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To: Ramsey Su who wrote (38884)	9/26/2003 2:23:42 PM
From: Ramsey Su	Respond to of 74559

Message 19345255

To: Ramsey Su who wrote (38884)	9/26/2003 9:56:39 PM
From: TobagoJack	Respond to of 74559

Hello Ramsey, <<... China will continue to accumulate US treasuries and agency debt>> I believe (a) China's pace of accumulation is very slow (relative to Japan which has a surplus of trade with the US, China, and ROW) because China in fact has a trade deficit with the world, and (b) China will be spending and dissipating its USD hoard faster than folks expect, on energy resources, infrastructure, Euro, strategic metal hoard, mines, ... <<... serious China bashing is just around the corner>> ... yes, and yet, nothing will come of it because eventually, as by August of 2005, the administration will have to go to Beijing, begging cup in hand, asking for investment money and diplomatic support, and eventually, as in 10 years time, as Nixon had once quipped, asking Beijing to extend Most Favored Nation status to the US. It is just math. <<... cancel a few Boeing orders in protest ...>> ... I can think of several ways of counter-response in addition to cancelling Boeing orders (10-20% of its potential business over the next 20 years is from China, and implicitly, same for its US suppliers and contractors): - Encourage Europeans to step up China manufacturing investments with preferences, so as to raise European profile in China on par with Japan, Korea, Taiwan (the US can join the party or stay out, as it wishes, as has been the case forever) - Encourage Boeing to establish massive manufacturing presence in China as has GE - Encourage Greater Asia Co-Prosperity Sphere - Spend USD on FDI to Canada and Australia, and buy manufacturing plants/resources/distribution - Invest USD in LatAm business relationships and networks - Buy Euro/gold - Stop buying US treasuries/agencies - Start sell US treasuries/agencies - Free-float its RMB currency and do not stop it from devaluing against all other currencies - Actively advocate genuine peace in the ME - Ignore the N.Koreans Even a <<... small part of the overall picture>> ... is very complicated. What do you say to one from column A and two from column B :0) It's just history cycling, over and again, and then once more. Chugs, Jay