Chinese aunties buy gold to avoid the fate of the Russian babushkas
Posted on 09 May 2013
Chinese consumers led by their old ‘aunties’ have reportedly bought over 300 tonnes of gold worth more than $16 billion since the price crash last month. There have been queues at the nation’s many gold shops. Perhaps the Chinese aunties have heard the story about what happened to the Russian babushkas in the 90s.
Basically the babushkas are largely pensioners on fixed incomes and in the 1990s their income was devastated by a massive inflation that also destroyed the savings of the communist era. If only they had switched their money into gold then their savings would have been preserved.
Don’t forget what a pensioner in China has lived through. Younger people know only the successes of the past 30 years. Some of the older folk had 40 years of Chairman Mao. They know just how tough hard times can be in China, a country with very little by the way of a welfare state.
The Beijing Daily newspaper commented yesterday: ‘Perhaps the majority of Americans cannot comprehend the unusual feelings Chinese people have toward gold and silver. They’ve never considered that rather than being afraid to invest in gold, the Chinese are more afraid that they won’t possess gold.
‘Maybe what Chinese aunties care about is not the price of gold tomorrow, their desire is perhaps nothing more than to buy gold, to delight in gold, to hold it. Chinese aunties’ gold investment strategies are simple and unsophisticated, they just buy what they want.’
A professor at the Shanghai Advanced Institute of Finance, Zhu Ning blogged: ‘Why are Chinese aunties so frenzied in their quest for gold? The primary reason is the limited options for domestic investments.
‘The country strictly controls real-estate purchases; money could be saved in the bank but interest rates are low, and taking into account inflation, there are hardly any profits, but mostly losses; it’s been only a few years since the stock market slump, with investors losing much of their wealth. So, after gold prices fell, many people thought of gold as a last straw investment and now eagerly anticipate a future rise in value. They only want an investment outlet.’
Gold as the ultimate and only investment? That is what happens when the world loses control of the money supply, and China gave its economy the biggest stimulus in history after the global financial crisis. The result has been hyperinflation (click here). What comes next is a savage deflationary depression.
Where you could criticize the aunties is that they are closing the door after the horse has bolted. Whatever the ludicrous official inflation figures say ArabianMoney was a bit shocked last month to find some prices higher in Chinese cities than in Dubai where tax-free salaries are many, many times higher.
However, we don’t see any reason to think this process is over. The gold price crash last month was another example of central bank intervention. The reality is that global money printing in 2013 is running at the highest level since the global financial crisis just over four years ago.
Things are getting worse, not better with money printing, and that will push the price of gold very much higher. The Chinese should look after their aunties who are going to become rich!
Statistics: Posted by yoda — Thu May 09, 2013 12:26 am
View full post on opinions.caduceusx.com
Chinese Gold & Silver Exchange Society Runs Out of Gold…Importing from Switzerland and London
Posted on April 19, 2013
Hong Kong’s Chinese Gold & Silver Exchange Society has been in operations for over a century, and it’s President Haywood Cheung was interviewed by Bloomberg news earlier today. Whoever orchestrated the attack on gold and silver in the last week or so has gravely miscalculated, since the response to the drop has been surging demand for physical gold and silver. While I tend to be skeptical when I hear about silver shortages since these reports have been so exaggerated in the past, the lack of silver coin availability and premiums are the most extreme I have seen since the financial and economic meltdown of 2008. Now we discover that the Chinese Gold & Silver Exchange Society has essentially sold out of gold bullion, and must wait until Wednesday for shipments to arrive from Switzerland and London.
Statistics: Posted by yoda — Fri Apr 19, 2013 12:12 pm
View full post on opinions.caduceusx.com
Gold Drop Spurs Demand From Indian Bazaar to Chinese Mall
By Glenys Sim & Michelle Yun – Apr 18, 2013 12:00 AM MT
Shoppers in China lined up for gold this week, while in Hong Kong they rushed to buy bracelets and in India sought jewelry for weddings not set until December. The metal’s biggest price drop in three decades provoked the clamor.
