Have a look at China @ 2049
Oct/090
Chen Zhiwu, a professor at Yale University School of Management, Tsinghua University Visiting Professor of Humanities and Social Sciences.
Published in “Chinese entrepreneurs” in October 2009 Issue
We are very glad that they can live in 2049 in China, not only the total size of the economy has surpassed the United States, and that ordinary people share the real “state ownership” benefits.
Today is already in 2049, since 1949 it has been a hundred years, gone through several different stages during the period China has experienced several crises, including domestic and international. Nevertheless, China’s economy may count on a per capita GDP is still lagging behind the United States and other Western countries, but in the overall scale comparable with the United States has two strong world economy.
Looking back at the past, in the Chinese economy to achieve such a state before 2049 is not so smooth as it was expected, the original always feel that China is different from other countries. Only now look back, we found that the decision of the law of human nature in China is no exception.
I remember when, from 1978 to 2008 of the reform and opening up the Chinese economy growing at a rate of up to three decades more than 10%, in that on the basis of the economic miracle, but also added in 2008 – 2009 world financial crisis , because then the government sweeping bailout, let the Chinese economy would soon emerge from the crisis, so that China’s economic success amazed by the world, which of course is not surprising.
Recalling the 2009 – 2019 History
Can be derived from this problem precisely because of that crisis, complacency prevail, people become too confident that China’s economic growth momentum can not possibly be sustained, turned upside down has been transferred to China. As a result, before the financial crisis, intending to carry out many of the basic institutional reforms have been postponed indefinitely, including land reform, property rights reform of state-owned enterprises, financial democratic reform, political reform of the mechanism of checks and balances, after the crisis had been postponed. It was said that the decision-making, intellectual, and the industry generally that there was no need to change the previous system, no need to change there had been overwhelming, “the country back into China,” the trend, they feel kind of government is strictly controlled, state-owned enterprises led the economic system was not only the rapid growth of China’s economy three decades, but also to its very high resistance to the crisis shocks.
In this way, the reform momentum in 2009 after rapid degradation, structural reform is the case, fall behind, specifically in the following aspects. First, the “wealthy and poor,” the situation continues to deteriorate. This is not surprising, since during the financial crisis in 2008-2009, on the one hand the government trillions of “Iron Kimimoto” project mainly by the large and medium state-owned enterprises to undertake the other hand, a few trillion in 2009, “days the amount of credit” is also the main the flow of state-owned enterprises, private enterprises in the large-scale private enterprises in at most only get some, but thousands of small and medium private enterprises are not 10000, not to mention that such a multi-bank deposits, loans to state-owned enterprises, the SMEs so that the original had been “financing difficult” the problem worse. As a result, state-owned enterprises have rich resources in all sectors to attack, many private enterprises have been squeezed out, cessation of business to close. See a number of private enterprises either closed or operating difficulties, and many people do not realize that this is the financial resources and national policies due to discrimination, but rather the impression that “private enterprises unreliable, can only rely on state-owned enterprises” Development of China’s economic conclusions. Thus, from 2009 to 2018, financial resources and policies continue to focus on favoring state-owned enterprises.
A strong state-owned enterprises, private enterprises squeezed, in 2015, there is no state-owned enterprises which are not a complete monopoly. Government-owned property rights and other forms of wealth, the proportion of return to the early 1990s level. In other words, from the economy as a whole property income, the government received the share of state-owned property back to level before the reform, the share of private families have hit a new low.
