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Offline g

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Re: Official Chinese Toast Thread
« Reply #180 on: March 25, 2015, 05:25:43 AM »
The US is going to deafault on the debt Ka, it cannot be paid due to it's enormity. Most likely way is through inflation.

The debt can't be paid off by inflation.

In order for Da Fed to create more FRNs, the Treasury has to issue out an equivalent amount in T-Bills. That is more debt.  You can't pay off old debt with new debt, the Greek case demonstrates that quite well.

The only way to get rid of debt is for it to be written down.

What is more likely is that there will be a currency crisis and crash, followed by a collapse of Da Goobermint.  This likely comes after the Yen, Euro, Yuan and Ruble all crash.

In the aftermath of that, the Illuminati may try to issue out some new Global Currency and try to do a reboot.  However, without Energy supplies this credit will access, that currency will also be worthless.

RE

Quote
The debt can't be paid off by inflation.

The US has been inflating away it's debt for one hundred or so years.

Quote
You can't pay off old debt with new debt, the Greek case demonstrates that quite well.

 Greece fucked up and can no longer print it's own currency since it joined the Euro, it did quite well printing it's own color of confetti before then.
The only thing Greek demonstrates, Greece a mere pimple on the ass of the financial world country, is that the Nazi's screwed up big time with their ass hole attempt to take over Europe with a single currency scheme. The Euro is a failed con job, the work of politicians who are proven ass holes,  a fact that no one is willing to accept just yet.


Quote
What is more likely is that there will be a currency crisis and crash, followed by a collapse of Da Goobermint.  This likely comes after the Yen, Euro, Yuan and Ruble all crash.

A currency crash and inflation are synonymous, the speed of the currency crash is what denotes an inflation or hyperinflation, it usually starts as mere inflation but the speed escalates to hyperinflation.

Quote
In the aftermath of that, the Illuminati may try to issue out some new Global Currency and try to do a reboot.  However, without Energy supplies this credit will access, that currency will also be worthless.

There will always be energy and always be a method of payment as long as humans inhabit the earth.






Offline RE

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Re: Official Chinese Toast Thread
« Reply #181 on: March 25, 2015, 05:37:41 AM »
The US is going to deafault on the debt Ka, it cannot be paid due to it's enormity. Most likely way is through inflation.

The debt can't be paid off by inflation.

In order for Da Fed to create more FRNs, the Treasury has to issue out an equivalent amount in T-Bills. That is more debt.  You can't pay off old debt with new debt, the Greek case demonstrates that quite well.

The only way to get rid of debt is for it to be written down.

What is more likely is that there will be a currency crisis and crash, followed by a collapse of Da Goobermint.  This likely comes after the Yen, Euro, Yuan and Ruble all crash.

In the aftermath of that, the Illuminati may try to issue out some new Global Currency and try to do a reboot.  However, without Energy supplies this credit will access, that currency will also be worthless.

RE

Quote
The debt can't be paid off by inflation.

The US has been inflating away it's debt for one hundred or so years.

The FSoA hasn't inflated away any Debt.  That's why the total is going Exponential.


Quote
You can't pay off old debt with new debt, the Greek case demonstrates that quite well.

 Greece fucked up and can no longer print it's own currency since it joined the Euro, it did quite well printing it's own color of confetti before then.
The only thing Greek demonstrates, Greece a mere pimple on the ass of the financial world country, is that the Nazi's screwed up big time with their ass hole attempt to take over Europe with a single currency scheme. The Euro is a failed con job, the work of politicians who are proven ass holes,  a fact that no one is willing to accept just yet.


The Greeks did quite poorly with the Drachma before they signed on to the Euro.  Back in the day, you could buy a bottle of Ouzo for Chump change in Dollars.  The Euro got them Industrial Bennies of Oil Purchasing power they did not have with the Drachma.

Quote
What is more likely is that there will be a currency crisis and crash, followed by a collapse of Da Goobermint.  This likely comes after the Yen, Euro, Yuan and Ruble all crash.

A currency crash and inflation are synonymous, the speed of the currency crash is what denotes an inflation or hyperinflation, it usually starts as mere inflation but the speed escalates to hyperinflation.

Quote
In the aftermath of that, the Illuminati may try to issue out some new Global Currency and try to do a reboot.  However, without Energy supplies this credit will access, that currency will also be worthless.

There will always be energy and always be a method of payment as long as humans inhabit the earth.

There will always be Energy as long as the Sun Shines, but the amount which is recoverable and can be "sold" is vanishingly small compared to the amount of energy contained in Fossil fuels.  It is unlikely that any global monetary system can be created to deal with a planet in energy deficit relative to the total population size.  The outcome here is a collapse of all monetary systems until the die off is sufficient to bring Homo Sap back into balance with the total energy available that can be collected on a Pay As You Go basis.
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Offline g

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Re: Official Chinese Toast Thread
« Reply #182 on: March 25, 2015, 05:57:37 AM »
RE, Will have to have continue this one at a later date.

