"Each time a person stands up for an ideal, or acts to improve the lot of others. . .they send forth a ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance."Robert F. Kennedy
Using grade school physics of both Newtonian and Nuclear models, does anyone foresee counter currents of sufficient size to minimize/change direction of the huge 'Tsunami' roaring down on us, taking away not only our Freedom, but our Lives? Regardless if our salaries are dependant on us not knowing the inconvenient truths of reality (global warming, corporate rule, stagnant energy science) portrayed by the rare articles in the news media? I know only one - a free science, our window to Reality - that easily resolves the Foundational Problem of Quantum Physics and takes E=MC2 out of Kindergarten

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Thursday, August 9, 2007

China Weighs Economic "Nuclear Option"

Time will tell the Gifts we bring to ourselves and our children in the next few years - the major forces at play accelerating and foretelling our destination are in the headlines - science suppression causing the Trouble With Physics and creating the stagnant energy science is an extremely unwise and lethal choice as it also deprives us of the evolutionary wisdom and understanding that accompanies new energy revelations - all requirements for survival Evolution Freedom Survival The Promise of New Energy
China Weighs Economic "Nuclear Option"
BEIJING, Aug. 9, 2007
(CBS) CBS News' Barry Petersen filed this story from China for CBSNews.com.
Talking about currency rates is a lot like being forced by Mom to eat your vegetables: you know it's good for you, but you hate it. So, apologies for offering a big course of Brussels sprouts here, but it is information worth knowing. The Chinese are holding and investing something like $1.3 trillion they made from selling goods to America. Now, some Chinese officials have floated the idea that these U.S. dollars could be used against the United States. Here is how the London Telegraph's Ambrose Evans-Pritchard reported the story: "Two officials at leading Communist Party bodies have given interviews in recent days warning — for the first time — that Beijing may use its $1.33 trillion of foreign reserves as a political weapon to counter pressure from the U.S. Congress. "Described as China's 'nuclear option' in the state media, such action could trigger a dollar crash at a time when the U.S. currency is already breaking down through historic support levels." The words that hit were "NUCLEAR OPTION". Rarely do you find that in a story on currency. Here is the problem: The United States maxed-out its credit cards long ago, and it needs to borrow and borrow both to raise still more money, and to pay interest on that ever-growing debt. The Chinese, with all those dollars, are willing to lend by buying U.S. Treasury bonds. That keeps interest rates down and that gives Americans extra bucks to buy… more goods from China. This is now a part of the presidential campaign. Here's what Sen. Joe Biden (D-Delaware) said at this week's AFL-CIO debate in Chicago about our debts to China: "This administration, in order to fund a war that shouldn't be being fought and tax cuts that weren't needed for the wealthy — we're now in debt almost a trillion dollars — a trillion dollars to China. We better end that war, cut those taxes, reduce the deficit and make sure that they no longer own the mortgage on our home." His comment drew this response from leading Democratic candidate Sen. Hillary Clinton: "I want to say amen to Joe Biden, because he's 100 percent right." The reality is that China is probably going to slow down its investment in U.S. bonds anyway. This is not so much because they don't like us, as it is because they are becoming savvy about where and how to spend their huge nest egg. Low-interest U.S. bonds? According to an article in USA Today, some Chinese bankers say it would be better to start buying into businesses (U.S., European. Asian), where you get a better return and have long-term growth. Think the Japanese in the 1980s buying U.S. skyscrapers (Rockefeller Center) and golf courses (Pebble Beach). Back to the nuclear option — oddly enough, many voices in the U.S., especially in the U.S. Senate, are pressing China to re-value its currency up against the dollar, making Chinese goods more expensive and U.S. good cheaper for the Chinese to buy. The Chinese are resisting. Their cheap currency helps them sell their goods. And that is where the nuclear (currency) option comes in… the U.S. is being warned to stop meddling in China's internal affairs. But let us, for a moment, allow those Senators their due. Let us say that China revalues its currency. Then the Chinese could — if they wanted — buy U.S. goods by spending a lot less of their money, called the yuan. American proponents of this think it would level the trade playing field and spark an economic revival for U.S. companies. Alas, and alack. Back to those vegetables, because it probably won't happen that way. Arthur Kroeber, a managing director of the Dragonomics research firm in Hong Kong and Beijing, looked ahead to see what would likely happen if China's currency is revalued. His thoughts:
· China's exports will get more expensive so manufactures will just move to Vietnam or other places with cheap labor. Net result — it won't bring back those lost U.S. manufacturing jobs.
· If China retaliates by no longer buying low-interest U.S. bonds, the U.S. still needs the money. That means raising interest rates to attract other investors and that means higher interest rates on American home mortgages, car loans, etc.
· Gas price go up, even further. With a more valuable yuan, the Chinese can buy gas for less, encouraging them to drive more, and spike world demand. Overall oil prices could climb ever higher. Sorry about making you eat all those spears of economic broccoli. But if we don't understand this, and are guided by politicians playing for sound bites, promising quick fixes, we could end up on a path that means we all share the pain... right in our pocketbook. And the Chinese would be laughing all the way to the bank. Their bank.
© MMVII, CBS Interactive Inc.

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