The second performance is the financial and tax accounting for GDP ratio continues to rise. In 2007-2008, the GDP, the proportion of income people is also only slightly lower than 50%, but by 2018, then dropped to less than GDP, 40%. The reason why the expansion of the financial revenue can be achieved because of the democratic constitutional reform has not been enough pressure, therefore, restricting the expansion of tax rates and taxes over a chance to become a foothold. Of course, one reason is the tax revenue growth after 2005, greatly improved the efficiency of tax collection, but more important reason is that needs-based. That began during the 2008-2009 financial crisis, so many “iron Kimimoto” project, forcing investment in all levels of government continue to drive a few years, otherwise there are too many unfinished projects, so the government needs a lot of money. In addition, local governments can rely on the original “land finance”, for example, in 2007, many municipal spending about 80% of the land transfer from the gold, therefore, that time, there are many incentives to local governments to “protect” prices. After several rounds of administrative control only after 2015 or so, real estate is already sky-high price. At that time China’s urbanization rate is close to 60%, not into the town because prices were so high, can not enter the city, while the investment in the city to house more people who can not buy them. Moreover, cities and towns can be the government sold the land has been depleted. In this way, price ceiling, “land finance” the road is getting narrower, in order to support the expenditure needs, local governments had no choice but to abandon the “extra-budgetary income” to shift to rely more on formal taxes.
Third, the domestic private consumption demand continues to decline, to 2018, household consumption accounted for only 30% of GDP. On the one hand, due to the “wealthy and poor” and growing trend in 2009, though many economists and officials have stressed the importance of expansion of private consumption, but in the private possession of wealth and income ratio of assets Yue Lai The lower case, which of course is just aspiration. On the other hand, private enterprises in 1978, when barely a few, to 2008 when more than 6000 million, while in 2018, left more than 5000 million. This result of the financial resources and policies of discrimination resulting from the outcome of state-owned enterprises out of private enterprises, for social employment dealt a severe blow in 2008 before the Chinese experience are: investment in state-owned enterprises is four times that of private enterprises, but state-owned enterprises does not increase employment opportunities, and private enterprises for more than five million annual increase in employment. However, these data did not alter the allocation of resources favoring state-owned enterprises in China’s basic pattern, but in 2008-2009 the world financial crisis be strengthened. Therefore, since then, employment demand is greater than the supply of employment situation continues to deteriorate, so that the people of income labor costs continue to decline, which in 2018 resulted in GDP, household consumption accounted for only 30%.
Growth in private consumption can not be too many cases, China’s economic growth can not be the transition to reliance on domestic demand, but can only continue to rely on export markets. However, by 2009 China’s share of the global market for many commodities have been close to capacity, to increase again after 2009, and its growing political resistance in various countries, especially in countries that the global financial crisis on the impact of employment, after Even U.S. politicians could not withstand the pressure from industrial unions had to give way to trade protectionism. In 2013, the Chinese government has tried every means to China’s export growth in every year a bit reluctantly, but in 2015, exports have not increased.
Thus, since 2008, when the global financial crisis began to “re-nationalization” and “Iron Kimimoto” movement after-effects of 2015 has been fully exposed, not only in social and serious unemployment, and many infrastructure projects after the completion of the low utilization rate of state-owned enterprises 1970,80 era began as a loss of less serious, which are converted into a bank’s bad debts. Coupled with falling prices since then, the banks housing loans bad debts become increasingly serious. A banking crisis is imminent.
However, because commercial banks are state-owned or state’s absolute control, so the bank’s problem is the Government’s problems, that is, there is no problem as long as the Government’s finances, the Treasury will be able to foot the bill for banks, bank insolvency crisis can not happen.
Is, as described above, by 2015, all levels of government revenue has become increasingly tight. Although the “land finance” there are a few, all kinds of tax is already high, but the growing loss of state-owned enterprises, the government needs to subsidize the amount of which more and more banks are also expanding bad debts, which forced the Government to increase tax and treasury bonds issued by the bank finance, with a view to tide over the challenges.
That by 2018, in the strict sense of the financial crisis has not occurred only in the state-owned economy of the arrangement, the potential financial crisis has been transformed into a financial crisis. While continuing to increase taxes may increase social discontent, while government debt has been a lot of cases, or choose to print more money to the financial crisis, inflation will be transferred to the community people. The results, or lead to a strong social discontent, there is no turbulence.
