Believe me, while I have rested my keyboard-weary fingers for a few months, my mind has been going full-speed-ahead.  I have watched my stock portfolio take a hit that is reminiscent of 2008 (I cringed when I got my statement today), Congress has proven yet again their unworthiness to govern and President Obama  has demonstrated to all sensible  Americans that he is  as American born and Christian (he professes) as the next  who only attends church on Easter and for funerals.  The economy is souring with unemployment still (20 months into this recession) the #1 problem.

But wait, there is more.  Iraq is no longer a combat zone for Americans (pity the Iraqi’s though), Afghanistan is ballooning into a Vietnam and a Korea all balled up into one awful nightmare, and the Mid-East situation is no better at all (despite the opening of Obama’s direct talks with Palestinians and Israelis) as the threat of Iranian nukes hovers ominously.

Hold on!  If you keep on reading you will get even more from CapitalistMarks in the coming days.  Health care reform is proving to be the opposite of the wonderful promises made  (Regence Blue Cross/Blue Shield of Utah has cancelled my policy and forced me to take another with significantly less coverage/benefits coupled with added costs that could easily be in the tens of thousands of $$ each year).  I am told there are a bunch more like me out there that won’t be helped at all until at least 2014 when the new Obamacare/Democratcare plan kicks in.  But will I (others) live that long with reduced coverage and costs that exceed average American family incomes?

Bailout spending?  Sure a few big banks have survived and some large Corps.  too . . . but only to the benefit of the CEOs and a few of their croonies . . . surely not you and I . . . the ‘head-shaking’ shareholders or the stunned taxpayers.

Stimulus?  Cost billions more than we were told originally and now Obama and his minions are talking about adding a few dozen more billions.  And, the Federal Reserve is out of arrows with interest rates at about zero (of course they have quantitative easing left . . . but by the Fed buying up government notes all they do is add to the already enormous deficit).

Fiscal Policy?  Don’t look for any help there in an election year.  Everyone in the country knows that the tax system needs to be reinvented.  But, don’t expect any politicians to offer  any credible solution.

Remember the old sage who said (roughly) ‘when 51% of the poor decide they want to live off the honest earnings of the other 49% then democracy will fail’ . . . and Obama’s democratic solutions of socialism at it’s worst are beginning to make that a possibility.  Wouldn’t it be something if he really is a Muslim or Communist ’sleeper’ who ends America’s greatness by destroying our economic/political system with old fashioned Marxist policies?  NOTE:  I am not saying that is true but Geeze Louise . . .

China?  Passed Germany as the #2 economy in the world and is only 30 or so more years of double digit GDP growth from passing the U.S.  Oh, yeah, don’t forget their military is growing faster and more aggressively than any other in the world, nor their efforts to grab natural resources from the rest of the world for their own good (sounds pretty capitalist to me).  Note that the ‘rare earth’ minerals used in so many high-tech products are produced primarily in China’s two mining centers, and that the costs of these crucial minerals have gone up over 1000% (yep, one thousand) in the last 10 years or so.

Iran?  I can’t even bear to talk about it.  Ahmadinejad is nuts!

Venezuela?  Run by a lunatic dictator.

Housing?  Millions of homes in foreclosure and the banks aren’t bending over to help anyone despite new federal laws requiring them to do so  (wait until those writeoffs hit the books!).

Unemployment?  Some estimated put actual #’s as high as 20+% when underemployed and work-force abandoners are included but regardless there are at least 25 million Americans who want full-time jobs.

Global warming?  Only the HOTTEST summer in history for our northern hemisphere.

I could go on but my moist, warm tears are clouding my eyes so much as I return.

All I can say is it behooves you to stay tuned to this channel.

I will tell it like it is–give my answers to tough questions–offer solutions where needed.  I will be right-on most of the time and never wavering in pursuit of truth and justice.