That dreaded time is here for me, the tax man. Completing my days of arduous labor on such at present and have to make the CPA's office at 2 PM. Will most likely be MIA for a few days. Be a good boy while I'm gone, and remember I'll most likely drop in to lurk for a while so remember GO is always watching and listening  .  :exp-grin: :exp-grin:

                                   
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Offline RE

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Re: Official Chinese Toast Thread
« Reply #183 on: March 25, 2015, 06:03:09 AM »
RE, Will have to have continue this one at a later date.

That dreaded time is here for me, the tax man.

Good luck with the Taxes GO!  I got mine and SUN's DONE!  Big relief.

We'll be here if the Internet is still running when you get done with it.

RE
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Offline RE

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Re: Official Chinese Toast Thread
« Reply #184 on: March 26, 2015, 06:12:02 PM »
New Chinese Bubble waiting to POP!

Gotta love that graph for the Shanghai Composite Index.  Nearly DOUBLES in under a year!

Seriously folks, the companies in that index are worth 2X as much today as they were last year?  While just about the whole world is stagnant at best and in recession in many places?

Meanwhile, they're buying all this stock leveraged up to beat the band.  What could go wrong?

RE

China's Stock Bubble Leaves BNP Speechless: "What Happens Next Is An Unknown-Unknown"

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Earlier this month, we identified the reason why Chinese stocks have continued to rise in the face of overwhelming evidence that the country’s economy is decelerating quickly. While the first part of the 8-month run can be plausibly attributed to PSL, the furious buying that began in late November looks to be at least partly attributable to the fact that thanks to tighter regulations on lending outside the traditional banking system, China’s $2 trillion shadow banking complex needed somewhere to put cash to work and that somewhere turns out to be the giant bubble that is the SHCOMP. Here’s more: 

 
 

Because according to Reuters, it is precisely China's trust firms, with total assets of $2.2 trillion, and who together with Banker Acceptances comprise the bulk of China's shadow banking pipeline, and no longer able (or willing) to lend to China's small companies and individuals due to a spike in regulation, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans.

 

In other words, instead of using their vast cash hoard of over $2 trillion to re-lend and stimulate China's economy, China's unregulated, shadow banking conduits are now directly buying stocks!

Shortly thereafter we highlighted the 7 main reasons for the Chinese stock ramp all of which boil down to one thing: liquidity. Here they are, courtesy of UBS:

 
 

With no significant change in China's macro or corporate fundamentals, the visible rebound in China's A-share market since November appears to have been largely liquidity driven. We think this, in turn, may have been fuelled by a number of factors including:


1. new funds flowing into the stock market from household saving, real estate, commodities and trust markets;


2. banks' bridge loans provided to investors who lost access to other high-yield shadow banking products as the result of tighter regulation;


3. the PBC's easing of liquidity conditions via a variety of "targeted easing" tools (e.g. MSL, PSL, etc.);


4. the official launch of Mutual Market Access (MMA) between the Hong Kong and Shanghai exchanges;


5. long-term expectations for SOE reform and A-shares entering the MSCI index next June;


6. increased use of leverage by retail investors via margin trading; and

 

7. market sentiment being boosted by expectations for further policy easing.

Meanwhile, February’s RRR cut failed to meaningfully lower China’s interbank rates, likely due to continued sizable capital outflows and significant liquidity withdrawals from China’s money markets by recent IPO applications.

Meanwhile, China’s securities regulator warned investors that not wanting to miss out on the next leg up is not a good investment strategy to follow, especially in a market as frothy as this one. Now, BNP is out with a note calling China’s equity bubble “a microcosm for the overall economy: unsustainable growth in leverage masking ever-deteriorating fundamentals and increasing future downside risks.” Here’s more: 

 
 

Against all odds, the best performing asset class on the planet over the last nine months or so has been Chinese equities…

...it’s not the economy (as we’ve been saying for months)...

 
 

What underlies these extraordinary gains? It is certainly not economic fundamentals. Led by the accelerating real estate slump (China: It’s Only Just Begun), China’s GDP growth has steadily slowed with reported 2014 GDP growth of 7.4% the slowest in almost twenty years. A range of ‘hard’ economic indicators such as electricity production and rail cargo volumes suggest even slower growth. Our preferred ‘real, real’ GDP estimate flags that output growth could have been as low as c.4½% in 2014 (China: Fit as a Fiddle). While the usual data fog around the Lunar New Year partially clouds analysis, high frequency indicators that generate early estimates of GDP growth suggest that the growth has continued to slide in 2015Q1…

...it must be liquidity….

