Archive for the China category
October 13th, 2009
Today’s pictures say alot about the success of the Shanghai Coooperation Organization in policing its bounds and pushing back expansionist American policy since 2000.
China and Russia ink trade agreements and agree re natural gas.
Russia resists Hillary push for new sanctions against Iran — the latter which sends a ton of oil to China.
September 30th, 2009
This may prove a milestone.
Or perhaps the marker of a great top?
September 6th, 2009
Some people have been guessing in the past two weeks that this is in the works.
Might explain some of the strange things happening with stocks and bonds and gold and the universe.
The strange things, in a nutshell: Bonds are saying the world is mired in deflation and not likely to change soon, and US bonds in particular — where the short and medium and long term Treasury yields are low (showing no worries about inflation) and the inflation-protected Treasury bonds (called TIPS) are stagnant.
Bonds in short are saying things are bad and going to get worse.
But the US stock market has been rallying since March, and refusing to go down despite a world of traders expecting it to do so. As if things were much improved and going to get better.
The dollar is crashing thru what some had hoped as late as a week ago was short-medium term support. And gold is rocketing, thru the $1000/oz psych level. These (like the bonds) would seem to say things are cruising for a bruising. So why are stocks rocketing?
And why are people buying US bonds (driving those yioelds down) if there is a panic underway with the dollar (which when devalued hurts bonds denominated in dollars)?
A scenario which makes sense of these apparent broad contradictions is a sudden revaluation of the Chinese currency (some call it Yuan, some REmimbi) against the dollar.
The chinese for a long time thru their Great Industrialization these past years held the Yuan fixed against the dollar. This Peg was relaxed a bit a few years ago but the chinese government still holds the Yuan low vs dollar with stern intent — by buying dollar-denominated bonds with the great influx of cash (in many currencies) it enjoys as the world’s sweatshop manufacturer of choice.
But at the same time, of course, Peking has been moaning and groaning as first Bush-Cheney and now Obama pursue policies that have broken all prior restraints on the US national debt. For the future here is clear — inflation. Which devalues that trillion in Treasuries Peking holds.
So the chinese are floating down river with a leg in the Buy Dollars boat and a leg in the Sell Dollars boat. (They want the Yuan low against the dollar to continue to fertizlize their industirial growth — but they see and fear the inflationary future of their dollar denominated holdings.)
If Peking does allow the Yuan to rise dramatically vs the dollar, gold would likely go to the moon, Chinese stocks in general would suffer, the dollar would tumble against all the major currencies, and everything one buys with dollars (eg oil, US Treasuries) would cost more merely as a matter of exchange, regardless of fundamentals.
It might trip off, sooner than anticipated, the Great Inflation / Dollar Devaluation that everyone sees on the horizon as the only way out of the great debt hole Uncle Sam has dug for himself since the 9/11 attacks.
The cure always begets another disease. Greenspan took us down to super low interest rates to try to keep things going post Tech Bubble Pop and 9/11.
Those low rates begat the credit and real estate bubbles.
Their popping begat the meltdown of the New York-London-based high-tech global financial system.
That has begotten this Depression, to treat which Washington a year ago went banannas with new debt.
Which leaves the Chinese with a foot in each of two boats, which the tides of history are pushing apart. They’ve been jawboning about the Dollar and reducing their dollar assets for several years now.
Perhaps the moment for the big move — allowing their currency to float — ie, CEASING to buy tons of dollars/dollars assets to keep their currency down — is upon us.
Here’s the last 18 months of the dollar. The DXY index.
Bottoming circa 78 or ready to revisit that 72 level??
April 11th, 2009
Some call it a global currency.
On the heels of the recent Chinese call for something such.
I imagine Peking’s not thinking the IMF however.
March 28th, 2009
An American in Ireland, Richard Moore, worries often aloud about the world in articulate, informed style — at the moment about the Bilderbergers. Just now I dashed off a reply email that without trying hard encapsulates a view of the world (if not a Worldview):
The Bldbrgers are good and useful to consider. They don’t Run the World but they give insight into some of the people involved in the high level struggles to operate and endure the world.
They express a more European point of view than, eg, the Davos gatherings, which are more technocratic and global and American influenced. This European view is caught in our time in the middle, and I tend to sympathize with it.
I mean — the world today is dividing in a new way:
1. Russia and China, among the major powers, are still nation-states. Their owner-operators are still wed to their Nations (ie People). These powers can be read fairly easily as to what their interests are and how they are likely to behave to protect and forward them.
2. The US since the advent of the bomb has been ceasing to be a nation-state (if indeed it was ever a good idea to consider it as such).