From Zaveri Bazaar in Mumbai, India’s largest bullion market, to Australia’s Perth Mint, where sales doubled from last week, consumers headed to shops after the commodity entered into a bear market last week. As gold plunged 13 percent in the two sessions through April 15, retail sales tripled across China on April 15-16, the China Gold Association reported.
The frenzy appeared in India and China, the biggest gold- consuming nations, with cultures that traditionally acquire the metal for brides, babies or strongboxes. This year’s 18 percent decline may reignite demand that last year fell for the first time in three years, with Asian investors in particular seeing the drop as a buying opportunity.
“The culture in Asia is such that they will absorb the physical metal when the price drops,” Dick Poon, general manager at refiner and trader Heraeus Metals Hong Kong Ltd., said in a telephone interview. “Jewelry demand is improving and industrial customers are also buying on the dip.”
In India, where coins and mass-market jewelry often are priced by weight, demand in the world’s biggest buyer during recent days was the most this year, the All India Gems & Jewellery Trade Federation reported. Daily customer traffic in Hong Kong and Macau rose as much as 25 percent April 13-16, said Chow Tai Fook Jewellery Group Ltd. (1929), the world’s largest jewelry chain.
‘Built Into DNA’
“We are buying gold after two years, and we will buy some more if prices fall further,” Yogender Gyan, 29, said in an interview in a jewelry store in New Delhi’s Connaught Place retail area, where shoppers outnumbered salesmen by about 5- to-1. Urged by his mother, the blue jean-clad physics teacher went shopping on his break and said he saved 5,000 rupees ($92) compared with a week ago on earrings for his sister.
Owning gold “is built into the DNA” in Asia, said Grant Williams, portfolio manager at Vulpes Investment Management Ltd. in Singapore, which manages $280 million. “Whenever we get these meaningful sell-offs, there’s always a pick-up in demand for physical gold. It’s a very different attitude you get in places like China, Hong Kong and India than you do in the U.S.”
Related Content: The Real Cost of Owning Gold
In London, the scene was calmer. Fewer customers entered Baird & Co., a bullion merchant in Hatton Garden for trade buyers, and goldsmiths J Blundell & Sons Ltd. next door, during the lunch hour. Customers at ATS Bullion were thinned as the Strand road was cordoned off for the funeral of former U.K. Prime Minister Margaret Thatcher.
A 24 carat 1-ounce Brittania gold coin sells for about 1,000 pounds ($1,525), down from about 1,080 to 1,090 pounds last week, ATS Chief Executive Officer Chris Burrow said in an interview. He said buying earlier in the week was “massive.”
Gold futures fell to a two-year low of $1,321.95 an ounce on April 16 on growing optimism that an economic recovery will curb demand for a protection of wealth. The metal’s two-day slump through April 15 was the most since January 1980. Gold for immediate delivery dropped 0.8 percent to $1,365.10 today.
The sell-off in gold was sparked by investor concern that European governments may have to follow Cyprus in selling part of their holdings and exacerbated as the metal fell below so- called technical-support levels, Goldman Sachs Group Inc. said April 16. BlackRock Inc. (BLK) said that it was a “panic event.”
For retailers and refiners the price plunge is proving a boon for business.
Volumes of gold products sold surged 150 percent in Hong Kong and Macau during the April 13 weekend compared with the weekend prior, Dennis Lau, director of sales operations at Chow Sang Sang Holdings International Ltd. (116), said in a phone interview yesterday. Customer traffic rose as much as 40 percent on April 16 from a week earlier, with gold bracelets popular with shoppers, said Kent Wong, managing director at Chow Tai Fook.
Tokuriki Honten Co., Japan’s second-largest gold retailer, said purchases doubled April 16 as prices slumped, while Perth Mint Treasurer Nigel Moffatt said in a phone interview “there’s people running through the gate.”
India and China accounted for more than half the world’s gold demand in 2012, according to the London-based World Gold Council. Jewelry was 43 percent of global bullion demand, and bars and coins 29 percent, according to the industry group. More than 60 percent of gold demand last year came from Asian nation’s including India, China, Thailand, Vietnam and Indonesia.
The boost to retail demand comes even as some investors cut holdings. Bullion held in exchange-traded products decreased for a 12th day to 2,364.9 metric tons yesterday, the least since January last year, according to data compiled by Bloomberg. Holdings have slumped 10 percent from a record 2,632.5 tons in December.
