China​ Accus​es US Plund​ering​ World​ Wealt​h With Dolla​r

[Mrs. Sharon B. Hodge]

China​ Accus​es US Plund​ering​ World​ Wealt​h With Dolla​r

Lets face it... The disasterous US dollar policy is destroying China's investment in US massive debt - China eventually will not need US to support its massive economy because US is only borrowing more money from China banks (run by the state) to purchase Chinese made goods, and eventually China and US will go into war over Taiwan and pave way for the upcoming Chinese military incursion onto US soil - they own Fannie Mae Freddie Mac mortgages and all of your homes anyway, PLUS THEY ARE OVERPOPULATED, LAND OVERDEVELOPED, TOP SOIL DEPLETED, AND ARE NOW DESPARATE FOR AGRICULTURE AND FOOD - THAT MEANS YES THEY WILL MAKE MILITARY INVASION IN A VERY NEAR FUTURE, THEY GOT 300 MILLION COMBAT AGE MEN AND 30 MILLION COULD NOT GET MARRIED DUE TO IMBALANCE BETWEEN SEXES, PLUS CHINA AND RUSSIA WILL BE TAKING CHARGE OF THE UNITED NATIONS SECURITY COUNCIL - This New World Order wont be a Zionist European dream – China will not give up its OWN New World conquest without a big fight, and that may take nuclear exchange





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US has plundered world wealth with dollar: China paper
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Reuters
Fri Oct 24, 2008

http://www. reuters. com/article/email/idUSTRE49N1XX20081024

BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday

The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S.
dollar from their direct trade relations for a start, relying only on their own currencies

A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said

The People's Daily is the official newspaper of China's ruling Communist Party.
The Chinese-language overseas edition is a small circulation offshoot of the main paper

Its pronouncements do not necessarily directly voice leadership views.
But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis

"The grim reality has led people, amidst the panic, to realize that the United States has used the U.S.
dollar's hegemony to plunder the world's wealth," said the commentator, Shi Jianxun, a professor at Shanghai's Tongji University

Shi, who has before been strident in his criticism of the U.S.
, said other countries had lost vast amounts of wealth because of the financial crisis, while Washington's sole concern had been protecting its own interests

"The U.S. dollar is losing people's confidence. The world, acting democratically and lawfully through a global financial organization, urgently needs to change the international monetary system based on U.S. global economic leadership and U.S.
dollar dominance," he wrote

Shi suggested that all trade between Europe and Asia should be settled in euros, pounds, yen and yuan, though he did not explain how the Chinese currency could play such a role since it is not convertible on the capital account

A two-day Asia-Europe Meeting (ASEM) of 27 EU member states and 16 Asian countries was set to open on Friday.
Though few analysts expect much in the way of concrete agreements, Shi said it could prove momentous

"How can Europe and Asia grasp each other's hands and together confront the once-in-a-century global financial crisis sparked by the U.S.
; how can they construct a new equitable and safe international financial order?" he said

"The world is waiting for this Asian-European meeting to achieve big results in financial cooperation"







October 04, 2008 - The Chinese military is modernizing so fast that the U.S.
should be building its own new weapon systems to counter it, this what's being said in a draft report by the US Secretary of State's International Security Advisory Board, We bring you this story based on an exclusive report from The Washington Times (FEAR OF NOT BEING ABLE TO PAY BACK THE CREDITOR?)

US told to increase nuclear arsenal as China threat looms
The US must increase its nuclear arsenal in response to China's gro...


Political Science 101: Mutually Assured Destruction
William Spaniel explains how mutually assured destruction--fear of the extremely deadly nuclear weapon--has spawned peace for the last 60 years among the superpowers

Mutual assured destruction (MAD; sometimes written as mutually assured destruction) is a doctrine of military strategy in which a full-scale use of nuclear weapons by two opposing sides would effectively result in the destruction of both the attacker and the defender, It is based on the theory of deterrence according to which the deployment of strong weapons is essential to threaten the enemy in order to prevent the use of the very same weapons, The strategy is effectively a form of Nash equilibrium, in which both sides are attempting to avoid their worst possible outcome—nuclear annihilation

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China Now Pulling the Strings on US Financial Policy
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Barbara L Minton
October 24, 2008

http://www. naturalnews. com/024599. html

(NaturalNews) The Times Square National Debt Clock, that unpleasant reminder of our national embarrassment, needs to be replaced. Since 1989 the clock has been tallying up all the money owed by the U.S. government. As of October 21, 2008, the outstanding national debt of the United States of America was $10,468,455,924,657.18 and mounting by the minute. In September, the dollar sign was removed to make way for an extra digit, as the national debt blew through $10 trillion and became a 14 digit disgrace. A new clock is on the drawing board that will allow for the reporting of a quadrillion dollars of debt. Anyone passing by the clock has got to wonder to whom all this money is owed, and what it means to the world standing of the country that the U.S.
is in hock up to its eyeballs