Thirty years after the crisis of reform
Past is not always bitterly painful. From 1978 to 2008 three decades of reform and opening up economic miracle came too easy, so even if people did not figure out the logic behind it does not prevent China’s economic growth for so many years. In particular, after the 2008-2009 global financial crisis, China’s economic performance, many people even do not recognize: the results of China’s reform and opening up, precisely because the original control of the economy away from the farther the farther away from the monopoly of state-owned enterprises, relying on economic freedom closer, relying on the private economy closer due to, rather than due to a high proportion of state-owned economy.
Self-confidence and complacency prevail at the time of the situation, many people find it difficult to rationally understand the reasons for the original Chinese economic miracle is difficult to choose to basic reform. So, after 2009, but had chosen to strengthen the “National Progressive people back.”
Therefore, in this sense, 2018 years after the crisis and turmoil in the brief is not purely a bad thing, because no matter how society Ye Hao, too, after a successful, especially after the success for too long, will become too self-confident, and then on the way to go toward the irrational difficult to self-back. As the saying goes, “the sight of coffins were moved to tears,” it seems that only a crisis can be forced social correction.
After 2019 the community was experiencing a period of analgesia. However, the painful lesson that the leaders of that time advocate for a fundamental reform of the system created a social base. That is why after the beginning of the public a genuine reform of state-owned assets, land property rights trading market reform, taxation, the right to restrict institutional reform, fiscal reform, democratization, and so on, these are the Deng Xiaoping era, but also considered premature until the reform In the past three decades has finally happened.
1978-2008 year is “economic” reform and opening period ,2019-2049 was also the thirty years of reform and opening, but the focus is on institutional. Two phases together, until the completion of China’s “gradual” reform of the entire path. Looking back, when people say Eastern Europe’s “shock therapy” approach to reform how how inappropriate, and China’s “progressive” is just how superior. Only now look at this issue, the difference is that Eastern Europe was completed at the time, they already talk about the topic of reform, because reform is far from something right that they have; while China’s “progressive” to today, to 2049 realize in the past. Life, there are several seventies!
However, we are very fortunate that he can live in 2049 in China, not only the total size of the economy has surpassed the United States, and that the people from the state-owned assets in direct ownership of the national interests of the Fund’s shares, share the real “state ownership” of the benefits of and the government of all walks of life access control greatly reduced, even if the executive branch would like to expand the power, but also not so easy, will be the NPC Standing Committee’s hearing on the professional oversight and accountability. More importantly, the various sectors are no longer monopolized by state-owned enterprises, but Gejia free competition in private enterprise, whether young or old, and regardless of its origin or educational background, were able to free enterprise, access to full development prospects industry. Since there is not much state-owned enterprises, and financial resources no longer have a discriminatory bias to some companies, ignoring the other businesses, therefore, in the development of more equal opportunities, and even business rules, industry laws and regulations are more embody the “equality before the law” principles.
Today’s China is more commercial, market-oriented, and so the family interests of the exchange functions are diluted, the kind of interoperability through family blood ties to the interests of the traditional arrangements have become increasingly lighter. Many people say that the humane society, light, high divorce rates, health less the number of children, etc., this is not a bad thing, because in the financial markets and other markets to replace the family, social relations, economic transactions feature, marriage and family the basis of more of the feelings, rather than the interests of individuals for themselves but for others no longer alive. Therefore, once no feelings, there is no basis for marriage, and divorce is a reasonable choice. With the financial market to solve the economic security of invalidity pension arrangements, they naturally do not need to rely on more children “adopted son of old age”, and people’s lives so from a utilitarian tool is intended to be liberated. Life and how precious ah, is it so for decades, is this not the full enjoyment of life, freedom of flying body to understand it? The market eventually developed a “54″ campaign by the pursuit of individual freedom and personal liberation.
