Author: matt605

USA plan for China [Copy link] 中文

Rank: 6Rank: 6

Post time 2005-10-18 21:39:57 |Display all floors

Fish: Inflation hurts domestic US economy, and increase future borrowing cost

US don’t have the financial leverage to open China’s markets and they know it.  Snow and Greenspan will come back empty-handed, and will get what China wants to give.  They will try to spin it for political leverage in the US, but let’s be clear.  The US economy cannot handle more rapid economic changes by China.  In July, with only a 2% revalue, that was enough to push domestic interest rates up enough to cool down the real estate market.  This cool off was expected in many interest sensitive markets.  

Snow’s statement, “China needs to get people to spend more and save less” is downright laughable if that was a true statement.   While China has increased domestic spending and consumer spending, one of its cultural identities is its ability to save.  I’m afraid Snow is ignorant of that.  

China will adopt institutional reforms based on what’s good for China, not what’s good for foreign corporations.  The restrictions on ownership, especially in financial assets, are valid since China wants more control macro-economically.  If the situation was reversed, I’m sure other countries would want likewise.

Fish, your inflation idea is plain silly.  Inflating away the debt would be an idea if it were a one-time occurrence.  To pay back huge debts with deflated dollars is like robbing Peter to pay Paul, when a needy borrower like US still needs to borrow money in the future.   

Inflation is harmful to the US economy as it isn’t something US can sustain continuously without damage to other sectors of its economy.  History is filling with examples of economies that tried to use inflation that way, and failed miserably.  Examples include Germany before WW1, and Czechoslovakia most recently.   

Inflation would also increase the cost of future borrowings.  Unless you think US will miraculously balance its budget, and run surpluses from now on, it will need to borrow future funds, mostly likely from China et al, and that will be at even higher cost.  Right now, US can still do this, but eventually, the debt coverage ratio will be such that its creditworthiness will no longer attract, but repel foreign monies.  And if Iran is successful in implementing their oil bourse, don’t be surprised that other countries will use Iran’s bourse, or implement their own version to bypass petrodollars.  Without the support from petrodollars, there is legitimate questions about whether US can sustain itself in an inflationary economy, and what further damage that will do to the financial fundamentals of the US.  If US allow the dollar to weaken more, the next real question is how much longer can it legitimately be a world reserve currency, as the Central bankers around the world are watching.  

Rather than use these failed strategies from history, US will be well served to correct the economic problems by addressing these issues at the root, instead of trying to manipulate the currencies for economic symptom improvement.  But I suspect US will go for economic symptom improvement, instead of working to address the roots of its economic problems.

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Rank: 6Rank: 6

Post time 2005-10-20 10:56:06 |Display all floors

Your point about the USA equities markets is a good one.

Since March 2000, the NYSE has traded usually between 10k and 11k.  It bottomed out at 7600 and almost touched 12000 once.  Generally though, it looks horrible.  If you were to base an argument for  capitalism on the trend of the market for the last 5+ years, it could not be done.  What's worse is that the market has been flooded with liquidity (cheap cash), which should make it rise, but it has not.

Greenspan's explanation of the bubble market is that the measures to have corrected it would have been more harmful to the economy than to simply allow it to correct itself.  Whether or not this is true is for economic historians to debate.  

Why is it the Treasury, Defence, and Federal Reserve leaders all visit China at the same time?  The war guy and the money men.

Wouldn't a more logical combination be Sect of State, Dept of Commerce, and a delegation of congressional leaders from similar committees?  Diplomacy, trade, and expanded local understanding.

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Rank: 8Rank: 8

Post time 2005-10-25 08:47:59 |Display all floors

China is not rich...

...they just have the cheapest work force.

Worlds richest...     age  worth
"1 William Gates III  49 46.5 United States United States , WA , Medina  
2 Warren Buffett  74 44.0 United States United States , NE , Omaha  
3 Lakshmi Mittal  54 25.0 India United Kingdom , London  
4 Carlos Slim Helu  65 23.8 Mexico Mexico , Mexico City  
5 Prince Alwaleed Bin Talal Alsaud  48 23.7 Saudi Arabia Saudi Arabia , Riyadh  
6 Ingvar Kamprad  78 23.0 Sweden Switzerland , Lausanne  
7 Paul Allen  52 21.0 United States United States , WA , Seattle  
8 Karl Albrecht  85 18.5 Germany Germany , Mülheim an der Ruhr  
9 Lawrence Ellison  60 18.4 United States United States , CA , Silicon Valley  
10 S Robson Walton  61 18.3 United States United States , AR , Bentonville  "

437 Wong Kwong Yu  35 1.5 China China , Beijing  
413 Larry Rong Zhijian  63 1.6 China China , Shanghai

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Post time 2005-10-25 11:06:28 |Display all floors


You miss many more points.

In addition to cheaper labor, China also has cheaper cost of living.  

