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“The incremental parts of our of our foreign reserve holdings should be invested in physical assets,” said Li Daokui at the World Economic Forum
It however doesn’t mean a flight of Chinese investment…..
“We would like to buy stakes in Boeing, Intel, and Apple, and maybe we should invest in these types of companies in a proactive way.” he continues.
In other words, the privatization of the Chinese Investment Fund.
“Once the US Treasury market stabilizes we can liquidate more of our holdings of Treasuries,” he said.
He just said “liquidate”… Previously nothing stronger than the term diversify had been floated, and that diversification was simply to invest new ($200 B/quarter) into other accounts…
Was this a slip? Or intended as a warning? Considering the local, and person uttering it, it most likely is a slip, albeit, one that shows the thinking that is going on inside China’s Financial Management Team.
First Algeria, then Tunisia, Yemen, Jordan, Egypt, and Albania. And I just heard Kyrgyzstan had riots too?
And no one is blaming Israel or the Great Satan? These are truly incredulous times…
So then, who is blame? A better question,…. once facts are on the table, is WHAT… is to blame?
The heart of the problem is in the dysfunctional nature of conservative, traditionalist Arab society. They fail to function economically, because of their values prohibit them from doing so.
Here is a case in point. Nine out of ten Egyptian women suffer genitalia mutilation. This act is not sanctioned by the government of Egypt, but is actually, officially opposed. Mubarak’s wife, actively campaigns against it. Yet nine out of ten women continue to have this done:
Sheikh Yusuf al-Qaradawi – the president of the International Association of Muslim Scholars – explains:
That is not a Muslim view (the practice is rare in Turkey, Iraq, Iran and Pakistan), but an Egyptian Muslim view. In the most fundamental of matters, President and Mrs Mubarak are incomparably more enlightened than the Egyptian public. Three-quarters of acts of genital mutilation in Egypt are executed by physicians, meaning they are not being performed at religious ceremonies, but are instead being quietly paid by the very parents of the girls themselves.
Fact is, Egypt is wallowing in backwardness, not because the Mubarak regime has suppressed the creative energies of the people, but because the people themselves cling to the most oppressive practices of traditional society. And countries can only languish in backwardness so long before some event makes their position untenable.
So what broke the back of those toiling in Egypt? The price of wheat?
Wheat prices have almost doubled in the past year.
Egypt is the world’s largest wheat importer, beholden to foreign providers for nearly half its total food consumption. Half of Egyptians live on less than $2 a day. Food comprises almost half the country’s consumer price index, and much more than half of spending for the poorer half of the country.
Egyptians love their bread. The nation is the world’s biggest consumer of bread with around 400 grams of bread consumption a day, easily eclipsing France at just 130 grams daily.
So, why can’t the Egyptians buy wheat?
The prosperous Asians are buying it up first. The wheat flows to the area having the most money.
Earlier this year, after drought prompted Russia to ban wheat exports, Egypt’s agriculture minister pledged to raise food production over the next ten years to 75% of consumption, against only 56% in 2009. Local yields are only 18 bushels per acre, compared to 30 to 60 for non-irrigated wheat in the United States, and up 100 bushels for irrigated land.
Prosperous Asians want their protein. And we all know it takes seven times as much wheat to make an equal amount of protein. The Asians have priced wheat out of the Arabs budget.
The trouble isn’t long-term food price inflation: wheat has long been one of the world’s bargains. The International Monetary Fund’s global consumer price index quadrupled in between 1980 and 2010, while the price of wheat, even after the price spike of 2010, only doubled in price. What hurts the poorest countries, though, isn’t the long-term price trend, though, but the volatility.
It turns out that China, not the United States or Israel, presents an existential threat to the Arab world, and through no fault of its own: rising incomes have gentrified the Asian diet, and – more importantly – insulated Asian budgets from food price fluctuations. Economists call this “price elasticity.” Americans, for example, will buy the same amount of milk even if the price doubles, although they will stop buying fast food if hamburger prices double. Asians now are wealthy enough to buy all the grain they want.
If wheat output falls, for example, due to drought in Russia and Argentina, prices rise until demand falls. The difference today is that Asian demand for grain will not fall, because Asians are richer than they used to be. Someone has to consume less, and it will be the people at the bottom of the economic ladder, in this case the poorer Arabs.
Wheat supply dropped by only 2.4% between 2009 and 2010 – and the wheat price doubled. That’s because affluent Asians don’t care what they pay for grain. Prices depend on what the last (or “marginal”) purchaser is willing to pay for an item….
