Category Archives: China

A Tale Of Two Countries

Business, China, Debt, Economy, Federal Reserve Bank

CHINA AND THE US: Two countries whose respective central banks are pursuing distinctly different policies.

Federal Reserve Chairman Ben Bernanke’s reason for living is to lower interest rates and inject liquidity into an overinflated economy. When Ben announced, a few days back, that he remains “open to using the blunt tool of higher interest rates to avert or pop future asset bubbles … particularly if other approaches aren’t working”—people were floored. (Yes, Ben considers raising interest rates a “blunt tool,” but keeping them artificially low quite okay.) For now, Our Ben is keeping rates near zero.

The People’s Bank of China, on the other hand, has moved to restrain lending by raising “the proportion of deposits that banks must set aside as reserves by 50 basis points starting Jan. 18.” This, anticipates Bloomberg.com, “may foreshadow higher interest rates.”

China is cooling its economy; Ben is heating ours’ up, as he tries to pump stale air into deflating balloons.

Updated: NIMBYs: Not-In-My-Backyard Environmentalists

Barack Obama, China, Democrats, Energy, Environmentalism & Animal Rights, Left-Liberalism And Progressivisim

The excerpt is from my new, WND.COM column, “NIMBYs: Not-In-My-Backyard Environmentalists”:

” … State-sponsored ‘sexy’ technologies in the West have decidedly ugly outcomes for worker bees in the East. The Copenhagen Crowd’s cravings must be sated, but not by despoiling California, if you know what I mean.

Enter the Chinese worker.

‘You buy a Prius hybrid car and think you’re saving the planet,’ divulged Lindsey Hilsum of PBS’s ‘News Hour,’ ‘but each motor contains a kilo of neodymium and each battery more than 10 kilos of lanthanum, rare earth elements from China. Green campaigners love wind turbines, but the permanent magnets used to manufacture a 3-megawatt turbine contain some two tons of rare earth.’

Mining for rare earth metals is not the cleanest undertaking. Hybrid hypocrites prefer by far that it be done by the poor villagers of the Baiyunkuang District of Darhan Muminggan in Inner Mongolia, northern China. There lie the largest deposits of rare earth metals.

The Prius is packed with the stuff.

The Limousine and Learjet liberals who legislate ‘green’ industries into being prefer to outsource all energy-related extraction. …”

Read the complete column, “NIMBYs: Not-In-My-Backyard Environmentalists,” now on WND.COM.

By popular demand, my libertarian manifesto, Broad Sides: One Woman’s Clash With A Corrupt Society, is back in print. The Second Edition features bonus material. Get your copy or copies now!

Update (Dec. 18): A reprieve, for the time being. If I read the veiled vernacular correctly, BO has achieved as much this time around in Copenhagen as he did during his first trip there a few months ago.
The CSM: The Copenhagen Crowd—“the United States and four other countries—“has agreed to a new, voluntary climate pact today. The move, which could become the framework for a broader agreement here, drew responses ranging from cautious acceptance to outrage. But it could prove a historic development in big-power negotiations, say some analysts.”

The Telegraph: “The limited deal was understood to include both developed and developing nations agreeing to ‘list national actions and commitments’ on cutting carbon emissions, US officials said. Agreement was also reached in principle of a package of financial measures to help poorer counties faced with the worst effects of climate change. Crucially, the leaders also gave their assent to targets to limit any rise in global temperatures to 2C.”

[SNIP]

So more foreign aid. The undeveloped countries scored something, but they always do. “Yet More Of Your Money Down The … Rathole.”

