I dont think they know how many ICBMs China has. A single nuclear submarine would carry 12 ICBMs per ship. Why would they only build 3 per year?
These arent expensive weapons. A DF31 is 1/3rd the cost of an f16. Nuclear weapons are not expensive weapons. The only reason so few countries carry them is because these weapons can not be legally traded. Hydrogen bombs were produced back in the 50s and 60s. Back when cadillacs were 1000 dollars per vehicle. The f16 was designed for 1980s warfare and sold to just about any country on the planet.
No security council member perceives a fighter jet to be a security threat.
Sunday, February 27, 2011
Reason for protests is because the standard of living is being set back
People can see, hear, and feel their own standard of living dissolving. Its not a question of; I was poor and I am complaining that I am poor. But I am poor, and now I feel that I have become even more so. That is the reason why these protests are taking place across the united states. The private sector has downsized itself, and the public sector will be following suit. The Republicans are ideological driven to reduce the public sector, since it does not fit into their political paradigm. With budget deficits from the federal to state sector. Such an ideology is actually quite justified. But by choosing this option as opposed to simply extending these budget deficits even further, they are forcing people across the country to come out and protest.
Friday, February 25, 2011
It makes no long term difference if the CCP fell or not
The J20 is still here. The DF21s, 31s, and 41s are still there. The nukes are still there. Whoever comes in power would still have possession of them. Its not like those weapons would disappear along with the CCP. The CCP does China and whatever successor government a favor for having built those weapons. Since they would still remain in Chinese hands and whatever government that replaces them.
Thursday, February 24, 2011
RMB is always a better investment than the dollar
I prefer Gold and Silver, but the Yuan is always better than the dollar because it appreciates against the dollar by 5 percent a year.
Of course you can flood the global market with RMB
Foreign exchange trading is global. This means there is always global demand for any national currency the same way there is global demand for equities. This is how the Japanese managed to purposefully depreciate its Yen against the dollar. The government prints excess Yen and uses the Yen to purchase foreign dollars. It creates an artificial supply of Yen and also helps produce an artificial demand for dollars.
However, global demand for Yen is so great, that foreign investors from the united states and Europe are doing the same exact thing. Selling their dollars and euros in exchange for Yen. Helping to create demand for the Yen and an excess supply of dollars and euros on the global market. Forcing the Yen to appreciate against dollars and euros. Thus the Japanese central government would have to print even more Yen if it wants to overcome global demand.
However, global demand for Yen is so great, that foreign investors from the united states and Europe are doing the same exact thing. Selling their dollars and euros in exchange for Yen. Helping to create demand for the Yen and an excess supply of dollars and euros on the global market. Forcing the Yen to appreciate against dollars and euros. Thus the Japanese central government would have to print even more Yen if it wants to overcome global demand.
Broker Joe!
Show me some flow
I need the dough!
I’m Broker Joe!
That Broker Joe!
That Broker Joe!
I do not like
That Broker Joe!
Would you buy my CDO?
I do not like them, Broker Joe
I do not like your CDO!
Would you like it here or there?
I would not like it here or there
I would not like it anywhere
I do not like your CDO
I do not like it, Broker Joe
Would you like to sell some yen?
I do not want to sell the yen
The big fat tail just kills my zen
If you don’t sell now, then when?
I will not sell it here or there
I will not sell it anywhere
I do not like your CDO
I do not like it, Broker Joe
Our SIV has had a few rough knocks
Get in now, you sly old fox!
I am slyer than a fox
And I don’t think you have the docs
That you must have if you foreclose
And so a judge will thumb his nose
At you, your SIV, and CDO
Who owns the mortgage?
I don’t know
And you don’t either, Broker Joe
I would not know it here or there
I would not know it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!
We have some hedge funds who are long
Those guys are smart! They can’t be wrong!
Some funds are long and some are not
The ones who are, are feeling caught
The short ones make a lot of sense
And they are up lots of percents
No SIV, no yen
Not now, not then
Not here, not there
I would not touch it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!
But you can trust the agencies
They’ve rated this stuff Triple-B!
This tranche is still investment grade
You buy it here, your year is made!
The agencies have been asleep
Their ratings are just like ‘Bo Peep
That is, they’re from a fairy tale
As fiction goes, they’re off the scale
And I do not believe them, Joe
And so your tranche is a no-go
You think at 50 it’s a do
Until it falls to twenty-two
I do not like your CDO,
I will not buy it, Broker Joe!
Have you met our in-house quant?
He’ll model anything you want!
Except, that is, transactions costs
No thanks, I do not want the loss
From any quant’s sexy black box
Or mortgages unbacked by docs
Or mindless buys of kiwi-yen
Or ABX headed to 10
Or any other credit turd
I’ve spoken, Joe, so hear the word
I do not like your CDO,
I will not buy it, Broker Joe!
