But Aren’t We Joined at the Hip with China?

Another very common objection raised to the Economic Warfare reality is based on the misperception that China is so connected to our economy that “they” would never harm us. [Of course, these are the same people who said that America would never lose our Triple-A Credit Rating.] The idea that “the Chinese” would never harm us is ridiculous on its face, given the proven reality that there are Chinese who continually hack our systems, manipulate and undermine our markets. There is ample evidence of that. The whole concept is rather naive, assuming that all Chinese are the same. Certainly the average businessperson in China might not want harm to our economy. But, how about the PLA (People’s Liberation Army)? We addressed this in our posts titled “Which Chinese?” and “Which Chinese Part 2.”

“Here in the U.S. you may hear many people worry that the Chinese government might stop buying American T-Bills. I think those fears are vastly overblown. The economic situation between China and the U.S. is the financial version of mutually assured destruction…”

Basically, this theory is based on the idea that the Chinese hold so much in dollar debt that they couldn’t afford to see the dollar go down. Here’s the problem. The military doesn’t care. They have a much longer view of things than the next quarter’s export sales. The smug response of those who believe China needs us so much that they must always stay friends is just another example of American arrogance. Now, there is further evidence of what we have been saying all along. We have no idea about what China really holds in dollar debt. They have so many ways to obscure their holdings that we can’t ever be certain. This from the March 2, 2012 Wall Street Journal cover story (Beijing Diversifies Away From U.S. Dollar):

Full article: But Aren’t We Joined at the Hip with China? (Kevin Freeman / Global Economic Warfare)

The Transatlantic Future

In view of this year’s US presidential elections, German government advisors have diagnosed major tensions in relations between Berlin and Washington, which have arisen because of the USA’s grave economic difficulties demanding inevitable drastic austerity measures. It is also uncertain how long the dollar will be able to maintain its exceptional global status. According to an expert of the German Council on Foreign Relations (DGAB), it had already become apparent at the last G-20 Summit that “the enormous power of the US” had “noticeably diminished” because of its economy’s chronic weaknesses. The US government will therefore continue to apply pressure on Germany and the EU to increase the importation of US products and insist on a much stronger participation in military interventions. Because of its harder line toward Beijing, Washington can also be expected to formally or informally seek to expand NATO’s range to Asia – to encircle China.

A Lost Generation

Washington’s chronic economic problems are the cause for the current dislocation in its relations to Berlin. Josef Braml, a scientific advisor to the USA/Transatlantic Relations Program at the German Council on Foreign Relations (DGAP), writes in a recently published analysis that, since 2008, the financial and economic crisis has hit the USA very hard. The unemployment has risen sharply. Because of its insufficient training in “often dilapidated educational institutions,” the younger generation, is incapable “of sufficiently contributing to the GNP.” Apprehension is spreading “that the youth of today could belong to a ‘lost generation’.” A “small elite” takes a “disproportionately large slice of the income pie,” while “very many must be satisfied with very little.” Of all the OECD member countries, only Mexico and Turkey have a wider social gap. Approximately 46 million US-Americans, particularly those in the Afro-American and Hispanic communities are living below the poverty line. “One-third of the Hispanic homes suffer under a lack of food,” reports the DGAP expert Braml. This desolate social situation is also worsening the country’s economic perspective. “If it is true that two-thirds of the US economy is generated by consumer demand, in other words by private consumption, then this social imbalance is very bad for economic recovery.”[1]

Full article: The Transatlantic Future (German Foreign Policy)

Yen-Yuan trade plan

The world is beginning to undermine and move forward without the Dollar. The US is clearly (and quite literally) on borrowed time.

In contemporary world the real indicator of state power is economy rather than territory, population or army, days of physical warfare are long gone, now is the era of economic warfare. Economy determines the destiny and position of states in international politics. The phenomenon of interdependence in international economy has modified the concept of sovereignty, Terms such as sovereignty are irrelevant to countries with weak economies, and sovereignty cannot be protected unless a country is self-sufficient with no dependency on any other country. One can see that leading countries in contemporary world having a strong position in world affairs are countries with huge economies at their back. Economically powerful countries Such as the United states use organizations like World bank and International Monitory Fund (Which are described by many economists as modern tools of colonization) to further their agenda and influence the policies of strategically important but economically weak countries, there is a very well known phrase in economics that aid of any kind is never without strings attached to it. One of the preeminent things that have happened at December 26, 2011 was the Sino Japan currency deal. Sino Japan deal is the beginning of direct trading in their currencies. Currently yen Yuan are not convertible and for trade between two countries need to buy Dollars that adding up extra expenses. China is the biggest trading partner of Japan, according to static’s of Japan external trade organization; trade volume between two countries was $339bn in 2010, which is expected to grow rapidly after Yen Yuan deal.