 
 

By definition therefore equities’ stellar performance has been a function of liquidity driven multiple expansion. The P/E ratios for the Shanghai and Shenzhen markets have roughly doubled since August to c.19x and c.44x respectively. While still a long way short of the incredible highs of 70-80x reached during the 2006-2007 bubble, multiples are now rapidly approaching their post-GFC highs. One obvious source of fresh liquidity which could have powered equities’ bull-run is from the long-delayed introduction of the Hong KongShanghai ‘stock connect’ last November. The scheme, formerly known as ‘the through train’, allows two trading between the Shanghai A-share market and the Hang Seng. Two-way flows however have been relatively meagre. An initial aggregate quota of RMB300bn was set for northbound flows into Shanghai. So far only about a cumulative RMB125bn has flowed north, leaving RMB175bn of the aggregate quota unfilled. And northbound buy orders have in turn typically only accounted for around ¾% of the Shanghai market’s daily turnover…

...and it comes from a predictable place, leverage…

 
 

Far from a surge in external liquidity, an increasingly self-feeding domestic frenzy fuelled by leverage appears to be the key driver….Margin purchases have been running well ahead of redemptions ensuring that the outstanding stock of margin debt has ballooned by over RMB1 trillion since August; equivalent to more than 1% of GDP…

...and castles built on quicksand (i.e. margin debt) will likely collapse…

 
 

Margin purchases are now accounting for almost 20% of equities daily turnover which itself has soared to wholly unprecedented levels in another sign of self-feeding speculative frenzy. What happens next is clearly an ‘unknown-unknown’. By definition detached from fundamentals, speculative bubbles are inherently re-enforcing in the short-term and frequently last longer than expected. The longer they continue, however, the larger the eventual bursting. 

 

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As a reminder: 

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Offline agelbert

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Re: Official Chinese Toast Thread
« Reply #185 on: April 20, 2015, 03:03:00 PM »
 
Leges         Sine    Moribus      Vanae   
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if it has not works, is dead, being alone.

Offline RE

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New Silk Road Could Change Global Economics Forever
« Reply #186 on: May 23, 2015, 06:49:31 PM »
More Silk Road nonsense.

RE

New Silk Road Could Change Global Economics Forever

By Robert Berke
Posted on Thu, 21 May 2015 20:58 | 4

 Part 1: The New Silk Road

Beginning with the marvelous tales of Marco Polo’s travels across Eurasia to China, the Silk Road has never ceased to entrance the world. Now, the ancient cities of Samarkand, Baku, Tashkent, and Bukhara are once again firing the world’s imagination.

China is building the world’s greatest economic development and construction project ever undertaken: The New Silk Road. The project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia.

The ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The 'Road' will traverse China, Mongolia, Russia, Belarus, Poland, and Germany, extending more than 8,000 miles, creating an economic zone that extends over one third the circumference of the earth.

Related: This Innovation Will Help U.S. Companies Win The Oil Price War

The plan envisions building high-speed railroads, roads and highways, energy transmission and distributions networks, and fiber optic networks. Cities and ports along the route will be targeted for economic development.

An equally essential part of the plan is a sea-based “Maritime Silk Road” (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean.

When completed, like the ancient Silk Road, it will connect three continents: Asia, Europe, and Africa. The chain of infrastructure projects will create the world's largest economic corridor, covering a population of 4.4 billion and an economic output of $21 trillion.

Politics and Finance:

The idea for reviving the New Silk Road was first announced in 2013 by the Chinese President, Xi Jinping. As part of the financing of the plan, in 2014, the Chinese leader also announced the launch of an Asian International Infrastructure Bank (AIIB), providing seed funding for the project, with an initial Chinese contribution of $47 billion.

China has invited the international community of nations to take a major role as bank charter members and partners in the project. Members will be expected to contribute, with additional funding by international funds, including the World Bank, investments from private and public companies, and local governments.

Some 58 nations have signed on to become charter bank members, including most of Western Europe, along with many Silk Road and Asian countries. There are 12 NATO countries among AIIB´s founding member states (UK, France, Netherlands, Germany, Italy, Luxembourg, Denmark, Iceland, Spain, Portugal, Poland and Norway), along with three of the main US military allies in Asia (Australia, S. Korea and New Zealand).

After failed attempts by the US to persuade allies against joining the bank, the US reversed course, and now says that it has always supported the project, a disingenuous position considering the fact that US opposition was hardly a secret. The Wall Street Journal reported in November 2014 that “the U.S. has also lobbied hard against Chinese plans for a new infrastructure development bank…including during teleconferences of the Group of Seven major industrial powers.

The Huffington Post’s Alastair Crooke had this to say on the matter: “For very different motives, the key pillars of the region (Iran, Turkey, Egypt and Pakistan) are re-orienting eastwards. It is not fully appreciated in the West how important China's "Belt and Road" initiative is to this move (and Russia, of course is fully integrated into the project). Regional states can see that China is very serious indeed about creating huge infrastructure projects from Asia to Europe. They can also see what occurred with the Asia Infrastructure Investment Bank (AIIB), as the world piled in (to America's very evident dismay). These states intend to be a part of it.”

Related: Big Oil May Be Caught Off-Guard By Wave Of Retirement

Buttressing this effort, China plans on injecting at least $62 billion into three banks to support the New Silk Road. The China Development Bank (CDB) will receive $32 billion, the Export Import Bank of China (EXIM) will take on $30 billion, and the Chinese government will also pump additional capital into the Agricultural Development Bank of China (ADBC).

The US: Unlikely Partner on the Silk Road:

Will the US join the effort? If the new Trans-Pacific Partnership (that pointedly leaves out both Russia and China, two Pacific powers) is any indication, US participation seems unlikely and opposition all but certain.

