give their children medication if they were sick because they would claim the medicine would make their children even more sick. Boom and Bust is natural. Let the market do its own work the same way you would let god fix the world's problems. And if god does not answer us, well, its no one's fault than the child's. Because he just was not strong enough thus does not deserve sympathy.
The Great depression was a severe depression that finally forced central governments to take action. They no longer just sat back and let the classical system do its own work. Its a real shame that the only way that most governments around the world could end the Great Depression was through war. That if it was argued that spending should be increased to improve social welfare, such a thought would be shot down. Instead, hundreds of billions of dollars (which was considered a lot back then, inflation adjusted) was injected into military spending to finally end the depression. Production that was not used to put smiles on people's faces but simply to hurt one another.
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s.[1] It was the longest, most widespread, and deepest depression of the 20th century...
Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the start of World War II.[8]
Sweden was the first country to come out of the great depression through deficit spending and operating a welfare state. Nazi Germany was the second country to come out of the great depression through deficit spending, social welfare, and military rearmament.
Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.
The economic policies of the Third Reich were in the beginning the brainchildren of Schacht, who assumed office as president of the central bank under Hitler in 1933, and became finance minister in the following year.[15] Schacht was one of the few finance ministers to take advantage of the freedom provided by the end of the gold standard to keep interest rates low and government budget deficits high, with massive public works funded by large budget deficits.[15] The consequence was an extremely rapid decline in unemployment—the most rapid decline in unemployment in any country during the Great Depression.[15]
The massive rearmament policies leading up to World War II helped stimulate the economies of Europe in 1937–39. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 finally ended unemployment.[49]
America's entry into the war in 1941 finally eliminated the last effects from the Great Depression and brought the unemployment rate down below 10%.[50]
Since I am an english speaker (random chance), I would not understand data written in other languages, but here is data relating to the united states.
United States Unemployment Rate
Year Rate
1920 5.2 %
1928 4.2
1930 8.7
1932 23.6
1934 21.7
1936 16.9
1938 19.0
1940 14.6
1942 4.7%
1944 1.2
1946 3.9
1948 3.8
1950 5.3
1952 3.0
1954 5.5
Unemployment rates and economic growth did not begin to slow down until the end of the war. Growth and low employment did not begin to resume until the Korean War. And when that war ended, unemployment slipped again.
This is not to imply the the second world war was a godsend. Because unfortunately, the government spending that helped end the Great Depression did not go to health care and education or consumer goods and services but was instead used to end millions of lives across the united states to Europe. People lived on ration tickets and soup kitchens. You are talking about ending unemployment and creating economic growth by sending out young men to die. It did not matter what the money was spent on. Millions of European and american young men could have been sent to the beaches of Brazil to just lay about. Instead of storming Normandy they could have stormed Copacabana to the horror of Brazilian locals. But that government spending was crucial. Without it, the Depression would not have ended.
No, it doesnt matter
I will bite. As Chinese wages rise, certain industries would discover that it would be cheaper to move their production facilities elsewhere. Particularly into the states in the ASEAN. They will also discover it would be more profitable to sell the products produced in ASEAN to China since Chinese wages continue to rise.
As Chinese wages continue to rise, the process continues even further until China may not even need to do consumer manufacturing but simply focus on the military and service industry.
Now, it is important to note, the reason Chinese wages continue to rise is because PBOC continues to produce more money allowing Chinese citizens to earn more. So long as China's monetary supply continues to outstrip its counterparts. Then the GDP as well as per capita GDP will continue to improve.
The problem with Gordon Chang is simply because he is wrong. He thinks that manufacturing has a relationship to income and economic growth. If that were true, why do countries that produce absolutely nothing have such high GDPs per capita? Besides paper money, they do not produce anything else at all. This is a man who wrote a book about the day that China would inevitably crash. Whether its due to intellectual dishonesty or just because he is intellectually wanting, he is still wrong. He does not understand how the monetary system works. And its 2011 and the man still has the thick skin to not just admit he is an idiot.
As Chinese wages continue to rise, the process continues even further until China may not even need to do consumer manufacturing but simply focus on the military and service industry.
Now, it is important to note, the reason Chinese wages continue to rise is because PBOC continues to produce more money allowing Chinese citizens to earn more. So long as China's monetary supply continues to outstrip its counterparts. Then the GDP as well as per capita GDP will continue to improve.
The problem with Gordon Chang is simply because he is wrong. He thinks that manufacturing has a relationship to income and economic growth. If that were true, why do countries that produce absolutely nothing have such high GDPs per capita? Besides paper money, they do not produce anything else at all. This is a man who wrote a book about the day that China would inevitably crash. Whether its due to intellectual dishonesty or just because he is intellectually wanting, he is still wrong. He does not understand how the monetary system works. And its 2011 and the man still has the thick skin to not just admit he is an idiot.
Quantitative easing and China
A statement on the government's website said the State Council had approved a plan to invest 4 trillion yuan in infrastructure and social welfare by the end of 2010.[4][3]
On March 6, 2009, China's National Development and Reform Commission announced a revision of the stimulus and published a breakdown of how the funds would be distributed.