(The bomb brought pressure to control events globally and to do so without major-power war; this pressure has been bending the minds of the people who run the National Security Apparat since the end of the war 1945. This is one big reason why the Apparat has grown so strong in Washington while the Congress has almost ceased to exist as a policy making body and the White House careers back and forth, with presidential heads more often than not winding up on platters.)
The owner-operators of the US began to reassert themselves behind Reagan’s smile and broad shoulders, having gone to school on the lessons of Vietnam (an educated working class is not a good idea, reliable pensions are not a good idea, fairly free and balanced mass media are not a good idea) and having realized that the technological revolution meant (re capital) that Globalization was the ticket.
To be extremely brief then: The US since the war has been morphing from something like a nation-state to a thing bestride the globe with two primary interests: to float the National Security Apparat (chiefly the Pentagon but also the mature so-called intelligence agencies) and to float the large globalizing corporations. Responsibility of the owner-operators for and to the Nation (ie People) has become almost neglible.
(Even the most Progressive voices among the American owner-operators are corporate-centric, as if someday Google may just blast off into space, Silent Running with Hughie, Dewey and Louie … )
3. Europe occupies too a rather new and strange space — having undertaken the Euro Union. But the traditional bonds between the component ruling classes and Nations (Peoples) — born of millenia of strife and tight geography — are still rather strong.
The Bilderbergers convey this uneasy place in the middle — between the brute classico Russian and Chinese nation-states and the global military-industrial enterprise based in the U.S.
Europe: Trying to “compete” with the run-amok North American colossus, while trying (as always) to survive the “Asian Hordes,” while trying to maintain the distinctly European take on the Individual-in-Society.
For my money, Europe’s approach to Modernity (the technological civilization that in the West succeeded Christendom) is superior to the American, the Russian and the Chinese. European societies seem to me superior.
So then — even though my own feet are rooted in the Working Class, I don’t find the Bilderbergers as alarming as some. (And I have always valued the reports from the chamber that Mr Estulin has been channeling for some time now.)
Rather, I find the entire careering planet alarming. Chiefly the unbridled advance of science these past two centuries, which has created monstrous wealth, technological processes and weapons that have left us and the earth at the mercy of forces I think NO one or one body of people has a chance to control, let alone govern. Everything put together sooner or later falls apart, as Paul Simon noted circa Watergate.
My view of Europe’s “superiority” doesn’t mean, of course, that if one had to bet on the Last Man Standing he should bet on the European Union. Indeed, many have been writing that the current financial crisis may ruin it.
Would Europe survive the Union’s disintegration? In some fashion, surely. Might that seismic de-centralizing move actually, despite costs, show us something of the way out of Modernity’s disaster? Too much to hope for, I suppose.
March 28th, 2009
Well the votes this past week came in.
Geithner’s patchwork Smart-Money-to-the-Rescue approach to fixing the banking system — Paulson II — has received the presidential imprimatur. The question now is how long the US will limp along as Japan did thru the 90s. Obama has eschewed the bold moves the world was hoping for last November.
As if in reaction: the Chinese officially called this past week for the a new international currency to replace the dollar as the world’s “reserve currency.” The notion makes no sense, in a way (arbitrageurs would simply constantly trade thru the shell currency to whatever sovereign currency they sought, and in that way designate one of the latter as the de facto “reserve currency”). But it expresses a point of view that bodes ill for Washington’s ability to fund itself going forward.
The prez gave a big speech. No surprises. Putting his stamp on the policy Gates-Mullen began to implement under Bush-Cheney after the banishment of the Likud Lobbyists post 2006 elections.
Obama has consented to the escalation the Pentagon wants. Has consented to the the Apparat’s plan to downgrade the Kabul government of elected President Karzai in favor (again) of Men We Can Work With selected from the quasi-existent rogue Northern Alliance — foreigners (non Afghan, non Pashtun) from the north. Has put Gates-Mullen-Petraeus in charge of policy. Can now go to the beach.
March 13th, 2009
When I worried (in the penultimate sentence of an essay about zombies) about things soon “getting rough” for the new President, I was thinking foreign affairs.
And was thinking of President Kennedy, who was blasted by the Bay of Pigs raid on his 76th day in office.Â Things were never the same.Â The White House’s struggle thereafter to gain control of American foreign policy and change course might best be imagined as one long scraggling slide off a cliff.
But to return to current affairs:
Mass murderous bombs are going off again.Â Very bad for the Pentagon song that both McCain and Obama began to sing last spring, a coro castrati.Â For if the Surge there was not simply a Success — if the relative calm of 2008 was tactical and keyed in good part to the American audience/elections — if the basic animosities (Shia, Sunni, Kurd) and political questions (who shall control the state?) have not been soothed by General Petraeus’s community policing, what then?
And with what effect on the marketing of the Iraqi Surge’s young cousin on Iran’s eastern borders?
