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bucheon bum
Joined: 16 Jan 2003
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 Posted: Thu Feb 04, 2010 1:40 pm Post subject: |
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I think I'm naive and/or ignorant because I really do not think China is a viable threat. What could it do?? As Mises said, they'd screw themselves over if they dumped our debt.
The tech issue? I have that dumb "bring it on!" attitude.
And Taiwan? Yeah, what else is new? Just more whining and empty threats.
And trade embargo? HA, ok, go ahead. It will just shift production to other countries and maybe US consumers will be less inclined to buy crap (assuming prices of those goods would increase). |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Thu Feb 04, 2010 3:43 pm Post subject: |
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If China demands the unification of Taiwan with the mainland, saying Taiwan has always been a part of China, then in my mind which government is the legitimate government of China? Why are the communists the legitimate government? I find it strange that Mao's popularity is rising considering his legacy: Mass Starvation, Cultural Revolution, Huge deaths (Hundreds of Thousands of people) from flooding due to a damn that he ordered built after he was warned would never work, for very good reasons.
Ah what the hell, LET A THOUSAND FLOWERS BLOOM again. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Feb 05, 2010 4:47 pm Post subject: |
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| bucheon bum wrote: |
I think I'm naive and/or ignorant because I really do not think China is a viable threat. What could it do?? As Mises said, they'd screw themselves over if they dumped our debt.
The tech issue? I have that dumb "bring it on!" attitude.
And Taiwan? Yeah, what else is new? Just more whining and empty threats.
And trade embargo? HA, ok, go ahead. It will just shift production to other countries and maybe US consumers will be less inclined to buy crap (assuming prices of those goods would increase). |
I mostly agree, actually. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Feb 09, 2010 10:36 pm Post subject: |
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Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.
The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China's National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency.
The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday. |
http://www.reuters.com/article/idUSTRE6183KG20100209
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| Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China�s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events. |
http://blog.atimes.net/?p=1352
Read this:
http://www.c4i.org/unrestricted.pdf
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| There, they mention the potential for financial weapons to trigger "a near collapse of the social and political order" as "a form of non-military warfare which is just as terribly destructive as a bloody war." |
http://ipezone.blogspot.com/2010/02/fire-your-guns-2-pla-urges-economic.html
http://www.youtube.com/watch?v=UXPtdQYOgw8
Meanwhile, Obama pushed a 90billion "jobs bill" (stimulus). Entirely debt-financed.
http://www.csmonitor.com/USA/Politics/2010/0209/Obama-optimistic-about-jobs-bill-after-bipartisan-meeting |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Feb 10, 2010 6:48 am Post subject: |
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Interesting times:
RBS
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| 1- China/US � �Agreeing� to sell arms to Taiwan, talk about meeting the Dalai Lama�.these are BAD developments and important ones�.I fear the outcome for the West, esp the US, but also the UK, if the idea is to flex muscles in the direction of China. I am sure the US would not take too kindly to China agreeing to sell serious military hardware to Vene or Iran, nor would it take too kindly to the Beijing authorities hosting a global fundraising conference for global jihadists. NO, I am not saying Taiwan is the same as Iran/Vene, and of course I do not think the Dalai Lama is in any way comparable with al-Qaeda. But what I think is NOT the point. It is all about the Chinese leadership, and I reckon they must be seething. We in the old West need to be very very careful here. China funds the US to a meaningful degree. Imagine if China decided to stop buying US govt/agency debt. And then imagine if it decided to sell 300/400/500bn of such debt, say on the same day as the next big auction. The word UGLY comes to mind. My real fear is that PROTECTIONISM might become THE central issue later this yr as a result of all of this. Not good at all. |
BNP Paribas
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| Dollar-denominated risk assets, including asset- backed securities and corporate, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China�s large commercial banks. The Chinese government has ordered its reserve managers to divest themselves of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events. Meanwhile, the Chinese military has urged the government to sell US bonds, boosting defence spending on Taiwan arms deal. Hence, we watch US spreads intensively. A widening of spreads would not bold well for share markets while putting economic recovery at risk. It was US liquidity feeding financial markets until January this year. Hence a decline of risk appetite suggests repatriation flows moving back into the USD. |
http://ftalphaville.ft.com/blog/2010/02/10/145956/chinas-punishment-treasuries-pain/
So many landmines.
http://english.caing.com/2010-02-09/100116953.html
Trade war looming? Andy Xie does not dismiss it. I'd support a trade war, though it will cause near-term economic chaos. Gotta get set right.
http://www.telegraph.co.uk/finance/china-business/7205110/China-orders-retreat-from-risky-assets.html
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China orders retreat from risky assets
A Communist Party directive leaked to the Chinese-language edition of the Asia Times said dollar reserves should be limited to US Treasuries or agency mortgage debt such as Freddie Mac that enjoys Washington's implicit backing.
BNP Paribas said the move has major implications for global risk assets. "The message from Beijing is that we don't like this environment," said Hans Redeker, the bank's currency chief.
"When the world's biggest investor turns risk-averse, that is something you take notice of. We think this could become the new theme for the markets in the medium-term," he said.
The directive covers both the State Administration of Foreign Exchange (SAFE) and China's state-controlled commercial banks. Together they have an estimated $3 trillion (�1.9 trillion) of foreign holdings.
The exact break-down of China's holdings are a state secret but it is understood that SAFE bought large amounts of corporate debt as well as municipal and state bonds during the boom years of 2006 and 2007. Any move to liquidate holding of California debt at this crucial juncture could have serious implications.
The exact motives for China's shift of strategy are unclear. Analysts say the authorities may fear that the end of quantitative easing by the US Federal Reserve could cause risk spreads to widen sharply, triggering heavy losses. The shift in policy appears unrelated to the US spat with China over Taiwan.
SAFE has some very sophisticated economists. The chief investment officer of its reserve management department is Changhong Zhu, until recently head of derivatives for the hedge fund operations of the giant US financial group PIMCO, and viewed as one of the 'rock stars' of the global hedge fund industry.
The move by Beijing comes at a time when China's current account surplus is falling. This reduces reserve growth, reducing the supply of global liquidity.
Mr Redeker said this will have the paradoxical result of boosting the dollar. Flight from risk can lead to an automatic rise as hedge funds, banks, and investors across the world cut back leverage on dollar balance sheets.
David Bloom, head of currencies at HSBC, said the explosive dollar rally over the last six weeks has been the reversal of the dollar carry trade. "It has been short, sharp, and vicious. People borrowed in US dollars to invest in places like Brazil, Turkey, and New Zealand and now it is unwinding."
"We don't think the dollar rally is going to last much beyond the first quarter because we're in a new world of rotating sovereign crises where politics matters again. It's Greece right now but it could be the UK next, and then US which has yet to take any steps at all to tackle it fiscal deficit," he said. |
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