But there's no good reason that America should sacrifice its own leadership role in the region to China. A project as vast and complicated as the Silk Road will need US technology, experience, and resources to lower risk, removing political barriers for other allied countries like Japan to join in, while maintaining US influence in Eurasia. The Silk Road could enhance US objectives, and US support could improve the outcome of the project.

An editorial in the Wall St. Journal argues that the US proposed trade agreement and China's sponsored Silk Road project are complimentary, with the trade agreement aimed at writing rules for international trade, while the Chinese aim at developing infrastructure is necessary for increased trade.

Initial Project:

A look at the first project, currently under development, provides a good example of how China plans to proceed.

The first major economic development project will take place in Pakistan, where the Chinese have been working for years, building and financing a strategic deepwater port at Gwadar, on the Arabian Sea, that will be managed by China as the long-term leaseholder.

Gwadar will become the launching point for the much delayed Iran-Pakistan natural gas pipeline, which will ultimately be extended to China, with the Persian section already built and the Pakistan-Chinese section largely financed and constructed by the Chinese.

The pipeline is also set to traverse the country, following the Karakoram Mountain Highway towards Tibet, and cross the Chinese western border to Xinjang. The highway will also be widened and modernized, and a railroad built, connecting the highway to Gwadar.
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Originally, the plan was to extend the pipeline to India, with Qatar joining Iran as natural gas suppliers, forging what some considered a “peace pipeline” between India and Pakistan, but India withdrew, under pressure from the US along with its own concerns over having its energy supplies dependent upon its adversary, Pakistan.

India's Counter:

Not surprisingly, India, a US ally, countered China's initiative with one of its own, announcing a new agreement to build a port in Iran on the Arabian Sea, only a few hundred miles from Gwadar, bringing Iranian energy to India via Afghanistan, bypassing Pakistan.

Although it would offer an alternative to the Chinese-backed Gwadar initiative, the US warned India not to move ahead with the port project before a final nuclear agreement between Iran and the West is actually signed.

Related: America’s Shadowy Energy Partnership With Azerbaijan

Both the Chinese and Indian projects are clearly in defiance of international sanctions on Iran, but both countries appear unconcerned. The Chinese could also be accused of a ‘double dip’ sanctions violation, given the immense and continuing trade deals it negotiated with Russia.

The rest of the business world is sure to follow, or risk losing out in what is certain to be a new “gold rush” towards Asia in a world still struggling with the lingering effects of the great recession. And New Delhi pointed out the harsh truth: American energy companies are also trying to negotiate deals with Iran. Following on the heels of the US visit, the German mission is due in Tehran soon, with the French beating everyone to the punch in an earlier visit.

What then of sanctions? Sanctions only work in a world united behind them. If a large part of the world chooses to ignore sanctions, they become unenforceable.

Conclusions:

China and much of the world is intent on developing the largest economic development project in history, one that could have dramatic ripple effects throughout the world economy.

The project is expected to take decades, with costs running into the hundreds of billions of dollars, if not trillions. What that will mean for the world economy and trade is almost inconceivable. Is it any wonder then, that the world’s largest hedge funds, like Goldman Sachs and Blackstone, are rushing to market new multi-billion dollar international infrastructure investment funds?

No doubt a project as large and complex as this is likely to have failures, and is certain to face many western geopolitical obstructions. Assuredly, the “great game” will continue. Look no further than US President Barack Obama, who also senses the urgency. “If we don’t write the rules, China will write the rules out in that region,” he said in defense of the Trans-Pacific Partnership.

In a world where economic growth is tepid, with Europe still struggling with the aftermath of the global recession, along with China's growth slowdown, where else could a project that promises so much opportunity be found?

It's a good bet that giant iron mining companies like Vale, that have seen their business fall to a thirteen-year low, are currently busy figuring how much steel goes into construction of a new, high speed 8,000 mile railroad. If the project is successful, it could very well spark a boom across the entire depressed international mining, commodities, and construction sectors.

Consider how many jobs could be created in a decades-long construction project that spans a huge region of the world. In practically every sector, the prospects are enormous for a revival of trade and commerce.

The ancient Silk Road increased trade across the known world, but the Road also offered far more than trade. One of its least anticipated benefits was the widespread exchange of knowledge, learning, discovery, and culture.

Beyond the riches of silks, spices, and jewelry, it could be argued that the most important thing that Marco Polo brought back from China was a famous nautical and world map that was the basis for one of the most famous maps published in Europe, one that helped spark the Age of Discovery. Christopher Columbus was guided by that map and was known to have a well-annotated copy of Marco Polo's travel tales with him on his voyage of discovery of a new route to India.

For the world at large, its decisions about the Road are nothing less than momentous. The massive project holds the potential for a new renaissance in commerce, industry, discovery, thought, invention, and culture that could well rival the original Silk Road. It is also becoming clearer by the day that geopolitical conflicts over the project could lead to a new cold war between East and West for dominance in Eurasia.

The outcome is far from certain.

Coming in May, Part 2: Cold War or Competition on the New Silk Road.