Gold’s drop has been excessive as there are still a lot of troubles out there, Dominic Schnider, head of commodities research at UBS AG’s wealth-management unit, said yesterday, citing the potential for a weaker dollar and debt concerns.
Still, the metal may drop to the so-called marginal cost of production at $1,150 if investment demand doesn’t return, Schnider said.
Goldman Sachs said April 10 the turn in the gold cycle was quickening and investors should sell the metal. Bank Julius Baer & Co.’s head of research Mark Matthews said “this thing’s going down.” Longer-term investors are going to be very cautious about re-entering this space until they see some stability, Peter Richardson, a Morgan Stanley analyst, said yesterday.
Not everyone is rushing to buy, according to Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation.
“There is still a confusion among consumers and traders if prices will fall further,” Soni said from New Delhi yesterday. “So some buying is yet to come.”
Gold has rallied 12 years through 2012, advancing as investors sought a store of value, before dropping this year. Prices dropped below $1,500 an ounce on April 12 for the first time since July 2011.
“Some people have been waiting for an opportunity like this as gold has been trading above $1,500 an ounce in the past two years,” Zhang Bingnan, vice chairman of the China Gold Association, an industry organization representing mining, refining and retailing, said yesterday from Beijing. “Chinese consumers still widely accept gold as a wealth protection.”
Statistics: Posted by yoda — Thu Apr 18, 2013 12:24 am
View full post on opinions.caduceusx.com
Chinese birth tourism booms in Southern California
Any child born on U.S. soil is granted citizenship. Hundreds of expecting moms from Mexico have been crossing the border into Arizona to deliver their babies for years as a result. Now, a growing number of pregnant Chinese women are flying to the U.S. to secure their child that prized U.S. birth certificate, and Southern California has become a hot bed of what’s called “birth tourism.”
The Santa Anita Inn in Arcadia, Calif., is operating as what some are calling a "baby factory." (KTLA)
This week KTLA-TV reported on a motel in Arcadia where expectant women from China are checking in to give birth. Every three to four months a new group arrives. The hotel provides guests with a full-time nursing staff, meals and a nursery. The women are typically wealthy and pay a China-based agency about $25K in fees for travel, medical, visa and other related expenses.
After giving birth and receiving their newborn’s U.S. birth certificates and passports, the women and their babies fly back to China. As U.S. citizens the children can return when they’re older to attend school and take advantage of other benefits that go along with citizenship. Some women are also making the trip as a way to get around China’s one-child policy because the restriction doesn’t apply to those who deliver out of the country.
While hotel employees are denying that they’re running a “baby factory,” Arcadia Asst. City Manager Jason Kruckeberg told KTLA that the city is aware of the hotel’s underground operation. Even though some locals disapprove of the situation, Kruckeberg says the city has no power to stop it because nothing illegal is happening. Equipped with tourism or business visas, these women aren’t violating federal immigration laws.
Last month, the media covered a similar situation in Chino Hills where a residential home was transformed into a maternity hotel for women traveling from China. Some neighbors were so outraged by the the activity generated by the operation that they picketed outside the home.
Chino Hills resident Rossana Mitchell told CBS: “When people think of the American dream, they’re not thinking about birth tourism. They’re thinking about people who come here, immigrate here, work hard, pay their taxes, become citizens and become Americans.”
Authorities eventually shuttered the maternity hotel due to zoning issues, according to NBC.
The United States is one of many countries in the world where a child automatically receives citizenship at birth. “The U.S. law dates back to the 14th Amendment of the Constitution, ratified after the Civil War to ensure that all freed slaves and their children would be American citizens,” according to NBC.
Some lawmakers want to see an end to the practice. Representative Phil Gingrey (R-Ga) thinks the 14th Amendment should be reinterpreted so only children with at least one American parent receive citizenship. Earlier this year he introduced a legislation aimed at ending birth tourism.
But just how big is the birth tourism problem and is a new law really necessary?
