Thanks AdmSmith. Oh, cool, it's got a bank behind it in the picture.
Posted on 08/29/2010 10:23:09 PM PDT by JustTheTruth
China's Hayman declaration
30 Aug 2010
In most years something very memorable occurs at the Australian Leadership Retreat on Hayman Island. Last year the Chinese were stopped from attending because China discovered that the then Prime Minister Kevin Rudd would be in attendance. Rudd had fallen out with the Chinese leadership (Building bridges with China, September 1 2009).
In 2010 Rudd was not there and the Chinese came in force and some of their messages are still ringing in my ears.
By far the most dramatic was the declaration that China did not plan to buy any more US treasury securities or bonds. The person who made the statement does not make that decision, but he is closely connected to the China hierarchy. He explained that the $US2.5 trillion of China’s foreign reserves held in US dollars was burdensome because it limited the flexibility of monetary policy and any appreciation of the Chinese currency would cause loss. China would therefore not be a buyer of US dollars but would not sell. China would look to diversify its holdings and was a buyer of European and Japanese government bonds as well as other currencies.
A statement along those lines in more normal times would have seen the Hayman phones running hot to sell US dollars.
But at the moment the US dollar, as the world currency, is gaining considerable support from the Middle East and other areas. In addition China is looking to increase imports and to reduce its surpluses. But longer-term when the main supporter of a particular asset says that they will withdraw their continued support, the value of the asset will fall. If China follows through on the Hayman declaration it is not good long-term news for the US currency.
But the Chinese also had some special messages for Australia. In particular, the rise in iron ore prices has had a huge impact on China and so China wants long term contracts with price stability, which will protect Australia if there is a price fall.
The problem for Australia is, of course, that if we accepted a lower price now, would we really be insulated against a fall in later years?
The Chinese said at Hayman that Australia would be insulated, but in the light of the Stern Hu affair there is limited trust. Companies like Rio Tinto and BHP want to maximise current gains and BHP, in particular is pressing for market pricing – the reverse of what China seeks. The Chinese repeated that they wanted a long-term trade agreement with Australia and obviously the price of iron ore would be part of it.
Although Australia has approved the vast majority of Chinese proposals to invest in Australia, there is clearly a belief in China that we take an unrealistically tough view of Chinese investment.
We have always been proud of our democratic institutions but China took the Australian election as an example of the shortcoming in the Western democratic system. While emphasising that they did not want to be critical, they pointed to the cost of the system and the difficulty for governments in taking a long-term view. The message was clear – do not criticise the Chinese system.
It was also clear that there were some underlying difficulties in the Chinese economy. While China had sufficient land to feed the population there were problems with the supply of water, while those living in rural areas were paid at rates equal to about one third of those that were working in the cities.
It seems that China wants to cut unoccupied apartment prices by about 10 to 15 per cent and to achieve this the government developers to sell their stocks. China is undertaking all sorts of measures to force these dwellings onto the market at prices that buyers can afford. And this is one of the factors behind the fluctuations in the Shanghai composite index.
If China does reduce its housing prices, the Australian housing market will emerge as one of the few developed countries where house prices have not been corrected as part of the global financial crisis.
Meanwhile, the days of China growth rates approaching 10 per cent have gone. It creates just too many problems. We are going to see growth rates of around or a little below 9 per cent in the a years ahead. Eight per cent seems to be a floor.
www.chicagotribune.com/business/feed/sc-biz-0827-wall-street-diversity-20100829,0,482951.story
chicagotribune.com
Bill aims for diversity on Wall St.
Each of the 30 federal financial agencies and departments are required to establish an office to boost hiring of and contracting opportunities for minorities and women.
By Julia Love and Jim Puzzanghera, Tribune Washington Bureau
August 29, 2010
Reporting from Washington
The recently enacted financial reform legislation tries in numerous ways to change how Wall Street companies and their federal regulators act, but a little-noticed provision aims for something potentially more difficult and controversial — altering how they look.
