Hello CB, <<I'd advise the Chinese government to listen to Greenspan and Bernanke, rather than you, but would bet 99.9% odds that they won't.>>
Congratulations, you are right!
Here we are, my 10,000th post on SI. Or here I am at 10k post and there you are at 33,863rd post.
I understand that the SI Ignore function is not working at the moment and so I take the opportunity to write to you to solicit your views on several matters and a few anti-matters.
So, before SI revives the dreaded Ignore function, let me get to the great issues of the age:
USA Election
The democratic electorates are about to choose their leader once again, either admitting that they made mistakes the first time around, as in really screwed up for either voting for or against the incumbent, or fanatically, as in redoubling their effort while in obvious dire strait due to their earlier choices, vote as they did last time, for whichever party’s candidate they happened to have voted for.
Looks like the crowd will have to decide, on the domestic front, whether to borrow and spend or tax and spend, in other words, go bankrupt now or Chapter 11 later.
On the geopolitical side of the equation, the choices are almost equally not good for appetite, namely to vote for debilitating perpetual war or ballot for chaotic never peace. What to do, what to do?
For the youngsters of voting age, I guess they must decide whether they want to be drafted into a war that serves to put gasoline in SUVs and maintain a militaristic philosophy of pre-emptive strike, strike again, strike once more, until striking no more.
The problem with the current equation of the WAT-WOT-Whatnot War (“WWWW”) is that for one side it seems to be a forever until victory effort, and for the other side, for a while until fed up endeavor.
What are your current views, seeing that you were an early and most enthusiastic supporter of the various battle initiatives?
If you remember, we had an interesting (at least I thought so) discussion about the geo-politics and Bush-league maneuvers Message 17161813 , and I quote myself:
March 7th, 2002
QUOTE
On the interaction between Russia, China and the US, let me adopt a Maoist type analysis to the matter:
1. The world is comprised of contradictions (yin vs. yan);
2. From the US view, the major contradiction today is between the rise of China, and the sustainable supremacy of the US;
3. From the Chinese view, the major contradiction is between the rise of China, and the fall of China;
4. From the Russian view, the major contradiction is between the fall of Russia and the rebirth of Russia;
5. These contradiction will guide matters for the next umpteen years, and each vector of contradiction has its own momentum and velocity (mass, force, speed, direction) and equation of time (elapsed time during which momentum and velocity matter);
6. The US efforts to enlarge NATO mainly serves to undermine Russia’s claim to future leadership of its ‘sphere of influence’, loosely delineated as the ex-USSR and Warsaw Pact countries. The enlargement of NATO is being characterized as something other than this transparent motivation, and does not fool a man such as Putin, and certainly cannot put the traditionally suspicious Russian population at ease. I agree with you that Putin is very smart, necessarily so, else he would not have risen to where he is today. The brutal nature of politics in countries such as Russia and China necessarily makes the current leadership “foxes” by definition;
7. The US willingness to “go MD with or without XYZ” and to unilaterally abrogate the Anti-Ballistic Treaty serves only to undermine US credibility as a treaty partner, and the US willingness to scuttle the Kyoto Treaty negotiations serves only to undermine the US as a negotiating partner. In an age where the world is requiring long term solutions for deadly problems, the US model of 4 year election, 2 term presidency, two party oligopoly, multiple and diverse interest group horse trade, is simply not dependable for solutions, not dependable for partnership, and not dependable for security;
8. I believe the Russians, Chinese on the mainland and on Taiwan, and even the Japanese are beginning to realize this, all attributable to Bush’s election victory. The damage Bush is doing to the US interest has been enormous, only not realized in the US;
…
10. Ms. Rice is viewed as a pretender, and climber, of no particular substance, and dangerous;
11. In such circumstances, Bush is humored by all, even as they busily make their own preparations for their own needs. The US press is not realizing this at all, to my amazement, but then I have high expectations for people doing their jobs;
12. When two smiling foxes (Jiang and Putin) say they can do business with Bush, Bush will be taken on a ride;
13. So, my short term predictions – China will focus on the economy and nuclear parity, Russia will not reduce their missile count further, Japan will rearm, Taiwan will make nice with mainland, SE Asia will watch, cower, and stay very quiet, Europe will do what is best for itself (difficult, because to many interest groups);
14. Russia will need to, Putin willing, put economy ahead of democracy;
15. Any US financial aid given to Russia will end up in offshore banks via Cyprus. There is no shortcut to development of political economy and financial economy;