The most recent statistics from the National Center for Health Statistics show that births of babies on American soil to foreign mothers increased from 5,009 births in 2000 to 7,462 births in 2008. This is a tiny percentage of the more than four million babies born in America each year. There is no tracking system in place to record which countries the mothers are from or why they are in the United States.
Angela Kelley, the vice president of immigration policy and advocacy for the Center for American Progress, isn’t convinced that the birth tourism issue is big enough to warrant a reinterpretation of the Constitution.
“I don’t see this type of legislation having any traction, or being taken seriously,” Kelley told NBC. “I think something as really fundamental and integral to this nation’s character: that you’re born here, you belong here, that we’re not a country club that you apply to– that would be met with enormous resistance from all sorts of quarters…from left and from the right.”
Statistics: Posted by yoda — Fri Mar 15, 2013 12:54 pm
View full post on opinions.caduceusx.com
Return of Chinese buyers from New Year holiday to rally gold as central banks buy most in 50 years
Posted on 15 February 2013
Bearish noises in the gold pit have lowered prices again this week but the real reason for the price fall is the absence of the world’s most voracious buyers, the Chinese who are on a national holiday this week for their New Year, though they have been buying in the gold souks of Dubai instead.
Global central banks bought more gold last year than at any time in the past 50 years, according to figures published yesterday by the World Gold Council. They added 535 tons to reserves, 17 per cent more than in 2011. Gold prices rose for a 12th successive year.
The bear argument against gold is that economic growth is picking up in the US and China and will divert investment into stocks and away from disaster insurance like gold. That can only really stack up if you believe economic growth is actually about to accelerate.
Unexpectedly GDP in the US did not grow at all in Q4 and recent Chinese trade data is a fiction according to many Asian economists. Besides if the world economy does grow a bit faster this year it will be entirely down to money printing by the global central banks who continue to hedge their own inflation risk with gold.
Individuals are likely to do the same and hedge funds could quickly switch back to being bullion positive. Our local ‘Mr. Gold’ in Dubai thinks the gold price will bottom at current levels and not test the $1,500 an ounce level that chartists have as a potential floor.
Chinese liquidity coming back into the bullion market is probably all it takes. China is the biggest global gold consumer and overtook India sometime last year. They always love to snap up a bargain and with gold on sale should be back with a bang from their holidays.
ArabianMoney does not buy the argument about Chinese growth being bearish for gold. If it is true then the inflation risk is elevated again and the Chinese know gold is the best way to diversify their foreign exchange reserves.
Gold legend Jim Sinclair has highlighted the Chinese as the savoirs of the gold price in 2013 with the first Chinese ETF on the horizon . We think the current price weakness is just down to the absence of Chinese buyers for their New Year.
Sell your gold cheaply now and you will regret it as the price goes up again. Mr. Sinclair’s conservative price target is still $3,500 an ounce.
Statistics: Posted by yoda — Fri Feb 15, 2013 12:22 am
View full post on opinions.caduceusx.com
If you want to live, best not to work for a company headed by a former Chinese government official.
(From The Harvard Business Review)
Our results showed that on average, the rate of worker deaths is five times greater at connected companies than at similar companies that lack political connections. The finding that connected companies have much worse records was remarkably consistent from year to year. Moreover, deaths per 10,000 workers rose by almost 10, on average, during the year following the arrival of a connected executive at a previously unconnected firm, and fell by 6.4 during the year following a connected executive’s departure.
The post Chinese Workers More Likely to Die While Working for Crony Capitalist Companies appeared first on AgainstCronyCapitalism.org.
View full post on AgainstCronyCapitalism.org
What in the world is China up to? Over the past several years, the Chinese government and large Chinese corporations (which are often at least partially owned by the government) have been systematically buying up businesses, homes, farmland, real estate, infrastructure and natural resources all over America. In some cases, China appears to be attempting to purchase entire communities in one fell swoop. So why is this happening? Is this some form of “economic colonization” that is taking place? Some have speculated that China may be intending to establish “special economic zones” inside the United States modeled after the very successful Chinese city of Shenzhen. Back in the 1970s, Shenzhen was just a very small fishing village, but now it is a sprawling metropolis of over 14 million people. Initially, these “special economic zones” were only established within China, but now the Chinese government has been buying huge tracts of land in foreign countries such as Nigeria and establishing special economic zones in those nations. So could such a thing actually happen in America? Well, according to Dr. Jerome Corsi, a plan being pushed by the Chinese Central Bank would set up “development zones” in the United States that would allow China to “establish Chinese-owned businesses and bring in its citizens to the U.S. to work.” Under the plan, some of the $1.17 trillion that the U.S. owes China would be converted from debt to “equity”. As a result, “China would own U.S. businesses, U.S. infrastructure and U.S. high-value land, all with a U.S. government guarantee against loss.” Does all of this sound far-fetched? Well, it isn’t. In fact, the economic colonization of America is already far more advanced than most Americans would dare to imagine.