Public infrastructure development took up the biggest portion -- 1.5-trillion yuan, or nearly 38% of the total package. The projects lined up include railway, road, irrigation, and airport construction.
China's economic growth was sustained by the economic stimulus and in addition, assisted neighboring countries with the economic recovery in 2010.[12] Chinese economic growth was around 10 percent even as its European and north American economies were slowing. [13] The stimulus provided funds for infrastructure projects and housing developments. Some were used to assist local governments to lend money to state-owned companies to develop housing estates, roads and bridges. [13] This will drive employment in areas of manufacturing, steel, cement and other sectors of the economy.
China's economic stimulus spending was so successful that China had to raise interest rates in order to prevent the economy from overheating.
Austrian school
I sympathize with the Austrian school, I really do. But they are wrong. Just very very wrong. Their theories do not correlate with reality. It just does not fit in the practical world. Even the classical economists knew that the economy was related to the money supply. Thus the great debates between conservatives and liberals on whether the money supply should be tied to gold or tied to both gold and silver. Because both sides knew that the only reason there was money in the world was because it was fictionally created. And that if money could only be arbitrarily tied to a finite commodity rather than through fiat, then the supply of money could only grow as fast as the commodity produced. But if the demand for products, employment, and technology exceed or expands beyond the level of commodities that can be produced. Then that demand will never be supplied because there simply is not the capital to pay for it.
While I do enjoy Austrian comments, because it gives me an excuse to think. They are still wrong.
While I do enjoy Austrian comments, because it gives me an excuse to think. They are still wrong.
Alternatives
Parts of the american media wants to discourage americans from thinking that China is a threat. So they sometimes pump false stories about China. But everything is true. It is the world's largest economy and the world's largest military.
Sunday, January 23, 2011
Keynes vs Classical
Classical economics is outdated. Adam Smith is dead. Most of my economics education was classical economics. We were taught that money like goods and services was finite. But reality is much different. Keynes did not create boom and bust cycles. Otherwise there would have never been a boom and bust cycle prior to the Great Depression. There even would not have been a Great Depression.
Historically growth and decline is a result of over extension. Many choose the word hubris and arrogance. There is no return unless you are willing to take risks. But if you take too much risk, it will ruin you. But there is no clear dotted line as to what constitutes too much risk. Individually, for a lot of industries, they keep taking risks so long as they are rewarded for their actions. Until finally, the coin flips the other way and all of their risk taking finally destroys them. However, this would not explain the entire economy which constitutes many many industries, and not just one. What are the chances that every industry across the economy fail simultaneously? So this alone might explain why a single industry may rise and fall, it does not explain why entire national economies rise and fall.
Historically, boom and bust cycles are related to gold. They are determined by the money supply and its relationship to gold. Banks typically practice fractional reserve lending. So they usually lend out more bank notes and loan agreements than they have in physical gold. Not only do private banks do this, but so do central government banks. As the ratio between money creation and gold becomes even wider, the risk that the bank is unable to exchange each bank note for an ounce of gold becomes even greater. A 10 to 1 ratio is normally considered safe. Meaning there are 10 gold certificates but only 1 ounce of gold. The assumption is that normally, the 10 holders of the gold certificates do not simultaneously come in to collect their gold. If only one person comes in to collect his gold, it would be absolutely fine because that person would only redeposit the gold back into the bank in exchange for a gold certificate in some near future. And the 10 holders of those certificates would each have a claim on the same ounce of gold just borrowing it from one another never knowing that there is only one ounce of gold between the 10 of them.
At some critical point, the fractional reserve lending process is discovered. And all 10 come in at the same time to claim their one ounce of gold. This creates a terrible consequence to the financial sector. The banks are then forced to become more prudent and careful in how they create money, thus money creation becomes difficult. The monetary system goes through austerity because they do not want the same kind of risk blowing up again. But having less bank notes floating around in the economic system means terrible consequences for the economy. Banks are hesitant to give out loans to pay for consumer spending and factory output. Having less money being created means people have less income and thus stagnant wages and an anemic economic system.
Governments and Banks have removed themselves from the gold standard and thus the boom and bust cycle has become obsolete. China has not had a recession for over 30 yrs. The only reason the united states suffers from recessions is because its the only tool the federal reserve has in order to calm inflation. The federal reserve is not a social worker. Their only tool in slowing inflation is to send millions of americans towards unemployment. This is because americans who dont have jobs, incomes, and spending habits, wont help drive up consumer prices. If you dont have a job, then you will just stay home every night and wouldnt be bidding on products on ebay. And by not participating in the economy, you are helping to keep inflation low.
Today, recessions do not occur because we run out of money because money is no longer tied to any finite commodity. Recessions today occur because the state is trying to stabilize the money supply. The reason China has never had a recession is because the Chinese Central Bank rarely tries to rein in the money supply in order to cause one.