By Robert Berke of Oilprice.com
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Offline Palloy

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Re: Official Chinese Toast Thread
« Reply #187 on: May 24, 2015, 02:59:59 PM »
Quote
US President Barack Obama: “If we don’t write the rules, China will write the rules out in that region,” he said in defense of the Trans-Pacific Partnership.

You can't get much more blatantly fascist than that.  The TPP rules will favour multi-national corporations over sovereign laws, which is why no public discussion is allowed.
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Offline alan2102

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Re: New Silk Road Could Change Global Economics Forever
« Reply #188 on: May 27, 2015, 03:50:04 PM »
More Silk Road nonsense.

RE

New Silk Road Could Change Global Economics Forever
By Robert Berke
Posted on Thu, 21 May 2015 20:58 | 4
Part 1: The New Silk Road

from the Berke article:
"US President Barack Obama [said] 'If we don’t write the rules, China will write the rules out in that region'"

Hahahaha!  I LOL'ed IRL!

That's right, Bunkie: China WILL write the rules. And will do so whether or not you try to do the same. You lose. Sorry.

Your comment, RE -- "More Silk Road nonsense" -- was also good for a minor chuckle. What, pray tell, is "nonsensical" about it? One of the greatest infrastructure development projects of all time, occurring right now, executed by a well-endowed and fiercely-committed Chinese leadership... where's the "nonsense"? Of course, there is none. It is a fantastic project, plain and simple, and it will change the course of history, not just in Eurasia, but everywhere. At this late date, this is clear to all intelligent observers -- Berke included.

Thanks for the Berke article, RE. Good one!

On a related note, I just wrote a reply to Ilargi's latest foolish and impotent China-bear handwringing over on TAE. Here it is, FYI:
http://www.theautomaticearth.com/2015/05/time-to-get-real-about-china/#post-21285

I would like to pause here and give you the same advice I gave Ilargi. The problem you guys will face in not-many years is that the world will very likely NOT go down in flames (barring black swans), as you continually predict that it will, but instead will likely go in the opposite direction, toward growth, development, health, wealth, and longevity for billions. Bummer, huh? For neomalthusian doomers, it'll be like the bucket of water thrown at the Wicked Witch.

Well, hey, I don't make the news, I'm just reporting it. And I'm saying you need to make course adjustments in order to avoid losing credibility, eventually to the point of becoming a laughing-stock. Mark my words. Don't say I didn't warn you.

To Ilargi:
"You should start thinking now about what you’re going to do, i.e. what you’re going to write on your blog, when the world — instead of collapsing, as you have predicted so tenaciously — enters a great economic boom, skyrocketing the living standards of billions of people, and bringing about unprecedented health and well-being. I am not certain that that is going to happen, but it is a distinct possibility, verging on likelihood. I suggest that you focus more clearly on the plight of the U.S., which is unlikely to participate in any such party. The decline-and-fall narrative will resonate here, and reflect the reality here, but not elsewhere, IMO."

Words for you to consider, RE.

Cheerio!

And Long Live the New Silk Road!  :-)

Alan

Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #189 on: May 27, 2015, 04:01:29 PM »
Quote
US President Barack Obama: “If we don’t write the rules, China will write the rules out in that region,” he said in defense of the Trans-Pacific Partnership.

You can't get much more blatantly fascist than that.  The TPP rules will favour multi-national corporations over sovereign laws, which is why no public discussion is allowed.

It is a case of dueling fascisms, after a fashion: the U.S. kind, and the Chinese kind. The U.S. kind is more corrupt, more inherently and disastrously wasteful, more arrogant, and generally more of everything that you don't want. The Chinese kind is more forward-looking, more courageous, much more decisive and committed, and willing to place huge bets on things capable of paying off with much-more-huge, global-level wealth (scores and hundreds of $trillions, in 2015 bucks). It is clear now that they will succeed. But their system has some of the uglier fascist characteristics as well; e.g. civil liberties in China (ug!). At least we have the tattered remains of a Bill of Rights, for whatever that may be worth.

Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #190 on: May 27, 2015, 04:19:41 PM »

PS: 

Dateline May 2015, and... and... and no collapse (China or other) in sight! I was promised that China was going down in flames last year, and the year before, and the year before that. And every year before THAT, back to the turn of the century at least.  I am growing impatient.  I want my doom, dammit!


PSS:

for your reading pleasure:

http://nextbigfuture.com/2015/02/china-plans-to-developing-every-silk.html
  2/01/2015
  China plans to develop every Silk road country and pledges using $4 trillion in reserves to drive overseas expansion of industry, nuclear and rail
  China's two domestic High Speed Rail (HSR) manufacturers, China North Railway (CNR) and China South Railway (CSR), now control the country's entire HSR market. By 2014, just six years after the launch of China's first HSR passenger service, there was 16,000 km of tracks, connecting most major cities....

http://nextbigfuture.com/2015/02/chinas-4-trillion-mercantilist-will.html
  2/07/2015
  China's $4 trillion Seedfunding for Global Infrastructure Buildout
  China will be leveraging its $4 trillion in reserves to provide low interest financing for high speed rail, export of Chinese nuclear reactors, factories and property development. China is offering to fill the worlds infrastructure gap. This will enable all of the developing world to follow the China economic development plan....

http://nextbigfuture.com/2015/02/china-spending-to-build-40000-miles-of.html
  2/02/2015
  China spending to build 40,000 miles of global high speed rail compared to Obamacare or US War costs
  Thirty-eight countries and regions worldwide plan to build high-speed rail lines and work mostly with China on the construction of those high speed rail lines. A global (across Asia, Europe, middle east and Africa) high speed rail network with total length of 93,000 kilometers (58000 miles), or 8.5 times the total length of high-speed railways....