So how in the world did we get to this point? A few decades ago, the United States was the unchallenged economic powerhouse of the world and China was essentially a third world country.
So what happened?
Well, we entered into a whole bunch of extremely unfavorable “free trade” agreements, and countries such as China began to aggressively use “free trade” as an economic weapon against us.
Over the past decade, we have lost tens of thousands of businesses and millions of jobs to China. When the final numbers for 2012 come out, our trade deficit with China for the year will be well over 300 billion dollars, and that will be the largest trade deficit that one country has had with another country in the history of the world.
Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars. That 2.3 trillion dollars could have gone to U.S. businesses and U.S. workers, and in turn taxes would have been paid on all of that money. But instead, all of that money went to China.
Rather than just sitting on all of that money, China has been lending much of it back to us – at interest. We now owe China more than a trillion dollars, and our politicians are constantly pleading with China to lend more money to us so that we can finance our exploding debt.
Today, the U.S. government pays China approximately 100 million dollars a day in interest on the debt that we owe them. Those that say that the U.S. debt “does not matter” are being incredibly foolish.
So thanks to our massive trade deficit and our exploding national debt, China is systematically getting wealthier and the United States is systematically getting poorer.
And now China is starting to use a lot of that wealth to aggressively expand their power and influence around the globe.
But isn’t it more than a bit far-fetched to suggest that China may be planning to establish Chinese cities and special economic zones in America?
Just look at what has already happened up in Canada. It is well-known that the Chinese population of Vancouver, Canada has absolutely exploded in recent years. In fact, the Vancouver suburb of Richmond is now approximately half Chinese. The following is an excerpt from a BBC article…
Richmond is North America’s most Asian city – 50% of residents here identify themselves as Chinese. But it’s not just here that the Chinese community in British Columbia (BC) – some 407,000 strong – has left its mark. All across Vancouver, Chinese-Canadians have helped shape the local landscape.
A similar thing is happening in many communities along the west coast of the United States. In fact, Chinese citizens purchased one out of every ten homes that were sold in the state of California in 2011.
But in other areas of the United States, the Chinese are approaching things much more systematically.
For example, as I have written about previously, a Chinese group identified as “Sino-Michigan Properties LLC” has purchased 200 acres of land near the town of Milan, Michigan. Their stated goal is to build a “China City” that has artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.
In other instances, large chunks of real estate in major U.S. cities that are down on their luck are being snapped up by Chinese investors. Just check out what a Fortune article from a while back says has been happening over in Toledo, Ohio…
In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.
Toledo is being promoted to Chinese investors as a “5-star logistics region“. From Toledo it is very easy to get to Chicago, Detroit, Cleveland, Pittsburgh, Columbus and Indianapolis…
With a population of 287,000, Toledo is only the fourth largest city in Ohio, but it lies at the junction of two important highways — I-75 and I-80/90. “My vision is to make Toledo a true international city,” Toledo’s Mayor Mike Bell told the Toledo Blade.
But some of these deals appear to be about far more than just making “investments”. According to the Idaho Statesman, a Chinese company known as Sinomach (which is actually controlled by the Chinese government) was actually interested in developing a 50 square mile self-sustaining “technology zone” south of the Boise airport…
A Chinese national company is interested in developing a 10,000- to 30,000-acre technology zone for industry, retail centers and homes south of the Boise Airport.
Officials of the China National Machinery Industry Corp. have broached the idea — based on a concept popular in China today — to city and state leaders.