Currently, foreigners hold over $2.5 trillion of this U.S. government debt, mostly in Treasury securities. The largest foreign holders of these securities are Asian countries, primarily China and Japan. The Chinese Economic Review has confirmed that major Chinese banks own $8 billion in the Fannie Mae and Freddie Mac securities that were the targets of the bailout provisions. The Bank of China also holds $5.2 billion in mortgage-backed securities guaranteed by Freddie and Fannie. With the recent Wall Street bailout that sent the rise in the national debt absolutely parabolic, people are beginning to speculate as to whether this bailout is the result of pressure put on the U.S. by the Chinese and other Asian countries to get its financial house in order.
This pressure may be behind the inclusion of foreign banks in the bailout

The Chinese and other Asian countries now "own" the U.S. to such an extent that it is no longer free to determine a financial policy that would be in the country's best interests. Instead, it as in the position of being yanked around by its creditors who are not willing to be left holding the bag as the U.S. fiddles along and lets its financial system disintegrate. It is becoming apparent to many that these creditors decided to jerk the chain of the U.S. and insist that it shore up the system in which they hold such a vested interest.
This is why a bailout was suddenly announced, and why it had to be railroaded through the Congress and Senate with no deference to the arguments of elected officials or the will of the citizenry

Speculation is that at the same time that Treasury Secretary Paulson was twisting the arms of Congressmen, his own arm was being twisted by those higher up in the global financial chain. It may have been the vision of what would happen if the foreign banks decided to turn off the credit spigot to the U.S. that made him look so pale and haggard during the Congressional hearing.
And he may have used this ghoulish, pre-Halloween vision to scare Congress into voting for his plan

Without this bailout, most of the underlying assets of the country still would have had value on Main Street, and would have been the basis of a recovery after things settled out on Wall Street. The free market we claim to value so highly always works it out in the end. What needs to sink would sink, and then we would move on. But free market principals carry no weight in Beijing. The Chinese have no interest on our Main Street. They have no respect for free market principles any more than they respect the principles of a free society. They don't believe in the salutary effect of bankruptcy punishing those who made bad decisions, especially when they are the ones who stand to suffer the consequences of those bad decisions. All they care about is that their position as Big Daddy to the U.S.
credit markets is protected

People with a tendency to wonder also want to know why Fannie Mae and Freddie Mac were declared "too big to fail".
Looking back only a short period of time reveals many large companies that have collapsed, companies that were the largest in their areas

Look at Enron. This company, hailed as the most innovative company in American for six years in a row, created an over the counter trading market for electricity, natural gas, communications services and many other commodities. What the NYSE and the NASDAQ do for stock trading, Enron did for the utilities and telecommunications companies. When it went down in 2001, it took a lot of people with it including Arthur Anderson, one of the largest accounting firms in the U.
S Why wasn't it too big to fail?

And what about Worldcom? This telecom giant was the darling of everyone on Wall Street and held in almost every mutual fund and individual account in America.
When it went collapsed in 2002, everybody was crying Why wasn't it too big to fail?

Enron and Worldcom both went bankrupt and the people who ran them were sent to jail. The companies were allowed to fail, and after the dust settled, life went on. We still had the internet, gas and electricity, and telecom services.
Businesses still got their accounting done

Why? Because the underlying assets of those businesses still existed and were dispersed into the market. Enron sold all of its assets. Worldcom emerged from bankruptcy and was bought by Verizon. Employees from Arthur Anderson found other jobs, and the crooks that had been in control of these companies got what they deserved.
As a nation, we were cleansed and life went on

But now that China is running the financial show, the U.S. can no longer depend on natural market forces to expedite it through rough times. Now the country is no different than its citizens who have run up huge debts and are now at the mercy of their creditors. The U.S.
now dances to a Chinese tune




August 22, 2008 - ICBC becomes most profitable bank in world

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Chinese bank chooses NYC for first US branch
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The Associated Press
October 16, 2008

http://www. businessweek. com/ap/financialnews/D93RLGV00. htm

Gov. David Paterson says the largest commercial bank in China has chosen New York for its first U.S.
branch