Historically growth and decline is a result of over extension. Many choose the word hubris and arrogance. There is no return unless you are willing to take risks. But if you take too much risk, it will ruin you. But there is no clear dotted line as to what constitutes too much risk. Individually, for a lot of industries, they keep taking risks so long as they are rewarded for their actions. Until finally, the coin flips the other way and all of their risk taking finally destroys them. However, this would not explain the entire economy which constitutes many many industries, and not just one. What are the chances that every industry across the economy fail simultaneously? So this alone might explain why a single industry may rise and fall, it does not explain why entire national economies rise and fall.
Historically, boom and bust cycles are related to gold. They are determined by the money supply and its relationship to gold. Banks typically practice fractional reserve lending. So they usually lend out more bank notes and loan agreements than they have in physical gold. Not only do private banks do this, but so do central government banks. As the ratio between money creation and gold becomes even wider, the risk that the bank is unable to exchange each bank note for an ounce of gold becomes even greater. A 10 to 1 ratio is normally considered safe. Meaning there are 10 gold certificates but only 1 ounce of gold. The assumption is that normally, the 10 holders of the gold certificates do not simultaneously come in to collect their gold. If only one person comes in to collect his gold, it would be absolutely fine because that person would only redeposit the gold back into the bank in exchange for a gold certificate in some near future. And the 10 holders of those certificates would each have a claim on the same ounce of gold just borrowing it from one another never knowing that there is only one ounce of gold between the 10 of them.
At some critical point, the fractional reserve lending process is discovered. And all 10 come in at the same time to claim their one ounce of gold. This creates a terrible consequence to the financial sector. The banks are then forced to become more prudent and careful in how they create money, thus money creation becomes difficult. The monetary system goes through austerity because they do not want the same kind of risk blowing up again. But having less bank notes floating around in the economic system means terrible consequences for the economy. Banks are hesitant to give out loans to pay for consumer spending and factory output. Having less money being created means people have less income and thus stagnant wages and an anemic economic system.
Governments and Banks have removed themselves from the gold standard and thus the boom and bust cycle has become obsolete. China has not had a recession for over 30 yrs. The only reason the united states suffers from recessions is because its the only tool the federal reserve has in order to calm inflation. The federal reserve is not a social worker. Their only tool in slowing inflation is to send millions of americans towards unemployment. This is because americans who dont have jobs, incomes, and spending habits, wont help drive up consumer prices. If you dont have a job, then you will just stay home every night and wouldnt be bidding on products on ebay. And by not participating in the economy, you are helping to keep inflation low.
The federal funds rate, which had averaged 11.2% in 1979, was raised by Volcker to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well.
The Early 1980s recession was a severe recession in the United States which began in July 1981 and ended in November 1982.[1][2] The primary cause of the recession was a contractionary monetary policy established by the Federal Reserve System to control high inflation.[3]
Today, recessions do not occur because we run out of money because money is no longer tied to any finite commodity. Recessions today occur because the state is trying to stabilize the money supply. The reason China has never had a recession is because the Chinese Central Bank rarely tries to rein in the money supply in order to cause one.
Saturday, January 22, 2011
How GDP is decided
GDP is Government Spending + Private Consumption + Gross Investment + (Exports minus Imports)
The more money we print, the faster the GDP would grow.
By injecting more money into Government Spending, Private Consumption, and Gross Investment, that would lead to more economic growth. Monetarily, economic growth is inevitable. The real economy may or may not decide to produce more goods as a result of more money being printed. But most likely, people will produce more goods and services if there was wage inflation so long as employment rates have not already been maximized. Deficit spending is necessary because that money that is being injected into GS, PC, and GI, must come from debt. When the Government takes out loans to pay for government expenditures, that boosts Government spending. When Consumers take out loans to pay for consumer purchases, that boosts Private Consumption. And when businesses take out loans to purchase new factories, buildings, and machine tools, that boosts Gross investment. So these loans become necessary to boost GDP. And thus the nation's debt and its GDP are inevitably tied.
The more money we print, the faster the GDP would grow.
By injecting more money into Government Spending, Private Consumption, and Gross Investment, that would lead to more economic growth. Monetarily, economic growth is inevitable. The real economy may or may not decide to produce more goods as a result of more money being printed. But most likely, people will produce more goods and services if there was wage inflation so long as employment rates have not already been maximized. Deficit spending is necessary because that money that is being injected into GS, PC, and GI, must come from debt. When the Government takes out loans to pay for government expenditures, that boosts Government spending. When Consumers take out loans to pay for consumer purchases, that boosts Private Consumption. And when businesses take out loans to purchase new factories, buildings, and machine tools, that boosts Gross investment. So these loans become necessary to boost GDP. And thus the nation's debt and its GDP are inevitably tied.
Not really
Military spending is measured the same as any other forms of spending. Thus an undervalued currency in China affects China's nominal military spending values the same way it affects China's civilian production spending values. China is currently the largest economy in the world and with a GDP per capita much larger than 10,000. However it is difficult to understand that due to the unrealistic exchange rate. Military spending suffers from the same miscalculation, which is why China can produce 5 submarines in a single year when it would take the united states fives years to produce one.