But,remember this always:  the single biggest problem America has today is professional politicians.  They call D.C. home and they love living there and partaking of their unAmerican perks.  The new byword is ‘if you don’t like thier perks, get rid of the jerks.’

Do NOT vote for incumbents . . . we need citizen leaders who leave their real lives to serve for 4-8 years and then go back to those same lives.  Guys like you and I who can listen to both sides consider the alternatives and decide what is really best for our country.   Our founding fathers depended on it.  We really have to now.  Oh, and eliminate the golden retirements and benefits for congress and government employees.  Make them live like the rest of us ./ . . they won’t want to stick around more than they are welcome if we can push that through.

I hope you will join me at the polls in November to oust these greedy, self-serving ‘pros’ and vote in our neighbors and friends (particularly those who promise to go home after one or two terms).

I will post when impressed to do so and not just in order to get another word in.  You can count on that.  Also, due to some lingering and worsening health issues, I may not post as regularly as I would like.  I promise though, every post will be important, current, relevant and helpful.

I can’t imagine any other reason for it.

Man, aren’t we great though?

A nation that allows all sorts of behavior in public (dare I admit that sometimes we even encourage it?), all kids of crazy dress (my opinion — but then who am I to judge styles?), all kinds of religious belief (without judging for the most part — a special caveat here for Tom Cruise), all kinds of decorating on automobiles that drive our highways (remember the fur covered ‘dogmobile?), shoes that make you wonder why we ever invented the dern things . . .  and on and on.

But, we are also a nation that forgives a guy like Tiger Woods who egregiously violated marriage oaths and common sense.  The crowd at the Masters has followed him loyally and encouragingly — well he did offer a genuine (it seemed to me) apology before the competition started.

At the same time we welcome a new Masters hero (for this year)  and applaud the success of Phil Mickelson, because he is a great golfer (the best this day) and a dad who loves his wife and family so much they spent the week there with him.

Yep, we can appreciate at the same time that we forgive.

And that is a good thing.

We forgave the Germans for WWII (thank heavens since I married one), and the Japanese for the same war ( thanks for the Toyatas and Hondas that I have bought over the years and continue to drive).

And we will forgive the Iraqies and the Afghans if we can ever finish our wars there and let them prove to the world how great their culture is.

In fact this propensity to forgive is one of the greatest things about our country . . . we are so varied and diverse that we find it easy to forgive just about anyone and any nation for just about anything.  Pretty quick too.

Each time we do it the world opens up, gets more forgiving, allows greater acceptance and follows our example.

In short the whole dang place gets better.

I hope, and believe,  that we will never change.  Good thing too.

Just a year ago the world (well at least the Chinese and Russians — I don’t count Iran, Venezuela or Cuba) were yelling that the American Economic model of free-market capitalism was dead.  Boy were they ever wrong.  Our system works and worked — adjustments were made, changes were accepted and now we are on another tear that I hope will soon employ everyone that really wants a job (another neighbor got off unemployment this week!).

Man aren’t we great?

Your darn tootin’ we are!!

thanks to flickr’s johntraynor for the photo

Recession, a still messed up financial sector, overbearing majorities in the House and Senate, two wars, unprecedented unemployment, ongoing political bickering, nutty ideologues on TV & radio, a celebrity President, fearful climate change (?), porous borders, huge deficits, ballooning national debt, rapidly increasing cable rates, Big Macs, french fries and the disappearance, and fall,  of  Tiger.

And thus, speaking of Tigers, on to China . . . a problem that is a growing economic and political threat and one that we are not doing enough about.

China continues to own nearly $1 trillion of American debt (including  $800 billion of Treasury notes), has increasing influence around the Globe, possesses $2.5 trillion of walking around money and is using it to ‘buy’ into future resources that we both need, with a military that is rapidly narrowing the tech gap with the U.S., has a very Communist political system that prohibits real freedom (say goodbye to Google, Shanghai),  can exercise nearly instant and complete control of their seemingly ‘free market’ economic system, and finally, relishes political and economic power that grants them greater clout in the UN and around the world.

