June 3, 2009

And then China smartly planned its US exit strategy


Thanks for playing Americans.

Soon, we won't need you.

"What the Chinese are doing is moving some of their long-term assets into short-term so they can make a quick exit strategy," Peter Navarro, an economic at the University of California-Irvine, told CNBC this week. "Plus, they're setting up all these bilateral currency deals with countries around the world so they can back the dollar out. We are literally living on borrowed time."

41 comments:

Anonymous said...

How dare them Al Kayda Chinese terrorists not buy our treasuries!! I hear Osama Bin Laden has moved to Shanghai. We're gonna have to bomb you now China!!!

Ross said...

I've been thinking a lot about this lately. Maybe WE are the Grifers. America. Not just Paulson, Bush, Bernanke, Greenspan, Obama, Geithner, Fuld etc. America is the world's grifter.

So we've exhausted the Real Estate ponzi scheme and derivatives scheme. Now it's time to come up with the next one to trick the rest of the world and most of our own people. Will it be the "Green," Alt Energy, Climate change prevention scheme? I think it will be.

So sleep tight little sashers, we will figure out a way to fool everyone again and steal their money so that you can afford your gastric bypass surgery and collagen.

The only way to stop a grifter is to literally put them behind bars and cut off all contact with their buddies. How do you do that to an entire country?

Anonymous said...

oh yea? we will show them, we will stop buying their leaded plastic crap. bye bye trade surplus for china.


Obammmmyyyy! gimme some made in USA plastic crap!

Mike Hunt said...

China is pursuing all options which is pretty wise. However they have their own issues, and it's a terrible place to live.

Just came back to the US for a holiday, transferring through Guangzhou. What a clusterf*ck that was.... when we landed there were two officers in full biohazard bunny suits checking everyones temperature. Kept us on the plane for 1 hour because someone in the back had a high temperature. We were thinking we would be stuck when unexpectedly they let everyone off.

Even though we had to transfer we had to wait in a 2 hour line, in a hot, humid hallway packed with coughing Chinese before we could submit our paperwork that declared where all we've been in the last 7 days.

We made the flight back to the US but I'm not looking forward to repeating that on the way back.

Folks, China needs 7% growth to prevent unrest with their workers. The wealth distribtion is quite unequal, with many people living below the poverty line. The are at 6% right now and bailing like crazy with their moneybombs.

Yes, they have most of the world manufacturing. They have an attitude to accept whatever work comes to them, but the culture has an element of arrogance and elitism, like they should be the top economy of the world. That is probably their biggest downfall.

China wisely used the export model to raise the living standard for millions of people. It remains to be seen what is their best way forward. Certainly they are not ready for 100% reliance on their domestic spending, in my opinion, to keep their economy growing.

-Mike

Anonymous said...

"Maybe WE are the Grifers. America."

Well, Glory Hallelujah, someone just woke up from his nap.

Anonymous said...

Keith,

I thought you were a smarter guy.

Why don't you give us a list of those "short" term currencies or investments that China is investing in?

Believe me, China is LONG treasuries right now. LONG...

Dny

Anonymous said...

Decoupling? What decoupling?

Anonymous said...

Yeah, except the dollar went UP and FULL POINT today.

Head fake?

keith said...

Can you picture a day in your lifetime when China has the #1 GDP, and #1 military?

Think about it.

Anonymous said...

So Keith, how does this fit into your new found optimistic outlook?

How many hours of CNBC do you watch a day?

Too many me thinks.


trPM

Randy said...

Queeferonio,

Does China have a Money tree in beijing?