Geopolitics knows no bounds
World politics is not driven by ideology. It is driven by power. Despite woodrow wilson's claim that world war one was a war between democracy and autocracy. Prussia did have universal suffrage for everyone but women, just like the united states. In america, women and non whites still didnt have political rights.
All the Kaiser did during first world war was to defend its Austrian ally who had their prince assassinated by Serbian secessionists (who are currently Chinese allies). If this had happened again today. China would support Serbia not because its ok to go around shooting royals, but because the two have expressed international camaraderie.
Bubbles only pop when you stop injecting money
Inflation is a result of money creation. When you give money to researchers and scientists to produce innovation. They will take the money they received as a salary and use it to purchase goods and services or to invest in digital or physical assets. Thus you get inflation. If a scientist takes his salary to purchase a second home, then that creates property inflation.
In order for the private market to flourish. The government and banks must be willing to loan and give grants to the private sector. This is because all money is derived from the state. There is no such thing is private sector money. All money is government legal tender.
A bubble only pops when it is intentionally popped. A bubble is simply inflation. When you continue to pour more money into finite assets. The value of those assets will continue to rise. Until the government expresses intent to reduce the money supply thus creating more assets than there is money. Then prices fall as asset values begin to decline.
It is a real shame that so many Chinese americans can be so intellectually retarded.
In order for the private market to flourish. The government and banks must be willing to loan and give grants to the private sector. This is because all money is derived from the state. There is no such thing is private sector money. All money is government legal tender.
A bubble only pops when it is intentionally popped. A bubble is simply inflation. When you continue to pour more money into finite assets. The value of those assets will continue to rise. Until the government expresses intent to reduce the money supply thus creating more assets than there is money. Then prices fall as asset values begin to decline.
It is a real shame that so many Chinese americans can be so intellectually retarded.
It isnt important whether or not China and the united states cooperate
As the old saying goes, one mountain can not have two tigers.
Ultimately, China needs to eliminate the united states. Any good student of history and geopolitics will tell you that there is only one constant. And that is competition.
Lots of laymans commenting
Asset bubbles only pop if the money supply contracts. Housing prices are a result of more money chasing after a finite number of homes. The number of homes do continue to increase as a result of more money being produced, however the ratio of homes to money is unstable. For instance, 1 to 1, 4 to 2, 10 to 3 etc. The number of homes continue to increase because housing prices continue to rise giving the real estate market more incentive to produce more housing. In order for the bubble to burst. The money supply must contract. For instance 10 to 3, 5 to 3, 1 to 3 etc. Now you have more homes than you have money thus property devaluation.
In addition, you will also see fewer homes going up. Because the property developers that wanted to build homes at 10 are going to have less incentive to construct housing now that the money supply is at 1.
The only force that can cause property prices to collapse is the People's Bank of China. If they set a policy to drain more money than there is pouring in. Then you will have the opposite of inflation, which is deflation.
In short, the comment that I previously read about the Chinese economy was terrible. Let us assume China had 100 air craft carriers. How would this ever pose a threat to the united states? A carrier can only launch air crafts with limited combat radius. How would the Chinese strike montana or illinois? China's threat to the us is much greater than that. On any given day, enough nukes can land on the united states to wipe out the american population. Why would China owe the us? It is the us who owes China nearly 1 trillion in debt after the Europeans dumped american dollars.
In addition, you will also see fewer homes going up. Because the property developers that wanted to build homes at 10 are going to have less incentive to construct housing now that the money supply is at 1.
The only force that can cause property prices to collapse is the People's Bank of China. If they set a policy to drain more money than there is pouring in. Then you will have the opposite of inflation, which is deflation.
In short, the comment that I previously read about the Chinese economy was terrible. Let us assume China had 100 air craft carriers. How would this ever pose a threat to the united states? A carrier can only launch air crafts with limited combat radius. How would the Chinese strike montana or illinois? China's threat to the us is much greater than that. On any given day, enough nukes can land on the united states to wipe out the american population. Why would China owe the us? It is the us who owes China nearly 1 trillion in debt after the Europeans dumped american dollars.
Geopolitics
No american inherently believes what they are doing is inherently correct. Our actions are driven purely by self interest. Anything else is an after thought, a commercial, false advertising.
At least in trade, there is some mutual understanding even if one is to benefit more than the other. In a war, there is no trade. It is purely duress.
“It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest”
Friday, January 21, 2011
Thats not how it works
When you suspend military spending. That has negative consequences for the economy. To put it plainly, GDP is simply the sum of a variety of factors.
GDP= Government Spending + Private consumption + Gross Investment + (Exports minus Imports)
Government spending = Military spending + Social spending.
Thus GDP is Military spending + Social spending + Private consumption + Gross Investment + (Exports minus Imports)
As a result, a reduction in military spending will have serious negative consequences for the economy. Economic growth depends heavily on military research and military output.
To understand how economic growth depends on the military without using odd looking equations. Try to understand it intuitively. If you work as a soldier or as a professor being assigned to do military research. You would certainly not want to see the government downsize your department. It would negatively effect you, your family and even your community. Without having that government job designing and manufacturing SSBNs, your ability to make mortgage payments decline. The amount of money you normally spend on eating out, or buying trinkets for your family also declines. It has a serious domino effect.