On top of that it is the Chinese year of the Tiger.

Seems like everything is going their way.

Should we be worried?

You bet’cha (as Sarah Palin would say from her modest home in Wasilla).

The signs are all over.

Recently, the President confirmed sales of modern Aircraft, weapons and defensive hardware to Taiwan.

China didn’t like that and announced a halt to military exchanges with the U.S. — exchanges that would help lessen the tension and open a mutually beneficial dialogue.

They didn’t care about the benefits — something more was at stake.

Chinese leaders are acting like petulant children who won’t share their candy.  They have always taken such an approach.

This time it is different though . . . they don’t seem to care what ‘our’ leaders think about them and they don’t really expect change.  Its all about politics and public relations and the rest of the world is their audience (excluding America).

In their own minds they deserve better–or they just don’t care what we think.  In their opinion the American markets for Chinese goods is shrinking . . . so the leaders in China find us less appealing . . . and other global markets are being targeted.

Heck, the President put off a meeting with the Dali Lama just to please them and they were still somewhat less than civil.

What more do they want?

Chinese leadership is increasingly independent of the U.S., and, at the same time,  best buddies with Venezuela, Russia and even Iraq.

How does that old saying go?  The enemy of your enemy is my friend.

Our leadership needs to beware.

At stake is the once inevitable globalization of our Democratic system — our economic model as well.  China’s recent success has third world and developing nations thinking that the option of democracy and American free-market economics isn’t as attractive as once believed.  China’s model is the new answer.

How would the world look with only two systems?  Ours and theirs.  And, since the majority of nations and populations are in the third world or developing category that are now inclining toward them — we could end up as the minority.  Odd man out.

Not good.

We have to counter with wise policies to end recession and reignite our economy.  We also have to come up with quick ideas to rebuild our demonstrably better political system.

Not going to be easy.

Obama has to lead — not ’shine.’

Congress has to act — not react.

The FED, the Treasury, Congress, and the President have to monitor the recession and start raising interest rates and taxes as soon as a recovery is evident.  Political change is as important as economic change.  And both need to bring a clearly ‘better’ result.  Soon.

Democrats and republicans alike should have enough confidence in themselves and their parties to push for a constitutional amendment that would create term limits on all elected offices.

Further the government, from Washington D.C. to Wasilla, Alaska, should follow-suit .

If we follow this plan we can be back in the global ‘driver’s seat’ in about four years.

American should, and can, return to greatness.

Level-headed economic policy (including debt reduction) and term limits are two good places to start.

2010-2014 can by our years of the tiger-beater (and maybe Tiger Woods will back us up too!).

thanks for the photo to flickr’s law_kevin

It is not right to consider China a developing nation in 2009 and beyond.

This was the case when I first started doing business there. An example from the past.

Once, on my first morning in Ningbo, China, I got up early (jet lag can be a real *&@%) and found that there was no electricity and no water.  I walked down to the front desk and was told that electricity and water were always turned off between 10pm and 7am.  Now, that was a developing nation.  But it was also twenty years ago and times have changed.

Chinese leaders love to play on their ‘developing nation’ status.  Gives them credibility for all the social/political and economic decisions they make without any real debate.   You can’t say twenty-first century politics are involved because all critical decisions are made at the top by leaders who have no higher authority (the people) to worry about.  That’s the beauty, if you care to call it that, of Communism in its Chinese form.  Decisions are easily made, quickly implemented and subject the decision makers to few if any consequences.  But those decisions often violate human rights and economic fairness.

It works for them, but because of generations of communist policy the Chinese leaders can’t effectively relate to America or Americans.  And we don’t really understand them all the time.

For example, once I was met with a high-ranking local Communist party official (with his cadre of about 10 ‘assistants’) to discuss ‘terms’ for making my patented products in their fine city.  Turns out he was also was the President of the local factory that wanted to make our products for us (where me met).   This was a dingy dickensonion kind of place that just didn’t feel right to me.  No heat at all in the conference room of the executive building.  Nor was there any heat provided on the factory floor.  And can’t even bring myself to describe the toilet facilities.