Benazir Bhutto’s murder.Â The rocky greeting given her widow-successor, Zardari, after his first address to parliament. (During the reception unhappy campers blew up the nearby Marriott, home to yankee journalists and diplomats.)Â The attack on the Taj Mahal hotel in Bombay by a Paki assault team.
And, meanwhile: the mass-murderous missile attacks by the Americans in northwest Pakistan, which began circa Labor Day and which yesterday killed 21 people identified — in first reports — as “militants aligned with a Pakistani Taliban leader,” and wounded fifteen others.
Note that three weeks ago, a similar first report by American authorities, claiming that 15 of 16 killed were “militants,” was revised to acknowledge that 13 were random walkers — indeed, “civilians.” The Army general in charge issued not an apology but “deepest condolences” and a week later the New York Times observed in an editorial:
Almost no one wants to say it out loud. But between the threats from extremists, an unraveling economy, battling civilian leaders and tensions with its nuclear rival India, Pakistan is edging ever closer to the abyss.
Such were the trends inherited by Obama and, for his part, left on Cruise Control.
In the past ten days they have coalesced into a major political crisis — based on widespread anti-Americanism — that might leave Islamabad looking more like the Federally Administered Tribal Areas than the capital of a large industrialized state armed with nuclear weapons.
Meanwhile across the border ….
Today the Times relays White House views (elaborating upon Obama’s comments in a pub’d interview last weekend) sketching the new US plan for Afghanistan:Â Lots of carrots and a stick or two, to tease out from among the Evil feuding warlords those We Can Work With, and to encourage those to enforce a sort of peace (stability, equilibrium) that at least does lip service to the quasi-installed, quasi-foreign government in Kabul.
Or maybe President Karzai and Kabul will be abandoned in public, in favor of something even more Realistic with the so-called Northern Alliance warlords (non Afghan and non Pashtun) who Bush-Cheney found, however briefly, to be Men We Can Work With.
This range of possibilities seems to be the Petraeus Plan at the moment. Maybe it’s the best Obama can do with a long-neglected and seemingly pointless situation.Â Maybe it’s the best way Home. (Then again, whatever happened to that Unocal pipeline?) One might hope.
But the Times piece also talks about transferring US attention and resources to Pakistan. And so perhaps (as surmised here since erstwhile CIA director Hayden’s belligerent speech of December) the new Afghan policy will be best understood (largely in retrospect) as what the Pentagon thought best to quickly stabilize Afghanistan to allow it to function as the staging of a boots-on-the-ground war in the FATA across the border.
And what further necessities might that incursion give birth to?Â Where will the Petraeus Plan really lead?Â This is the relevance of the Bay of Pigs precedent.Â (See the “blasted” link above.)
It’s hard to imagine serious trouble breaking out between China and the US right now, since they both have so much at stake in the effort to stabilize the global economy.
And gee, surely the Obama honeymoon (internationally — like Gorbachev’s) has more legs than this?
But for the files if nothing else (you realize you have fallen into my filing cabinet?), one must note:
– the seemingly silly quasi-naval confrontation off the Chinese coast.Â The Times says the American vessel is a submarine hunter.Â But gee, the South China Sea is exceedingly shallow.Â Perhaps “spy vessel” is best?Â Recall the Mayaguez, during Ford. In any case, now we’re sending in ships with guns and missiles mounted in plain sight.
–Â the Chinese premier expressing worries about getting stuck holding the bag on a trillion in US Treasury bonds. Various voices over there have been expressing concern for some time, and more than a year ago Peking began to swap dollars for gold, but this is the most salient signal to date.
Surely Uncle Sam and China must be friends.Â Surely.
Yet it’s a signal of how big a worry the current problems could become that Obama had an unscheduled sit with the Chinese Foreign Minister at the White House yesterday.
Did a Bruce Lee boxed set change hands?
HOWEVER THE CURRENT contretemps may work out, things are indeed getting rough.Â The Prez is going to have much less time on his hands to muse about where precisely to suggest his arm’s-length adjuncts apply their Band-Aids to the buboed bodies of the big banks and the health care system.
One must temper expectations, of course. Things since November 1963 (of which I have no memory — I was five) have indeed never been the same.Â A hundred years hence, Chinese grade-school textbooks will use Julius Caeser’s crossing of the Rubicon River and the murder of JFK to illustrate how republics by and for people morph into empires run by and for the state’s military-money complex.
Nevertheless, Obama has a few miles of blue water left as the pounding of the lee shore drifts to his ears. As an aid to navigation, Robert Dallek points out this morning that LBJ walked away with neither Guns nor Butter from the White House, after one elected term.
A cautionary tale about Imperial Overreach.Â It’s worth noting in addition that not one president, but three, back then, were handed their heads by the brassy entrepreneurs of the Vietnam war.