From yesterday's "Daily Reckoning":
Tom Dyson, from the thriving metropolis that is
Baltimore...
- "I'm Comrade Faber. You are now all members of the
Central Committee of the Communist Party," began a speech
by regular Daily Reckoning contributor Marc Faber.
- Faber was role-playing. He was pretending to be the new
president of the Chinese Communist Party's Central
Committee. It was a cunning ploy to make a point to his
audience.
- "My plan," said Faber, keeping up his appearance as an
imaginary Communist bureaucrat, "is to keep the U.S. dollar
very, very strong."
- According to Faber, there are two overriding reasons why
a strong dollar is desirable for China's administration.
Firstly, he argues, China can strengthen its manufacturing
base by undercutting the U.S. competition. It's a play for
market share using the classic "price war" maneuver.
- Chinese officials then return their dollar earnings back
to the United States and plow them into U.S. government and
agency debt securities. Yields are forced down, and the
great U.S. import binge carries on.
- "One day disaster will strike," concludes our faux-
Communist mouthpiece. "This is a small penalty to pay for
the transfer of technology and manufacturing and
investments into our country."
- The money migration, total economic warfare, beggar thy
neighbor...call it what you will, but it sure ain't good-
natured, wholesome globalization.
- And of course, it's already begun...
- In 2003, reports the AFP this week, China overtook the
United States as the top global destination for foreign
direct investment. Last year, China attracted $53.5 billion
dollars, versus only $30 billion dollars attracted by the
United States. The United States is traditionally the
largest recipient of FDI, but last year's total was so
pathetically low - plunging 53% from the year before and
setting a new 12-year low - that China was able to leapfrog
the United States into the top spot.
- Marc Faber may not be the first person to recognize this
cunning plan by those wily Chinese capitalists. And their
designs may not be purely economic in nature either. Now
Japan wants to classify China as a potential military
threat.
- According to a report from Japan's leading business
newspaper, Nihon Keizai, a 10-member advisory panel will
recommend that Russia be replaced by China as Japan's
mightiest adversary and the most likely to attack.
- "The panel will not call it directly a military threat,"
says Lance Gatling, a U.S. defense consultant, "but the
concern about a conflict between Taiwan and China is quite
real, and Japan is concerned about getting drawn into
that."
- China has been in a defense-spending boom, according to
reports, investing in deep-water navy, more offensive
weapons and reconnaissance satellites. And we find this in
The Washington Times: "China's naval buildup has produced a
new type of attack submarine that U.S. intelligence did not
know was under construction, according to U.S. Defense and
intelligence officials."
Looks like someone ELSE figured out what WilliamofCarmichael, WillieGreen, and I have been harping about for the last several months, or longer.
Thanks for the post.
However, super-capitalists don't care who wins the war as long as there is profit to be made.
China has repeatedly stated that they would engage in asymetric warfare to bring down the United States. Economic warfare is one facet.
Neoliberal free traders don't about the death of nations(even their own) as long as the market keeps expanding because they see the market as everything-- economic and social.
Thanks for your post, its right on the mark!
Yep. I've been doing my harping on a related thread: China beats US as top investor choice
Bump.