The article suggested that this “technology zone” would be modeled after similar projects that already exist in China, and that Chinese officials were conducting similar negotiations with other U.S. states as well…
Sinomach is not looking only at Idaho.
The company sent delegations to Ohio, Michigan and Pennsylvania this year to talk about setting up research and development bases and industrial parks. It has an interest in electric transmission projects and alternative energy as well.
The technology zone proposal follows a model of science, technology and industrial parks in China — often fully contained cities with all services included.
Thankfully the deal in Idaho appears to be stalled for now, but could we soon see China establish special economic zones in other communities all around America?
The Chinese certainly do seem to be laying the groundwork for something. They have been voraciously gobbling up important infrastructure all over the country. The following comes from a recent American Free Press article…
In addition to already owning vital ports in Long Beach, Calif. and Boston, Mass., the China Ocean Shipping Company is eyeing major ports on the East Coast and Gulf of Mexico. China also owns access to ports at the entry and exit points of the Panama Canal.
And due to fiscal woes plaguing many American cities and states, U.S. legislators have been actively seeking out Chinese investors. In one of the worst cases, Baton Rouge, La., Mayor Kip Holden offered the Chinese government ownership and operating rights to a new toll way system if the Chinese would provide the funding to build it.
Does it make sense for the Chinese to own some of our most important ports?
Isn’t there a national security risk?
Sadly, there isn’t much of anything that our politicians won’t sell these days as long as someone is willing to flash a lot of cash.
The Chinese have also been busy buying up important real estate on the east coast as a recent Forbes article explained….
According to a recent report in the New York Times, investors from China are “snapping up luxury apartments” and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.
But it is not only just land and infrastructure that the Chinese have been buying up.
They have also been purchasing rights to vital oil and natural gas deposits all over the United States.
There have been two Chinese companies that have been primarily involved in this effort.
The first is the China National Offshore Oil Corporation (CNOOC). According to Wikipedia, CNOOC is 100 percent owned by the Chinese government…
CNOOC Group is a state-owned oil company, fully owned by the Government of the People’s Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government.
The second is Sinopec Corporation. Sinopec Group is the largest shareholder (approx. 75% ownership) in Sinopec Corporation. And as the Sinopec website tells us, Sinopec Group is fully owned by the Chinese government…
Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large petroleum and petrochemical group incorporated by the State in 1998 based on the former China Petrochemical Corporation. Funded by the State, it is a State authorized investment arm and State-owned controlling company.
So whenever you see CNOOC or Sinopec, you can replace those names with the Chinese government. The Chinese government essentially runs both of those companies.
And as you can see from the following list compiled by the Wall Street Journal, those two companies have been extremely aggressive in buying up rights to oil and natural gas all over the nation…
Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.
Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.
Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.
Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.
Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.
Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.
Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.
Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.
So why is the U.S. government allowing this?
That is a very good question.
For a nation that purports to be pursuing “energy independence”, we sure do have a funny way of going about things.
Unfortunately, the sad truth is that China is absolutely mopping the floor with the United States on the global economic stage. China is rising and America is in an advanced state of decline. Global economic power has shifted dramatically and most Americans still don’t understand what has happened.
The following are 44 more signs of how dominant the economy of China has become…
1. A Chinese firm recently made a $2.6 billion offer to buy movie theater chain AMC.
2. A different Chinese firm made a $1.8 billion offer to buy aircraft maker Hawker Beechcraft.
3. In December it was announced that a Chinese group would be purchasing AIG’s plane leasing unit for $4.23 billion.
4. It was recently announced that the Federal Reserve will now allow Chinese banks to buy up American banks.
5. A $190 million bridge project up in Alaska was awarded to a Chinese firm.
6. A $400 million contract to renovate the Alexander Hamilton bridge in New York was awarded to a Chinese firm.
7. A $7.2 billion contract to construct a new bridge between San Francisco and Oakland was awarded to a Chinese firm.
8. The uniforms for the U.S. Olympic team were made in China.
9. 85 percent of all artificial Christmas trees are made in China.
10. The new World Trade Center tower is going to include glass that has been imported from China.
11. The new Martin Luther King memorial on the National Mall was made in China.
12. In 2001, American consumers spent 102 billion dollars on products made in China. In 2011, American consumers spent 399 billion dollars on products made in China.