What?
What must I do, What must I do
What must I do to trade with you?
Perhaps you should avoid the drink
And use your brain sometimes to think
And not assume what’s gone before
Will follow on, and thus ignore
That circumstances sometimes change
And things that once seemed awfully strange
Can swiftly become commonplace
And then vanish once more, sans trace.
In short, you’ll have to look ahead
To win your future daily bread
In your head you have two eyes,
Use them, please, to analyze
And then you’ll see your business grow
So THINK THINK THINK THINK, Broker Joe!
I see! I see! I start to think
That all of my ideas stink
That CDO is mark-to-myth
The model’s written by a Sith
I’ll call my custies on the phone
And say “hey leave the yen alone!”
I’ll leave it to the black-box nerds
To buy up all the subprime turds!
I’ll say “you’re welcome”, “thanks”, and “please”
And just ignore the agencies
And as for our beleaguered SIV
The guy who runs it is a spiv
I’d stay away if I were you
Yes, that’s the wisest thing to do!
It’s been a quite eventful year
Weak hands have been found out, I fear
At bonus time they’ll feel the pinch
And find they’re working for the Grinch
(that begs the question: which is worse?
That bonus cheque, or all this verse?)
But now, at last, the race is run
Both year and verse are almost done
I hope your holidays are great
I’ll see you in 2008!
King of Saud
The best thing to do is run budget deficits in order to maintain a happy citizenry. There really is no limit to how much you are able to print in order to maintain happiness for the people in a nation. Its either budget deficits to artificially inflate wages, salaries, and benefits for the common man. Or risk getting overthrown. I would think the former being the better choice.
Its not taxpayers money. If it was, Saudi Arabia would not get anywhere. You take 10 riyals from one man and give them to another. There is still only 10 riyals between the two of them. The payment does not come from taxation, it comes from budget deficits. Meaning its printed out of thin air.
Its not taxpayers money. If it was, Saudi Arabia would not get anywhere. You take 10 riyals from one man and give them to another. There is still only 10 riyals between the two of them. The payment does not come from taxation, it comes from budget deficits. Meaning its printed out of thin air.
There is no fundamental reason to have high oil prices so quickly
There was no fundamental reason for an oil price hike. It was up only because of the perceived Middle East crisis. Once that subsides, oil prices would level off. Basically, you have so much money being pumped into the dow. There is this incredible pent up inflation in the form of equity prices. Once they perceive an oil crisis. Investors will dump their stock shares and go out and buy oil.
Once the fear subsides, the price of oil will fall, and the money that was used to boost oil prices will return back to equities. This isnt to say oil prices wont break 140. Oh they will, but it will most likely come later than come now.
Once the fear subsides, the price of oil will fall, and the money that was used to boost oil prices will return back to equities. This isnt to say oil prices wont break 140. Oh they will, but it will most likely come later than come now.
Sunday, February 20, 2011
There is not motivation for a protest
The GDP is experiencing over 10 percent growth. Unemployment remains low. 26 million unemployment out of a population of over 800 million working men and women is less than 4 percent unemployment. Government and banks are still extending loans and liquidity for public and private enterprise. The government and private sector is not gutting state and private budgets. It is continuing a loose monetary policy to help extend economic expansion.
No, I dont even believe the concerns are genuine. And are most likely funded by foreign groups. The hope is that a small group of paid protesters can rally enough volunteers to join. That is how activism works. To pay a few, to incite emotions for the rest. They do not have enough money to pay everyone. But with few like minded volunteers, the movement has little momentum.
The only thing worse than inflation is not having a job. And the only thing worse than both is having inflation and not having a job. People rarely protest because of inflation, they protest because they fear losing their only source of income.
Protests are erupting across the united states because state and city budget deficits are forcing local governments to cut spending and disband public employees. They are not protesting high oil prices and higher food prices at the supermarket. Food and oil prices inflate 30 percent a year. And yet, that is not the source of their protests. They are protesting the downsizing of state employees. A government budget deficit debate does not exist in China. They will keep spending because the CCP says so.
No, I dont even believe the concerns are genuine. And are most likely funded by foreign groups. The hope is that a small group of paid protesters can rally enough volunteers to join. That is how activism works. To pay a few, to incite emotions for the rest. They do not have enough money to pay everyone. But with few like minded volunteers, the movement has little momentum.
The only thing worse than inflation is not having a job. And the only thing worse than both is having inflation and not having a job. People rarely protest because of inflation, they protest because they fear losing their only source of income.