Boy was I naive, I learned later that the factory was owned and operated by the Red Army.  It ‘employed’ people who were housed in dorms on site (8 or ten to a room), worked 12-14 hour days seven days a week and apparently never left.  The big iron gate was always closed and guarded and the ten foot high brick fence around the factory and related property was topped with a three foot section of barbed wire that would have scared away Brer Rabbit).  Draw your own conclusions but mine was all about ‘forced’ labor.  No wonder they could offer prices that were a fraction of those in Taiwan or Hong Kong.  And the profits went to the military, no doubt.

This local leader began by joking that if America believed China was abusing its people then we should let more of them emigrate to California (a place most Chinese think is like heaven).  He suggested we start with two or three hundred, then he smiled and added million.  Three hundred million?  Yes, he replied.  Then he added that they wouldn’t even be missed in China.

Boy did that give me some perspective.

The factory’s idea of quality control was something that barely worked.  Mine of course was something that worked well, was made of really good raw materials and looked real good.

We never could get together.

I hope this is giving you a sense of the enormous divide that separates our two nations . . . philosophically, economically, politically and socially.

Yet, in spite of all the immense differences China should NOT be considered a developing nation and should NOT be given the free rein developed nations allow those who are disadvantaged.

China must be held socially accountable — and this goes double for economic and military issues.

Their refusal to float the Renminbi (the ‘peoples’ money’) or Yuan (the name of the currency denomination that is equivalent to our dollar) provides an unfair trading advantage.  It increases their exports (because good are cheaper) and decreases their imports (‘cuz our goods are more expensive) thus contributing to the incredible trade imbalance between China and America (think in the neighborhood of half a $trillion per year–or one good Obama stimulus package).

China’s defense of such unfair practice?  “Oh, but we are a developing nation.  It is necessary for us to level the field.”

Tiresome to our diplomats.

How does one measure developed and developing nations anyway?  Putting the gross economic issues aside (average wages, for example), how about the availability of consumer products and especially luxury items.  Think cars, cell-phones, TV’s, computers and such.  This measure sure reflects reality in places that lack such (we consider) amenities.

And so the news last week that China has passed the United States as the biggest market for cars.  Chinese sales are expected to be 12.7 million in 2009, while U.S. sales are forecast at 10.3 million.  Oh, and by the way the Chinese total is an increase of 44% over the previous year!!  Cell phones?  China has more in use.  Computers?  China.  Students in technical Universities?  China.  Miles of high-speed rail?  China (by thousands of miles).

But this car deal is big.  Think of the implications to fuel usage, the cost of oil, pollution, green house gases, steel and other raw material costs.  Huge, baby!  And then there are the jobs, factories and suppliers to make all that possible.  Wow!

Developing nation?  Baloney.  China’s military power is second only to ours.  China’s technology is third to the U.S. and Russia.  China’s population is first (4 times the U.S.’s).  China’s economy is first right now in every meaningful way, with near double digit growth and holdings of  more than $2 trillion of other nations currencies (yes they have a surplus — something other ‘developed’ nations can only dream of right now).

The infamous G7(or is nearly irrelevant now (the largest economies in the world — i.e. Global 7).  The real decisions are at the G2 level and those two are China and the U.S.  No other nation is really close.

Developing nation?  Baloney.  We, and the rest of the world have to stop even thinking about China as a developing nation — they are not.

China has put men into space, has nuclear weapons and the delivery systems to drop them anywhere in the world, a military (in terms of soldiers) the size of Russia and the U.S. combined.

Drop the pretext.  The four or five  most developed nations in the world today include China in just about everybody’’s reckoning.

China has to be taken seriously, held to developed nation accountability and treated as the most powerful ‘partner’ of the United States (remember Obama doesn’t want to think in terms of enemies or friends — not such a bad idea really).