13. The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
14. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.
15. The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.
16. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
17. The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.
18. Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.
19. According to the Economic Policy Institute, America is losing half a million jobs to China every single year.
20. Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
21. In 2010, China produced more than twice as many automobiles as the United States did.
22. Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.
23. After being bailed out by U.S. taxpayers, General Motors is currently involved in 11 joint ventures with companies owned by the Chinese government. The price for entering into many of these “joint ventures” was a transfer of “state of the art technology” from General Motors to the communist Chinese.
24. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.
25. The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
26. China’s number one export to the U.S. is computer equipment.
27. The number one U.S. export to China is “scrap and trash”.
28. The U.S. trade deficit with China is now more than 28 times larger than it was back in 1990.
30. China now consumes more energy than the United States does.
31. China is now the leading manufacturer of goods in the entire world.
32. China uses more cement than the rest of the world combined.
33. China is now the number one producer of wind and solar power on the entire globe.
34. Today, China produces nearly twice as much beer as the United States does.
35. Right now, China is producing more than three times as much coal as the United States does.
36. China now produces 11 times as much steel as the United States does.
37. China produces more than 90 percent of the global supply of rare earth elements.
38. China is now the number one supplier of components that are critical to the operation of U.S. defense systems.
39. A recent investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.
40. 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.
41. China now awards more doctoral degrees in engineering each year than the United States does.
42. According to one study, the Chinese economy already has roughly the same amount of purchasing power as the U.S. economy does.
43. According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.
44. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.
Without the “globalization” of the world economy, none of this would have ever happened. But instead of admitting our mistakes and fixing them, our politicians continue to press for even more “free trade” and even more integration with communist nations such as China.
In fact, according to Dr. Jerome Corsi, the U.S. government has already set up 257 “foreign trade zones” all over America. These “foreign trade zones” are apparently given “special U.S. customs treatment” and are used to promote “free trade”…
Corsi noted that the U.S. government has created 257 foreign trade zones, or FTZs, throughout the United States, designed to extend special U.S. customs treatment to U.S. plants engaged in international-trade-related activities.
The FTZs tend to be located near airports, with easy access into the continental NAFTA and WTO multi-modal transportation systems being created to move free-trade goods cheaply, quickly and efficiently throughout the continent of North America.
“There is nothing in the U.S. government’s description of FTZs that would prevent a foreign government, like China, from operating a shell U.S. company that is in reality owned and financed by the Chinese government and operated through a Chinese government-owned corporation,” Corsi wrote.
Sadly, we are probably going to see a whole lot more of this in the years ahead.
According to Corsi, a professor of economics at Tsighua University in Beijing named Yu Qiao has suggested the following plan as a way to transform the debt that the United States owes China into something more “tangible”…
- China would negotiate with the U.S. government to create a “crisis relief facility,” or CRF. The CRF “would be used alongside U.S. federal efforts to stabilize the banking system and to invest in capital-intensive infrastructure projects such as high-speed railroad from Boston to Washington, D.C.
- China would pool a portion of its holdings of Treasury bonds under the CFR umbrella to convert sovereign debt into equity. Any CFR funds that were designated for investment in U.S. corporations would still be owned and managed by U.S. equity holders, with the Asians holding minority equity shares “that would, like preferred stock, be convertible.”
- The U.S. government would act as a guarantor, “providing a sovereign guarantee scheme to assure the investment principal of the CRF against possible default of targeted companies or projects”.
- The Federal Reserve would set up a special account to supply the liquidity the CRF would require to swap sovereign debt into industrial investment in the United States.
Apparently the Bank of China really likes this plan and would like to see something like this implemented.
In the years ahead, perhaps many of you will end up working in a “special economic zone” for a Chinese company on a project that is being financially guaranteed by the U.S. government.
If that sounds like a form of slavery to you, the truth is that you are probably not too far off the mark.
The borrower is the servant of the lender, and we should have never allowed ourselves to get into so much debt.
Now we will pay the price.
To get an idea of how much the world has changed in recent years, just check out this incredible photo which contrasts the decline of Detroit over the years with the amazing rise of Shanghai, China.