Protests are erupting across the united states because state and city budget deficits are forcing local governments to cut spending and disband public employees. They are not protesting high oil prices and higher food prices at the supermarket. Food and oil prices inflate 30 percent a year. And yet, that is not the source of their protests. They are protesting the downsizing of state employees. A government budget deficit debate does not exist in China. They will keep spending because the CCP says so.
Saturday, February 19, 2011
The private sector exists only because of the money supply
All these claims about recovery do not seem to fit with reality. Local and state governments continue to cut spending. Police officers, teachers, and government employees of all types continued to be laid off. Excessive budget deficits are preventing the state from being able to keep their operations going. If a recovery was real, there would be enough taxable income derived from the private sector to pay for these activities. Higher employment levels, higher consumer spending, higher real estate prices would have created the taxable revenue needed to continue funding state and local enterprises. Some might argue that these enterprises should have never existed in the first place. Perhaps they are right. But the point is, the fact that these activities are being downsized is a symptom of economic weakness. That the private sector economy lacks the financial strength that the government needs to withdraw taxes from.
Now the president makes the claim that there needs to be more math and science so as to improve the private sector. As if somehow new financial strength can be reborn by simply improving math and science. While new technology would certainly be nice, that is not what lends to financial strength. New technology is constantly be created. The aisles are filled with it. Whats down is not technology, what is down is consumer spending.
The federal reserve created nearly 2 trillion in quantitative easing to help the economy recover. And instead of seeing a rise in employment levels, consumer spending, and economic growth, the dow was pushed up from 6700 to 12,000. Oil prices have doubled from being below 40 dollars to now over 80 dollars. Its clear where this liquidity went to. I personally invest myself. Am I grateful for the gains. But at the same time, you have to ask, is this the only sector that the fed intends to prop up?
The fed is determined to break 14,000 and beyond, and it clearly has the liquidity to do it. But is equities and commodities going to be the only game in town from now on? This is not a consumer led economy where higher wages leads to higher consumer spending leading to higher prices. Higher prices appear to come out of no where even when wages, employment, and spending remain down. This is trickle down economics. Businesses and financial institutions do not even need consumers any more to help prop up inflating prices. They can just ask for more liquidity from the fed.
Now the president makes the claim that there needs to be more math and science so as to improve the private sector. As if somehow new financial strength can be reborn by simply improving math and science. While new technology would certainly be nice, that is not what lends to financial strength. New technology is constantly be created. The aisles are filled with it. Whats down is not technology, what is down is consumer spending.
The federal reserve created nearly 2 trillion in quantitative easing to help the economy recover. And instead of seeing a rise in employment levels, consumer spending, and economic growth, the dow was pushed up from 6700 to 12,000. Oil prices have doubled from being below 40 dollars to now over 80 dollars. Its clear where this liquidity went to. I personally invest myself. Am I grateful for the gains. But at the same time, you have to ask, is this the only sector that the fed intends to prop up?
The fed is determined to break 14,000 and beyond, and it clearly has the liquidity to do it. But is equities and commodities going to be the only game in town from now on? This is not a consumer led economy where higher wages leads to higher consumer spending leading to higher prices. Higher prices appear to come out of no where even when wages, employment, and spending remain down. This is trickle down economics. Businesses and financial institutions do not even need consumers any more to help prop up inflating prices. They can just ask for more liquidity from the fed.
Friday, February 18, 2011
China's economy is already larger than the united states
We already know that in real terms, China is the larger economy. What we are analyzing now is when will the numbers crunch up so that China's economy is larger than the us nominally.
What Does Nominal Mean?
An unadjusted rate, value or change in value. This type of measure often reflects the current situation, such as the current price of a car, and doesn't make adjustments to reflect factors such as seasonality or inflation, which provide a more accurate measure in real terms.
(of money, income, or the like) measured in an amount rather than in real value: Nominal wages have risen 50 percent, but real wages are down because of inflation.
Definition of REAL
1: of or relating to fixed, permanent, or immovable things (as lands or tenements)2a : not artificial, fraudulent, or illusory : genuine <real gold>; also : being precisely what the name implies <a real professional>
If there is another american financial crisis, it would only strengthen China's economy.
Depending on what this financial crisis is, the dollar would most likely strengthen. A fall in the dow jones, would force the value of financial and business assets to collapse. But what are they collapsing against? If the dow is at 14,000 points then that is an indication of a weaker dollar. If the dow is at 6700, that is an indication of a stronger dollar. Since the dollar would be able to purchase more stocks at 6700 than it would if stocks were expensive at 14,000.
If prices for goods and services are deflating it is most likely due to a drop in consumer spending. Businesses would then most likely be contracting and a higher level of labor finding themselves unemployed. This would extend China's lead over the us in a real sense given that the service sector is dwindling down. The dollar may or may not strengthen against the RMB during a recession but the contraction of the total dollar supply would mean a total GDP contraction. Since an appreciating dollar against a basket of goods does not make up for the total loss of dollars due to a reduced level of fractional reserve lending.