Oh, and by the way, Russia is devolving under Putin (and his puppet Medvedev).  The first of what I will call undeveloping nations (although Cuba probably sets the standard there).  I don’t think they want to be anybody’s ‘partner’ and that egoistic and Machiavellian approach is part of their problem.

Thanks for the photo to flickr’s francisodiez

America is losing the economic supremacy it has held for over a century.  We have gone from a nation of winners to one of losers.  That goes for the stock markets (I remember just a few years ago a friend of mine from Netherlands wanted only American stocks–now he never calls) and for the real estate markets (losing nearly half of our legacy net worth in just three years).

Even Warren Buffet is concerned with our debt and its growing size relative to overall GDP and frankly he supported Obama and the billions and trillions he has spent on less-important things that are politically expedient (Bush is responsible to).

China is building an economic wall around their own internal interests and we stand by congratulating everyone.  They are buying up up natural resources around the globe and it is easy for them because our $$ is weak and our corporations are running scared.

All the while, our President just wants to make nice (he let that moron Putin ramble and complain for 90 minutes in their first personal meeting before responding).  Our Secretary of State seems more worried about how she stacks up against her former President husband that in accomplishing anything (she embarrassed our country and herself by her outburst in Africa).

I read that developing nations now account for half of the world’s GDP . . . and they are ‘developing’ while we are ‘backsliding.’    We used to be preeminent in this area but now the combined output of China, India and Brazil are equal to that of the United States (estimates from the International Monetary fund . . . but according to other figures from The Economist they aren’t even close when it comes to percapita comparisons).

Huge trade imbalances are washing our incomes and wealth overseas.  Some economists say this is not a problem . . . but of course it is.  At some point America’s debt will be ‘called’ just like that of all of neighbors who are losing their homes.

We have been a nation of spenders, though, due to the recent and unrelenting crisis, Americans are starting to save.

I just wonder if it is too late.  Has the global power shift to Asia and South America become irreversible?  Are America and Europe destined to become the lowest on the economic totem pole in the next generation?

Dang, it seems so and that is NOT a good thing. We have to stop or at least slow the trend.

Our technological and intellectual superiority (education-wise and not inherently) have been a big advantage for decades.  Our abundant natural resources were a tremendous foundation on which to build.  In both areas we are in rapid decline (can’t you remember that incoherent rambling by Miss California in the Miss America pageant?).

Something can be done about this.  Bailing out financial and auto companies and their executives to the tune of several trillion $$ is NOT one of the ways. Let the capitalist economic system destroy the weak and open doors for the strong.

We need to put our money where our mouth is.  We need to ‘recreate’ our infrastructure.  We need to create millions of jobs (there are 12 million more workers in the U.S. now than there were in 2000–yet nearly 7 million jobs have been los!t).  We need to invest in the best technologies and we need to subsidize education so that is available to all (imagine an inner-city ghetto child with an IQ of 150 who is forced by circumstances to forgo an education that just might lead to the discovery of a truly unlimited alternative fuel–then multiply that by ten million or more!).

By the way, one of the things that makes America great is that virtually anyone with the desire, innate capacity and the time can accomplish great things.  Not in China it seems, Newsweek informed us (July 20 issue) that 91% of the 3,220 multi-millionaire Chinese are the children of top Communist Party officials.  Yeah people, that seems fair and balanced!!

Back to the issue at hand.

Sure healtcare is important, but we can’t forget all the other things that make healthcare even a possibility for most.  Create a strong foundation and let’s build up again from there.

I hope Congress (and now the President) who are on vacation for the next two weeks get rested and come back ready to start facing the tough decisions that time will only make worse.  Yet, I fear they only worry about getting re-elected.

America was better when we were an economic power house . . . guess what, so was the rest of the world!