Buy GBP is a good point these weeks
Oct/090
On my last article I mentioned it’s a good idea to sell GBP @ 1.65, and take profit @ 1.60, now it seems the end of the downtrend of GBP/USD is over for a short period. If you had followed my suggestion and trading with a lot, you have already got USD$5000 with initial fund of USD$400 or so, which is a standard lot.
So, it is good idea to buy GBP/USD and take profit @ 1.70.
The suggestion above may be effective for 2-4 weeks.
Good luck.
China is repeating the mistakes of Japanese real estate bubble burst
Aug/090
Cao Jianhai
2009-08-28
Japan’s economy has maintained an annual growth rate to Surprisingly, several decades of growth, while maintaining the lowest in the industrial countries, inflation rates, in the 20th century, 80 years by many analysts and scholars predict will become the world-scale largest economy. However, since 1991, the Japanese economy suddenly collapse, house prices are production prices plunge, a number of Japan’s major banks declared bankrupt, the Nikkei dropped quickly to less than half in 1990. What factors have contributed to the collapse of Japan’s economy? It is left to us what lessons? Is worthy of our way of learning.
1, a large, inefficient public investment program
After appreciation of the yen, out of the deteriorating situation in international trade, product demand reduction and lower GDP growth concerns, the Japanese authorities concerted effort with all departments to take, including low interest rates, monetary easing policy, as well as some structural reforms and deregulation and other measures to to stimulate domestic demand.
From the spring of 1987, the Japanese central government out of tight fiscal policy, adopted a large-scale emergency spending policies, the adoption of a domestic public investment for the total value of up to 6 trillion yen in additional budget. Local governments have also been the central government proposal for them to expand the regional re-development plan. Meanwhile, the Construction Ministry canceled the city’s planning and building limitations, and encouraging domestic enterprises to participate in re-development plan. These moves mark a proactive fiscal policy, and in the economy generated a lot of investment.
Public expenditure items to the related industries, especially in the construction industry, raw materials and heavy industry sectors, first of all brought growth and prosperity. Government of the grand development plans will be pushed land prices to a very high level. National Land Agency began to “Tokyo regional reconstruction plans” will be re-developed into a downtown Tokyo, an international financial center, the land prices in central Tokyo has been very clearly improved.
Public investment in the demonstration, the public believe that land prices will continue to grow, domestic demand will also be further improved. Land in the public works and low interest rates, spurred by the rapid rise has attracted a lot of money from home and abroad. During the period 1985 to 1990, housing investment and consumer durable goods spending increased steadily, while business fixed investment is also on the rise. This was seen as the main driver of economic growth.
The study found that 80 years in the 20th century, Japan’s economy is mainly by investment rather than consumption-driven. This investment-driven economy between production and consumption distortions, making the capital stock makes the economy more dynamic inefficiency. Investment-driven over-investment caused by explosive growth, and ultimately rupture of credit and production cycle.
Second, extremely loose monetary policy and monetary policy
Loose monetary policy is a necessary condition for generating foam. In response to “Plaza Accord” after the yen’s appreciation to the adverse economic effects of the Fourth Year in 1986, the Bank of Japan to cut the benchmark interest rate from 5% to 3%, and 87 years in February again by 0.5%, to the time historical low of 2.5%. To the mid-87 Japanese enterprises through technological innovation and business rationalization efforts, a substantial increase in high-tech exports, the economy began to show signs of recovery. However, due to concerns about the U.S. stock market crash caused by depreciation of the dollar, as well as the sustained and stable domestic consumer prices, the Bank of Japan will be 2.5% of the ultra-low interest rates of 2 years and 3 months, until 89 years, until May 31 upwards to 3.25%.