If prices for goods and services are deflating it is most likely due to a drop in consumer spending. Businesses would then most likely be contracting and a higher level of labor finding themselves unemployed. This would extend China's lead over the us in a real sense given that the service sector is dwindling down. The dollar may or may not strengthen against the RMB during a recession but the contraction of the total dollar supply would mean a total GDP contraction. Since an appreciating dollar against a basket of goods does not make up for the total loss of dollars due to a reduced level of fractional reserve lending.
Top Biz NewsFor instance, it had always been anticipated that China would overtake the us in total amount of automobiles produced and consumed. But when it was supposed to occur depended heavily on Chinese and american rates of growth. If China is growing 10 percent a year and the us is growing 3 percent a year, it wouldnt take very long for Chinese levels of auto production to exceed the united states. However if China is growing 10 percent a year and the us actually contracts 3 percent a year, then it makes overtaking the us that much easier.
China: World's biggest auto producer, consumer
(Xinhua)
Updated: 2010-01-12 15:37
Official figures Monday confirmed China had overtaken the United States to become the world's top auto maker and market in 2009 boosted by government stimulus measures.
The China Association of Automobile Manufacturers (CAAM) announced annual sales rose 46.15 percent year-on-year to 13.64 million units. Output increased 48.3 percent to 13.79 million units.
Passenger car sales were up 52.93 percent to 10.33 million units, and production was 10.38 million units, up 54.11 percent year-on-year.
World could have a financial crisis, and it would have no effect on China
China does not depend on global trade or global finance. Any difference in the influx or outflow of money supply can be corrected by the People's Bank of China. Just like the Federal Reserve can prop up the stock market using quantitative easing, the People's Bank of China can prop up wages and employment growth through quantitative easing. All they need to do is make a head count of the number of people that need to be employed. And make an estimate of how much money needs to enter the money supply and distributed correctly to get 10 or 20 percent wage growth. And when these calculations are done, quantitative easing will create the money necessary to hit those marks.
The money is not coming from taxation. Otherwise there would be no real monetary wealth creation. Any additional Yuan one laborer receives comes at the expense of another laborer who loses one Yuan from taxation. So the money is always newly created, not from taxation and redistribution.
The money is not coming from taxation. Otherwise there would be no real monetary wealth creation. Any additional Yuan one laborer receives comes at the expense of another laborer who loses one Yuan from taxation. So the money is always newly created, not from taxation and redistribution.
Thursday, February 17, 2011
China's economy isnt dependant on foreign trade
There is about 39 trillion Yuan in the Chinese money supply. That is about 30,000 Yuan per Chinese. In order for there to be 10 percent nominal GDP growth the money supply needs to be increased to 43 trillion Yuan or 33,000 Yuan per Chinese. If foreigners increase their money supply through quantitative easing or fractional reserve lending and use that liquidity to purchase Chinese goods, then that money would enter into China to boost China's domestic money supply.
If that export surplus is equal to 4 trillion Yuan, then that would contribute to about 10 percent GDP growth to the Chinese GDP. If China fails to export anything and still needs 10 percent GDP growth. That increase in the money supply would have to come domestically. That means PBOC would have to increase quantitative easing and fractional reserve lending by about 4 trillion Yuan. And that would produce the 10 percent nominal growth it needs.
If that export surplus is equal to 4 trillion Yuan, then that would contribute to about 10 percent GDP growth to the Chinese GDP. If China fails to export anything and still needs 10 percent GDP growth. That increase in the money supply would have to come domestically. That means PBOC would have to increase quantitative easing and fractional reserve lending by about 4 trillion Yuan. And that would produce the 10 percent nominal growth it needs.
The foreign reserve is a waste
Even if the foreign reserve was to be reallocated towards the import of commodities to pay for a shortfall in the domestic market. That could have been done 10 yrs ago as opposed to today. If China needed to import coal and iron, it could have done that 10 yrs ago when coal and iron prices were much cheaper. If they needed to rebuild their corn stocks, they could have done that 10 yrs ago, when prices were still much more cheaper. Better yet, they could have kept a gold reserve 10 yrs ago when it was still 300 dollars an ounce. And then sold it today for 1400 and used that value to import coal and iron today.
China is the world's largest food producer. Grain production in 2010 was 546 million tons.
China is the world's largest food producer. Grain production in 2010 was 546 million tons.
BEIJING, Jan. 20 (Xinhua) -- China's National Bureau of Statistics (NBS) said Thursday that the country's grain output rose 2.9 percent year on year in 2010 to 546.41 million tonnes, marking the seventh consecutive year of growth.
