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The tide has turned against US $ July 7, 2014

Posted by hslu in China, Cold War, Economics, Energy, Euro, Global Affair, Health Insurance, Islam, Obama, Oil, Politics.
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The US dollar will lose its reserve currency status sooner than many people have expected. Mark my words. The downfall of the US has just been accelerated a bit.

Some ananlysts have suggested 10 to 15 years. A few said 20. In all likelihood it will be sooner now because the world has more or less united against America the bully since the start of  financial crisis of 2008.

China fired the first shot with bilateral trade agreements with many countries and these trades will be settled in renminbi instead of US dollar. The latest was Gazprom’s 30 year, $40 billion gas deal with China which will be settled in renminbi. Not USD.

Today, France has joined the party because it is tired of being jerked around by America also. I guess the Frenchmen have just about had it up to their eyebrows with the $9 billion fine American regulator placed on BNP Paribas.

France call it ‘re-balancing.’ I call it ‘get rid of the US dollars’ because it will lose more value if you decide to hold on to it.

Consider you forewarned.

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Source: CNBC mobile site.

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Source: CNBC mobile site.

Even Total wants to settle its crude oil trades in Euro instead of USD. And what about airplanes made by Airbus? They are now settled in USD even within EU which totally doesn’t make sense.

Well, since France is doing the bidding for the Chinese government, China can sit back and watch the confrontation from the sideline. In the mean time, keep expanding the renminbi agreements with more funds and more countries.

Well, having France in China’s corner isn’t enough yet. If Saudi Arabia decides to use riyal to settle the Kingdom’s crude oil exports, the death of US dollar as world’s reserve currency will be preordained.

Is Saudi happy with the US? Probably not: not when the US abandoned Egypt or after the US allowed Iran keeps its nuclear capabilities. The US isn’t trustworthy. America only looks after its own interest and does what’s good for itself. Just take a look of the recent history of the middle east and you’ll know. Saudi isn’t stupid. They see what every other country see. The day will come.

The plot just got more interesting now.

Currency War: US dollar vs Renminbi April 13, 2013

Posted by hslu in China, Cold War, Economics, Global Affair.
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Step by step, Chinese’s currency is chipping away green back’s dominance on the world’s stage. The latest player coming on board is France, according to a Reuters article. It appears that France likes to set up a direct currency swap line with China and what’s left to decide is the terms of the deal in terms of the size of the swap and its duration.

http://mobile.reuters.com/article/businessNews/idUSBRE93C01S20130413?irpc=932

The reason is simple to understand: the US dollar is losing its value thanks to Bernanke. France is simply looking after its own interest because there is BIG money to be made in direct trades with China and on being a hub of Europe’s Renminbi trading center. If France does not act fast, it will lose the fight to London forever.

France’s brand new president will visit China and an announcement is expected soon.

America is making new friends with Vietnam and Phillipines and swears to help Japan in a war. It has made major shift of its military might to the Asian theater since a couple of years ago under Clinton. The sole intent is to block the advancement of China.

China knows that and China is avoiding direct conflict with America because its military is nit even one tenth of the size of that of the US.

Instead of fighting the US with guns, nuclear missiles and air carriers, China is fighting US on the economic front. The fight will be long and hard, but China is very patient.

Besides, China doesn’t have $16.5 trillion debt. It doesn’t have 9 air carriers or billion dollar fighter jets (that’s a billion dollar each) to support either. Oh yeah, did I mention Obamacare? That will definitely be a deeper hole for Americans to dig themselves out with.

Hmmm……. 鹿死誰手還待下回分解!

I for one is waiting patiently too.

US is the Worst Currency Manipulator Ever November 1, 2012

Posted by hslu in China, Cold War, Economics, Euro, Global Affair, Obama, Oil, Politics.
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The United States is the world’s most egregious currency manipulator.
Take Plaza Accord, for example, United States led the conspiracy to lower US dollar and gave Japanese people a misery life for 23 years and counting.

The Unites States gave Japanese people prosperity after WWII as a pay back for bombing Japan with 2 nuclear bombs. The United States then took the punch bowl away through currency manipulation, because American people and politicians, from the US president to Senators and Congressmen, had enough of low Japanese yen which took away American jobs.