Industrial and Commercial Bank of China will open the branch in Manhattan, giving the global financial hub a shot in the arm amid Wall Street's meltdown

There was no word on how many jobs might be created

Paterson says the bank is the largest in mainland China and its shares trade on the Shanghai and Hong Kong stock exchanges

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Chinese bank opening first U.
S branch in NYC
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The Business Review
October 16, 2008

http://www. bizjournals. com/albany/stories/2008/10/13/daily37. html

Gov.
David Paterson is touting two banking developments as proof that Manhattan can retain its identity as a hub of global finance—despite the ongoing shake-up on Wall Street and turmoil on the stock markets

Today, Paterson announced that the largest bank in mainland China will open its first U.S. branch in New York City. The announcement follows the news on Oct. 13 that Goldman Sachs Group Inc. is going to headquarter its U.S.
commercial bank in the city

“Once again, New York is proving itself to be the capital of global finance,” Paterson said in a statement. “When one of the largest banks in the world chooses New York City as their U.S.
base of operations, it is a reminder of the role that our state plays in global financial markets”

The Chinese bank, called Industrial and Commercial Bank of China, has shares traded in the Shanghai and Hong Kong stock exchanges.
At the end of last year, the bank had a market value of $339 billion

The bank has branches in 13 nations and serves 173 million clients.
It is the world’s largest bank, when ranked by market capitalization

Goldman Sachs, meanwhile, is seeking to turn its state-chartered trust company into a full-service, state-chartered bank called Goldman Sachs Bank USA.
As part of that move, Goldman Sachs will merge its Utah-based industrial loan company into the new headquarters in New York City

Goldman Sachs will become one of the nation’s 10 largest banks when the transition is completed

“New York is the hub for international finance and Goldman’s decision [on Monday] builds on a strong foundation,” Paterson said in a separate statement





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China Merchants Bank opens New York branch
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www. chinaview. cn
2008-10-08

http://news. xinhuanet. com/english/2008-10/08/content_10166545. htm

SHANGHAI, Oct.
8 (Xinhua) -- China Merchants Bank (CMB), the sixth largest domestic lender, opened a New York branch on Wednesday

It was the first branch of a Chinese bank to set up in the United States in 17 years

The branch is targeting Chinese companies investing in America, U.S. companies having branches in China and local companies dealing with Sino-U.S.
trade

The U.S branches of two conglomerates, China International Marine Containers. Co.
Ltd and China Ocean Shipping Company, have become the branch's first customers

"Opening our branch in such a special time and place is sure to face more difficulties and challenges," said CMB president Ma Weihua

"But we are confident of the long-term prospect of the U.S. economy and its financial sectors, especially the bilateral trade and investment between our two counties.
I am confident of our New York branch"

The bank, based in the southern boom city of Shenzhen, is listed on the Shanghai Stock Exchange. It had total asset worth 1.3 trillion yuan (191.8 billion U.S.
dollars) through 2007




*This was an old article from 2 years ago but worth the read

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China versus USA - Economic equivalent of M.A.
D may end with a bang
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by Eric Janszen - April 19, 2006

http://www. itulip. com/economicMAD. htm

Easy to confuse the commitment of one nation to another for an act of friendship. As mid-19th century British Prime Minister Lord Palmerston once commented, nations don’t have friends; nations have interests. The mutual interests of China and the U.S. are the kind that kept the U.S.
and the Soviet Union from going at each other with nukes during the Cold War

China and the U.S. are running inter-dependent bubble economies, relying on the economic equivalent of Mutually Assured Destruction (M.A.D.) to keep one from blowing up the other’s economy.
Whether by intent or accident, sooner or later market forces will assert themselves and both economies will go through tough transitions How will the world look after that?

The Set-Up

The U.S. and China are have distinctly different bubble economies.
The Chinese bubble economy runs mostly on credit and corruption, like the Japanese bubble economy of the late 1990s except more extreme

