Tag Archives: China’s strategy

Does Cap and Trade Signal China’s Rise as the World’s New Super Power?

U.S. President Barack Obama (L) and Chinese President Xi Jinping have a drink after a toast at a lunch banquet in the Great Hall of the People in Beijing November 12, 2014. Obama is on a state visit after attending the Asia-Pacific Economic Cooperation summit.  REUTERS/Greg Baker/Pool    (CHINA - Tags: POLITICS) - RTR4DTFJ

For the past 40 years, China’s leadership has systematically implemented a 50-year strategy to overtake America as the world’s leading economic and political power.  In the history of the world, no country has ever accomplished this feat without a major war.  Yet China brilliantly planned to dethrone America without bloodshed by disabling America’s ability to conduct war well before our politicians would ever think to drum up a war frenzy.

China strategized that she could accomplish a first ever bloodless transition of superpowers through rapid economic growth, overbuilding industrial infrastructure, cheapening the dollar with massive American debt, building a gold backed Yuan world reserve currency, strengthening her military to protect critical trade routes, co-opting America’s elite to support China over America, and gutting America’s industrial capacity to support a sustained world war.

A critical assumption of China’s strategy was that America’s international investors and financial institutions would scurry to help her grow, given the chance. America’s elites did not disappoint China’s leadership.  With promises of riches, America’s capital investors feverishly rushed in to help China achieve most of her goals in just four short decades.

While both China’s and America’s leaders wanted China’s economy to grow dramatically, the motivations of each country’s leaders were strikingly different.  China’s leadership grew rich while building a massive economic and technological infrastructure to support her people’s future.  On the other hand, America’s leadership grew rich by stripping our citizens’ future to fuel their own personal wealth.  China simply had to offer a gold rush to America’s investors, and they in return blindly transferred America’s wealth for China to overtake the United States.

Knowing that the world could only extract a finite amount of debt from western economies to support China’s growth and that the cash flow from West to East would ultimately create an unsustainable debt bubble, China rapidly overbuilt manufacturing capacity in anticipation of slowing of investments from America and others. Now, China sits atop a mountain of physical assets while the rest of the developed world sits atop a junk pile of debt.

The West is now in the precarious position of either propping up China, or of sending the world into depression.  If the World’s debt bubble bursts, much of America’s investors’ wealth will evaporate. China will also default on her debt, but tens of thousands of new factories will remain in China.  China, will recover from an unprecedented depression with infrastructure, skills, trade relations, and gold to restart a new world economy.

Given America’s amassed debt and gutted manufacturing capacity over the past 40 years, we cannot withstand a long, deep depression. Our central bank has no alternative but to assist China in keeping the bubble afloat.  But, our citizenry must adopt a long term strategy to reverse what has left us in this dire predicament.

With a massive shift in power that the world unwittingly gave China as a backdrop to the issue of global warming, China’s President, Xi Jinping, has now come to America offering his support for pollution cap and trade.  Until now, neither America nor China has been willing to sacrifice economic growth to reduce carbon emissions.  Why then is China now willing to offer pollution cap and trade?  At this stage in the progress of her 50-year strategy, China can now manipulate cap and trade to further her bloodless revolution.

Americans believe that a small consolation of our slowed economy from tens of thousands of factories being transferred from America to China is that pollution was also transferred from America to China.  Our air and water is cleaner as a result.  Yet, in a cap and trade environment, this transfer of pollution now gives China “pollution assets” to either expand her own economy or to sell back to America.   Cap and trade would force America to either trade existing American pollution for new pollution or to buy pollution from countries like China.

Cap and trade thus could give China the ability to manipulate America’s industrial collapse even more.  With a massive worldwide debt bubble already in place, cap and trade would give China yet another powerful lever to either rise through the bubble or to send the world crashing into depression, to then rise through the ashes of world economic chaos as the world’s next superpower.  Adding pollution cap and trade to the mix would give China an untenable political and economic lever to control America’s destiny.

America’s dollar is so diminished, our central banking tools so depleted, our industries so gutted, our trade relations so reduced, our nation so indebted, that we are almost toothless to counter China’s 50-year strategy.  If we do not coalesce around a focused strategy to counter China, our Constitutional Republic could be endangered.  Xi Jinping’s visit should be a wake-up call.  America must not let Cap and Trade have a place in our economy until our economy, national security, and future is placed first in the hearts and minds of America’s investors and politicians.