American companies and their workers couldn’t compete with Japanese’s labor force and its management practice fairly in the market. The politicians did it with a meeting behind the closed doors of a New York hotel.

The history is repeating itself with China’s RMB.

Constant threats of retaliation from senators, such as Schumer, treasury secretary, secretary of state, Obama, Romney and the others fill the prime time TV news programs and Sunday political talk shows. But China doesn’t want any of this or shall we say that “中國不吃這一套.” China had Japan as its teacher in this department and China knew the course sucks.

China will continue to control its currency, RMB or 人民幣, for the benefits of Chinese people. China will continue to resist calls to appreciate its currency unless it is beneficial to China to do so. In the meantime, China will continue bilateral trades in RMB with many of its neighbors which will affect US dollar’s importance in the financial market. These countries agreed to trade with China in RMB because they are worried by Bernanke’s actions and the value of its US currency holdings.

When Europe comes out of the funk of its financial crisis, Euro will become a much stronger currency which will depress American dollar further. When the oil producing countries, especially members of OPEC not so friendly to the US, such as Iran, Venezuela, Libya, and possibly Iraq sometime later, decided to take other currencies for their oil, the demise of US dollar will accelerate and a new reserve currency, possibly a combination of a basket of currencies, will emerge.

That will be the final nail on the coffin of US economy and US dollar.

Bill Clinton Lied. Hillary is no different. January 15, 2011

Posted by hslu in China, Cold War, Congress, Economics, Global Affair, Military, Politics.
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A pre-requisite of a politician is be able to lie.

Be able to lie in front of cameras.

Be able to lie with a straight face.

As such, the higher the office, the greater a liar she or she has to be.

Bill Clinton lied. He lied under oath. He lied in front of cameras. He knew he lied.

And he got caught, humiliated and impeached. He got what he deserved unless he liked jail better.

Hillary lied as well. Her lies before the visit of China’s President next Monday are strictly for domestic consumption because China does not believe her or the Obama Administration. She said that the US is not trying to contain China. The US is merely cultivating allies in Asia to help it manage Beijing’s increasingly bold projection of military and economic power.

She is either 睁着眼说瞎话 “zheng1 zhe1 yen3 shui1 xia1 hua4” or, shall we say,  放狗屁 “fang4 gou3 pi4”:

http://www.nytimes.com/2011/01/15/world/asia/15diplo.html?_r=1&emc=tnt&tntemail1=y

The United States is no question the most powerful nation in the world with influences felt every corner of the world: Mid-East, Europe, Americas and Asia.

Except China.

The US treats China as its enemy and a threat to its super power position. It is uniting China’s neighbors; South Korea, Japan, Taiwan, Vietnam and India; to contain China’s expansion both militarily and economically.

The US is hoping a repeat of the outcome of the Cold War with Russia where a military race with America bankrupted the former Soviet Union.

The United States has lost the economical war to China. In less than 20 years, from 1993 to 2000, the US  has become the biggest debtor nation in the world. The only thing the US has going for it is the US dollar which is used as the reserve currency of the world. That position is slowly being chipped away. When, not if, it happens, all hell breaks lose and the US will be in shit hole so deep that it has no way of getting out ever.

Now, let’s go back to the Cold War between the US and China.

The US wants a Cold War with China. I say:”Let them have it.”

Why?

Because that’s a sure way of bankrupting a nation, especially a nation like the United States.

Yeah, $600 billion per year! $700 billion per year! Why not $800 billion per year?

Let’s the US Congress approves all the weapons the military wants while green back is the king in the world. We are only talking about tax dollars from its citizens.Who cares about the national debt?

The thing is that the $700 billion or $800 billion won’t stimulate the US economy like it used to after the Great Depression. That $700 billion or $800 billion buys a lot of pork, supports a lot of waste and stimulates the economies of other countries where US stations its troops at.