It wasn’t the financial crisis that undermined dysfunctional Arab states, but Asian prosperity. The Arab poor have been priced out of world markets. There is no solution to Egypt’s problems within the horizon of popular expectations. Whether this regime survives or a new one replaces it, the outcome will continue to be a disaster.
So in each of these conservative Muslim states, no matter who remains or takes over, the conditions will not become better until they understand that… it is their conservatism, that is literally the thing killing them.
In this past month’s news cycle, the state visit by the Chinese delegation, … got little attention. Yet, Historians will probably look back on that visit as the most important finishing touch of the past decade, even though it happened a few days into this current one. (Decades begin in the 1 years).
Alas, giant snowstorms and football playoffs have the tendency to suck up America’s attention in January. 🙂
What was notable;
A. China and the US are now equal players, both dependent on what the other does.
B. Both sides recognize that the other entity will do what is best in their self interest, and that neither party can make the other change course.
C. Both countries suffer malignancies the their hard line conservative movements (the mother-in-law syndrome), that slow the machinations of better relations.
The best description we have in today’s world to describe this relationship, at least that comes to this mind, is that of a marriage.
For an enjoined relationship has now grown up between these two partners; one that appears beneficial on all fronts for us both to continue; but one, which if ever split apart, will cost us both, ….. half of everything we own ad infinitum.
With that in mind, … the unilateral dominance that America has enjoyed since the breakup of the Soviet Union, is no more. We have a marriage now, whose new rules may cause us both some internal turmoil, but one that is better resolved through negotiation and discourse, than unilateral actions to the contrary………..
The US and China relationship …. has matured.
….. and now Steve Newton of Delaware Libertarian is bowing out….
Forgive me for getting some out of order, but his name now goes up on the wall next to those of Dana Garrett, Mike Matthews, Jason Scott, Shirley Vandever, Dave Burris.
All gone, leaving only these few greats are still left: Nancy, Tommywonk, Kilroy, LiberalGeek, Pandora, David Anderson, & Hube.
The era over which these giants roamed was between the elections of 06 and 08. Some started earlier, but these few individuals were the only source of information during that time stamp.
Today, the News Journal has lost its paternalistic viewpoint touting the union of construction labor and developers formerly known as the Delaware Way, and is actually reporting news ahead of bloggers for a change. Likewise today, WDEL has both on its morning show with Al Mascitti and afternoon show with Rick Jensen, steered discussion away from the likes of (who?) Sean Hannity… and Al Loudell has kept us abreast of local politics in ways unheard of before bloggers began typing in their briefs…
So in a way, since these bloggers were successful back then, today they are not as vital as they once were… Many saw their blogs as the only way to get the truth past the News Journal censors, those higher ups who would not publish any truth that showed an elected official in bad light….
Those studying this phenomena will see that there was much agreement between bloggers on both sides of the aisle… It was very rare for this group to be divisive over the prime issues of this state’s business.. All of them were for Atkins removal. All of them were for beginning offshore wind in Delaware, … All of them were for the slowdown of work force housing… all of them were for the betterment of Delaware’s educational opportunities…
Of course we quibbled on who would become the next president, but that is to be expected… No family lives without arguing at least once…
There were rises and falls among each giant’s influence… But at the core of each individual was the feeling that each had a unique insight into the current problem staring us down, and wrote about it with an urgency that turned out usually to be correct… And usually, if agreement was not forthcoming by the first comment, by the end of the comment thread, some form of agreement among the blogger’s roundtable, was visible…
As politicians came to realize the News Journal wasn’t changing, they began contributing to these giant’s pages, giving substance in ways unheard of among those writing for the Community Board of the News Journal… Reading the blogs gave us a real time insight into the workings of our state government in Dover……
But it was the wind controversy that elevated the giants to their current stature… Only the blogs could get the message out that Delmarva was incredibly concerned about losing control of their monopoly, and that wind power for Delaware would by offering competition, lower our energy prices. And they did, so well, that the entire legislature at the end of their 2007 session, voted unanimously to approve of the landmark agreement between Bluewater Wind and Delmarva Power….
Some of us think that they, shaking in their boots, didn’t dare vote otherwise… For bloggers have long memories as well as does the public….
But these giants among men, did more than just push wind. They publicized the eminent domain controversy. They scoured local politics. They broke the work force housing pact apart. They clamored against Atkins, forcing him to resign. They dogged the SEU. They picked apart candidates so much that those who had flaws, couldn’t win. Dana Garrett could be heard almost weekly on WVUD.. Tommy Noyes, for a while was a weekly guest on Al Loudell’s award winning newscast. They OOGAcised the fight for open government, forcing one flustered legislator to call out for a prayer dedicated to just for the bloggers, asking for their salvation of their souls… Apparently those prayers were answered; for by their souls we have open government today….