Go USA!!

thanks to smokingpermitted for the photo from flickr

Much of this is smoke and mirrrors.  At least until we (the politicians) generate a bunch more confidence and get a handle on unemployment.

So, what gives?

The market this week was driven by three main stocks.  Goldman Sachs, Intel and IBM.  And you know what all of these have in common, and why you shouldn’t be raiding your mattress for $$ to throw at the market?  They have huge international components to their earnings.

If you take the time you can read all the press releases and you will soon discover that the gains are not a result of a change in perspective by the ‘all important’ American consumer.  These good earnings are a result of positive GDP (Gross Domestic Product — the value of all goods and services) in three of the so called BRIC countries.  Brasil, India and of course China.

These countries have a combined GDP of about $4.5 trillion.  The United States has a GDP of about $13 trillion.  But the U.S. is going to lose ground this year (negative GDP growth) and the BIC (BRIC less Russia) are going to have an average GDP growth of around 6-8%.  Their consumers are spending.  Their governments are NOT running up huge deficits (China even has a huge net SURPLUS — several $trillion).  Their governments are not trying to do too much with too little.

These countries have a population of around 2.6 billion people (the U.S. has 305 million) or about twelve times ours.  So they don’t ALL have to be buying computers, TVs and Toyotas.  But a bunch of them are.  Buying computers with Intel chips and IBM software or consulting.  Plus, because they are growing, the innovators in these countries are growing or starting companies and where do they get the money and financial savvy to do that?   Goldman Sachs and the boys.

DELL, the once dominant American PC company reported disappointing earnings and projections.  Starting to see the picture?

The bottom line:  The U.S. is not even close to being out of this recession.  Obama and his team of ghurus and knuckleheads have got to get a handle on unemployment and rising taxes.  Don’t expect this runup to continue.  If you have some good profits then consider taking some of them off the table in the next few weeks . . . you just might be able to get back in cheaper if and when the next wave of bad news hits (for the traders our there, and not the long-term investors . . . wait are there any of those left?).

By the way, historically the month of October seems to be when markets can take some awful hits–especially if things aren’t going well– and they aren’t and probably won’t be by then.

Too bad we are pumping out bad news all the time (i.e. full speed ahead with universal health care and damn the costs) and the BIC’s are pumping out real infrastructure projects, sensible energy policy (well at least Brasil), and actual economic growth.

Stay tuned.

This ain’t over yet baby!

thanks to epak at Flickr for the photo

It was scary but turned out to be a game.? Albeit a very dangerous game.

I think that is what is going on in North Korea.? Their bankrupt economy is forcing them (i.e. the great leader Kim Il jJung ) to play games with geo-politics in order to garner attention and justify aid.? Ahmadinejad in Iran too.

Sad thing is they have nothing to lose.? Except a potential war . . . in which case they would expect U.S. and U.N.? economic intervention to resurrect their corrupt nations. I have to interject though that Iran is certainly a few steps above the bargain basement craziness of NK–great history, sorta open, educated and intelligent people, if misguided by religious zealots.

Anyway, how many nations have American taxpayers funded introduction into the developed or developing? world?? Oh yeah, there’s Germany, Japan and South Korea for sure.? Whoops, Vietnam, Iraq and China too (China by the round about way of paying premium $$ for everything they could make for twenty or so years).? A bunch of others if we really focused.? Is North Korea next?

Holy mackerel batman, I hope not.

Up to us, the U.S. of A.? Finally President Obama has something on his table that is not economic.? He has a full-blown international crisis that can’t be pushed down the priority ladder.? This is the biggest geo-problem of his administration so far.

What is he to do?

For one thing he has to bring his current popularity in the world to bear and especially in China and Russia (if such popularity exists there).? These nations have us by the oil and dollar vise-grip and certainly don’t have to cave to pressure from Washington (at least in their minds).

On the other hand, with our dependence on China to keep buying up trillions of $$ of loans from the government to support or ‘debt fix’ and Russia providing a significant part of the oil and gas needs of our allies in Europe, we are not playing from a position of strength.