Let the US borrow more money from China and Japan to fund its ambition of being the superpower in the world. It adds no real value to its economy. You can’t eat bullets. You can’t eat air carriers. You can’t eat cruise missiles either. And all that inventories require a lot of money to keep them functioning at all times while the roads, water pipes and infrastructures are crumbling down. They only serve one purpose and one purpose only: maintaining an image of the most powerful nation in the world. Other than that it has no real value except hastens America’s road to bankruptcy.

With all the lies from Clinton, China will not be easily intimidated. And China will do what it plans to do: 5 years at a time.

 

 

TD vs C December 25, 2010

Posted by hslu in China, Cold War, Economics, Energy, Global Affair, jobs, Politics, stocks.
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The Canadians I knew in general detested Americans based on my personal experience from working with them in Calgary for a year and half in the late 1980’s and after that  till 2000 when I left the oil company I worked for 20 years.

For instance, my salary was roughly the same as that of my Canadian colleagues with similar qualifications. But, my purchasing power in Canada was almost twice as much as my Canadian friends because I was paid in US dollars, not to mention that I paid considerable less taxes than they did.

They were proud of their health care system but they didn’t tell me that they had to wait three to nine months for an MRI.

Yet many of them at the same time have this unspoken jealous sentiment about the United States as well.

Well, time has changed and I bet most Canadians are watching the malaise in the United States with a smirk.

And they couldn’t help but say: “The US did it to themselves and they  deserved every bit of it.”

I don’t blame them at all.

Well, Canadian dollar is now on par with the US dollar if not more valuable. Canada didn’t have sub-prime mortgage and they played according to the rules. As a result, they escaped the world wide financial crisis almost totally unscathed. Canadian’s natural resources, especially its heavy oil and oil sand resources, are the target of acquisitions from China and other countries, e.g., Japan.

And in case you don not know, the United States relies on Canada for almost 2.5 million barrels of crude oil and petroleum products every day.

That’s $225 million every day and $82 billion a year at current prices of $90/barrel.

Many Alberta and Saskatchewan residents have a reliable job and enjoy a handsome salary thanks to millions of US drivers who can’t go a day without his or her car.

This figure will only increase in the coming decades as Canadian engineers find more ways to produce this vast amount of resources in the next 50 to 100 years.

The United States needs this oil because it comes from a country that’s friendly to the US.

That increase may come much sooner if a proposed 2,000 mile Trans Canada and America pipeline, the $7 billion Keystone XL project, gets government approvals which will link Alberta’s oil sand productions to the refineries in the Gulf Coast.

We’ll see how this project goes in the next few months. The kicker for the American consumers is that if the United States doesn’t want it for purely environmental concerns, the Chinese oil companies will gladly pick it up even if the price is higher than it should be.

Do you not see the Cold War between the US and China now?

I also noticed that the Canadian TD Bank has taken over the Commerce Bank (There is one on on Elden Street.) I guess that Canada, with a strong Canadian dollar, can afford to buy it at bargain basement price because many American banks are on such shaky grounds.

And the following figure of last five year’s stock prices of TD Bank (blue) and the Citi Group (green) tells it all:

Stock price comparison: TD vs C

 

Well, don’t tell me that I didn’t warn you that:

“The Canadians are coming!”

“The Canadians are coming!”

 

 

US in no position pressing China on Currency November 12, 2010

Posted by hslu in China, Economics, Global Affair, Obama, Politics.
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With QE2, the US is manipulating its currency with the intention to lower the value of US dollar further in the next few months in order to save its sluggish economy through export.

Isn’t this what US is accusing China of doing for the past several years? No wonder that G20 refuse to back Obama’s call to force China pushing up its currency, the Renminbi.

http://finance.yahoo.com/news/G20-refuses-to-back-US-push-apf-746192354.html?x=0&sec=topStories&pos=1&asset=&ccode=

 

Chinese has a saying that describe Obama’s action perfectly:

 

只许州官放火, 不许百姓点灯

zhi1 xu3 zhou1 guan1 fang4 huo3, bu1 xu3 bai3 xing4 dian3 deng1

While county officer can play with fire, common people are not allow to use a lantern.

What that means is Obama is trying to speak from both sides of his mouth and applying a double standard on America’s conduct on currency manipulation.