Through this deal it is first time that Chinese Government allowed any state to issue Bond in Yuan. Japan bank of international cooperation will issue Bond in Chinese market. Japan Government was interested to buy Chinese Government bond and through this deal a new door of mutual cooperation is open which is beneficial for both states. Japan Government stance to adopt China bond as foreign exchange reserve will assist Yuan’s future role as international currency. Sino Japan deal will be beneficial to get investor’s confidence to invest in China bond that give a credible boom to Yuan in eastern markets. China and Japan has long history of rivalry but they come to an agreement, which is beneficial for both states that will give confidence to foreign investor. Japan is the world’s third and china is second largest economy and the deal clearly depicts that rule of Dollar as global currency is going to end.

Full article: Yen-Yuan trade plan (Pakistan Observer)

It’s too late for other Europeans to be as efficient as Germans

While some see China or Russia becoming the next dominant world super power(s), the core of what drives Europe (Germany) is more likely poised to take the stage. People have disdain for cheap quality Chinese products flooding the world, and also being a health issue (lead contaminants). After the middle east, Russia is mainly a leading energy provider in gas and oil as well as a weapons salesman/proliferator to enemies of the west. There is also a large distrust of Chinese and Russian intentions globally in general. After China, Germany is the second largest exporter and represents one of the top five largest economies in the world

To put in perspective how far their reach goes product-wise, here are some examples:

Audi, Volkswagen, BMW, Mercedes, Porsche, Lufthansa, Adidas, Puma, Boss, FC Bayern Munich, Dr. Oetker, Siemens, SAP, T-Mobile, MAN, Nutella, Nivea, Bayer, Bosch, Persil, Maggi.

Germany has the manufacturing capacity. Germany has the technology. Germany has well known and trusted brands throughout the world. Germany is the most populous country in Europe, thus having largest labor force. Germany is currently also dominating Europe, dictating terms to neighboring countries in economic plight and restructuring the continent to it’s vision. For many, Germany taking the leading role in the world might be a surprise, but not for those that follow current European events.

You know the old euro-joke about heaven and hell. Heaven is where the British do the policing, the Italians are the lovers, the French are the cooks and the Germans do the engineering. Hell is where the British are the cooks, the Germans are the lovers, the French are the engineers and the Italians run the place. Yes? There are all sorts of variants being chortled over in the bars of Brussels, but that is the gist.

Well, the European set-up is heavenly at least in the sense that the Germans are unquestionably the engineers. In this celestial world we currently occupy, the cars are German, the washing-machines are German, the fibre-optics are German, the high-value medical scanners are German and the machine-tools are German. The only thing is that the result is very far from heavenly for most of the economies of Europe. In fact, the whole experiment is looking more hellish by the day.

Full article: It’s too late for other Europeans to be as efficient as Germans (The Telegraph)

Counterfeit Money, Counterfeit Policy

What is the difference between printing money and counterfeiting? There is none.

Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.

Counterfeiting is illegal because the counterfeiter creates no additional value–he creates only the proxy for value. Creating real value–adding meaningful goods or services to the economy–is tedious, hard work. How much easier to simply transform near-worthless paper into a claim on actual goods and services.

If this is illegal, then would somebody please arrest the Board of the Federal Reserve for counterfeiting? The Fed has blatantly printed money without creating any real value to back up their added claims on productive value. Hence they are counterfeiting, pure and simple. A government based on rule of law would arrest these fraudsters and cons at the earliest possible convenience.

And while you’re drawing up the indictment, can you also charge them with counterfeiting competence and policy, as they have demonstrated the Peter Principle par excellence: the Board has risen to its highest level of incompetence. Their counterfeit policies have wreaked incomparable damage on the real productive economy.

The essence of counterfeit policy–a fake policy that claims to be something it is not–is “extend and pretend.” And the sole goal of “extend and pretend” is self-preservation and the preservation of the Financial Elite which has tightened its grip on the nation’s throat as a direct consequence of Federal Reserve policies–notably “extend and pretend.”

Full article: Counterfeit Money, Counterfeit Policy (Financial Sense)