Sunday, March 28, 2010

WAR ...WHATS IT REALLY GOOD FOR...ABSOLUTELY NOTHING

Now those were the songs.....Droke has a nice piece to read that should give your mind something to wrap around gl today.

In the current phase of relative peace and stability we now enjoy, many are questioning when the next major war may occur and speculation is rampant as to major participants involved. Our concern here is strictly of a financial nature, however, and a discussion of the geopolitical and military variables involved in the escalation of war is beyond the scope of this commentary. But what we can divine from financial history is that “hot” wars in a military sense often emerge from trade wars. As we shall see, the elements for what could prove to be a trade war of epic proportions are already in place and the key figures are easily identifiable.



Last Wednesday the lead headline in the Wall Street Journal stated, “Business Sours on China.” It seems, according to WSJ, that Beijing is “reassessing China’s long-standing emphasis on opening its economy to foreign business….and tilting toward promoting dominant state companies.” Then there is Internet search giant Google’s threat to pull out of China over concerns of censorship of its Internet search results in that country.



The trouble started a few weeks ago Google announced that it no longer supports China’s censoring of searches that take place on the Google platform. China has defended its extensive censorship after Google threatened to withdraw from the country.



Additionally, the Obama Administration announced that it backs Google’s decision to protest China’s censorship efforts. In a Reuters report, Obama responded to a question as to whether the issue would cloud U.S.-China relations by saying that the human rights would not be “carved out” for certain countries. This marks at least the second time this year that the White House has taken a stand against China (the first conflict occurring over tire imports).



Adding yet further fuel to the controversy, the U.S. Treasury Department is expected to issue a report in April that may formally label China as a “currency manipulator,” according to the latest issue of Barron’s. This would do nothing to ease tensions between the two nations and would probably lead one step closer to a trade war between China and the U.S.



Then there was last week’s Wall Street Journal report concerning authorities in a wealthy province near Shanghai criticizing the quality of luxury clothing brands from the West, including Hermes, Tommy Hilfiger and Versace. This represents quite a change from years past when the long-standing complaint from the U.S. over the inferior quality of Chinese made merchandise.



On Monday the WSJ ran an article under the headline, “American Firms Feel Shut Out In China.” The paper observed that so far there’s little evidence that American companies are pulling out of China but adds a growing number of multinational firms are “starting to rethink their strategy.” According to a poll conducted by the American Chamber of Commerce in China, 38% of U.S. companies reported feeling unwelcome in China compared to 26% in 2009 and 23% in 2008.



As if to add insult to injury, the high profile trial of four Rio Tinto executives in China is another example of the tables being turned on the West. The executives are by Chinese authorities of stealing trade secrets and taking bribes. There’s a touch of irony to this charge considering that much of China’s technology was stolen from Western manufacturing firms which set up shop in that country.

http://news.goldseek.com/ClifDroke/1269784800.php

7 comments:

  1. Then there was last week’s Wall Street Journal report concerning authorities in a wealthy province near Shanghai criticizing the quality of luxury clothing brands from the West, including Hermes, Tommy Hilfiger and Versace. This represents quite a change from years past when the long-standing complaint from the U.S. over the inferior quality of Chinese made merchandise.On Monday the WSJ ran an article under the headline, “American Firms Feel Shut Out In China.” The paper observed that so far there’s little evidence that American companies are pulling out of China but adds a growing number of multinational firms are “starting to rethink their strategy.” According to a poll conducted by the American Chamber of Commerce in China, 38% of U.S. companies reported feeling unwelcome in China compared to 26% in 2009 and 23% in 2008.

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  2. The real "Strategy" is in the hands of the Chinese....its a global chess game now with the chinese playing Bobby Fisher and looking down the board 15 moves. Will they win? hehehehhehe I luv it. Well that depends on your definition of "Win". ie. Will they they take over our lead as the lead destroyer of global natural resources and polluting their citizenry to the point of extinction then YES ...they win.

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  3. cbs - Did you get my email? Hope it was of some help. - Sis

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  4. China was the world's second largest economy at the end of the 19th century.

    Has so much really changed? We'll see, but JMO nothing has except a lot of talking head nonsense about the Chinese ruling the world.

    Clif's comments would support what I said the other day - it's not China we should be worrying about, but Russia. And the time matches up well with Putin's anointment as ruler/president + problems with Sochi reaching a crescendo.

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  5. Sis-I did get the email. However,it was of no help. cbs

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