GDP= Government Spending + Private consumption + Gross Investment + (Exports minus Imports)
Government spending = Military spending + Social spending.
Thus GDP is Military spending + Social spending + Private consumption + Gross Investment + (Exports minus Imports)
As a result, a reduction in military spending will have serious negative consequences for the economy. Economic growth depends heavily on military research and military output.
To understand how economic growth depends on the military without using odd looking equations. Try to understand it intuitively. If you work as a soldier or as a professor being assigned to do military research. You would certainly not want to see the government downsize your department. It would negatively effect you, your family and even your community. Without having that government job designing and manufacturing SSBNs, your ability to make mortgage payments decline. The amount of money you normally spend on eating out, or buying trinkets for your family also declines. It has a serious domino effect.
No more landing ships
What the navy needs is the same thing every branch of the military needs. Fire power.
I saw what was described as a ridiculous class of fictional vessels. But personally, I found the concept to be unusually brilliant. Normally. Every frigate and destroyer has its own independent electronics system. Meaning they would be able to operate alone, independent from the battle group. They have their own sensory equipment, their own antiship weapons, their own antiair weapons. Generally, these ships are fairly rounded. They do not excel in any single one area, but are capable to perform several different tasks.
However, if a class of vessels could be produced that were simply armed with nothing but DF31s. What we would have is a very blind ship that packs an apocalyptic volume of firepower. There are enough destroyers and frigates that can act as the eyes and ears of these one hit wonders. The 052s and the 053s can act as the escorts of these death stars at sea while your so called death stars act the the nucleus for your fleet.
Like a carrier, the ship will always be under constant surveillance by enemy vessels. But unlike a carrier, the payload it carries is intercontinental, while the weapons it brandishes are apocalyptic.
No one wants to end the world. But to posses the power to do so needs to be very real.
I saw what was described as a ridiculous class of fictional vessels. But personally, I found the concept to be unusually brilliant. Normally. Every frigate and destroyer has its own independent electronics system. Meaning they would be able to operate alone, independent from the battle group. They have their own sensory equipment, their own antiship weapons, their own antiair weapons. Generally, these ships are fairly rounded. They do not excel in any single one area, but are capable to perform several different tasks.
Like a carrier, the ship will always be under constant surveillance by enemy vessels. But unlike a carrier, the payload it carries is intercontinental, while the weapons it brandishes are apocalyptic.
No one wants to end the world. But to posses the power to do so needs to be very real.
DF5 will never be numbered
There are too many complications with dealing with silo based ICBMs. Even if they are discovered, the attack must be strong enough destroy their hardened bases. And the attack must come on all of the silos simultaneously. DF5s can be fired preemptively or through counter. If the Chinese feel that any segment of its Silo based ICBMs are being threatened, they can fire the rest of them right away. If the Chinese fire them preemptively simply because some patrol ship was struck in the middle of the sea, then its just waiting for them to land.
Thursday, January 20, 2011
Consequences of Yuan appreciation
I doubt Yuan appreciation would ever cause Chinese exports to become less competitive than the united states. However, it is very possible for Yuan appreciation to cause Chinese exports to become less competitive compared against nations like Vietnam and members of the ASEAN. Since they maybe more willing to produce the same product for even less reward than the Chinese.
But none of that is strategically important to China. If ASEAN is willing to export its undervalued products to China in exchange for the Yuan and Yuan bonds, China would be getting something for nothing. What is strategic to China's economy isnt trade revenue, but military spending. China's foreign debt could become 100 trillion dollars equivalent. But what nation in the world could ever force China to pay it? Not only is forcefully collecting debt no longer accepted as a social norm. But even if we returned to 19th century gunboat diplomacy where armies marched against foreign countries to collect on debt. What nation is willing to take a nuke to their capital to collect debt from China?
Currently, China is the world's largest creditor, so if anyone is going to be hiring debt collectors, it would be China. But assuming a hypothetical reversal in reality. What difference would it make?
But none of that is strategically important to China. If ASEAN is willing to export its undervalued products to China in exchange for the Yuan and Yuan bonds, China would be getting something for nothing. What is strategic to China's economy isnt trade revenue, but military spending. China's foreign debt could become 100 trillion dollars equivalent. But what nation in the world could ever force China to pay it? Not only is forcefully collecting debt no longer accepted as a social norm. But even if we returned to 19th century gunboat diplomacy where armies marched against foreign countries to collect on debt. What nation is willing to take a nuke to their capital to collect debt from China?
In 1902 the Venezuelan government defaults on its interest payments to Britain, Germany and Italy. All three send warships to bombard the Venezuelan coast. In 1903 Germany threatens to collect a debt in the same way from the Dominican Republic.
Currently, China is the world's largest creditor, so if anyone is going to be hiring debt collectors, it would be China. But assuming a hypothetical reversal in reality. What difference would it make?