Long-term sustained low interest rates make a substantial increase in money supply, the emergence of the so-called “liquidity glut.” As the appreciation of the yen and raw material import prices down, “excess liquidity” and did not show up on the price. Which to some extent the economic theory behind, leading to CPI statistically untrue. In accordance with the original statistical methods, Japan’s CPI at the end of the bubble economy began to rise slowly: in March 1989 over the previous year increased by 1.1% to April 1990 more than 2%, the same year in November reached 3% above, until August 1991 has remained at this level.
The Japanese government policy of expanding domestic demand, encouraged by the country set off a land development boom. A lot of money flowed into the stock and real estate industry, making asset prices skyrocketed. As the delay does not appear to inflation,
Bank of Japan will be the exchange rate and price stability as the primary goal, ignoring the rise in asset prices, resulting in asset inflation. In the “excess liquidity” passed to the CPI, the Japanese central bank’s tightening policy has become Japan’s asset bubble burst in the fuse. Can be seen that the bubble blown a prerequisite for the continuing large loose monetary policy, and commodity prices rise by, loose monetary policy can not be sustained, large-scale asset price bubble will not form. It now appears that a laissez-faire expansion of the bubble caused by the loss than the mistake of taking the austerity policy to economic development brought about a greater negative effect.
Third, the occurrence of the real estate bubble and bust
1985 to 1990, five years, the Japanese urban land price in the already high levels rose another 2 times, in which the central area of Tokyo land prices rose three-fold. The end of Japan’s land assets in 1990 amounted to ¥ 2389000000000000, compared with the end of 1985 increased 1.4-fold, the increase of ¥ 1385000000000000 equal to three times the GDP at that time. Chuo-ku, Tokyo, commercial buildings and land prices in 1982 for 3.5 million yen per square meter in 1990 up to 3200 yen, converted at current exchange rates the equivalent of 220 thousand U.S. dollars per square meter. In 1990, only Tokyo’s land prices is equivalent to the United States the country’s land prices, land the size of the United States, California, Japan, the total value of the land is almost four times the United States. Not only the land continued to soar, but also produced a crazy price linkage, resulting in land and stock bubble era of mutual promotion, circulation rose.
In March 1990, the Japanese Ministry of Finance issued “on the control of land-related financing requirements,” land finance in total control of this man-made emergency brake has led to a natural decline of an already into the whereabouts of the bubble economy to accelerate and lead to support the the core of the Japanese economy’s long-term credit system collapse. Since then, the Bank of Japan has adopted the policy of monetary tightening, and further led to the bursting of the bubble. December 29, 1989, the Nikkei index reached 38,915.87 points, the highest since started to decline, land prices have also started to decline around 1991, the bubble economy began to officially broken. Asset prices plunge, leading to a large number of book assets of companies in just one to two years come to naught.
During the bubble economy, in addition to real estate and construction companies, the Japanese almost all large companies are involved in varying degrees, real estate, real estate prices plunge and long-term economic downturn, resulting in a large number of deeply involved in real estate companies to close down. Real estate prices continue to fall, so that many real estate developers and construction companies in the real estate investment in a serious failure, inability to repay bank loans, had to declare bankruptcy. With land prices continuing to decline, the declining value of the security, leading Japanese financial institutions, the size and proportion of non-performing credit assets is growing, the capital adequacy ratio dropped substantially. The resulting financial structure of Japan’s financial institutions are very fragile, and anti-risk ability is low, some financial institutions and even appeared in a liquidity failure and other issues. Since then, Japan’s 10 largest banks in the Japanese long-term credit banks, Nippon Credit Bank and Hokkaido Takushoku Bank closed down, small and medium financial institutions, bankruptcy is one after another, Japan’s financial system has undergone an intense turbulence of the function of the Bank of Japan have been hit.
4, Japan, China has earnestly draw lessons should be present
From the macro-economic policy review, the lessons of Japan’s bubble economy tells us: first, to prevent due to exchange rate adjustments, in particular the appreciation of local currency led to asset bubbles, and making an economic bubble. Secondly, especially in the period of price stability, but also should beware of assets bubbles, otherwise bound to burst the bubble catastrophe. Third, we must deal with the current economic prosperity and long-term economic relationship between the sustained and healthy development and can not be taken to stimulate short-term economic growth and jeopardize long-term development of macroeconomic policies. Because both fiscal policy or monetary policy, economic growth can not solve the fundamental motivation.