Or does their money come from:

Barneys New York
Barneys New York Outlet
Bealls Florida
Burke's Outlet (in areas where the unrelated Bealls Texas trades)
Belk
Best Buy
The Bon-Ton
Bergner's
Boston Store
Carson Pirie Scott
Elder-Beerman
Herberger's
Younkers
Parisian
Boscov's
Century 21
Dillard's
Factory 2-U
Filene's Basement
Forman Mills
Gabriel Brothers
Gordmans
Gottschalks
Gus Mayer
JCPenney
JCPenney Outlet
Kohl's
Loehmann's
Lord & Taylor
Macy's, Inc.
Bloomingdale's
Macy's
Macy's Clearance Outlet
Neiman Marcus
Last Call! Neiman Marcus Outlet
Bergdorf Goodman
Henri Bendel
Nordstrom
Nordstrom Rack
Renys
Ross Dress For Less
Saks Fifth Avenue
Off 5th Saks Fifth Avenue Outlet
Sears
Sears Outlet
Shirokiya
Stage Stores Inc.
Stage
Bealls
Palais Royal
Peebles
Stein Mart
Target
TJX Companies
A.J. Wright
Marshalls
T.J. Maxx
Von Maur

The list goes on
and on.

so, without the American consumer,
ummmmm..

Batman said...

Imagine a Brit in 1910 saying: "Can you imagine a day when the United States has the highest GDP and the Strongest Military?"

It took 35 years to fully move the British Empire out of pole position. When did the US decline begin? 35 years ago was 1974.

keith said...

trPm - I don't have US TV - only videos on the internet

You all sit around all day watching Fox, CNN, MSNBC, CNBC etc. I only have to suffer through a few minutes a day

yoski said...

Anon 9:19pm:
"Believe me, China is LONG treasuries right now. LONG..."
Are you just making stuff up or do you have some credible sources? If yes, please post them.
Thanks

Anonymous said...

It's gotta be good when people stop feeding the government's debt habit, right?

Anonymous said...

Yoski and Keith,

And I got this right off one of Mish's latest postings.

The dollar is measured against other currencies. So... please tell us which other currency will the dollar fall against? And explain to us why you believe the fundamentals of those countries look better than the US's?

- So, does China have better fundamentals than the US?

- Does Europe have better fundamentals than the US?

- Does the UK have better fundamentals than the US?

- Does Japan?

- Does Russia?

- Does France?

Am I the only one able to see this clearly. With the exception of the Yen, the US Dollar is probably the next "better" currency.

Dny

Anonymous said...

Oh and Keith and Yoski,

Answer the following while you are at it.

Please tell us about sovereign debt ratios of those nations. Tell us about those nation's external debt ratios. Tell us about those nation's bank capitalization ratios.

Dny

Anonymous said...

Can you picture a day in your lifetime when China has the #1 GDP, and #1 military?

Think about it.
.


That day is closer than you think. What's left of the US engine of production is so weighed down by massive government spending and wasted expenditure on the huge military/intelligence behemoth of TODAY that there is no way the US will be able to SUSTAIN it's military dominance in this century without a dramatic change in policy.

Look at the youth of today. How many of them are capable of spurring a new revolution in US production? They don't have the knowledge or education to turn this ship around.

That's what these idiot Neocons do not understand. The money they spend on their empire building has to come from somewhere and it can't simply be printed up on demand.

It was the free market, low regulations and low taxes that built the American powerhouse. It is government control that has destroyed America.

JaneZ said...

Mike Hunt said...
....but the culture has an element of arrogance and elitism, like they should be the top economy of the world. That is probably their biggest downfall.

Gee, that sounds awfully familiar.

i've had it said...

Yes, China and other countries will be making their exits. They are gathering together to deep six us. No prob, we're doing it to ourselves anyway. Another jobs disaster in May: almost 550,000 vanished. This type of job loss for this month is unheard of as far as I know. Another couple of months of this level of job disintegration and we will enter the final leg down.

Mark my (Bush's words): This sucker is gonna go down.

Just a matter of time.

==============================

Private Sector Cuts 532,000 Jobs in May

MarketWatch Pulse



WASHINGTON-- The U.S. private sector eliminated 532,000 net jobs in May, the fewest jobs lost since November, according to the ADP employment index released Wednesday.

Goods producing industries cut 267,000 jobs while services cut 265,000. The index comes two days before the government releases its estimate of May nonfarm payrolls.

Economists surveyed by MarketWatch are looking for payrolls to drop by 500,000 in the government survey, which would be the smallest decline since October.

Including government jobs not counted in the ADP report, the ADP index implies total nonfarm payrolls may have fallen by 545,000 in May, close to the number of jobs lost in April.

i've had it said...

Also, Bernanke today said the congress and the administration have to stop spending money. What an ass! He's the one doing it.