Yuan Appreciation
As long as the Yuan appreciates, that is a guaranteed source of economic growth for China. If the Yuan appreciates 10 percent, the Chinese GDP would automatically grow 10 percent all other things being equal. Most people around the world have disassociated money from commodities. So they no longer believe that money should be inherently backed by anything.
As long as the Arab Numerals that appear on that banking statement continues to grow, then they feel a sense of progress and reward.
As for global acceptance of the Yuan. That is almost guaranteed. Investors, traders, and ordinary people are more than willing to accept Yuan as a global currency unit.
As long as the Arab Numerals that appear on that banking statement continues to grow, then they feel a sense of progress and reward.
As for global acceptance of the Yuan. That is almost guaranteed. Investors, traders, and ordinary people are more than willing to accept Yuan as a global currency unit.
Wednesday, January 19, 2011
The J8
It is an incredibly old aircraft. However, China should probably continue to operate this fleet until every single one of them falls out of the sky. Instead of trying to deactivate old air crafts and missiles like the J8 and the DF5. China should continue to build more air crafts and missiles to further enlarge the inventory. This way, the size of the military does not stagnate while newer inventory continues to replace the old. While instead, the size of the military continues to expand and gets larger as new inventory is placed on top of the previous bulk.
The J8 is no frontline, and the DF5 is a liquid fuel rocket. However the J8 is a twin engine aircraft capable of being equipped with modern weapons systems like BVR, guided munitions, and electronic warfare systems. It is able to expose and attack vulnerable enemy gaps while the enemy's front line is far too tied down as a result of facing your front line fighters and bombers. And the DF5 really needs no explanation. Its a fearsome missile regardless what century it is.
The J8 is no frontline, and the DF5 is a liquid fuel rocket. However the J8 is a twin engine aircraft capable of being equipped with modern weapons systems like BVR, guided munitions, and electronic warfare systems. It is able to expose and attack vulnerable enemy gaps while the enemy's front line is far too tied down as a result of facing your front line fighters and bombers. And the DF5 really needs no explanation. Its a fearsome missile regardless what century it is.
Tuesday, January 18, 2011
The Chinese Carrier
This has got to be the biggest waste of time in all of Chinese military history. The ship began construction by the Soviet Union in 1985. After the fall of the Soviet Union, the incomplete ship came under Ukrainian possession as Ukraine seceded from the Soviet Union. Not knowing what to do with it, the ship was sold to China in 1998. The ship is over 25 yrs old and it is still not completed. This has got to be the biggest waste of time in all of China's navy. The ship depreciates faster than China can complete it. And it makes no sense why the Chinese refuse to simply launch it.
If I was forced to rationalize why this ship was never put into the fleet it is because China fears that launching such a ship would encourage Japan and South Korea to try to launch their own carriers. But what does it matter. Both Japan, South Korea and the rest of the world falls under China's nuclear terror. So what does it matter if they launched a carrier or not.
The ship is using 25 yr old technology. By the time the ship is complete, it is already outdated. It must be remembered, that if it takes 25 yrs to solve a math problem, then do not bother trying to solve it at all. If the Chinese intend to launch this ship, then they better launch it soon before it gets eaten up by its own rust.
Fortunately, who ever runs China's SSBN department is not the type to take his american time.
If I was forced to rationalize why this ship was never put into the fleet it is because China fears that launching such a ship would encourage Japan and South Korea to try to launch their own carriers. But what does it matter. Both Japan, South Korea and the rest of the world falls under China's nuclear terror. So what does it matter if they launched a carrier or not.
The ship is using 25 yr old technology. By the time the ship is complete, it is already outdated. It must be remembered, that if it takes 25 yrs to solve a math problem, then do not bother trying to solve it at all. If the Chinese intend to launch this ship, then they better launch it soon before it gets eaten up by its own rust.
Fortunately, who ever runs China's SSBN department is not the type to take his american time.
Monday, January 17, 2011
Just Mass It
Too much time being spent in order to correct a product to some invisible standard means you will never get the kind of volume that you need. If there is something that you are not happy with, then you can correct those mistakes in future variants. But most people would be more than happy with the current product that is available. Technology moves very quickly. I do not think we have the patience to allow you to fool around with present technology when future technology is waiting to be made.
The Foreign Reserve
The Foreign Reserve has been bloated to 2.85 trillion. Most of that reserve is in the value of foreign debt. Thus China has not yet tasted the sweet and fat that comes from its export revenue. China could purchase technology, but that would not maximize the benefit that can be derived from China's foreign reserve. There is a considerable premium placed on technology when ever it is sold. Iron ore costs no more than 100 dollars a ton. So why does a 4 pound production sword cost 400 dollars? Why does a vehicle cost 15,000? Because a considerable fraction of the costs comes mainly from labor. When ever you purchase steak and potatoes from a restaurant, the cost is not simply the going market price for steak and potatoes. But the price that must be paid to the chef, the waiters, busboys, owners, rent, electricity, taxes and finally the cost of raw materials that is cows and potatoes. Thus a considerable premium is placed on steak and potatoes served at a restaurant.