China also has higher savings rate, and higher domestic investments, higher FDIs, and is the lender to the US.  It is such a lender to the debt-ridden US that even a small movement of only 2% last July, was enough to move interest rates up.   China may not be the richest country in the world, but it is rich enough to be lender to the US, and rich enough for Snow to beg to buy more Treasuries.  

Deal with reality, guy!  

Iran oil bourse.......may significantly reduce petrodollar recycling

War on Terror..........Drain on finances by attrition, exactly as bin Laden said

Need Oil.................Cannot go after Saudi Arabia, a major sponsor of terror

Need financing.....Snow and Greenspan have no leverage in China, and it shows

Bankruptcy law changes ................Tighter controls for deadbeat tenants.  I happen to love this change.  Bush is good for something and here's an example.  

Huge debts and deficits............billions of dollars of interest.....per day!!

Very high debt coverage ratio..............reserve currency questionable as other countries and OPEC are itching to change.  

And what is your retort?  

I cannot say I'm surprised.   I suppose your list might offer you empty solace, but their wealth does not address the real problems in the US.   It's funny how your responses just don't answer the issues here!

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Rank: 8Rank: 8

Post time 2005-10-25 13:11:40 |Display all floors

Mr. Fish...i think Mr. Bill Gates is going to make a lot of people loose their p

Imagine a company that has only revenue no more than US$20 billion and net profits of less than US$7 billion. Microsoft has a market value of US$290 billion....where got meaning....p/e of 30 to 50x earnings.

He is selling down his stake, avoiding paying tax by "donating it" to a CHARITY FOUNDATION chaired by himself! ha ha ha smart way to avoid tax.

ha ha ha and we have MS mimics already in the pipeline from Linux, to Korean's own version of microsoft.....

Bet, Mr. Gates is selling it to incestous American private banking.....and we have at 1 go....the conning from Arab, European and Asian Pashas of at least US$200 billion....

Then we have google, ebay...the digirati....

almost US$1 trillion to conned from the teeming pashas from all over the world..especially "cheap labour", "good innovative products" or "cheap resources" from East Asia, China, middle East and Europe!

now you understand why all those MONEY MASTERY SESSION looks so much like CHURCH SESSIONS...same GOYIMIZATION METHODS are used!!!!!!! All those Pasha children from Little Red Dot, Indonesia, Phillipines, India, Taiwan, Europe are in danger!!!!!!!

and failing which it can still blowup Israel and destroy oil supply...alas now that China has wise up...Venezeula, Russian, China, Canada announced much much bigger oil supplies than needs and bio fuels to sustain the poor in China and prevent too much wealth domination on a few mouths......and now we understand that there is more ways to skin the Lion..ha ha ha ha can still threaten to blow up New York..and solve its Alien infestation problems...

ha ha ha

Cheeky Game Master
Lord of the code

Council of Malaya

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Post time 2005-10-25 13:24:54 |Display all floors

Mr. Fish, we remember the swindling of the world.....

(1) Enron
(2) Global Crossings
(3) American airlines
(4) Citibank
(5) Possible Fannie Mae and Fredie Mae defaults

and bet you guys didn't know...the American bourse depends on only a few companies...

(a) The Digital biz...depends on China and the Far East nimble fingers and hardware....while taxed by Microsoft and Intel.
(b) The China Trade...depends on China consumeable and cheap durables.
(c) The Oil and Gas..
(d) The Financials...banks and bourse
(e) And Mortgage.....
finally the deficit spending by (f) military industrial complex...

ha ha ha

twig, up bubbles and burst it and pashas loses their pants...while the pashas continue to TAX the citizens in all those POOR COUNTRIES in Latin America, Singapore, India, Semite, Africa, Greater Asean....and some Pasha mentality like Japanese, Taiwan and Hong Kong peoples who enjoy tomfoolery of Jeewish Goyim parties known as Fake Christian evangelism...

ha ha ha

Cheeky Game Master
Lord of the code

Council of Malaya

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Rank: 6Rank: 6

Post time 2005-10-25 19:20:26 |Display all floors

flotsam flotsam flotsam

The world runs on money

whose money?

good question.

what you think we all gonna abandon the system that runs the world and go back to trading in silk or silver or gold?

hahaha, not likely!

its all about your credit score and how you might peddle your little butt faster than the rich that keep getting richer afore they run you over in their big black limousines

the game has shifted but it remains the same

the pawns and the kings

any Nation that wants to go at it , better have the damn credits to match

it ain't about the debt, it's about the credit

the debt is never paid


not ever

the debt ain't even for real

the credit is ... DOH!

better to love honor and cherish your bankster, maybe he will take pity on your poor worthless soul? -- not likely

have you ever seen the Godfather?

when the mobster comes around to collect their fee and you ain't got it, what happens?

when the mobster asks for a favor and you say no, what happens?


peddle faster.

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