But amongst the best, the very concept of government was debated back and forth, no doubt as it once was during the beginning of this nation during its infancy… Torture, domestic spying, gun ownership, thieving Vice Presidents, all had their day in court upon these pages….
And today, there are new names who in the years ahead might be considered to be the giants of this contemporary time zone..
Deldem, RSmitty, El “S”, Donviti, Cassandra, all came into prominence after the defining moment of passing the wind act…. As well as Sussex Green, Red Water Lily, Mourning Constitution,… all of which became big as the 2008 election season came upon us….
And from the ranks of commentators came a Sussex County Councilwomen, a candidate for a House seat, as well as a last minute candidate who took on Mr. Pam Scott, and began nailing his shoes to the floor…. Miro had a contender for once; that commentator speaks up often…
Steve Newton will be missed.
With his passing is the last of the great thinkers… Today, we have bullets fed to us… But Steve took on all other blogs, all other commentators and wrote posts about them… Steve looked at everything with fresh eyes…. Giants can do that, since they see things from way up…….
I won’t go in to praising Steve… for I’m here to call attention to the passing of a era. Perhaps those times when benevolent giants roamed our state, will be considered by us dying men and women, to be the glory times we hark back to, the second we close our eyes for their last time…..
For when you look back as what we’ve done, the word “giants” is not really a bad moniker….
During my absence I discovered that Delaware Libertarian is blocked whenever one tries to log in from inside China, and Delaware Liberal is not. What nefarious ideas sulk in the depths of the minds of Steve Newton, Tyler Nixon, et al. from which 1.3 billion people need their government to protect them?
Sussex Green pulled this into our collective atmosphere. My thanks, for I would have missed it.
While the U. S. was reeling from oil prices and hooting calls of “drill, baby, drill” and our blind leadership from “that other party” was calling for oil rigs off the coast of Rehoboth, our chief competitor, China, was busy doing something about burning coal more efficiently.
This has been totally off the radar screen.
First let me tell you why it is important. As an advocate of clean efficient wind power who has crunched the numbers, I can tell you coal will be around for a long time. Therefore, finding ways to burn coal more efficiently does much for reducing global warming as well, as lowering the cost of producing electricity.
Therefore if it were theoretically possible to burn coal with no carbon emissions, that would be a good thing. Even if were possible to burn coal with just slightly less carbon emissions, that too would be a good thing by moving us in the right direction…
Face it. The U.S. has done little, primarily due to the myopic vision that the oil saturated past administration had…..
Here is the synopsis…
China now uses more coal than the United States, Europe and Japan combined.
China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants.
China has begun building a more efficient kind of coal-fired power plant that uses extremely hot steam, at a rate of one a month.
China has already approved equipment purchases for a new generation of low-pollution power plants that turn coal into a gas before burning it.
China has begun requiring power companies to retire an older, more polluting power plant for each new one they build.
China’s most efficient plants achieve an efficiency as high as 44 percent. In the United States, the most efficient plants achieve around 40 percent efficiency, because they do not use the highest steam temperatures being adopted in China.
China’s improvements are starting to have an effect on climate models. I.E.A. cut its forecast of the annual increase in Chinese emissions of global warming gases, to 3 percent from 3.2 percent.
China has just built a small, experimental facility near Beijing to remove carbon dioxide from power station emissions and use it to provide carbonation for beverages. So far, it has no plans to make this a national policy.
China is poised to pass the United States as soon as this year as the world’s largest market for wind power equipment. China is building considerably more nuclear power plants than the rest of the world combined, and these do not emit carbon dioxide after they are built.
It now can cost a third less to build an ultra-supercritical power plant in China than to build a less efficient coal-fired plant in the United States.
One might wonder how a nation so far behind us just after Tienanmen Square, could now be the next superpower while we languish in the backwaters of a subsistence economy.
The answer should be obvious. China has no Republicans.
Yesterday the EPA moved forward with the pronouncement that Greenhouse gases were a threat to public health. They overturned 8 years of inactivity by the previousl administration, in recognizing the threat of global warming…
It is hoped that the prospect of the White House taking action could push Congress to come to an agreement.
In the post below, I posted Delaware’ CO2 emissions from the year 2006, as compiled by Delaware’s Energy Office. These corporations will no doubt suffer some economic ill effects if Carbon Taxes go into effect..
You will no doubt hear how your electric bill will rise if we began to tax carbon…
Here is how you have to look at it… You have to look at your energy bill and health costs as one lumped together expense… If you pay more for energy, but drop your health bill down to zero, your overall financial stature will be improved…
That is how this must be seen… As long as your total health and energy bills combined, do not grow, you are holding at the same level… If total of both grow, you are worse off; if the total of both drop, you are better off….