By only purchasing raw materials, the only premium that must be paid is for the raw material itself. The wages and profits that must be distributed to the miners and the owners of the mine. Thus it would make more sense for China to simply import the raw materials and manufacture the product themselves.
Europe is China's largest trade partner. Thus China feels the need to purchase European treasury bonds so that that they can continue to have the income available to purchase Chinese goods. If Europe buys 300 billion Euros worth of Chinese goods that leaves Europeans 300 billion Euros short to make the same purchase next year. Thus China loans back the 300 billion Euros to Europe so that it can make a repeat purchase the next year.
The Chinese exporters are not interested in the Euros, they are interested in the RMB because they must pay rent, taxes, electricity, wages, all in RMB. Thus the exchange rate must be favorable enough so that the Euros that they make can be exchanged for enough RMB that can pay for these expenses. In order to make sure enough RMB is available to these exporters to pay these expenses, RMB must be created out of thin air to exchange for these Euros. All of which creates a considerable strain in the form of inflation to the Chinese economy.
This is a rather silly relationship that only serves to keep Chinese exporters wealthy and the employees who work for those exporters to continue to have jobs. But this Keynesian dilemma could have been organized around any kind of system besides exports. It could have been centered around health care and education. It could have been centered around military spending.
China could have kept loaning itself 300 billion Euros worth of Yuan year after year to keep building J20s so as to keep PLA military contractors wealthy, and the people who work for those contractors to continue to have jobs. Since we have already accepted to endure the strain of inflation that comes from having to export goods to foreign markets. What consequence would there be if China simply endured that inflation for an entirely different objective. Which is from military spending.
By only purchasing raw materials, the only premium that must be paid is for the raw material itself. The wages and profits that must be distributed to the miners and the owners of the mine. Thus it would make more sense for China to simply import the raw materials and manufacture the product themselves.
Europe is China's largest trade partner. Thus China feels the need to purchase European treasury bonds so that that they can continue to have the income available to purchase Chinese goods. If Europe buys 300 billion Euros worth of Chinese goods that leaves Europeans 300 billion Euros short to make the same purchase next year. Thus China loans back the 300 billion Euros to Europe so that it can make a repeat purchase the next year.
The Chinese exporters are not interested in the Euros, they are interested in the RMB because they must pay rent, taxes, electricity, wages, all in RMB. Thus the exchange rate must be favorable enough so that the Euros that they make can be exchanged for enough RMB that can pay for these expenses. In order to make sure enough RMB is available to these exporters to pay these expenses, RMB must be created out of thin air to exchange for these Euros. All of which creates a considerable strain in the form of inflation to the Chinese economy.
This is a rather silly relationship that only serves to keep Chinese exporters wealthy and the employees who work for those exporters to continue to have jobs. But this Keynesian dilemma could have been organized around any kind of system besides exports. It could have been centered around health care and education. It could have been centered around military spending.
China could have kept loaning itself 300 billion Euros worth of Yuan year after year to keep building J20s so as to keep PLA military contractors wealthy, and the people who work for those contractors to continue to have jobs. Since we have already accepted to endure the strain of inflation that comes from having to export goods to foreign markets. What consequence would there be if China simply endured that inflation for an entirely different objective. Which is from military spending.
Saturday, January 15, 2011
What the J20 means
China has pretty much closed the gap. The biggest complaint about the Chinese air force was that it operated only 4th generation air crafts. These are fairly reliable planes that operates as your standard workhorse in an air war. But often than not the united states would hide behind the argument of fifth generation stealth, creating a line between the Chinese air force and their own. The J20 would help negate that argument as China too also possesses a fifth generation stealth aircraft.
I was never a big fan of stealth technology. But this aircraft would certainly assist in future political and military discourses. Finally closing that gap in conventional military technology.
Absolutely. Now that the images of the J20 flight test have been released. The suspense is over, and there is not much else to look forward to. The goal of the PLA and the CCP now is to ensure that this aircraft gets mass produced as soon as possible. A loose monetary policy would most definitely determine the speed of that endeavor.
I was never a big fan of stealth technology. But this aircraft would certainly assist in future political and military discourses. Finally closing that gap in conventional military technology.
Absolutely. Now that the images of the J20 flight test have been released. The suspense is over, and there is not much else to look forward to. The goal of the PLA and the CCP now is to ensure that this aircraft gets mass produced as soon as possible. A loose monetary policy would most definitely determine the speed of that endeavor.
Thursday, January 13, 2011
I doubt it
Usually the Chinese have a much more superior educational system from high school to university level. I can't say much for their liberal arts since there is no real clear ruler to measure this by. However, in most international meets between Chinese university students versus those coming from other states, Chinese tend to come in at number one.