To promote diversity in the largely white, male world, the new law requires each of the 30 federal financial agencies and departments, including the Securities and Exchange Commission and all 12 Federal Reserve banks, to establish an Office of Minority and Women Inclusion.
The provision, championed by California Rep. Maxine Waters (D- Los Angeles), has been hailed as groundbreaking by minority and women’s advocates. But it is raising concerns in the banking industry and among some Republicans of potentially burdensome regulations and costly new oversight that unnecessarily duplicates — and could go well beyond — other federal diversity initiatives.
First of all, the US imports all sorts of things from all over the word including gas, oil, electricity, semiconductors, uranium, steel, autos and just about anything else you can think of. We also export a lot of things as well. Should we declare that US citizens cannot import or that they cannot set up shop to do business in other countries? Should we be telling other people that they should have to live in poverty and not try to gain more affluence?
Secondly, look at the attitude of entitlement that people in the US have towards government entitlements. People think that they should get all the meds they can ingest or all the medical procedures they can handle even though they are not really paying for them. We can spend $700 billion plus per year on defense when no one is willing to increase their taxes to pay for the troops. We can keep borrowing $$ to pay the interest on debts we have already accrued?
This has nothing to do with globalism. We spend too damned much in this country both on government AND personal items and use debt to fund it. $500 billion plus per year on debt service that could have been used to reduce taxes for people who work.
We have the largest trade deficit with China, money they in the past they have loaned to the US to pay for the very entitlements that one decries.
In essence, Globalism made China, for a time they were content with loaning us their money made from it, now they are withdrawing from such purchases of .Gov debt.
Prior to the mid 90’s, why weren’t the ChiComs purchasing such quantities of US debt?
Because they did not have the money, via Globalsim and Outsourcing well gosh, they sure got wealthy all of the sudden..
You cannot expect the rest of the world to aspire to poverty and nor can we expect that the US is guaranteed anything.
We are globalists and outsourcers because we are part of the world, a leader in trade and competitive in what we produce.
We sell our stuff all over the world and have shed the unprofitable and uncompetitive products that are not worthwhile.
Our corporations are everywhere they can conduct good business and have set up shop where ever it is necessary to further the increase in trade.
America is because of our great corporations and their business acumen and ability.
We got their stuff and they got our dollars. Who won?
If China isn’t planning to buy anymore US Treasuries, that news should have been reflected in rising US treasury bond yields.
I don’t see that happening at all. At least not in the past month.
While China invests in businesses, energy, metals, cheap labor (???) we invest in food stamps, unemployment compensation, stimulus tax ‘credit’ checks, illegal immigrants, public sector unions, you can see where this is headed.”
China 2010 sounds like the 1700’s British Empire. Imperial and colonial.
Here is the remedy to our cause. We need no money from china or any enemies of the USA.
On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. Mr. Kennedy’s order gave the Treasury the power “to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.” This meant that for every ounce of silver in the U.S. Treasury’s vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.
With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything. Executive Order 11110 could have prevented the national debt from reaching its current level, because it would have given the government the ability to repay its debt without going to the Federal Reserve and being charged interest in order to create the new money. Executive Order 11110 gave the U.S. the ability to create its own money backed by silver.
After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Final Call has learned that the Executive Order was never repealed by any U.S. President through an Executive Order and is still valid. Why then has no president utilized it? Virtually all of the nearly $6 trillion in debt has been created since 1963, and if a U.S. president had utilized Executive Order 11110 the debt would be nowhere near the current level. Perhaps the assassination of JFK was a warning to future presidents who would think to eliminate the U.S. debt by eliminating the Federal Reserve’s control over the creation of money. Mr. Kennedy challenged the government of money by challenging the two most successful vehicles that have ever been used to drive up debt - war and the creation of money by a privately-owned central bank.