He was forced to say it because Tiny Tim called him from China and said the Chinese forced him to make the call to him, threatening not to buy any more of our worthless bonds and treasuries if he didn't.

There's no other reason he said it. He was forced to. He's the guy destroying our currency by printing money and working to increase our debt and he decides today to tell the govt. to get its spending under control?

Right.

Anonymous said...

there is no where else for china to go. they can talk all they want.

what other currency will the go into? the euro? that will fall apart with the next war in europe.

perhaps cuba's currency, or maybe the peso..... chavez has a deal for them...

Anonymous said...

Note to Helicopter!

Failed Auction Rattles Sweden
Vidya Ram, 06.03.09, 02:55 PM EDT
Bank shares plunge on fears the Latvian currency is about to fall again.


LONDON - The failure of a bond auction in Latvia is making bankers in Sweden quake in their boots.

Shares in Swedbank, the biggest lender to Latvia, dived 15.9%, to 38 Swedish Kronor ($4.92) after the Latvian government failed to sell any of its government debt securities on Wednesday. Skandinaviska Enskilda Banken--better known as SEB--fell 11.0%, to 30 Swedish kronor ($3.88). The Swedish kronor meanwhile fell to 10.91 against the euro, from 10.71.


http://tinyurl.com/o6lhpf

WarEagleHB said...

Randy,

All we are doing when we "send" money to China from our retailers is giving them the money that they loaned us back to them, but leaving the bill plus interest with us.

Angry Leprechaun said...

"I've been thinking a lot about this lately. Maybe WE are the Grifers. America. Not just Paulson, Bush, Bernanke, Greenspan, Obama, Geithner, Fuld etc. America is the world's grifter."

Ross, I want to welcome you to reality.

Angry Leprechaun said...

"so, without the American consumer,
ummmmm.."

Are we still on this argument? They don't need us.

Patriotard LOOSER said...

WTF? Power of pride, c'mon?

I just pasted an eagle decal on the back of my F-150 rear windshield.

I got ribbons, I got "power of pride".

Gotta respect them flags on the overpasses on I-275 east of Cincinnati in Clermont County.

TROGDYLYTE ANTI-EVOLUTION LOOSERS (Yes, 2 O's just for emphasis)

Drop DEAD

Anonymous said...

Ha Ha Ha! WEI FU YU AGREN.

Anonymous said...

OT, we were getting such regular updates from Countrywide during the foreclosure moratorium. I wonder why they don't update this useful report?

http://countrywide-foreclosures.blogspot.com/

Anonymous said...

.



You want flied lice with that?

Anonymous said...

I've been thinking a lot about this lately. Maybe WE are the Grifers. America. Not just Paulson, Bush, Bernanke, Greenspan, Obama, Geithner, Fuld etc. America is the world's grifter.

So we've exhausted the Real Estate ponzi scheme and derivatives scheme. Now it's time to come up with the next one to trick the rest of the world and most of our own people. Will it be the "Green," Alt Energy, Climate change prevention scheme? I think it will be.

So sleep tight little sashers, we will figure out a way to fool everyone again and steal their money so that you can afford your gastric bypass surgery and collagen.

The only way to stop a grifter is to literally put them behind bars and cut off all contact with their buddies. How do you do that to an entire country?




This point of view comes from a premise that you are part of "The Big Club". You aren't. You may have scored a few bucks during the past two bubbles, but they raped the planet.

http://www.youtube.com/watch?v=u9bLA5SmVfA

It's a big club, and you ain't in it.

Correct about stopping grifters though. Behind bars may stop em, but I prefer a bullet in their heads.

Anonymous said...

Judge Tosses Telecom Spy Suits

Done deal; we'll never officially know now.

Mark Klein already told us(anybody other than a rube/apologist) all we needed to know.

"...they had taken in particular what are called peering links which connect AT&T's network with the other networks...

...they were getting not only AT&T customers' data flow...whoever else might happen to be communicating into the AT&T network from other networks...a large chunk of...the Internet...

..."...yeah, we're having the same problem with the splitters going into other offices."..."Other offices?"..."Yeah, in Seattle and San Diego and Los Angeles and San Jose,"...