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Keynesian Economics will not Put the Pit Bull Teeth Back into America’s Bite

A business philosophy shared with me long ago suggests that one should never enter an enclosed back yard with a vicious pit bull unless you intend to kill it. If you are going to jump over the fence and face the neck ripper, go over it wielding a bat and swing it wildly, smashing the pit bull until it lays lifeless in its own pool of blood. Otherwise it will rip you to shreds.

If China had re-entered the world stage in 1979 claiming it was going to assert a strategy to overtake America and Europe, gut their real GDP engines, indebting their people to transfer historic levels of real GDP infrastructure to China, and most importantly (because the West’s elite drive political policy and military actions), entering a final pit bull smashing phase (this phase has not yet occurred) that leaves the West’s elite scrambling to protect their wealth from an epic class struggle of debt defaults, wealth redistribution, and financial collapse, the pit bull elite of EurAmerica would have financially ripped the neck of this immense country of wonderful people before they had a chance to implement such an ingenious strategy.

So if one believes like I do that China has proven the masterful central planner above all on Earth, it would be illogical for China to have entered into EurAmerica’s backyard too early. China’s GDP was much too weak to implement any semblance of a world hegemonic strategy that could directly confront the West. She would need to suckle on the teat of her Western nursemaid until strong enough to leave the nest and assert her own world power.

Now that China is strong enough, now that she has enough world hegemonic relationships in place, now that her nursemaid has entered menopause, China’s strategy will increasingly become apparent. Yet she still has no need to enter the backyard with EurAmerica’s pit bull even if she no longer fears its ferocity. China realizes there is no benefit to directly confront EurAmerica yet for the pit bull is old, in foul health and it has lost its teeth to cause any real damage to China’s continuing rise to world hegemony.

Certainly, if one believes that China lucked into such a meteoric rise as the leading economic force in the world, then attributing any intelligence of design to her strategy for doing so would seem conspriratory at best. Yet the results speak for themselves. FDI in China is unprecedented in any other point in the world’s history. It is the greatest gold rush, the most inflated bubble, has caused the deepest competitor indebtedness, and was the least bloody international coupe in history.

I do not disparage China for having the world class skill, patience and confidence to assist EurAmerican businessmen and politicians to shake down their citizens. China offered access of cheap drugs to a culture that had already chosen the addictive personality of consumerism. EurAmerica did not have to accept them but now that we did, we will have to suffer the withdrawal symptoms of our cultural weakness as we now attempt to rehabilitate ourselves.

In the midst of our economic turmoil, there are those that continue to espouse Keynesian principles to spur America out of our economic malaise. Our political leadership wishes to take QE to an even greater level of spending as a potential jobs solution. Keynesian principles suggest that in an absence of consumer demand, government can create artificial demand that will then spur additional consumer demand, increasing money velocity that can reverse the direction of collapsing money supply and right the course of capitalism.

For the principles to work, demand must be perceived as great enough and sustained enough for creditors to offer consumers new credit. In addition, the consumer’s potential income must be large enough to meet the obligations of the consumer’s past debt plus create additional debt capacity that can provide additional spending to spur the new business cycle. The amount required for Keynesian principles to take hold would be orders of magnitude greater than the politics of our day or the world creditors and credit agencies would allow given the historic consumer debt, housing overhang, and government deficits including national through local caused by an international extraction of equity to the East.

Additionally, this large amount of stimulus spending that is intended to spur on the local economy is diluted by the amounts that redirect to foreign economies. Our government cannot isolate stimulus and thus the amount of spending needed for America’s jumpstart would have to be multiplied for the effects of international leakage. America has long since gutted the tools of domestic Keynesian stimulus by allowing the tansferring of 40,000 factories to China alone.
We do not have the economic manufacturing base that supports money multiplying factor to implement Keynesian principles through governmental central planning in this country. The dollars we spend flow like a sieve into the world economy which also is in desperate need of stimulus. To attempt Keynesian principles in America today therefore would also be attempting to jumpstart the western world on our own.

I favor through my job voucher plan (www.jobvoucherplan.com), a distributive, domestic, Keynesian approach of sorts, one that attempts to direct as much of the catalyst into the domestic economy as possible while putting all able Americans back to work. Yet it combines Keynesian stimulus with a redistribution of current social welfare for that purpose and a redirection of the American economy to a modern mercantilism.

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Filed under American Governance, Full Employment, Job Voucher Plan