The following are Fortune 500s that filed briefs in favor of “affirmative action” in the Michigan “Grutter v. Bollinger” (Michigan University) case.
http://www.umich.edu/~urel/admissions/legal/gru_amicus/32_internatl.pdf
3M
Abbott Laboratories
American Airlines
Ashland
Bank One
Boeing
Coca-Cola
Dow Chemical
E.I. Du Pont De Nemours
Eastman Kodak
Eli Lilly
Ernst & Young
Exelon
Fannie Mae
General Dynamics
General Mills
Intel
Johnson & Johnson
Kellogg
KPMG
Lucent Technologies
Microsoft
Mitsubishi
Nationwide Mutual Insurance
Nationwide Financial
Pfizer
PPG
Proctor & Gamble
Sara Lee
Steelcase
Texaco
TRW
United Airlines
General Motors Corporation
http://www.umich.edu/~urel/admissions/legal/gru_amicus/gru_gm.html
Oh, wait a minute...
I'm not sure that Obama and Geithner in control would be much of an improvement. One might argue that unless we at least get the vermin in government under control, we will have the same fundamental problems. But I am afraid that would require the US voters to put patriotism above entitlements and pork. (Unfortunately, even some Tea Party members don't want to go that far.)
It is most probably related to this:
STRATFOR: China: Rumors of the Central Bank Chief’s Defection
Rumors have circulated in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou. Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou’s defection have spread around China intensively, and Zhou’s name has been blocked from Internet search engines in China.
STRATFOR has received no confirmation of the rumor, and reports by state-run Chinese media appeared to send strong indications that Zhou is in no trouble at the moment. However, the release of this rumor and its dispersion throughout the public is significant, particularly as the Communist Party of China (CPC) is preparing for a leadership transition in 2012.
Chinese state-run media and official government websites have run several high-profile reports about Zhou, which should be seen as an attempt to refute the rumors. The PBC website published two articles on its homepage reporting on Zhou’s meeting with visiting Japanese Financial Services Minister Shozaburo Jimi during the third China-Japan high-level economic dialogue as well as a meeting with an Italian delegation. Xinhua news agency reported that Zhou told the PBC Party Committee Enlargement meeting on Aug. 30 it should “continue to implement justice and strengthen legislative work in the financial system.” Prior to this news, Zhou appeared at the 2nd annual conference of the heads of the Chinese, Japanese and Korean central banks held on Aug. 3, and his most recent public appearance was Aug. 10 for China’s Financial System Anti-corruption Construction Exhibition.
Zhou is known to have lofty political ambitions and is believed to be a close ally to former Chinese President Jiang Zemin, as well as a core figure for Jiang’s “Shanghai Gang.” There has been no shortage of rumors about Zhou’s possible dismissal in the past five years, as he is believed to be associated with several high-level financial scandals. For example, Zhou was rumored to be under “shuanggui,” a form of house arrest administered by the CPC, during the massive crackdown of Shanghai Party Secretary Chen Liangyu in 2006, which was perceived in the country as a crackdown of the Shanghai Gang and part of President Hu Jintao’s effort to consolidate power ahead of the 2007 power transition. There was also a rumor that he might have been detained following the investigation and arrest of Wang Yi, the vice governor of the China Development Bank, along with several other officials in the financial circle. Currently, several financial scandals are still under investigation, and it is likely that Zhou, as PBC governor and one of the most powerful economic players in the country, could be associated with some cases. Therefore, whether or not the rumor is true at this time, the leaking of this news is very likely to be associated with a power struggle within the Communist Party’s economic hierarchy.
http://www.stratfor.com/analysis/20100830_china_rumors_central_bank_chiefs_defection
>>Perhaps the assassination of JFK was a warning to future presidents .....<<
Very likely.
Does this mean they will not buy Treasury roll overs ?
Is this as ominous as it seems ?
I’m getting a real unsettled feeling about this.
Are the wheels about to come off the economy?
Well said.
Thanks AdmSmith. Oh, cool, it's got a bank behind it in the picture.
IDK. I guess it depends on which category goes to shit first.
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