Things did not have to turn out this way. Unfortunately, we made decades of incredibly foolish decisions and we wrecked the greatest economic machine that the world has ever seen.
Now the future for America looks really bleak.
Or could it be that I am being too pessimistic? Please feel free to post a comment with your thoughts below…
View full post on The Economic Collapse
An American woman unwrapping Halloween decorations bought from K-Mart earlier this year found a note which appears to have been written by someone working in a Chinese forced labor camp. It desperately asks the world to pay attention.
Assuming that the note is real, and it sounds like there is every reason to believe that it is, it is a good example of the type of abuses which happen under a managed economy. When the state is the ultimate everything, the individual will always be abused.
When I read this article this morning, I immediately thought back to the praise some of our leaders have recently heaped upon the Ultimate Crony Capitalist State, China, for its “wise” management of its economy.
I imagine both Jeff Imelt the GE CEO and Andy Stern the former head of the SEIU, two men who have had nice things to say about Chinese state-capitalism, find consider forced labor abhorrent. Yet it is abuses such as forced labor which happen when the state is the overseer of everything in an economy. The praise both men have expressed for macro economic management is blind to the reality of the coercion which comes with such a “managed” economy. I’d like to see either one of these 2 fellows look the worker who wrote this note in the eye and tell him that state-capitalism is just.
View full post on AgainstCronyCapitalism.org
Paul C. "Chip" Knappenberger
Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”
In the vast majority of laboratory and field experiments, the benefits of higher atmospheric carbon dioxide (CO2) concentrations for plants (including food crops) generally outweigh the negative impacts from climate change. And this is even assuming the “dumb farmer scenario” that we recently blogged, in which farmers and agronomists don’t develop new production techniques, technologies, crop varietals, etc., to adapt to change, turning expected losses into gains. There is overwhelming evidence such as the remarkably robust increase that has occurred in the yield of most of the world’s major crops when grown in developing or developed nations. In other words, adding CO2 to the atmosphere may be a win-win situation for the world’s vegetation, but we digress…
Here, we’ll highlight a new study showing that including the fertilization effect of higher CO2 concentrations in a crop model of wheat grown in China turns projections of future climate change-driven reductions in crop yields into CO2-driven yield increases.
The study was conducted by researchers Yujie Liu and Fulu Tao of the Chinese Academy of Sciences and will soon be published in the Journal of Applied Meteorology and Climatology. Liu and Tao used a complex crop model to evaluate the changes in wheat production (which accounts from 22% China’s primary food production), in the main wheat cultivation areas in China under three climate change scenarios—global temperature increases of 1°, 2°, and 3°C. They modeled the crop response both with and without considering the fertilization impacts of additional atmospheric CO2 concentrations (which presumably produced the warming) and compared the results. Here is their summary:
There is a high probability of decreasing (increasing) changes in yield and water use efficiency under higher temperature scenarios without (with) consideration of CO2 fertilization effects. Elevated CO2 concentration generally compensates for the negative effects of warming temperatures on production. Moreover, positive effects of elevated CO2 concentration on grain yield increase with warming temperatures. The findings could be critical for climate change-driven agricultural production that ensures global food security.
Findings and conclusions like these are a breath of carbon dioxide-enhanced fresh air in a world of climate gloomsaying.
Liu, Y., and F. Tao, 2012. Probabilistic change of wheat productivity and water use in China for global mean temperature changes of 1, 2, and 3°C. Journal of Applied Meteorology and Climatology, doi:10.1175/JAMC-D-12-039.1, in press.
View full post on Cato @ Liberty
Marc Faber says we are marching toward a Keynesian economic disaster “The Chinese economy could crash.”
In this presentation given recently in Dubai, legendary investor Marc Faber explains the folly of current monetary policy.
Folly is really a kind word. “Disaster” is probably more apt. He sees potential eruptions of revolution due to inflationary monetary policy. As food gets more expensive, and wages stagnate, people get restless.
Our printing is unsustainable. Our welfare state is unsustainable. Our relationship with China is unsustainable. The whole world regime is unsustainable, and sooner or later it will correct.
View full post on AgainstCronyCapitalism.org