ACM International Collegiate Programming Contest World Finals
Place Name Solved Time Last Problem 1 Shanghai Jiaotong University 7 778 229 2 Moscow State University 7 940 263 3 National Taiwan University 6 779 201 4 Taras Shevchenko Kiev National University 6 928 238 5 Petrozavodsk State University 6 985 284 6 Tsinghua University 6 998 261 7 Saratov State University 6 1010 297 8 University of Warsaw 6 1042 263 9 St. Petersburg State University 6 1042 277 10 Zhongshan (Sun Yat-sen) University 6 1049 272 11 Fudan University 6 1114 294 12 KTH - Royal Institute of Technology 6 1265 288 13 Ural State University 6 1312 268 14 Stanford University 5 377 128 14 Cornell University 5 560 160 14 University of Tokyo 5 598 207 14 Carnegie Mellon University 5 782 192 14 University of British Columbia 5 819 196 14 Seoul National University 5 824 206 14 Belarusian State University 5 850 280 14 Massachusetts Institute of Technology 5 851 209 14 St. Petersburg State University of IT, Mechanics and Optics 5 860 269
Country Team size P1 P2 P3 P4 P5 P6 Total Rank Awards All M F G S B HM People's Republic of China 6 5 1 41 42 23 42 24 25 197 1 6 0 0 0 Russian Federation 6 6
41 35 11 42 20 20 169 2 4 2 0 0 United States of America 6 6
40 42 8 42 24 12 168 3 3 3 0 0 Republic of Korea 6 6
42 42 24 42 0 6 156 4 4 2 0 0 Kazakhstan 6 6
42 35 13 42 4 12 148 5 3 2 0 1 Thailand 6 6
42 42 16 42 5 1 148 5 1 5 0 0 Japan 6 6
41 29 15 42 6 8 141 7 2 3 0 1 Turkey 6 6
40 36 13 42 7 1 139 8 1 3 2 0 Germany 6 5 1 39 31 9 42 5 12 138 9 1 3 2 0 Serbia 6 6
39 31 7 42 9 7 135 10 1 3 2 0
41st International Physics Olympiad
Zagreb 17-25 July 2010
| Yichao Yu | China |
| Jundong Wu | China |
| Fabian Gundlach | Germany |
| Daniel Li | United States of America |
| Isarapong Eksinchol | Thailand |
| Sergei Patiakin | United Kingdom |
Wednesday, January 12, 2011
Stealth Comparison
The whole stealth argument is just ridiculous
The f22 has a limited combat radius and the b2 bomber can not even travel at supersonic speeds. Not only are we supposed to place our faith in stealth, but these platforms were flawed from the beginning. A DF21 would have a greater combat radius, reach hypersonic speeds, and be able to travel through space. When it comes to preemption, at over 14,000 km an hour, the DFs would be able to preempt even faster.
New Round of Spending
Being 2011, there really is not much time left. China has this incredible and unmatched industrial capacity and an incredible and unmatched industrial potential. It would be in China's interest to maximize military spending as soon as possible. There are tens of millions of Chinese that can be mobilized to help further boost military spending. A simple equation needs to be put together to determine what the level of idle human resources happens to be in China. And determine how much money needs to be spent in order to maximize those employment rates and then determine how many weapons systems such spending would allow China to purchase. The People's Bank of China will release the necessary funds, while other government officials will determine what weapons systems those funds will be allocated to. Millions of people need this source of income, whether it is for 30 yr mortgages, car loans, or the cost for the education of their children. Government spending helps provide to these tens of millions who otherwise would not be motivated to contribute. The state offers them the means to pay down their loans or to make future purchases while they offer their services to help maximize China's military output.
Tuesday, January 4, 2011
Not Really
A Housing Bubble only occurs after the money supply that was used to encourage housing spending comes to an end. Meaning the government who controls the money supply refuses to release any more money. As long as liquidity remains a constant, housing prices and construction will continue to expand. Since more money chases after a finite supply of housing.
If there really is unused housing, the government can manage a few things. It can choose to subsidize housing by giving these homes away for free for those who still dont own property. The government can choose to purchase them at a profit to the seller or choose to purchase them at a loss to the seller. The government can then redistribute the housing at a profit to itself, or at a loss to itself. Its a moral decision, rather than a financial one. This is because PBOC has an infinite supply of RMB as recently stated. So its inconsequential what the Chinese government chooses to buy. Whether its concrete buildings, or steel warplanes.
As individuals, our spending habits often require us to balance budgets. We are constantly shifting between paperwork to determine what we should or should not spend so as to remain within our own means. For the central government. It is a very different game. It does not need to look to see where it lands. The Central government is not a player, the Central government is the game master.
If there really is unused housing, the government can manage a few things. It can choose to subsidize housing by giving these homes away for free for those who still dont own property. The government can choose to purchase them at a profit to the seller or choose to purchase them at a loss to the seller. The government can then redistribute the housing at a profit to itself, or at a loss to itself. Its a moral decision, rather than a financial one. This is because PBOC has an infinite supply of RMB as recently stated. So its inconsequential what the Chinese government chooses to buy. Whether its concrete buildings, or steel warplanes.
As individuals, our spending habits often require us to balance budgets. We are constantly shifting between paperwork to determine what we should or should not spend so as to remain within our own means. For the central government. It is a very different game. It does not need to look to see where it lands. The Central government is not a player, the Central government is the game master.
Sunday, January 2, 2011
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