Comments on: The China Ultimatum http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/ Toujours Le Meme Mon, 08 Sep 2008 02:28:13 +0000 http://wordpress.org/?v=2.5.1 By: A Dashing Blade http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2905 A Dashing Blade Wed, 15 Aug 2007 14:36:21 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2905 Hmmmm, drunken conversations with the mid and back-office would suggest that in a "sh*t hits the fan" scenario, the US of A could invoke a force majeur (sp?) clause and, as they all have ID numbers (even those stored electronically), the TBonds could simply be cancelled just as those bearer bonds mugged off a city messanger back in 91 (?) were. But then the US should lose it's AAA rating . . . Hmmmm, drunken conversations with the mid and back-office would suggest that in a “sh*t hits the fan” scenario, the US of A could invoke a force majeur (sp?) clause and, as they all have ID numbers (even those stored electronically), the TBonds could simply be cancelled just as those bearer bonds mugged off a city messanger back in 91 (?) were.

But then the US should lose it’s AAA rating . . .

]]> By: Sophia http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2902 Sophia Tue, 14 Aug 2007 11:52:56 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2902 I read this excellent article few days ago. I have been reading on the markets since then avidly. Nobody knows how this 'bras de fer' between China and the US will end. The US is loosing grip. Remember, in one of his Al-Jazeera adresses Bin Laden stated that he will drag the US to financial decline. War are certainly profiting some but definitely sucking the economy. Our modern economies have never lived long wars. There is economic revival after wars when miltary investment and wars are followed by a relative period of peace and reconstruction. But I am not seeing this trend anywhere. The 'Reconstruction' of Afghanistan and Iraq are going awry and the prospects for peace are very slim. In my opinion, this will be the big burden on present day western economies. I read this excellent article few days ago. I have been reading on the markets since then avidly. Nobody knows how this ‘bras de fer’ between China and the US will end. The US is loosing grip. Remember, in one of his Al-Jazeera adresses Bin Laden stated that he will drag the US to financial decline. War are certainly profiting some but definitely sucking the economy. Our modern economies have never lived long wars. There is economic revival after wars when miltary investment and wars are followed by a relative period of peace and reconstruction. But I am not seeing this trend anywhere. The ‘Reconstruction’ of Afghanistan and Iraq are going awry and the prospects for peace are very slim. In my opinion, this will be the big burden on present day western economies.

]]> By: Wolfie http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2901 Wolfie Tue, 14 Aug 2007 08:30:30 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2901 ubermouth @ Now would not be a good time for the inexperienced investor to enter the market, it seems that you have to be an institutional investor to get a free bail-out after you have made idiotic investments. james @ No problem, thanks. ziz @ Interesting article, thanks. Although the author also gives credence to the "Nuclear Option" [which I dispute] but then goes on to describe a tactic more akin to a slow roasting, which I think is more likely. Either way, the US economy has its balls in a vice. ubermouth @

Now would not be a good time for the inexperienced investor to enter the market, it seems that you have to be an institutional investor to get a free bail-out after you have made idiotic investments.

james @

No problem, thanks.

ziz @

Interesting article, thanks. Although the author also gives credence to the “Nuclear Option” [which I dispute] but then goes on to describe a tactic more akin to a slow roasting, which I think is more likely. Either way, the US economy has its balls in a vice.

]]> By: ubermouth http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2900 ubermouth Mon, 13 Aug 2007 16:15:53 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2900 That would be scary. Can I get free investment tips here, or no? That would be scary. Can I get free investment tips here, or no?

]]> By: jameshigham http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2898 jameshigham Mon, 13 Aug 2007 15:46:18 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2898 didn't credit you earlier - sorry. Have done so now. didn’t credit you earlier - sorry. Have done so now.