So what?? We’ve been there before and risen to the occasion.

There come times when you do what is right regardless of the potential economic implications.

So, don’t let it bother you, Mr. President.? Do what is right and let the consequences follow.

We must not be blackmailed as a result of our failed energy policies and greedy economic failures.? After all, the previous three or four administrations caused most, if not all, of those problems.? Make your own tracks here BHO, and use the opportunity to force energy independence and fiscal responsibility on a nation that needs both desperately!

Take heart and take action now BHO.? Let China and Russia know that we will act without them if necessary.? Let them know that any inaction on their part will be widely publicized throughout the world as irresponsible so they wil be judged in the court of public opinion (I bet THAT thought has them shaking in their boots and slippers!).

Another thing.? Don’t be afraid to play the ‘race card’? if needed.? That is always a big threat nowasdays isn’t it?? This time though it is even more, as in the ‘arms race card.’? North Korea and Iran are pariah nations.? They don’t seem to care about the United Nations or public opinion.? But they can’t be all THAT stupid can they, criminy they DO have nuclear programs!? Does any one think they want an arms race aimed at them?

Make them think twice.? Or three times if it takes it.? Heck they are dictatorships and everyone knows that.? Elections in either nation are nothing more than publicity stunts.? All decisions are made by only one person in either country — ‘the great ladder, uh leader in North Korea (he needs a ladder to talk face to face with just about anyone) — and the ”grand I, uh told ya’, oops, Ayatollah, in Iran. Man, I despise such despots, does it show?

So, make sure these two morons know you are serious.? Make sure they know that stand-off military action is imminent (what they heck do we have stealth bombers for anyway?).? Let them know our next bomb and missile tests just might go off course like theirs have.? That our ‘bunkerbusters’? just might end up in the ‘burrows’ those crazies live in . . . not the ocean.

I abhor the thought of any military action but, you get the idea and ‘they’ must too.? Military action is on the table . . . it has to be for the safety of our allies and our own nearby forces (more than 200,000 of our military are in proximity to these two ‘yahoo’ nations.? For world peace, as far too many Miss America contestants remind us.

Global thermonuclear war?? Jeez, Louise, of course not!? But we have to take action now or it will be too late to do so without serious alternatives in the mix.

Sure, I hope China and Russia will get on board, and I sure hope South Korea will be 100% supportive. You are either for ‘world peace’ or against it.? Make ‘em chose and damn the economic consequences.? They have at least as much to lose — they need our $$ for their toys, electronics and oil.? Without those $$ their economies would fall like a house of cards.

Man am I looking forward to the international news during the next week!? I sure hope the Prez is as good as he has looked the past few months.? This could be interesting!

Thanks to flickr’s agutsi for the photo

Recent rhetoric ( surchur.com) is not helping our relations with China.? This is a ploy, in my opinion, by Chinese leaders, to take the focus off troubles at home.? And it is a dangerous mistake.

This fairly recent?development by our economic partner/adversary?deserves some elucidation…and a word or two of cautionary warning.? Start with this.? Bully’s are not usually as strong as they act.? I had a problem with one once in?10th grade.? He was bigger, meaner and uglier.? He was a dude.? He also went down like a ton of bricks when I’d had enough (yeah, but I was the one that got in trouble at school, how does that work?).

First, China is openly beginning to?bring pressure to bear on the ‘American’ model in international finance and economic venues (like the G-20 conference).? Sure, we have failed in our own dilegence, and we have let?our capitalist model run beserk for a while, but let’s face it China is a far cry from achieving the long-term prosperity that our model has generated for decades (centuries).?

There is more to it than that.

Many of?China’s worried citizens, 9% of whom are unemployed (imagine 60 million+ people without jobs wandering the streets!) want the $2 trillion of U.S. debt their government owns to be returned and spent at home.? They also want the government to get tougher with us.? Some of their more vocal dissidents too (the government lets anti-Americanism flow freely, but not criticism of their own system).? Their leaders are behind this believe me.? It is a ploy, a tactic, and should not be allowed the light of day.

