Pretend to be frightened, oh, China the great!

Obama Administration tearfully begs the Chinese communists to pretend being afraid of.

In brief: Hopefully, the Chinese comrades will understand the meaning of the message of feeble U.S. Democrats and will give the way to solve the problem of solid yuan. For example one day will say: Yes, we probably will do what White House want us to do... later.

Just a timid guy… Timothy Geithner (U.S. Treasury Secretary) is known as a rather timid and indecisive accuser. But the upcoming election for Congress and the Democratic Party ordered him to act – to try to criticize China over alleged unfair methods of export subsidies by an undervalued yuan. Geithner did its job in a spirit of intellectual timidity, trying to persuade China, as infants are forced to eat porridge.

In his speech he noted that the patience of the United States almost exhausted. And what if China will continue to observe a low rate of Chinese currency, the U.S. government will be forced to impose antidumping duties on all Chinese imports. In fact, it will be a trade war, and currently still unknown who will win of this new war.

Bound orangutans

It is worth to rememeber, that the U.S. and China are closely related to each other, sometimes even closer than they’d like. The entire democratic capitalist talk Geithner and Obama, congressmen and senators, all local and global war, America funded from Communist China. Why? Because without the presence of a large commodity-money cycle, the U.S. would have long bogged down in its own deficit. It keeps the PRC from bankruptcy American – say the words of the Soviet propaganda – imperialism. Supplying goods to the U.S., China uses this revenue to buy back state bonds United States. America should godzillion dollars to China. It is clear that this duty is maintenance-free, ie in fact China – as well as other holders of U.S. Treasury securities – have long recognized the fund bankrupt. The only problem is that the alternative applications of the U.S. is practically non-existent. An attempt to introduce them into free circulation would lead to a devaluation of American currency, and hence to be devalued their own promissory notes. China, Russia, Arab sheikhs want to avoid this. Mechanism of soft solution to the crisis the U.S. deficit does not exist – is an investor in the U.S. pulp and financial industry to stop buying Treasury notes, as there a strict trend at increasing risk, and the system promises to come down to the enchanting 1998 (the default in Russia).

Bound orangutans may hate each other, big monkeys can even fight. But go in different directions they can not. And Geithner, fulfilling a Democratic challenge to chew the fat, just understand – his demagoguery is actually intended for U.S. voters, but not impervious to the Yellow Emperor’s brain.

Why U.S. does not like a weak yuan?

In accordance with the views of specialists on the future of America – and the experts of the wing has in the U.S. about three hundred million – China subsidizes its exports through a weak yuan. Ie prices of goods made in China are too low, while U.S. goods and their manufacturers are suffering. “They take away our work” thinks voters of America and the righteously indignant demands from government action.

But what really? In fact, 80% of Chinese imports in the U.S. give FMCG, electronics and textiles. No wonder the honorary seventh place among importers took retailer Wall-Mart. Despite the trade deficit ($ 232.5 as of 2006, for example), the reverse current production is there, too: China buys U.S. high-tech equipment, element base, heavy machinery, aircraft.

It is easy to see that the U.S. is no longer a producer of what is imported to New York from Shanghai. Electronics manufacturing in the U.S. was last seen in Abraham Lincoln: John Booth called Fidel Castro on American mobile phone. The time when the U.S. textile manufacturers have been related to early epoch: now all the former producers of cotton sit on backyard and listen to music uns-uns-uns the Chinese players iSomething, preferring mostly live in the ghetto Government Assisted Living Projects. None of the Americans the Chinese are not taken away: the capitalists of the United States has long carried the production of any rubbish outside the road (literally) of his country. And above all in China, Mexico, Indonesia, Malaysia and Taiwan.

Geithner is aware of these circumstances, the more our own. But the closeness of the election always turns the democratic state in the March gathering of cats, languishing for love of the voters. Since the voter sacred believes that the Chinese took away his job, have to threaten the Chinese. But what would happen if Chinese goods actually impose a duty?

First of all, you need to understand that pet project and the main – and only – Barack Obama achieve increases in smoke. What keeps the U.S. stock market, except for speculation? At rallies the same Wall Mart, at the actions of electronic companies, whose products are actually re-imported into the U.S. and Europe. From China of course will be followed by a harsh response to the imposition of sanctions, will suffer and the States’ imports. And that’s typical: the replacement of Chinese imports in the USA. But the replacement of U.S. imports is easily found on the background desheveyuschego euros. Additional conditions will only reinforce the trend: the introduction of trade margins on imports from the United States will lead to the displacement of imports into the EU.

The Americans did not die without plastics, textiles and something: they simply will pay for these goods anymore. After all, American voters, boiling with righteous wrath of the fact that “the Chinese have taken away our jobs” will pay for the retail margin. Alternatives to Chinese imports, and no it does not appear: America is full then the same factories, which will be from dawn to dusk working former unemployed, with little (otherwise there will be a competitive advantage) fee.

China, in turn, will not alone improve the rate of its currency – their polite silence on the bilateral committees on this matter testifies to this. Increasing domestic demand, which so desperately appealing Timothy Geithner Celestial too useless for several reasons.

The first reason – China prefers to do everything slowly enough. And this contains a grain of common sense. Domestic demand increases and so: China is no longer what it was in anecdotes. Buy cars, buy electronics, operates a credit system. Increased domestic demand will trigger price increases, which in turn completely unnecessary Communist Party. In the financial sphere vspuchatsya pyramid and sham assets. Worsen the trade balance in the winning side of the deficit. Because the last thing China wants to become his brother-orangutan on the opposite side of the chain, Chinese leaders rejected this advice, except if the U.S. does not offer China something really profitable return. But what the U.S. can offer China besides the regular portion of their debts?

The second reason is that China knows that the cost of trade sanctions and the subsequent trade war will be on the side of the U.S.. PDA is much easier to keep control in case of a serious economic disaster than the donkey and elephant America. The third reason stems from a purely geopolitical importance of China as a growing superpower, and a permanent member of UN Security Council. Neither the United States initiative, the controversy of which I wrote yesterday, will not pass legally through international institutions. China is a limiting factor in the Far East, in Iran. Of course the U.S. can keep stupid war in the dusty corners of the world and beyond – but their sponsors? Work in China with a cup of rice.

What my heart makes calm down

The heart of the election calms down, as Geithner said little if not directly, pointing out that the U.S. Congress actually puts pressure on the administration of U.S. President on the issue of sanctions. The election will be in November. The noise around the sanctions will continue to grow and reach its highest level since September and October. In fact, the statement Geithner – a plea for political maneuver for the Democratic Party: Chinese Communist humbly asked to make concessions under the influence of visibility visibility sanctions. Such a theatrical performance for great justice!

Pavel Nurminen
2010-06-11 10:04, Economics.

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