Offline RE

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"New Silk Road" Part 2: Cold War Or Competition?
« Reply #191 on: May 27, 2015, 05:58:07 PM »
A1 The China Bull is BACK!

RE

http://www.zerohedge.com/news/2015-05-27/new-silk-road-part-2-cold-war-or-competition

"New Silk Road" Part 2: Cold War Or Competition?

Tyler Durden's picture



 

Submitted by Robert Berke via OilPrice.com,

Part 2: Cold War or Competition on the New Silk Road.

Note:
In Part 1 of “The New Silk Road,” we examined the China’s plan for rebuilding the Silk Road, stretching from Europe to Asia.

In Part 2, we look at currently proposed projects, and geopolitical rivalries that could stall and hamper progress.

Silk Road Projects:

It is important to understand that the new “Road’ is not a formal plan in any sense but merely a broad outline of goals, a work in progress, being filled in, opportunistically, with projects as they are developed, and as negotiations with target countries allow. The Road is also not a 'start-up' from scratch, but builds upon and extends a number of projects that have been ongoing with China's partners.

The Iran-Pakistan-China project (described in Part 1) is one of the few that provides more details, but it is still very much in the planning stage. The second proposed project, only recently made public, focuses on Russia. China is also proposing a partnership with India for its third project.

The Pakistan program is an important economic development project that ties in with the Road as one of the connecting dots along the way, while the proposed program for Russian could become the nexus for the entire Road project, and the proposed India project could become the crucial piece in tying it all together.

Russia and China, the Emerging Partnership:

What makes Russia important enough to include in the plan? A better question might be: how is it possible to leave out Russia, the largest country in Eurasia, from a plan to build across the entire region?

In a recent meeting in Moscow, celebrating the 70th anniversary of the allied victory in World War II – which saw Indian, Chinese, and Russia troops parading in Red Square – China and Russia signed multiple agreements to tie development of the Chinese sponsored Silk Road to the Russian sponsored Eurasian Economic Union (EAEU).

The EAEU plan is a Kremlin-sponsored trade union between Russian, Kazakhstan, Kyrgyzstan, Belarus and Armenia, that has been pilloried in the western press as part of Russia’s supposed underlying agenda to re-establish the Soviet Union. With Russia’s inclusion, the plan for the Silk Road will extend from Beijing to the border of Poland. The blossoming cooperation between Russia and China is not something to be ignored, according to former Indian diplomat M.K. Bhadrakumar:

“Clearly, the cold blast of western propaganda against the EAEU failed to impress China…China’s integration with the EAEU means in effect that a real engine of growth is being hooked to the Russian project. In reality, China is the key to the future of the EAEU. Significantly, Xi has combined his visit to Moscow with a tour of Belarus and Kazakhstan, the two other founder members of the EAEU….This is vital for the implementation of the Silk Routes via Russia and Central Asia.”

The Chinese/Russian agreements cover eight specific projects, starting with the development of a high speed railway that will connect Moscow and Kazan (Tatarstan Republic), and will be extended to China, connecting the two countries via Kazakhstan. China’s Railway Group has won a contract for $390 million to build the road, with China contributing an initial $5.8 billion toward total estimated costs of $21.4 billion. Eventually, the planners hope to link this project to Russia’s planned high speed railway to Europe.

Also, China's Jilii province has offered to build a cross-border high speed railway link between the two countries connecting with Russia's major Pacific port city, Vladivostok. In addition, the two nations are expanding their energy partnership through a variety of projects. As Oilprice reported in a May 12 article, “the Russian hydropower company RusHydro and China Three Gorges Corp. have signed a deal to cooperate on a 320-megawatt hydroelectric power project in Russia’s Far East…near the border between China and Russia.” As described, this is the largest dam project in China or Russia, already under construction, and is expected to generate 1.6 trillion watts of electrical energy per year, with an estimated cost of around $400 billion.

China has also proposed developing an economic corridor between Russia, Mongolia, and China, a plan likely to include the EAEU member states, the initial step in development of one of the major components of the Silk Road, the Eurasia Economic Corridor, a preferential trade zone stretching across the region.

Several smaller joint project deals were also signed, including establishing a $2 billion agriculture financing fund.

Geopolitics on the Silk Road:

Until very recently, it was widely assumed that the US would lead its western allies in a campaign against the Russian/Chinese deal to develop the Silk Road, but events have been reversing with remarkable speed.