Wednesday, February 16, 2011
China's nominal growth could exceed 20 percent.
GDP does not discriminate between real growth and inflationary growth. So even if no new goods and services were produced but the cost of goods went up, that would result in nominal economic growth. I suspect real GDP growth will be around 10 percent. Inflationary growth may add around 5 percent or more. That alone is 15 percent nominal GDP growth. If we assume the Yuan appreciates against the dollar by another 5 percent before this year ends. That would be a total of 20 percent nominal economic growth give or take.
reagan spent his way out of recession
Under carter, interest rates were as high as 21 percent. The purpose was to beat back inflation, but the economy suffered tremendously. When reagan took over, interest rates were dropped to the single digits. The national debt exploded from 900 billion to over 2 trillion. But the economy recovered as a result of increasing debt and spending.
Raising taxes adds no benefit to the economy. Its like designing an aircraft with engines facing the other way. If the economy grows while taxes are being raised, it had nothing to do with the taxes. It was because public and private spending exceeded taxation. Which is why government spending always exceeds government tax revenue. Spending acts as the turbofan engines that propels the plane. Taxation acts like turbofan engines facing the other direction. The only reason tax and spend would ever work is because spending exceeds taxes.
Reagan's tax policies pushed both the international transactions current account and the federal budget into deficit and led to a significant increase in public debt. National debt more than tripled from 900 billion dollars to 2.8 trillion dollars during Reagan's tenure.
Raising taxes adds no benefit to the economy. Its like designing an aircraft with engines facing the other way. If the economy grows while taxes are being raised, it had nothing to do with the taxes. It was because public and private spending exceeded taxation. Which is why government spending always exceeds government tax revenue. Spending acts as the turbofan engines that propels the plane. Taxation acts like turbofan engines facing the other direction. The only reason tax and spend would ever work is because spending exceeds taxes.
Deflation is great, but recessions are terrible
So the government succeeds in its endeavor in controlling inflation. The dollar, the product of the Federal Reserve, rallied and strengthened against a basket of goods. Dollar rallied against wages, home prices, dow, cost of oil. The fact that salaries, goods, services, and equities are falling in price is evidence of a stronger dollar. But this was all created through unemployment and recession. And while people hate inflation, they hate recessions just as much if not more. So the government is yet again reducing interest rates and increasing quantitative easing all to lift the burden of recession.
As of now, the project has not been as successful as it was back in 2001 when the fed reduced interest rates in order to hold off a recession. There is still a few more years to see how these interest rate policies play out. It worked for reagan, it worked clinton, it worked for bush jr. It remains to be seen if this will work for obama.
As of now, the project has not been as successful as it was back in 2001 when the fed reduced interest rates in order to hold off a recession. There is still a few more years to see how these interest rate policies play out. It worked for reagan, it worked clinton, it worked for bush jr. It remains to be seen if this will work for obama.
Why american growth has continuously stalled.
The central government bank, in this case, the Federal Reserve controls the nation's money supply. It also sets interest rates and the cost of lending. We have seen this from Quantitative easing policies set in the last few years. And the changing of interest rates for as long as people can remember. Today, oil prices stand at around 90 dollars per barrel. In case people have forgotten, oil prices used to be 140 dollars per barrel pre-recession. The Federal Reserve has about three main pillars that it needs to give much consideration to. Controlling inflation, encouraging economic growth, and maintaining low levels of unemployment. Unfortunately, these three objectives do not always share a commonality. In fact, they even serve as an antithesis to one another.
In 2006, record equity values, home prices, and commodity speculation led to some serious questions about inflation. Challenging the very foundation of the Federal Reserve. If one of the Federal Reserve's main goal is to control inflation. Then clearly, the Federal Reserve is doing a terrible job, evidenced by high housing prices, high oil prices, and high levels of speculation. The Federal Reserve needed to undo what it had created. Instead of setting interest rates low to battle the recession Bush inherited from president Clinton. Interest rates needed to be hiked again to battle the high levels of inflation that was generated from strong economic growth.
The Federal Reserve practiced a very slow and meticulous policy. It didnt want to pop the economic bubble. The goal was to simply deflate some of the air out. Nonetheless, an explosion erupted. With housing prices and equity markets falling in value, home owners and investors suffered a considerable loss to their savings which was tied to their assets. Without higher property prices to act as a motivator to produce more homes, construction companies too began to file for bankruptcy.
While the consequences were huge, the Federal Reserve did accomplish what it set out to do. It finally placed a lid on inflation. In 2008, record losses in consumer spending, and personal incomes led to some of the best deflation in years. With double digit unemployment rates and people suffering from little to no income, consumer prices and energy prices had no choice but to fall as a result of depleted demand. And thus, the single greatest contributor to controling the consumer price index was unemployment and wage deflation.