The formation of the real estate bubble from the point of view, the real estate bubble in financial institutions should maintain the highest degree of vigilance. 1985-1990 Yearbook, Japanese financial institutions to inadequate understanding of the real estate bubble of the hazards, have to the real estate and construction companies and loans to form a continuous appreciation of the real estate and credit, expanding the size of a vicious circle, the greater the bubble blowing. The financial institutions in pursuit of high profits, real estate loans as the best loan program, the uncontrolled expansion of the credit scale, fueled the bubble formation. On the bubble about to burst in 1991, Japan’s 12 major banks to the real estate industry paid a total of 50 trillion yen loans to total loans 1 / 4.
Secondly, the Japanese bubble burst in to tell us that the world has never been up not only off the real estate market. In Japan’s rapid economic growth and general improvement in living standards of the late 80’s, the Japanese people and investors generally believe that less people and more contradictions will lead to Japan’s land prices continue to rise, not fall forever rise. Therefore, even if the land useless, all companies are trying to win, resulting in high land prices and house prices further and further. As speculation over investment, resulting in a false real estate boom. People from bank loans to purchase real estate, and then re-use real estate as collateral Zaiqu to buy real estate, causing a great deal of duplication of mortgages and loans, and increased real estate prices skyrocketed.
Finally, the Government of the real estate bubble bursts and housing prices can not remain indifferent, but should actively governance for economic development to create a favorable external environment. Japan’s real estate bubble finally burst, a very important reason is that the Government respected in the field of asset markets, “governing by doing nothing” thinking, to land and housing prices skyrocketing without intervention, as an important reason for the bubble economy. From the beginning of 1990, the Japanese government began to intervene in housing issues, has taken some to stabilize prices and curb land speculation measures. In the bitter lessons of the bubble economy, on the basis of a deeper understanding of Japan through government intervention, has made the 11-year land price stability, it is worth, including China, other countries should learn from the
Econophysicist Predicts Date of Chinese Stock Market Collapse–Part II
Aug/090
www.technologyreview.com
Friday, August 21, 2009
The Shanghai Composite Index was supposed to burst before July 27 but didn’t. A few days after that deadline, however, it dropped by 20 percent. Coincidence?
Last month, we looked at a prediction that the Shanghai Composite stock market index was about to crash. The forecast was made by a team lead by the econophysicist Didier Sornette at the Swiss Federal Institute of Technology in Zurich, who has made a study of economic bubbles and how they burst.
His thinking is that bubbles are the result of some kind of feedback mechanism that creates faster-than-exponential growth. This kind of growth rate is straightforward to measure, and so bubbles should be easy to identify.
In July, he and his buddies pointed out that the Shanghai Composite stock market index was following exactly this kind of trend. But they also made an extraordinary prediction. They said that this bubble would burst between July 17 and 27.
That’s a very specific prediction of the kind that economists almost never make. How they came to their conclusion wasn’t clear, and I, for one, was very skeptical. In fact, I bet he was wrong and promised him an arXivblog T-shirt and baseball cap if the market proved otherwise.
So I kept an eye on the index, and on July 27 noted that it was still going strong. In fact, between July 17 and 27, the index rose by 251 points, or about 8 percent. So much for the crash.
Then something strange happened. On August 4, the market hit a peak of 3,471, and then it dropped. Dramatically. By August 19. it had fallen to 2,786, a drop of about 20 percent.
Several questions come to mind. Is this the fall that Sornette and company were predicting or just a coincidence, a regression to the mean? And if the fall is related to their prediction, could the drop have been caused by it?