Although the PRC has made some progress toward achieving other characteristics of successful market economies, the PRC retains many of the detrimental characteristics of command economies. In particular, the PRC’s four major state owned banks and other depository institutions have extended too many questionable loans to the state-owned enterprises and the state-influenced enterprises based on industrial policy, guanxi (i.e., connections) with government officials, or outright corruption. Along with below-market interest rates and distorted prices, non-market lending has sustained the PRC’s unusually high rate of investment in capital assets (i.e., equipment, software, and structures) of 43.6 percent of GDP in 2004. In turn, this high investment rate has boosted the PRC’s real GDP growth rate to 9.5 percent in 2004. However, many state-owned enterprises and state-influenced enterprises are unprofitable. Protected through guanxi from bankruptcy and foreclosure, many state-owned enterprises and state-influenced enterprises are either unable or unwilling to service their debts. Consequently, non-market lending has saddled the PRC’s four major state-owned banks and other depository institutions with enormous portfolios of non-performing loans. Private economists estimate that the cost of resolving the PRC’s bad loan problem would be about 40 percent of the PRC’s GDP. Non-market lending encouraged the state-owned enterprises and the state-influenced enterprises to invest in too many capital assets and the wrong types of capital assets to produce goods and services to satisfy market demand. The eventual liquidation of the resulting overinvestment or malinvestment poses a significant long-term risk to the continuation of the PRC’s economic growth.
Given the PRC’s integration with the global economy, a significant slowdown or recession in the PRC could diminish the prospects for economic growth in the United States and other countries around the world


Chairman Jim Saxton (R-NJ)
Overview of the Chinese Economy
Joint Economic Committee, United States Congress, July 2005

The U.S.
bubble economy, as explained in The Big Bet is heavily dependent on speculation in financial assets

The U.S.-centric global speculative financial system continues to operate as a kind of perpetual motion machine, propped up by the "moral hazard" of central bank policies and the willingness of foreign lenders to support U.S.
consumption on credit, in order to fund their own economic expansion at home via export income and domestic savings

As long as the global system works this way, profit incentives, asset markets, and resource allocation will remain distorted. The system will continue to reward speculators with great wealth while it offers scraps to the inventors. The U.S.
educational system will cater to speculators, who pay the endowments, and ignore the inventors, who can’t give them as much money

After more than 25 years of this, is it any wonder that the entire U.
S economy has organized itself to conform to this financial model: a gigantic, risky, one-way bet that uses trillions of dollars of credit and massive leverage, relying on the savings of foreign workers to fund the bet and foreign central banks to cover the risks?

To keep its credit-corruption economy going, China’s ruling party, the CCP, needs the U.S. to buy Chinese exports at a rate that keeps its economy growing fast enough to keep its new entrepreneur class growing and supporting the regime.
If they fail, the CCP loses their core political support base

Meanwhile, the U.S. needs cheap imports from China to balance out the inflation created by its asset-speculation based economy. Lacking cash savings, U.S. consumers cannot buy Chinese exports except with credit. To get access to credit, U.S. consumers need low interest rates. Thanks primarily to China now, and Japan and the UK in the recent past, purchases of U.S. treasury debt keeps U.S.
interest rates low, allowing North Americans to re-finance their homes to free up cash to pay for hammers and nails at Made in PRC

Low cost labor is one reason why Chinese exports are cheap. The wage rate for the average GM factory worker is about $74 per hour versus $3.50 for a factory worker in China, where they are are more than 100 auto companies in operation. When Chinese cars start to hit the U.S. market in volume in a couple of years, they will be comparable to Korean cars today but at two thirds to half the price if the current exchange rate between the Chinese currency, the Renminbi (RMB), and the U.S dollar hold. This is the most important factor keeping Chinese exports cheap for North Americans; an exchange rate that favors Chinese exports. U.S. officials say the RMB is too cheap. The Chinese say the problem is not enough saving in the U.S. Both assertions are true. Fact is, that in addition to indirectly supplying U.S. consumers with the cash and credit needed to buy Chinese stuff, the CCP’s purchases of U.S. treasury debt also strengthens the dollar because every time the CCP buys U.S. treasuries they need to convert RMB into dollars. This help keeps demand for dollars high and the dollar strong.
That helps keep Chinese goods inexpensive priced in dollars

The Stand Off

As the political heat over jobs due to Chinese imports rises in Congress, the U.S. threatens China with trade sanctions and tariffs if the CCP does not let the RMB increase in value to make U.S. exports more competitive. It’s generally believed by members of Congress that the RMB is undervalued by about 40%. But if China actually does as the U.S. asks, U.S. interest rates will increase, the U.S. housing market will decline in earnest and the asset-speculation based U.S. economy may go into a tailspin. China counters by threatening to stop buying U.S. treasuries at the same torrid pace if the U.S. slaps tariffs on Chinese goods. But if the CCP actually carries out this counter-threat then exports to the U.S.
decrease and China’s credit-corruption bubble economy may go the way of the Japanese bubble economy in 1991

An economic version of M.A.D. keeps the two co-dependent bubble economies “in balance.” Will economic M.A.
D work as well as the nuclear version?

