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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Jim Willie CB who wrote (52679)6/5/2002 3:15:58 AM
From: steve susko  Read Replies (3) of 65232
 
I like to throw a additional variable into the economic dissection here. The red China factor.

In the past 2 decades, the trade imbalance has slowly shfited from Japan to China. Today, even Japanese branded products are made in China. Japan has always feel obligated to complement its policies to the policies coming out of Washington DC and Federal Reserve.

But the PLA (People Liberation Army) is entirely different from Japan. It always considers the US its main adversary. To the degree it must cooperate with US and federal reserve to promote the free exchange of cheap goods for US technology to be redeployed into arming the PLA, it will do what it must to hold up the dollar to facilitate the bilateral trades.

As PLA becomes more technilogically sophisticated, it is seeing itself less and less depended on US technology, and less inclined to suit US. It now wants real money for its cheap products that US are totally dependent on for everyday living. The Chinese has always treasure Gold for centuries and centuries as real store of value.
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