From the word salad-like addresses delivered by assorted Third-World shakedown shysters, to the glam factor loitering in the swanky hallways—Copenhagen encapsulates what I’ve called (or, rather, what my dad has coined) The Age of the Idiot:

“Darryl Hannah arrived to make a splash in the city of The Little Mermaid. Thom Yorke, of Radiohead, joined assorted hacks at a British government press briefing. The martial arts film star Jet Li was everywhere and Arnold Schwarzenegger, the grand-daddy of them all, ended his speech with the inevitable promise – or threat – ‘I’ll be back!'” John Kerry and Ban Ki-moon were there too. [The Telegraph]

Updated: 'The Truth Behind China's Currency Peg'

China, Debt, Inflation

The synophobic narrative in this country has it that somehow China’s currency manipulation is responsible for America’s trade imbalance with that country. In a manner, the pegging of the renminbi to the dollar has enabled America’s grotesque, Fellini-worthy excesses. But the relatively austere Chinese are not responsible for our appetites.

Explains Peter Schiff:

“The peg, they argue, offers China a competitive advantage by making its products cheaper in U.S. markets, thus allowing Chinese firms to gobble up market share and steal jobs from U.S. manufacturers. The thought is that were China to allow its currency to rise, American manufactures would regain their lost edge, and both manufacturing firms and the jobs formerly associated with them would return. In this narrative, the struggle centers on the United States’ diminishing leverage in persuading the Chinese to lay down their unfair weaponry. It’s a sympathetic picture, but it tells the wrong story.

While the peg certainly is responsible for much of the world’s problems, its abandonment would cause severe hardship in the United States. In fact, for the U.S., de-pegging would cause the economic equivalent of cardiac arrest. Our economy is currently on life support provided by an endless flow of debt financing from China. These purchases are the means by which China maintains the relative value of its currency against the dollar. As the dollar comes under even more downward pressure, China’s purchases must increase to keep the renminbi from rising. By maintaining the peg, China enables our politicians and citizens to continue spending more than they have and avoiding the hard choices necessary to restore our long-term economic health.”

Update (Nov. 25): Pat Buchanan too believes the US is owed Chinese “gratitude” for “throwing open its market to Chinese goods”:

had it not been for U.S. magnanimity … Beijing would never have registered the double-digit growth rates it has seen for the past two decades. Some gratitude China is showing.

In other words, Americans had been begged to buy mounds of cheap Chinese goods they had no interest in, and, out of the goodness of their hearts, bless them, they relented, bought Chinese stuff and catapulted China to “double-digit growth rates.”

Updated: ‘The Truth Behind China’s Currency Peg’

China, Debt, Economy, Inflation

The synophobic narrative in this country has it that somehow China’s currency manipulation is responsible for America’s trade imbalance with that country. In a manner, the pegging of the renminbi to the dollar has enabled America’s grotesque, Fellini-worthy excesses. But the relatively austere Chinese are not responsible for our appetites.

Explains Peter Schiff:

“The peg, they argue, offers China a competitive advantage by making its products cheaper in U.S. markets, thus allowing Chinese firms to gobble up market share and steal jobs from U.S. manufacturers. The thought is that were China to allow its currency to rise, American manufactures would regain their lost edge, and both manufacturing firms and the jobs formerly associated with them would return. In this narrative, the struggle centers on the United States’ diminishing leverage in persuading the Chinese to lay down their unfair weaponry. It’s a sympathetic picture, but it tells the wrong story.

While the peg certainly is responsible for much of the world’s problems, its abandonment would cause severe hardship in the United States. In fact, for the U.S., de-pegging would cause the economic equivalent of cardiac arrest. Our economy is currently on life support provided by an endless flow of debt financing from China. These purchases are the means by which China maintains the relative value of its currency against the dollar. As the dollar comes under even more downward pressure, China’s purchases must increase to keep the renminbi from rising. By maintaining the peg, China enables our politicians and citizens to continue spending more than they have and avoiding the hard choices necessary to restore our long-term economic health.”

Update (Nov. 25): Pat Buchanan too believes the US is owed Chinese “gratitude” for “throwing open its market to Chinese goods”:

had it not been for U.S. magnanimity … Beijing would never have registered the double-digit growth rates it has seen for the past two decades. Some gratitude China is showing.

In other words, Americans had been begged to buy mounds of cheap Chinese goods they had no interest in, and, out of the goodness of their hearts, bless them, they relented, bought Chinese stuff and catapulted China to “double-digit growth rates.”