There’s no way of knowing, really. But it’s too close to Sornette’s original prediction to be ignored. If he has found a way to predict (or trigger) crashes of one kind or another, then it’s hard to underestimate the significance of such a breakthrough. We’ll certainly see other examples, and he and his team may be set to become very rich.
The truth is likely to be more complex. As for the bet, I think I’ll cede him a partial victory in the form of an arXivblog cap.
Econophysicist Predicts Date of Chinese Stock Market Collapse
Aug/090
www.technologyreview.com
Tuesday, July 14, 2009
The Shanghai Composite Index will burst between July 17 and 27, according to a new econophysics forecast.
The boom and bust nature of economics is one of the most puzzling aspects of the modern world. In the last year or so, many people have learned to their cost that when bubbles burst, businesses, jobs, and livelihoods can go with them.
So an obvious question arises: can we spot bubbles when they occur and predict when they are about to burst? One group of theorists say that they can and have used their techniques to make an extraordinary prediction.
First, they say that they’ve found the telltale signs of a bubble in the growth rate of the Shanghai Composite stock-market index. And second, they say that this bubble will burst between July 17 and 27.
That’s a brave move, so let’s look at it in more detail. The theorist behind this prediction is Didier Sornette at the Swiss Federal Institute of Technology, in Zurich, who has pioneered the study of market bubbles. Last year, he used his method for spotting bubbles to reveal that oil prices where dangerously inflated.
The telltale sign of a bubble, he says, is a faster than exponential growth rate caused by a positive feedback mechanism that generates this nonlinear growth.
The faster than exponential growth rate is relatively easy to spot. According to the analysis done by Sornette and a few mates, the Shanghai Composite Index certainly seems to have had a faster than exponential growth–a 69 percent rise since October of last year.
Whether an unsustainable positive feedback mechanism is causing this growth isn’t so clear. Sornette and co suggest that what is responsible is the Chinese government’s massive lending spree designed to maintain its economic growth rate at 8 percent a year. China has maintained that kind of growth for some years now.
Let’s take at face value the idea that a bubble has formed. What of the prediction that it is about to burst? Just how this team arrives at such a precise date isn’t clear, but whatever the mechanism, this is a much more speculative move.
One thing that physicists have learned about complex systems, such as stock markets, earthquakes, and forest fires, to name just a few, is that when changes occur they are scale invariant.
That means that if you were to remove the numbers from the axes of a graph plotting this behavior, there is no way that you could identify the scale of the events by looking at the plot. This implies that there is really no difference in principle between a small change in the stock market today and catastrophic change tomorrow.
That makes predictions of almost anything, let alone the imminent collapse of a bubble, extremely hard to make. Impossible may not be too strong a word for it.
Sornette and co do not say how they make their prediction, but they do hedge it by saying, “This will lead to a change in regime which may be a crash or a more gentle bubble deflation.”
But they’re still predicting an end to this faster than exponential growth in the Shanghai Composite Index between July 17 and 27. That change in growth will of course happen one day, but you’d have to have very good reasons to say that it will occur between those two dates. Those reasons are missing from this paper.
I say that this is a prediction that is impossible to make. And I’m prepared to bet Sornette that he’s wrong. The stakes? Let’s say an arXiv blog baseball cap and T-shirt.
Chinese is being fucked: CCTV new building is “sex jokes”
Aug/092
Openly admitted by the book designer: CCTV new building is “sex jokes”
2009-8-19
by Chengdu Evenings
Architect Rem Koolhaas recently published a book entitled “Content” of the book, the book openly to some of the screen the new building of CCTV as a male and female genitalia: the main building is a Nude knees when kneeling down to the next point to the sky and there is a male genital . This message 1, the construction industry in China has aroused strong indignation and condemned the acts of Koolhaas.
It is understood that this design has also been widespread opposition. China is not a design problem and no one to see.
