Why China is an ass headed nation

Trust the communist rulers of China to come out with either statements or actions that make them look like asses. Just a few pointers in the past 1 month or so.

1. China threatens to dump all the dollars it holds as foriegn exchange and switch to some other currency (Euro, Yen, Pound etc). China is not going to dump the more than 1 trillion USD it holds into the garbage dump for sure. When it will exchange it for some other currency, someone is buying it up. So where does the question arise of the US economy collapsing due to the dollar dumping? Also does China believe that 1 trillion dollars is enough to condemn the whole US economy? There are the Japanese, Arabs, European countries who will be gladly willing to mop up the excess dollar liquidity in the market. Surely the Europeans would not want the dumping to make the dollar cheaper and hence their products costlier in the market. So, to pre-empt, they will will simply buy all the excess dollars in the market.

2. The Indian navy will have joint maritime exercise with USA, Japan, Australia, Singapore in the Indian Ocean. Now China objects to the fact that all democratic countries are ganging up against them. A few questions. Is Indian Ocean, the Chinese govt’s father’s property? Or should a sovereign country like India ask for permission from a tin pot dictatorial country like China for naval exercises? Or is it a crime to be a democratic country? The writ of the Indian navy runs in the Indian Ocean. Every country realises that which is why they like to have joint exercises with the Indians.

3. Its the familiar story again. China has banned another movie. This time, the movie of its favourite son “Jackie Chan”. They say, the movie speaks about Chinese mafia. You mean, there is no Chinese mafia? Does the Chinese tin pot commies want us to believe that its all peace and happiness in China? There is no crime? Its a fuckin movie for Gods sake, you morons.

Other Oscar winning performance of the Chinese govt include

Putting a blanket ban on any news that will be reported in the Chinese media about the thousands of toys that have been recalled by Mattel. After cardboard buns, poisoned pet food, poisoned food, medicines, SARS, Bird flu…. Trust China to come out with a variety of diseases every year to keep the global pharma industry profitable.

Manhandling the reporters from RSF (Reporters Sans Frontiers) who held a silent protest about the thousands of civil liberties, human rights and journalists imprisoned in the chinese prisons.

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  • Niklas Keller

    The US Treasury Secretary clearly delusional, and he doesn’t seem to be much of an economist either. The argument that a rise in the Yuan will make all America’s trade-imbalance problems go away is plain ridiculous. American trade imbalance is primarily a cause of low savings rate and high fiscal profligacy. US-European trade provides a precedent: although the Euro has appreciated nearly 40% against the dollar since its introduction, the American trade deficit with the Euro-zone has nearly doubled, from US$64bn in 2001 to US$120bn in 2006. And there are good arguments to be made that even if China was to float its currency, it may not even rise that much.
    Apart from buffing dollar and Treasury bond values, the large scale buy-up of American treasury bonds also keeps the US interest rates lower – to the tune of 1%. At a time when everyone is frantically running in circles about what to do with the shaky US housing market, attacking a financial maneuver that results in such a reduction in interest rates seems, how shall I say….suicidal? Unmentioned is also the fact that there isn’t even much overlap between American and Chinese manufacturing sectors – meaning that American goods would not be able to replace Chinese goods and it would instead have to import from other, more expensive sources, which would undermine the already low American savings rate even further. The low Yuan is all in all therefore more a subsidy to American consumers as it is to the Chinese exporting sector.

    But while I agree that the notion that the US can tell China what to do with its currency has no leg to stand on, the threat that China will start dumping dollars was also a hollow one and China is not stupid enough the make good on it. It knows full well that for all the above mentioned reasons a dollar-dump would have a high chance of resulting in a US recession. And a US recession doesn’t stay a US recession for long – it’s got a tendency to go global. With Wall Street and the London and Tokyo stock markets taking a nose dive, and everyone immediately placing the blame squarely on China’s shoulders for having triggered it, I wonder where China would continue to get the FDI it needs to keep its overheated economy racing. So China will not dump dollars. In fact, the Chinese financial authorities have already rejected this policy shortly after it was voiced. There is a different and bigger threat though: Sovereign Wealth Funds.

    This article:

    http://www.atlantic-community.org/index.php/articles/view/Why_Dump_Dollars_When_You_Can_Own_the_US%3F

    provides a very good assessment of what we really should start worrying about – and it’s not overvalued currencies.