In 2006, record equity values, home prices, and commodity speculation led to some serious questions about inflation. Challenging the very foundation of the Federal Reserve. If one of the Federal Reserve's main goal is to control inflation. Then clearly, the Federal Reserve is doing a terrible job, evidenced by high housing prices, high oil prices, and high levels of speculation. The Federal Reserve needed to undo what it had created. Instead of setting interest rates low to battle the recession Bush inherited from president Clinton. Interest rates needed to be hiked again to battle the high levels of inflation that was generated from strong economic growth.
The Federal Reserve practiced a very slow and meticulous policy. It didnt want to pop the economic bubble. The goal was to simply deflate some of the air out. Nonetheless, an explosion erupted. With housing prices and equity markets falling in value, home owners and investors suffered a considerable loss to their savings which was tied to their assets. Without higher property prices to act as a motivator to produce more homes, construction companies too began to file for bankruptcy.
While the consequences were huge, the Federal Reserve did accomplish what it set out to do. It finally placed a lid on inflation. In 2008, record losses in consumer spending, and personal incomes led to some of the best deflation in years. With double digit unemployment rates and people suffering from little to no income, consumer prices and energy prices had no choice but to fall as a result of depleted demand. And thus, the single greatest contributor to controling the consumer price index was unemployment and wage deflation.
Tuesday, February 15, 2011
Chinese response to american default is limited
There is not much assets that China could repossess or nationalize from the united states in China. Annual american investment in China is a very low figure. Between 1 and 3 billion a year. China holds nearly 1 trillion in us treasury bonds. The united states would have to invest between 333 and 1000 years in China in order for China to have enough assets to nationalize to cover the difference.
The only thing China could do is sell the bonds to some other foreign country to see if they are able to collect on the maturity date. Even after a loan has defaulted, banks still sell loan agreements to one another to see how well the next bank is able to collect. If China is truly concerned about this issue, then China should sell the bonds before the us defaults rather than later.
Do not misunderstand. Its not that I assume that the united states is powerful, thus China is powerless to collect on american debt. Its just that defaulting on a debt is a national sovereign right. Countries default all the time. Spain defaulted on its debts 4 times during the 1500s, Argentina defaulted on its loans to the world bank and then got fresh loans from the IMF. If China ever became an international debtor, China could also exercise that sovereign right.
Remember, a bond is just a paper asset. Its not a real physical asset.
There are previous posts on this issue. Most of it centering around how real assets like physical commodities are the most secure reserves.
The only thing China could do is sell the bonds to some other foreign country to see if they are able to collect on the maturity date. Even after a loan has defaulted, banks still sell loan agreements to one another to see how well the next bank is able to collect. If China is truly concerned about this issue, then China should sell the bonds before the us defaults rather than later.
Do not misunderstand. Its not that I assume that the united states is powerful, thus China is powerless to collect on american debt. Its just that defaulting on a debt is a national sovereign right. Countries default all the time. Spain defaulted on its debts 4 times during the 1500s, Argentina defaulted on its loans to the world bank and then got fresh loans from the IMF. If China ever became an international debtor, China could also exercise that sovereign right.
Remember, a bond is just a paper asset. Its not a real physical asset.
There are previous posts on this issue. Most of it centering around how real assets like physical commodities are the most secure reserves.
China is already the worlds largest economy
It's the largest economy in the world. GDP is simply the money supply. Its a relationship between quantitative easing and fractional reserve lending. Appreciating the currency against foreign currencies would also allow the GDP to rise. And depreciating the currency against foreign currencies would also allow the GDP to fall. So when we measure the Chinese GDP, we are measuring its total sum of liquid instruments at today's exchange rate. But when we measure China's total physical economy. All goods and services produced, then it is already unrivaled. If it was possible to quantify all of the buildings, trains, automobiles, air planes, ships, and a myriad of other things, its already the largest economy in the world.
Monday, February 14, 2011
China does not need to do anything.
China lends to the united states so that the us can continue to have money to import Chinese goods. If the us only has 10 dollars, and exports 10 dollars to China to buy Chinese goods. Then the us cant import Chinese goods a second year because those 10 dollars are sitting in China. So China lends those 10 dollars back to the united states so that the us can purchase another 10 dollars worth of goods.
The united states could commit to some other monetary easing device like quantitative easing or fractional reserve lending so that it can export another 10 dollars to China without depending on China to lend that money back. And the us has done that. Which is why Chinese exports to the us are not stagnant but increase every single year.
It really does not make much sense from the Chinese standpoint to be exporting to the united states at all. But there are real winners in the Chinese economy from this trading relationship. Major exporting industries who's only income is derived from exports. The majority of Chinese will not benefit from the trade. But certain industry leaders who pull a lot of strings in Beijing do stand to gain.