16. Germany and France will press for more substantive Euro, EU etc; and
17. EU may not hold.
<<cultural ties between Russia and Europe>>
There is very little similarity between Russia and rest of Europe, and what similarity there is, is washed away by bad experiences of European-American interventions in the past, and current aggressiveness in line with perceived Russian weakness. There is a reason why China and Russia have pulled troops back from the border, so that they can both concentrate on what matters to them most, control of their respective spheres of influence elsewhere, development of Siberia, and stability in Central Asia.
China is bending backwards to be not threatening to Russia in her weakened state, and the US is shouting on top of lungs “we will do with or without you” “we will expand NATO to your doorsteps” “we will stop financing you”. BTW, the Russian submarine matter is on par with the Chinese Belgrade Embassy matter to Russia and China.
America is playing the game all wrong, to America’s long-term detriment. America needs to listen to its geopolitical-aware folks.
<<At the same time, the economic importance of China to Russia is also quite strong. They're going to try to have it both ways>>
They can have it both ways, because American diplomacy will grow up fast, even with Ms Rice in charge. What must be, will be.
<<The old balance of power may not have seemed like a balance to China, but it felt stable to us. China is the destabilizing factor, now.>>
Rumsfield’s view is that China must be actively stopped from developing the means to challenge the US on any and all issues, which basically comes down to that China must be stopped from developing economically under politically and geo-politically stable conditions. This is a naïve, cynical, and sinister approach that has no support of progressive elements around the world, and certainly has no support within any faction of the Chinese population, and thus will fail. The US holler concerning democracy, Taiwan, Tibet and labor rights are all interpreted in light of such geopolitical noise, and this is precisely why relationship between the US and China is tense. The NY Times, and WSJ type rationales are all a side show to the main event … power geopolitics. This Rumsfield attitude comes across again even in global warming … as in “China emits the most greenhouse gas” which is counter-balanced by “person for person, US accounts for most of the emissions”.
Matters are never as clear-cut, black and white, right and wrong, as the media would like to make it out to be. In the end, truth prevails and the good guys always win, god willing.
UNQUOTE
So, blah, blah, blah, and the bottom line is that China has been the stabilizing factor, and US the destabilizing issue, mainly because US diplomacy did not grow up, and so the US is busy trying to swipe off fire ants off its pajamas.
On the bilateral relationship of Russia-USA, Putin is not turning out to be the friend you were counting on, because your premise was wrong.
You were concerned at one time that the USA effort in the desert is diverting attention away from the true enemy, China. Well, China is busy doing what it is supposed to do, making what you buy. Enemy? Surely not, especially when it is most assuredly still a multi-polar world, lopsided, but multi-polar.
Macro Economics
Now that we have reviewed and updated the geopolitical situation, we can move on to the macro economic status.
China, wisely, is stepping on the economic breaks, because 9+% growth rate is simply too fast. I suppose you could be one who rightfully doubt China’s official statistics. The trouble is in determining whether the official numbers are too high or too low.
If you remember, you were and probably are still of the opinion that China’s move to slow the economy is a mistake. In case you forgot, I remind you …
Message 20042195
<<April 20th, 2004
CB, Question 1: Did you mean to say your recommendation is to "not stomp on bubbles"?
Question 2: Do you think there are material/substantive differences between construction/urbanization/industrialization bubbles and a consumption/housing inflation/financial valuation bubbles?
Question 3: Do you have an opinion on what the top three bubbles are at this time in this world, in terms of scale, scope, and possible effects?
On the matter of China and bubble, check this out
Message 18226135
November 12th, 2002
Hi Pezz, on China: It will ramp into bubble dimensions and go 'pop' 24 months from today.
[EDIT: Key words = China Bubble 2002]
Wild guess, or I am lucky at spotting bubbles and scripting their demise.
Last Question: What subject matters shall we discuss this round?
Something controversial or something fun? Same really.>>
In case you care, my latest read of the situation in China is here worldmarket.blogspot.com and antidote to the global macroeconomics is to worldmarket.blogspot.com
Chugs, Jay
|