]]> By: ziz http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2896 ziz Mon, 13 Aug 2007 13:46:02 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2896 "The notion that China cannot exercise its power without losing its US markets is wrong. American consumers are as dependent on imports of manufactured goods from China as they are on imported oil. In addition, the profits of US brand name companies are dependent on the sale to Americans of the products that they make in China. The US cannot, in retaliation, block the import of goods and services from China without delivering a knock-out punch to US companies and US consumers. China has many markets and can afford to lose the US market easier than the US can afford to lose the American brand names on Wal-Mart’s shelves that are made in China. Indeed, the US is even dependent on China for advanced technology products. If truth be known, so much US production has been moved to China that many items on which consumers depend are no longer produced in America. " http://tinyurl.com/2c7ue5 <b>China’s “Nuclear Option” is real </b> - Info. Clearing Hse.11/8/07 By Paul Craig Roberts Also 80 'ish <i> mostly</i> well informed comments. “The notion that China cannot exercise its power without losing its US markets is wrong. American consumers are as dependent on imports of manufactured goods from China as they are on imported oil. In addition, the profits of US brand name companies are dependent on the sale to Americans of the products that they make in China. The US cannot, in retaliation, block the import of goods and services from China without delivering a knock-out punch to US companies and US consumers. China has many markets and can afford to lose the US market easier than the US can afford to lose the American brand names on Wal-Mart’s shelves that are made in China. Indeed, the US is even dependent on China for advanced technology products. If truth be known, so much US production has been moved to China that many items on which consumers depend are no longer produced in America. ”

http://tinyurl.com/2c7ue5
China’s “Nuclear Option” is real - Info. Clearing Hse.11/8/07

By Paul Craig Roberts

Also 80 ‘ish mostly well informed comments.

]]> By: Wolfie http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2895 Wolfie Mon, 13 Aug 2007 07:58:19 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2895 Absolutely true Stef. The symbiotic relationship between Saudi Arabia and the US is an interesting one but has been souring since the Iraq invasion with a slow migration into Euro holdings [<a href="http://blog.twowolves.co.uk/2006/03/26/from-beijing-to-dubai/" rel="nofollow">I wrote about it here</a>]; Bush's "new vision" of the ME is not to the Saudi advantage. I'll admit that the Chinese strategy seems somewhat opaque but remember that cheap manufactured goods in a globalized economy depend entirely on cheap oil, once we are past peak the model breaks-down. This will leave import economies with a broken local manufacturing base and poor investment leverage in the face of accumulated debt, but I'm sure the Chinese have thought of this. One thing is for sure, the next twenty years are going to be a rollercoaster ride. Absolutely true Stef. The symbiotic relationship between Saudi Arabia and the US is an interesting one but has been souring since the Iraq invasion with a slow migration into Euro holdings [I wrote about it here]; Bush’s “new vision” of the ME is not to the Saudi advantage.

I’ll admit that the Chinese strategy seems somewhat opaque but remember that cheap manufactured goods in a globalized economy depend entirely on cheap oil, once we are past peak the model breaks-down. This will leave import economies with a broken local manufacturing base and poor investment leverage in the face of accumulated debt, but I’m sure the Chinese have thought of this.

One thing is for sure, the next twenty years are going to be a rollercoaster ride.

]]> By: Stef http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2893 Stef Sun, 12 Aug 2007 12:37:10 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2893 Even if the Chinese don't dump they're not going to be happy propping up the US by exchanging manufactured goods for junk paper indefinitely. As other markets for their goods develop, including their own internal markets, they're going to be a lot fussier about who they trade with and what currency they'll accept for their goods. But at this moment in time if any one country is holding the US by its economic nuts it's arguably Saudi - though there's not so much about that, or the implications, in the newspapers... Even if the Chinese don’t dump they’re not going to be happy propping up the US by exchanging manufactured goods for junk paper indefinitely.

As other markets for their goods develop, including their own internal markets, they’re going to be a lot fussier about who they trade with and what currency they’ll accept for their goods.

But at this moment in time if any one country is holding the US by its economic nuts it’s arguably Saudi - though there’s not so much about that, or the implications, in the newspapers…

]]> By: jameshigham http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2891 jameshigham Sat, 11 Aug 2007 11:44:36 +0000 http://blog.twowolves.co.uk/2007/08/11/the-china-ultimatum/#comment-2891 You know that my website's name is based on the Chinese adage and this has been there policy - building strength around the world - I wrote a long post a long time back on the whole matter. I also keep the Chinese government site in my sidebar. This appears to be the first real rattling of the sabres and I think the U.S. knows it has a sleeping moster on its hands. Leave Russia out of it for now. You know that my website’s name is based on the Chinese adage and this has been there policy - building strength around the world - I wrote a long post a long time back on the whole matter. I also keep the Chinese government site in my sidebar.

This appears to be the first real rattling of the sabres and I think the U.S. knows it has a sleeping moster on its hands. Leave Russia out of it for now.

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