...Your daily transactions on the Internet can be monitored with this kind of system, not just your Web surfing. All kinds of business that people do on the Internet these days -- your bank transactions, your e-mail, everything -- it sort of opens a window into your entire private life...

...They present it as about phone calls...they don't talk about the Internet...if they did, Americans would realize it's not just a few people; it's everybody...

...I can give them all the names they want, and they can go up the hierarchy of AT&T all the way up to Dave Dorman...

...I gave the Electronic Frontier Foundation [EFF] a declaration...that case is stalled because the government is still trying to get the whole thing dismissed..."

MISSION ACCOMPLISHED.

George L said...

sounds to me like the U.S. is getting ready to devaluate the dollar very soon.

guess we know know the real reasons for tiny Tim's visit to china.

or maybe Default on its debt?

yoski said...

China is not very forth coming with their data or what they are up too. Here's an article with a chart on that is somewhat useful.
http://www.financialsense.com/fsu/editorials/merk/2009/0602.html
China has been pretty sneaky about the doubling of their gold reserves. It's very difficult to tell what they're up too. Another fact is that this year they've only been buying short term treasuries. Another fact is that they bought old ships to store oil (and other commodities?) at sea.
As far as their fundatmentals, they don't have any debt, they have manufacturing, they have a bunch of smart people, their government seems somewhat competent. Their polution is out of control and some region might become uninhabitable. They don't have enough farm land to provide much more than a bowl of rice for their population. They don't have many resources and just like the US need to import most raw materials. They don't have unfunded liabilities like social security or medicare.
Most important, China is on the path up while the US is on the path down and doesn't have the political will to chnage course.

Does Europe have better fundamentals than the US?
Europe consists of many countries, some are in worse shape than the US (England, Spain, Ireland, Italy, Portugal, Greece) to name some of the biggest disasters. Germany and France are doing fairly well.
Here's a list with debt ratios. http://en.wikipedia.org/wiki/List_of_countries_by_public_debt
Keep in mind that the Obama administration is committed to add 10+% year after year to it.
As for any currency, stay away. They're all devaluating either because of debt and money printing (US, England) or for economic reasons to stay competitive (China).

Anonymous said...

"Maybe WE are the Grifers."

ding...ding...ding...you win the prize.

we are the grifters and we should pay for our sins...not our children...nor our grandchildren...but US.

Randy said...

WarEagleHB said...
Randy,
‘All we are doing when we "send" money to China from our retailers is giving them the money that they loaned us back to them, but leaving the bill plus interest with us.’

Ahem,
I think you got it backwards.
The money they lend us comes from millions of Americans who pay for their cheap products enabled by low wages.

China money does not come from the rice patties.

Happy Leprechaun said...

Angry Leprechaun said...
"so, without the American consumer,
ummmmm.."
‘Are we still on this argument? They don't need us.’

Of coarse China does not need us, they grow money on trees..

And that is why they invest all the dollars they receive in exchange for assembling Barbies, into the very strong Yaun.. NOT.

gutless and lazy said...

REJOICE!!! Pop open the champagne!!
We have a recovery! And what a recovery it is!
Unemployment # drops, and Walmart is hiring 22,000 new workers!
http://www.cnbc.com/id/31098869

So I guess all the laid off professionals can now get Walmart jobs.

And I wonder if the lower unemployment #s are due to people finding jobs, or because people are staying unemployed and just falling off the unemployment rolls.

Is this a great country or what?!!

gutless and lazy said...

But, But, BUT!!!

The USA has a "AAA" credit rating!!

Or so says S&P, Moody's, Fitch, etc. Or maybe we really don't and those 3 are full of SH*T?

Hmmmmm...

Anonymous said...

Yoski,

China does not have a floating currency, so it's not even worth mentioning.

Europe, like you mention, is made up of a bunch of countries that do not like each other, while one is better off than the other. Do I smell conflict coming up? Yes I do.

UK is not worth a mention. When the pound start tumbling look out below. Plus, UK doesn't have anything going for them.

Do you see what I mean?

I would not be making any statements on the dollar, if other currencies are in much worst shape than ours.

Dny

Devestment said...

Interest rates to the moon.