No wonder why no one in the world like the United States. The greedy Wall Street bankers gave themselves billions of year end bonuses while Americans and many people in the world are suffering the consequences of melt down of American’s financial system.

 

 

Chinese Yuan – Is it undervalued? October 24, 2009

Posted by hslu in China, Economics, Global Affair.
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Chinese Yuan – Is it undervalued?

Mr. Krugman of the NY Times suggested in his op-ad that Chinese Yuan is undervalued because it is pegged to the US dollar. As US dollar losing its value on the world market, Chinese Yuan is also headed lower.

He suggested that Yuan should strengthen and the United States should do something about it. A lower Yuan helps China exporting its goods to the world. At the same time, Krugman failed to point out, consumers all over the world also benefit from lower inflation.

His comments stemmed from Treasury Department’s assessment of Chinese monetary policy in a report to Congress last week. The report declared that China is not manipulating its currency but expressed “concerned” of Chinese government’s action.

The timing of the report was most intriguing because the YS president is about to visit China and he didn’t want to offend China which holds more than $800 billion of US treasury notes.

There are several points that I found interesting:

  1. I believe the US is now in a much weaker position economically against China compared to what it did in mid-1980 against Japan. Mounting national debt and blooming federal deficits boxes the US in a corner which is hard to get out in the near future. Since the deficit is expected to get worse in the next few years under current administration’s push for a bigger government, the US has to kowtow to China to avoid further decline of the US dollar. In mid-1980, the US, with coordinated efforts from other developed countries, forced Japan to strengthen its currency through what was called the Plaza Accord. The rapid rise caused in part the collapses of its stock market and asset values pushing Japan into two-decade long recession.
  2. The president is about to visit China. The beta male mindset of the current president dares not to offend its host before the visit which resulted in the language of the Treasury Department report.
  3. Chinese Yuan is pegged to a combination of currencies including the US dollar which Krugman conveniently failed to point out in his article too.
  4. Why should China raise the value of its currency when it is facing rising unemployment and troublesome social unrests? China knew what the US did in the mid-1980 to Japan and has gradually allowed it to rise in the past two years or so. I think China has learned the lessons and will raise the value of Renminbi on its own terms no matter who is making the noise; Nobel Price winner included.
  5. A weak nation will also lose out to the demands of a stronger nation. This is the norm instead of an exception in the world of global economic war and politics. Every nation in the world should protect its own interests but in reality some countries win while others lose the battle in the process.
  6. A crucial question Krugman failed to ask in his op-ad is who is responsible for a weak US dollar in the first place? He knows that the answer is the United States itself. The current administration does not care about the mounting unemployment rate and the ill-conceived stimulus package failed badly to create jobs promised by the president in January 2009. At the same time, he, with support of Pelosi and Reid, pushes his social agenda, increase the size of the government and ran up government debt to as far as eyes can see. It is none other than the reckless action of the president which is responsible for a weak dollar.
  7. I believe that the United States actually likes to see a weak US dollar because the export sector is the only sector that is showing any sign of life in the current economy.

I think it is unavoidable that the United States will gradually see China as a rival instead of a strategic partner. It may have already happened behind the scene in the corner offices of Pentagon and in the war room of the White House after China’s impressive showing of military capability at the celebration of China’s 60 year Anniversary earlier this month. With second-class naval fleets, China is by no means a military threat to the US. What the US is concerned about is that sooner or later China will pose a threat to the US a decade or two later.

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China has money and I have every reason to believe that its leaders will use it wisely such as the development of advanced technologies in the fields of outer space, weaponry and first-class naval fleets.

The United States is living on borrowed funds and will sink the nation deeper into a rat hole. However, the United States is still the strongest nation in the world but it is dying a slow death which will take decades to complete. Spain, France and Great Britain all had their time under the sun. For 60 years, the United States has enjoyed the unprecedented prosperity since WWII. However, the baggage is catching up with them fast. Once the economy shows any signs of recovery, interest rate will go up and the US will pay much more interests to debt holders such as China and Japan. Well, the United States can always crank up the printing press. The question is whether the other nations will continue to buy it in the future.

Maybe Mr. Krugman should devote some time to address this issue.

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