It's a waste of time. The relationship is not symbiotic. The relationship is not about technology. Otherwise, China would be posting a trade deficit importing technology. The relationship is about finance and becoming the global banker. China could be subsidizing anyone. Greece, Portugal, Spain, anyone who is looking for a lender.
The united states could commit to some other monetary easing device like quantitative easing or fractional reserve lending so that it can export another 10 dollars to China without depending on China to lend that money back. And the us has done that. Which is why Chinese exports to the us are not stagnant but increase every single year.
It really does not make much sense from the Chinese standpoint to be exporting to the united states at all. But there are real winners in the Chinese economy from this trading relationship. Major exporting industries who's only income is derived from exports. The majority of Chinese will not benefit from the trade. But certain industry leaders who pull a lot of strings in Beijing do stand to gain.
It's a waste of time. The relationship is not symbiotic. The relationship is not about technology. Otherwise, China would be posting a trade deficit importing technology. The relationship is about finance and becoming the global banker. China could be subsidizing anyone. Greece, Portugal, Spain, anyone who is looking for a lender.
Its not really cheating when your team is underage.
A 21-year-old poses as middle school football player
We're just into a new high school sports season and there has already been a troubling impostor found among the scholastic ranks. According to the Associated Press, Tampa Tribune and St. Petersburg Times, a 21-year-old man named Julious Threatts registered to play for the 13-14-year-old Town N' Country Packers of the Tampa Bay Youth Football League on Aug.
Cheating normally occurs when your team is overage.
Sunday, February 13, 2011
China is number one in all three
China has more combat vessels than Japan and all of Asia combined. Even a single vessel from the Chinese navy is enough to put an end to all of its adversaries in the region. Air force, China is the only one with a 5th generation air craft. Army, does not need explanation.
Saturday, February 12, 2011
Its not possible to deter Chinese missile strikes
Neither the quality or quantity exists to perform such a measure.
China doesnt have conscripts, they have 1.3 billion people.
| People's Liberation Army 中国人民解放军 |
|---|
| Military age | 18–49 (compulsory de jure; voluntary de facto) |
|---|---|
| Conscription | None |
China surpassed american manufacturing a long time ago.
China's crude steel production will reach 630 million tons this year, a year on year increase of 10.9%, as per industrial analyst.
Friday, February 11, 2011
Nobody has 500 trillion dollars
There isnt even 50 trillion dollars ever printed. Most of the assets people claim to have isnt assets at all. Its just 1 dollar being deposited and redeposited. The money never existed. Its just fractional reserve and leveraging.
If war in the pacific went out of control
There wouldnt be any americans left. An escalation in warfare would inevitably reach the united states. China would rain down ICBMs to snuff out the american population. It the would be the biggest victory in all of mankind's history. The us navy would be destroyed by antiship missiles, cruise and ballistic. Air bases and surface fleets would be removed from the earth. The only thing left would be to wait for american subs to surface.
Sunday, February 6, 2011
X-47B
Its an unmanned drone, not a stealth fighter. Its an attack aircraft. It cant even dance with a mig 19. Air force on the cheap. It can not travel at supersonic speeds and is only equipped with bombs.
Although admittedly, while it may not be a fighter class aircraft, it is a superior drone. Hydrogen fuel is not exactly a high energy substance. Its not exactly as efficient as jet fuel. What is the plane doing? Loitering at low speeds? Lets be honest, you expect this thing to take on a fighter aircraft?
Specifications (X-47B)
General characteristics- Crew: none aboard
- Length: 38.2 ft (11.63 m)
- Wingspan: 62.1 ft (30.9 ft folded) (18.92 m)
- Height: 10.4 ft (3.10 m)
- Empty weight: 14,000 lb (6,350.29 kg)
- Max takeoff weight: 44,567 lb (20,215 kg)
- Powerplant: 1× Pratt & Whitney F100-220U turbofan
- Maximum speed: "high subsonic"
- Cruise speed: 0.45 mach
- Range: 2,100+ NM (3,889+ km)
- Service ceiling: 40,000 ft (12,190 m)
- 2 × GBU-31 JDAM (905 kg each)(2000 lb)
Although admittedly, while it may not be a fighter class aircraft, it is a superior drone. Hydrogen fuel is not exactly a high energy substance. Its not exactly as efficient as jet fuel. What is the plane doing? Loitering at low speeds? Lets be honest, you expect this thing to take on a fighter aircraft?
From zero to twelve
Is that some kind of cheap joke. Australia does not even operate one nuclear submarine. And suddenly, they are to operate twelve? They can not even design a jet engine, and they are planning to design and manufacture a nuclear reactor?