While the $2 trillion is a?tremendous lever against the U.S. and seems to be an equally tremendous?potential benefit for China, there is no reason to believe that button will be pushed.? Sure, $2 trillion is a lot for?improving their infrastructure, for their growing military (including a proposed aircraft carrier), for social spending or whatever.? But, that is not a real alternative.??A short term ‘fix’ at best.? Their leaders would be mistaken to?continue suggesting such a path?(even with?further internal pressure–though I doubt that pressure?is independently real).?

Our leaders must know it is a shallow threat and have to treat it as such.

China has the largest positive trade balance in the world (over $310 billion in the last 12 months–on total exports of about $1.4 trillion).? Where does much of that come from?? The U.S.!? We of course have the largest trade deficit (nearly $800 billion in the last 12 months).? Much, if not?all,?of that comes from our relationship with China.? That could end in an instant with trade barriers and further ridiculous ‘hints’ from them would encourage our rapacious, and hasty (usually only when inadvisable), Congress to act.

If China begins to?play recalcitrant in their financial ‘arrangement’ with the U.S. their trade balance would fall off a cliff . . . and unemployment would worsen rapidly.? That is a risk they simply cannot take.? Another 10 million or so added to their unemployment lines would be just enough to encourage open dissension.? Revolution.? Maybe.? No one wants that in today’s economic turmoil.

So, BHO and his team need to be firm when dealing with China.? Trade imbalances need to be fixed.? Currency imbalances need to be fixed.? Negative rhetoric needs to be stopped.? China needs to contribute more to the world-wide financial and economic crisis and forget about isolating?and distancing themselves from their original capitalist model (the U.S.’s by the way).?

Stop the negative vibes, China.? You need to make friendly with us, dudes, we are not (really) the bully here.? Let me be frank.? We need you to sell us the cheap inexpensive goods that fill the ‘five-high’ shelves in Walmart.? Shucks, I am not sure you can even buy a T.V. that isn’t made in China today, let alone one from Walmart (that I am sure of).? Yet, you need us to buy those goods.? And at ever increasing volumes.? At least for the forseeable future.?

Hu Jintao, start talking up the American/ Sino realtionship, we ought to be buddies, dude.? Make goodie – goodie with Barrack.? While you are at it, start paying your part of the international bill this recession has left.? China is not completely innocent in this scenario.? Start recognizing it takes two to Tango.? If you want to dance with ‘the star’ you’d better listen to the beat of the music.? Truth is I don’t even care if you become the star.? We’ll still be glad to dance (with all 1.3 billion of your partners for our 300 million).

As for our part.?? BHO should realize the hollowness of?the Chinese Rhetoric (what? A new currency to replace the $$ — yeah, Europe thought that would work too) and start playing hardball if it continues.? We are sure as heck not going to do all of this alone — our wonderful legislative branch (it hurts to say that) won’t let it happen.? Believe it, dude.

America can’t fight the worldwide recession on its own.? We don’t need to.? China needs to do?their part and stop whining.? Free trade means just that, free–open–transparent–competitive.? Try it for a change, China.

Let the Yuan float or trade freely against the $$ or any other currency.? I don’t care about the internal implications.? It’s a flat world.? Deal with it.? Start pushing your own consumer economy.? Let them buy American for a change.

I learned a long time ago.? You push a bigger guy too much and soon he is going to push back.? Goes the other way, too.? I realize that as well.? Stop pushing , Hu Jintao and all of your endlessly communist buddies.? Let your people think and act for themselves.

Worked for us.? Still is too, just see what happens a year or two down the road.?

Sure, America screws it up bad at times.? But, we innovate and create and pretty soon we are the prom queen (or king) again.

Gotta love it dude.

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thanks for the flickr pic from chesi – photos cc