With Obama desperately trying to keep the wars in Yemen, Syria, and Iraq from metastasizing across the region, Obama’s Middle East policy is at a crossroads, with none of the big issues likely to be resolved before his term ends. Clearly, the US President wants to concentrate on Asia and reduce the US presence in the Mid-East, a region that has bedeviled every President for more than a generation.

The Deal to Get Out:

In the midst of all this, and after more than a two year absence from Russia, Kerry and his entourage requested an immediate urgent meeting with Putin and Lavrov that was granted by the Kremlin.

There is widespread speculation over what might have taken place in the Kremlin meeting on May 8th. Yet, the fact that the meeting took place at all may be more important than any agreements reached, because it clearly shows some form of thaw in a relationship that’s in process.

The rumor out of Russia is that Kerry requested Putin’s help in resolving the ME conflicts and closing the nuclear deal with Iran, with the Russian President agreeing. The quid pro quo for Russia was the US lowering tensions in Ukraine. The issue of Crimea was apparently not even raised, while the visit ended with Kerry’s unprecedented warning to Kiev to abide by the Minsk 2 agreement for a truce in Ukraine’s eastern provinces.

Much of the news media is speculating that the US is starting to remove the ‘crime scene tape’ around the Kremlin. Whether this is really a US offer of an olive branch to Russia is still pretty much guesswork, and even if it were, how far the US is willing to go in accommodating the Kremlin is largely unknown. Stratfor, the popular internet intelligence newsletter, speculates that the US is willing to start easing sanctions on Russia.

Israel and the Gulf Kingdoms:

For the Israelis, any easing of tensions with Iran and Russia is very bad news. In the Middle East, Israel is the canary in the coal mine, and is always among the first to discern the faintest signs of political unrest in its region.

There's no denying the significance of Israel's reaction to the US/Iran nuclear deal and US coordination with Iran and Russia in Syria and Iraq. Israel placed all of its chips on its ability to stop the deals, and lost badly, while perhaps severely damaging its relationship with it largest ally, the US.

Now, the howls of protest and betrayal pour out of every media source in the country, and Israel is not the only one. Saudi Arabia also feels left out in the cold with the Iran deal.

Proposed Partnership with China and India:

If it were possible to put politics aside, there’s no question that China’s single best partner for the Road would be its giant neighbor India, bringing together the two most important markets for traders on the original ancient Silk Road. As the Associated Press reported on May 14, 2015:

“Both countries are members of the BRICS grouping of emerging economies, which is now establishing a formal lending arm, the New Development Bank, to be based in China's financial hub of Shanghai and headed by a senior Indian banker. India was also a founding member of the embryonic China-backed Asian Infrastructure Investment Bank.

The cooperation between China and India is only growing, and their needs appear to be compatible, as the AP goes on to note:

China is looking to India as a market for its increasingly high-tech goods, from high-speed trains to nuclear power plants, while India is keen to attract Chinese investment in manufacturing and infrastructure. With a slowing economy, excess production capacity and nearly $4 trillion in foreign currency reserves, China is ready to satisfy India's estimated $1 trillion in demand for infrastructure projects such as airports, roads, ports and railways.”

If India chooses to partner with China in the Silk Road, it could keep China building for the rest of the century, in a project that would combine the world’s most populous nations, with more than 2.6 billion people. With Russia already a partner, and Iran waiting in the wings to join, the project could add almost another quarter of a billion people, with a combined total of over one third the global population. A better fit would be hard to find.

But there is no shortage of historical baggage between China and India, ranging from a half century of unresolved border disputes; China’s growing relationship with Pakistan, India’s longtime adversary; and India’s close relationship with the US and Japan, both opposed to China’s claims in the South China Sea.

In a recent meeting in Beijing, China and India signed agreements for $22 billion in development projects, disappointing to many observers when compared to the $47 billion committed to the China/Pakistan deal. A former Indian diplomat, Bhadrakumar, argues, “that strategic distrust cannot be wished away,” and “...that India is not ready to replace the west as its development partner.”

It seems like the US influence with India has at least slowed prospects of recruiting India as a major Silk Road partner. Yet, the results are not so simple to predict since so many countries involved are dependent upon trade with China to the tune of hundreds of billions of dollars annually, and are also active trading partners with both Russia and Iran.

Even in the cold war, India became adept in its studied policy of co-existence with the Soviet Union and the US, which allowed India to play both sides. For pragmatic India, the choice of development partners may depend on the simple formula of 'following the money', given the fact that China is one of the few countries in the world with sufficient resources to finance the rebuilding of India's infrastructure.

The rush of western allies, including India, to join China's sponsored Asian Infrastructure Bank speaks clearly to the fact that western business is eager to take part in the Road projects. There are probably few banks in the world that would hesitate to finance major components of the project. However, whether the recent sea change in the US/Russian dynamic is a prelude for US support of the Silk Road project remains an open question.

Coming in June, Part 3: Prospects for Success and What it Means for Investors.

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Offline alan2102

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Re: "New Silk Road" Part 2: Cold War Or Competition?
« Reply #192 on: May 28, 2015, 08:00:51 AM »
A1 The China Bull is BACK!

