<<<China Cancels Africa's Debts>> ... for goodwill and access to resources, without lectures and double-speak ;0)>
China has US$. They have rembi thingy. They can use a LOT of resources and add a LOT of value and sell them for a LOT more US$.
Africa [whoever Africa is, but going with the stereotype] owes them a bunch of money, rembis or US$. Say it's US$ [probably is]. China says, "Forget about that money you owe us. Sell us 10 years of copper, coal, coffee, cobalt, chromium, [or whatever it is that Africa has], and we'll pay you such and such a price."
The price will be cheaper than what it'll be in two years. So China is buying a forward contract, knowing that their consumption will drive the prices up. It is a bet against the US$ and in favour of commodity prices [which they control because they are the ones with demand, which they control and intend to increase].
They get a deal on the resources now in exchange for correcting an excessively low price a couple of years ago, which is expressed in a debt which "Africa" can only pay when they sell more stuff.
So it's not really 'goodwill', though that comes with the trading. It's just eons-old buying, selling, colonization and empire in the initial stages.
The USA will observe the obverse of global trade, with themselves in reverse. The USA would do well from a NUN. Far better than a PNAC. The USA is to the NUN as Taiwan is to China and New Zealand is to Australia.
That's my theory for the day Jay.
Mqurice
PS: Lectures and double-speak will come later, inevitably. |