The Chinese government is a totalitarian capitalist regime that has over the past several decades evolved from a communist into a capitalist totalitarian state. With the notable exception of perennial hawk Michael A. Ledeen, writing for the Wall Street Journal in 2002, few have stated this in public, and you will never hear it out of a member of the U.S.
Congress for two reasons

The first is obvious: the U.S. counts heavily on China for purchases of U.S. treasury debt to fund outrages fiscal deficits (PDF File) and for cheap imports to balance out strong inflationary forces within the U.S. asset-speculation economy that show up dramatically in commodities like oil that must be imported and in non traded goods and services, such as health care and education. To enable politically popular “Something for everyone!” government spending and support the “Every ticket is a winner!” asset-speculation economy, the U.S. relies on a country that increasingly puts political dissenters in concentration camps, shoots villagers who dare stand up to corrupt local politicians who confiscate their land, and jails anyone who offers even mild criticism of the government. This dependency eliminates the incentive for the U.S to get its fiscal house in order, put an end to reliance on asset-speculation for economic growth, and make a principled choice to not finance a totalitarian regime that continues to move away from the principles of liberty and freedom on which the U.S.
was founded

The second reason given for engaging versus shunning the CCP is that a policy of engagement is expected to lead to greater democratization of China. By doing business with the CCP, the U.S. is encouraging capitalism and trade. This will eventually lead to greater democracy in China. If the CCP does not increase personal freedoms to meet the demands of the nation’s burgeoning entrepreneur class, growing political instability will force the change. All these newly minted capitalists will press for personal liberties to match their economic liberties. The old – literally -- leadership will die off to be replaced by younger, more democratic minded leaders who grew up immersed in Western ideas of democracy and freedom.
This line of reasoning is justified with research that shows that the more a country is involved in trade, the more likely that country is to address human rights and other social issues

This is a politically convenient confusion of correlation with causation. Capitalism and trade may correlate to greater political freedom but does not necessarily cause it. The institutions of democracy do not grow naturally from the mechanisms of trade. A strong political class has to build them with outside help. How about China's new middle class and wealthy capitalists? Not likely. The credit-corruption system is making them rich.
They are not motivated to rock the boat, especially when doing so can land you in prison

As Ledeen pointed out in his WSJ piece, “It is… wrong to think of contemporary China as an intensely unstable system, riven by the democratic impulses of capitalism on the one hand, and the repressive instincts of communism on the other. Fascism may well have been a potentially stable system, despite the frenzied energies of Hitler's Germany and Mussolini's Italy. After all, fascism did not fall as the result of internal crisis; it was destroyed by superior force of arms.
Fascism was alarmingly popular; Hitler and Mussolini swept to power atop genuine mass movements, and neither Italians nor Germans produced more than token resistance until the war began to be lost”

How does it end?

Dangerous as it was, M.A.D. nuclear policy worked. There were a couple of close calls, but no nuclear war between the U.S. and the Soviet Union. The U.S. and the Soviet Union developed communications methods and checks and balances to help prevent accidents. Luck played a big part. The U.S. applied the economic screws on the U.S.S.R.
, raising the costs of military confrontation until the Soviet economic system failed, which was inevitable in any case

The current economic version of M.A.D. between the CCP and the U.S. may turn out to be as lasting and positive for the U.S. as nuclear M.A.D. was between the U.S. and the U.S.S.R. but for three major differences. Capitalism has made the CCP wealthy and powerful, supported by a large and growing capitalist class, whereas socialism brought the Soviet Union’s leadership to ruin, a lesson not lost on the CCP. Maybe free trade makes democracy more likely in China but shoveling U.S. capital assets and productive capacity into China and increasing dependency on China’s capital and labor to fund America’s fiscal profligacy and economic dysfunction takes away U.S. leverage to press the CCP for social reforms.
Either bubble economy may go through a crisis for reasons neither country either expects or desires, but that doesn’t mean such a crisis might not be instigated by one that foresees an end-game advantage

If the brewing confrontation between Iran and the U.S. breaks out into open hostilities the result will be a spike in oil prices and interest rates in the U.S. The asset-speculation economy will take a major hit. How will China’s credit-corruption economy fare? China has oil and gas deals with Iran and it has been credibly asserted that the CCP played a role in the election of Iran’s current anti-U.S. leadership. The CCP also has oil deals with an increasingly dictatorial Russia and overtly anti-American Venezuela. When the dust settles after a possible a U.S./Iran crisis, China winds up with oil, enormous productive capacity and trade partners across Asia, South America and Europe. And what does the U.
S have?