Economic Growth vs trade balance
China would continue to maintain strong economic growth even as its trade balance begins to deteriorate due to higher wages and GDP per capita. Citizens perceive their standard of living to be improving as their income levels continue to increase. The increase comes as a result of two variables. Appreciating currency and increase in the monetary supply. As Chinese GDP per capita reaches 100,000, or 200,000 or 1 million dollars per year. Chinese standard of living and personal incomes would be unrivaled. However such high levels of annual compensation would mean it is impossible to produce a product in China and sell it abroad at a profit. Especially when foreign consumers who purchase these products are not making 1 million dollars a year themselves.
China could subsidize the price of these products so that these goods could remain competitive abroad. However, that price subsidization would still spill off as a trade deficit for China through some other sector. The final result is that the only industries in China that can remain competitive are services and goods that can only be produced in China and sold to Chinese. Not goods that are produced in China and sold abroad.
To maintain near 100 percent employment rates would mean exports play almost no role in creating jobs, and the only sectors creating jobs would be found in services and government spending. Military spending, infrastructure spending, social spending etc. would then be the only manufacturing jobs available. And all service sector jobs would employ Chinese since with few exceptions only by being present in China are you able to provide a service.
China would experience massive trade deficits and foreign debt, however its standard of living would be the highest in the world. Since China would not only consume the goods and services Chinese are able to produce. But the goods and services that non-Chinese produce and export to China.
So long as foreign countries are willing to post trade surpluses with China, China can continue a lifestyle of easy living and high military spending. If they refuse to post trade surpluses with China. China would have to cut back on such a lifestyle. But cheap Chinese exports would once again force foreign industries into turmoil.
China could subsidize the price of these products so that these goods could remain competitive abroad. However, that price subsidization would still spill off as a trade deficit for China through some other sector. The final result is that the only industries in China that can remain competitive are services and goods that can only be produced in China and sold to Chinese. Not goods that are produced in China and sold abroad.
To maintain near 100 percent employment rates would mean exports play almost no role in creating jobs, and the only sectors creating jobs would be found in services and government spending. Military spending, infrastructure spending, social spending etc. would then be the only manufacturing jobs available. And all service sector jobs would employ Chinese since with few exceptions only by being present in China are you able to provide a service.
China would experience massive trade deficits and foreign debt, however its standard of living would be the highest in the world. Since China would not only consume the goods and services Chinese are able to produce. But the goods and services that non-Chinese produce and export to China.
So long as foreign countries are willing to post trade surpluses with China, China can continue a lifestyle of easy living and high military spending. If they refuse to post trade surpluses with China. China would have to cut back on such a lifestyle. But cheap Chinese exports would once again force foreign industries into turmoil.
Saturday, February 5, 2011
Please, dont insult my intelligence
Khammani, the economy is terrible. Nothing but a better economy would resolve that. Maybe instead of posting comments. You are better off going back to Laos selling whores to losers who need to pay for sex. You would certainly need it with that ugly mug of yours and your grotesque undefined body. You have the muscular physique of a 12 yr old male. And you wonder why you cant throw a punch. A fist is just bone and flesh. You would need a lot more muscular force if you intend to generate stopping power.
Thursday, February 3, 2011
SinoCentrism
China would have kept all of Korea if China didnt give Korea to Japan in the SinoJapanese war. You have to understand. It wasnt just Koreans in China that belonged to China. But the Koreans in Korea too.
This isnt the first time China will fight to defend its Korean territories from other nation-states. But this will be the first time China effectively loses it to Japan.
Date 1 August 1894 – 17 April 1895
Location Korea, Manchuria, Taiwan, Yellow Sea
Result Japanese victory; a significant loss of prestige for the Qing Dynasty. Korea becomes independent from China.
Territorial
changes China loses the influence of the Korean Peninsula to the Empire of Japan.
Qing Dynasty China cedes Taiwan, Penghu, and the Liaodong Peninsula to the Empire of Japan.
Belligerents
Qing Dynasty Qing Empire Empire of Japan
Commanders and leaders
Qing Dynasty Empress Dowager Cixi
Qing Dynasty Li Hongzhang
Qing Dynasty Ding Ruchang †
Qing Dynasty Deng Shichang † Empire of Japan Itō Hirobumi
Empire of Japan Yamagata Aritomo
Empire of Japan Itō Suke
Article 1: China recognizes definitively the full and complete independence and autonomy of Korea, and, in consequence, the payment of tribute and the performance of ceremonies and formalities by Korea to China, that are in derogation of such independence and autonomy, shall wholly cease for the future.
This isnt the first time China will fight to defend its Korean territories from other nation-states. But this will be the first time China effectively loses it to Japan.
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