Hi Maurice, <<Of events over the past 100 years, the attack was not a very big deal at all>> ... as usual, you may have spoken too soon, because:
(a) the attack leads to other events ... Message 17945791 , and
(b) the attack adds to the grassroots political urge to close borders, stop free trade and other survival impetus leading to planetwide financial collapse and global depression
A number of days and a bunch of equity index points later, I completed my tag-along of a US delegation to Beijing, Tianjin, Nanjing, Shanghai, Shenzhen and Hong Kong, and visiting multinational invested companies, local companies, US and Chinese officialdoms. I appreciate the trip because I had a chance to go out of hotel rooms and conference rooms, and observe. In any case, I may have seen more than was possible in New Zealand.
Where are we in the Script of Collapse?
What? You say we are at the altar steps to Q nirvana?
You are dangerously wrong, to the ledge of committing financial suicide.
We are at the confluence point of Axis of Evil, Matrix of Malevolence, Vortex of Manufacturing Deflation, Hurricane of Service Inflation, Implosion of Equity Wealth, Collapse of Unencumbered Affluence, Dimming of Retirement Hope, Bloc of Big Governments, Nibbles of Tax Increase, Milieu of White Collar Theft, Eddy of Small Business Discontent, Cyclone of Vengeance, and Tapestry of Perpetual War.
If bullishness is climbing a wall of worries, can we get any more bullish than now?
Never mind about all the Chicken Little fears listed above. Let us simply focus our minds on the fact that Global Free Trade may soon be carbonized toast.
cbsnews.com
QUOTE
(CBS) The House early on Saturday narrowly endorsed a major trade bill that
gives the president the power to negotiate broad new trade agreements. It would be the first time in eight years that the White House has had such authority.
…
The predawn 215-212 vote came some 11 hours after Mr. Bush traveled to Capitol Hill to personally appeal to Republicans to support him.
UNQUOTE
The Republicans extended this particular vote by 45 minutes after “Fast Track” lost. Without “Fast Track”, the US president cannot effectively negotiate any trade agreements because the counter-party will not negotiate knowing Congress will amend the agreement to death, instead of fast track vote “thumbs up/down, without amendment”. The Republicans held the vote open for 45 additional minutes, not to wait for additional members to cast their vote, but to twist the arms of members who voted “No” and recast them as “Yes”. At least one member from a textile state changed his vote as tears streamed down his face, knowing he was deciding his November election at that very moment. Bottom line, Free Trade won by 3 strong-arm twisted votes, and it can not get much closer than this.
Just a reminder. Your Q is dependent on trade generated money buying gizmos replacing other widgets.
In the coming November election, the US voters will likely chuck out the Free Traders deliberately or inadvertently for a variety of reasons (mostly because the free trader Republicans may get thrown out for all manner of reasons). The agitated population may want to throw up the border, turning their backs on globalization, and inaugurating an age of planet wide darkness and global decline, 1930s Part II.
Global Free Trade, you remember, was supposedly and probably responsible for the spreading of wealth, increase of wealth, cycling of money, smear of investments, growth of multinational companies, enhancement of efficiency, and all the good things leading to eventual pleasurable retirement.
As events turned out, Global Free Trade is also responsible for the pulverization of small manufacturing businesses in the US and around the globe, and the political blowback has started, in the US, the first and original champion of free trade.
The US multinational companies may not be able to maneuver the rapids of negative sentiments towards corporations and their leaders this time and save free trade, because “big business” is politically incorrect, tarred with the broad brush of all that has happened to the little guys savings, pension, jobs, and hopes.
Putting Free Trade worries aside for a moment. Let us wrap our mind around an important bilateral relation, namely that between the US and China.
The holy alliance of labour unions, anti-free traders, environ-greens, small businesses, and cold warriors are arrayed against China, fearing what they had never visited, terrified by what they do not bother to understand. I saw them looking for the hidden evil empire and failing to find such. Others may have better luck.
We saw:
(a) spanking new foreign invested workshops equipped with the absolute latest machines turning out goods rated by all as the best and cheapest in their portfolio of globally dispersed factories,
(b) spanking new domestic entrepreneur invested workshops equipped with second-hand equipment turning out goodies of every kind,
(c) local USD multi-millionaire entrepreneurs who started out as factory hands only 10 years ago,
(d) automobiles starting to be exported,
(e) girls in bars who could convert Mormans,
(f) neatly arranged industrial development zones taking in new workers from the countryside,
(g) beautifully built education zones, one aggregating 76 universities, housing 400,000 students, studying science, technology, education, law, and medicine, each paying USD 1,500 tuition per year,
(h) Japanese trading companies staffing up for yet another wave of Japanese plant relocations,
(i) hundreds of thousands of Taiwanese working in Taiwan businesses, eating in Taiwan restaurants, watching Taiwan movies, and studying in Taiwan schools, but near Shanghai,
(j) tens of thousands of Hong Kong folks transplanted permanently to the mainland,
(k) young Americans unwilling to return home after graduation,
(l) ancient city walls and antique houses being renovated,
(m) old factories being cleared from the cities and grass and trees being planted, aiming to cover 20-30% of cities,
(n) viewed plans for three magnetic levitation rail lines, and
(o) I saw in the news that 10 Chinese pharmaceutical companies have lodged legal case against Pfizer to invalidate its patent on Viagra in China, and if PFE does not defend itself or loses, their patent will mean naught in China. Now, I am not saying a Viagra is on the same order of significance as one Q photon, but one wonders about whether your Q will ever see their $.
We randomly talked to one humble peasant standing on a dike ladling manure into the irrigation ditch and asked about his life, and concluded that his is a hard life, but he is looking forward to his grand daughter having a better life.
We did not find the evil empire, at least not in China. Others may have better luck, elsewhere, and later. Americans seem forever destined to try to find things: evil empires, canned mass death, wandering Osama, poppy fields, and Elvis.
In any case, I do sharply sense two dangers: on-going worldwide blowback on free trade, and early bubble economics at work in China (enhanced by Japanese money, as usual, and always).
Blowback on free trade is part of our Script of Collapse, as borders close, tariffs rise, currencies fall, and money stops flowing.
Bubble economics at work in China is a new theme, as Chinese domestic borrowing cost is lowered along with the Maestro’s music score, and the Chinese Yuan is tagged to the USD. The bubble may burst as soon as and if the incoming Chinese leadership stops issuing state bonds. Social unrest may follow, Argentine style, and if not pricked early, bigger problems later on.
In the mean nasty time, Eureka, virtuous circle, as the Chinese borrow, build, sell, save, and build some more, even as the the Japanese bleed cash and factories, and Americans borrow and buy. All very symmetrical.
The politicians in the US tends to think that their constituency are all people and entities within the US border, but I believe the broader constituency are all who hold USD assets.
Later, watch the November elections of House of Representatives in the US, by the people for the people, to carry out the will of the people, and consider your investment moves and counter-moves.
What are you going to do? Buy Q with borrowed money;0)
I had bought more paper gold and am now at 7% of NAV (NAV increased 4.91% YTD), but cash allocation increased because Euro, CHF and AUD all went up. My South African gold shares also rose. I must count my blessings, again.
Chugs, Jay |