Therefore those families living around Delmarva’s power plant near Fox Point, need to consider the asthma medicine they spend on all their children when they pay their electric bill.. If, they can by God’s grace, eliminate that asthma medicine due to the fact that they need it no more, then their family’s income-after-expenses will grow…
That is how Carbon taxes must be viewed..
Now those who actually read Chapter 4 of the Kavipsian Theory of Economics, already know how Carbon Taxes benefit the United States economy… You know who you are..
For the rest of you, here is a refresher….
On the global scale, Carbon taxes will be levied as are tariffs today… For instance, if the United States refuses to sign on to the Carbon tax arrangement, then those other countries buying our products, tack on a tariff to cover the Carbon tax we did not collect.. That makes our products as high or higher than those of other nations…which on a global scale, hurts us economically.
On the reverse, if we enact a carbon tax upon our power plants and other sources of carbon, then we can trade with other nations doing so because our tariffs cancil out.. We don’t pay an excess.. Our prices are more competitive..
Developing nations, who do not tax their carbon, must pay our tariff on their products coming into our country. This makes them more expensive, and less competitive against our own manufacturing, despite the difference in the costs of labor…
So as the largest consumer, if the United States moves quickly to the forefront of this policy and begins to tax carbon before others can catch up, we gain an economic advantage, even though our carbon energy costs will rise by that taxed amount…
If you were an investor, doing manufacturing within the United States, now appears to be cheaper than offshoring all factories.. What’s the point, when the economic advantage of manufacturing offshore, has just been negated?
Speed is essentual.. Those nations playing catch up do not see a competitive economic advantage… The US due to our size and wealth has the potential to lead, and in doing so, creates a better marketplace for investors to put their money here…
So as some decry that raising the cost of energy in a bad economy will dampen growth, you can now inform them that doing so, brings investment back into the US… It also raises the costs of other nations imports, making our own products more competitive…
And it does all this, while dropping our medical bills at the same time….
Obviously first, you have to see this as the propaganda for what it is…
Second, you have understand that everything to which we are exposed is propaganda… We just sort and pick out what we wish to believe out of the mess both sides have thrown at us..
Third, with those clarifications in place, you have to realize that this would never have happened just a few months ago…. If its idea even existed at all, it was only in the wildest dreams of some Chinese party official….. who would have been afraid to even mention it to his supervisors, for fear of sounding too outlandish for a position respected by his Party…
It has now come to pass….
An economic conference to which the US was NOT invited… hosted by who else….China.
Reading between the lines:
The summit was a pragmatic, open meeting, which embodied the strong wills of Asia and Europe in meeting challenges and seeking common development,
Discussed was how prevent future ties with the United States, so that our selfish machinations when they implode, would not bring the global economy to core meltdown.
Asian and European leaders agreed to enhance information sharing, policy exchanges, and pragmatic cooperation on supervision and management in the financial sector and effectively monitor, prevent and respond to financial risks to ensure sustained, stable and sound economic growth.
In other words to bypass the United States in their discussions.
The Beijing Declaration says all parties concerned are committed to promoting the realization of the United Nation’s Millennium Development Goals (MDGs) as schedule.
The Cheney/Bush Administration removed the US from this initiative.
He said China has appealed to promote regional financial dialogue and cooperation and for reform of international monetary and financial systems. It had also proposed to build an Asian-European eco-city net, hold an Asian-European cultural and art festival, enhance trade safety between the two continents and promote disaster relief cooperation.
Meaning that the bullying down by our current administration has led our partners and allies to seek redress elsewhere. How can we bypass the US was the prime topic of cocktail conversations.
The summit has given the world a better understanding of China and stronger confidence of China’s development,
That it does. Meaning that the US is too busy saving its own ass to be counted upon for any leadership role.
The summit plays a key role in the process of Asian-European cooperation and will definitely push forward the new partnership between countries of Asia and Europe, contribute to global peace, prosperity and harmony,
The United States is conspicuously absent…..
My friends on the right who believe that Alaska is our strongest defense against Putin, who believe that not talking to China will force them back in line behind our failed policy, that making fun of their allies, is the way to curry favor….. have in 8 short years….brought the United States from its unsurpassed pinnacle of global dominance, to the rest of the world meeting behind our backs to whisper how to unseat us…..
What’s next?
Privately everyone wonders if China is about to call her loans……
And to even remotely consider putting in a new administration that has one of their spokespersons rattling off the same failed policies….(when she can adequately express them that is) does far more damage to this nation’s future……than those actions long ago partaken by one Benedict Arnold……
kavips 