RE

http://www.zerohedge.com/news/2015-05-27/new-silk-road-part-2-cold-war-or-competition

"New Silk Road" Part 2: Cold War Or Competition?

[snip]

The cooperation between China and India is only growing, and their needs appear to be compatible, as the AP goes on to note:

China is looking to India as a market for its increasingly high-tech goods, from high-speed trains to nuclear power plants, while India is keen to attract Chinese investment in manufacturing and infrastructure. With a slowing economy, excess production capacity and nearly $4 trillion in foreign currency reserves, China is ready to satisfy India's estimated $1 trillion in demand for infrastructure projects such as airports, roads, ports and railways.”

If India chooses to partner with China in the Silk Road, it could keep China building for the rest of the century, in a project that would combine the world’s most populous nations, with more than 2.6 billion people. With Russia already a partner, and Iran waiting in the wings to join, the project could add almost another quarter of a billion people, with a combined total of over one third the global population. A better fit would be hard to find.

[handwringing about "historical baggage" snipped -- alan2102]

Even in the cold war, India became adept in its studied policy of co-existence with the Soviet Union and the US, which allowed India to play both sides.For pragmatic India, the choice of development partners may depend on the simple formula of 'following the money', given the fact that China is one of the few countries in the world with sufficient resources to finance the rebuilding of India's infrastructure.

[BINGO! Ding Ding Ding!  The U.S. is sure as hell not going to do it. The U.S. cannot even undertake the rebuilding of its OWN infrastructure!  Don't be a fool. Follow the MONEY, honey. -- alan2102]

Good article, R.E.  Thanks. It largely corroborates what I am saying.

Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #193 on: May 28, 2015, 08:50:56 AM »
Quote

http://english.gov.cn/premier/news/2015/01/21/content_281475042663908.htm

European analysts confident about the prospects for China’s economy in 2015

Updated: Jan 21,2015

European business leaders and analysts are confident about the prospects for China’s economy in 2015.

“China has a very robust plan and a seamless execution of its economic transformation plan. This was the solid foundation that economic development had been successfully built on during the last 30 years and it will be a solid base for progress in the future,” president of the Swiss-Chinese Chamber of Commerce Kurt Haerri said.

“Further, it shall be noticed that China — unlike many countries in the West — has a long-term view and is therefore addressing the need for reforms timely and thoroughly,” Haerri added.

snip

Nicolas Musy, managing director of the nonprofit organization Swiss Center Shanghai, said that Swiss companies are actually experiencing a faster expansion of their businesses than before. “The reason is that seven percent growth today represents more added GDP than 11 percent growth in 2008".

Musy's point is important. In absolute terms, 7% growth today is like 12-14% growth a decade ago. A large, maturing economy like China's cannot possibly continue to grow, forever, at breakneck double-digit levels. It MUST slow down. And it is slowing down. This is good, healthy. If it were not slowing down, it would be a sign of an overheated situation, subject to violent correction.

China will probably settle into a 6-8% annual growth groove for the next decade or two. That rate would give a doubling each 10-12 years.

As usual, the China bears -- wringing their hands about China's growth "slowing" to 7% -- are laughably wrong. Newsflash: 7% is NOT slow in the sense of "too slow". Not for China. For Myanmar it might be, but not for China.  7% is slowER than before, and it is good.

The 12% growth days were possible, and necessary, for a good long while, to lift hundreds of millions out of poverty, and to generally expand the pie from its tiny starting size. That has now been accomplished, and the economy is beginning to mature. Not to mention the slowing population growth and aging population. With all that comes slower growth. It is all good. China is on a healthy trajectory.

Looks  fine to me:

http://www.tradingeconomics.com/charts/china-gdp-growth-annual.png?s=cngdpyoy

Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #194 on: May 28, 2015, 10:08:44 AM »
New Chinese Bubble waiting to POP! Gotta love that graph for the Shanghai Composite Index.  Nearly DOUBLES in under a year!  Seriously folks, the companies in that index are worth 2X as much today as they were last year?  While just about the whole world is stagnant at best and in recession in many places? Meanwhile, they're buying all this stock leveraged up to beat the band.  What could go wrong?

Of course you are right. That bubble will pop. And you will have your day in the sun, proudly exclaiming "I told ya! I TOLD YA!" 

But... so what?  So they have a bubble, and the bubble pops.  What of it?  It is the nature of "free" markets (like, de-Stalinized semi-market economies) to create speculative bubbles, which then pop.  BFD.  We ourselves have had dozens of bubble-ish things (real estate, stocks, bonds, whatever) grow and then pop, over the last few generations. BFD. Doesn't mean squat. It so happens that we are in long-term (measured by century) decline, but this has little or nothing to do with the tendency of bubbles to form and then pop.

China's economic growth, and growth of influence and power across the continent, will continue unabated. China's ambitious infrastructure development plans will continue unabated. Billions of lives will be improved, probably dramatically. The China/BRICS juggernaut will roll forward, inexorably, for the rest of this century. It is now a near-certainty. Again barring black swans (asteroid hits earth, etc.).


 

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