In 2003, the Heqing pseudonym, when told that the CCTV design the new building, he wrote, “the architect should be hanged? – CCTV’s new building program questioned the successful bidder, “an article published in” van nghe “weight people and called for repeal of the program. The reason is: This is a violation of the spirit of the Chinese aesthetic “side door”, like a paralysis of kneeling knees, and at the same time extremely unsafe and extremely expensive waste: 50 million initial budget, now nearly 10 billion hearsay. HighTech such construction and future maintenance costs of the construction cost of more than a general rule, each is a true bottomless pit.
Southeast University, Nanjing, Professor School of Architecture Mr. Zheng Guangfu, also wrote the “Who let the science and the economy is in misery” the article, accusing the new CCTV building is a “evil (ramp) door.” In particular, Mr. Zheng in the other one, “the anti-science, anti-economic, anti-culture of the construction is ahead of you? “Article, very early in revealing sensitive CCTV new building contains male and female genitalia of the” bad messages “:” He (Arata Isozaki) to the program recommended by Rem Koolhaas, is not a symbol of a pair of genitals? that T – House (later Des fire floor), it means the days of penis, but also with a scrotum? ”
Arata Isozaki was the Japanese architect, has always been to engage in “genital structures” is known, was invited to the CCTV is concerned the new building design, one of five judges, because of his strong recommendation of the final calibration.
A bear market is being forecast for after the summer
Aug/090
Britain’s Uber-bear is growling again. After predicting a torrid “relief rally” over the early summer, Bob Janjuah at Royal Bank of Scotland is advising clients to take profits in global equity and commodity markets and prepare for another storm as winter nears.
“We are now in the middle of a parabolic spike up,” he said in his latest confidential note to clients.
“I expect this risk rally to continue into – and maybe through – a large part of August. What happens after that? The next ugly leg of the bear market begins as we get into the July through September ‘tipping zone’, driven by the failure of the data to validate the V (shaped recovery) that is now fully priced into markets.”
The key indicators to watch are business spending on equipment (Capex), incomes, jobs, and profits. Only a “surge higher” in these gauges can justify current asset prices. Results that are merely “less bad” will not suffice.
He expects global stock markets to test their March lows, and probably worse. The slide could last three months. “A move to new lows is highly likely,” he said.
Mr Janjuah, RBS’s chief credit strategist, has a loyal following in the City. He was one of the very few analysts to speak out early about the dangerous excesses of the credit bubble. He then made waves in the summer of 2008 by issuing a global crash alert, giving warning that a “very nasty period is soon to be upon us” as – indeed it was. Lehman Brothers and AIG imploded weeks later.
This time he expects the S&P 500 index of US equities to reach the “mid 500s”, almost halving from current levels near 1000. Such a fall would take London’s FTSE 100 to around 2,500. The iTraxx Crossover index measuring spreads on low-grade European debt will double to 1250.
Mr Janjuah advises investors to seek safety in 10-year German bonds in late August or early September.
While media headlines have played up the short-term bounce of corporate earnings, Mr Janjuah said this is a statistical illusion. Profits were in reality down 20pc in the second quarter from the year before. They cannot rise much as the West slowly purges debt and adjusts to record over-capacity. “Investors are again being sucked back into the game where ‘markets make opinions’, where ‘excess liquidity’ is the driving investment rationale.
“The last two Augusts proved to be pivotal turning points: August 2007 being the proverbial ‘head-fake’ when everyone wanted to believe that policy-makers had seen off the credit disaster at the pass, and August 2008 being the calm before the utter collapse of Sept/Oct/Nov… 3rd time lucky anyone?”
The elephant in the room is the spiralling public debt as private losses are shifted on to the taxpayer, especially in Britain and America. “Ask yourself this: who bails out Government after they have bailed out everyone?”
Mr Janjuah said governments might put off the day of reckoning into the middle of next year if they resort to another shot of stimulus, but that would store yet further problems. “If what I fear plays out then I will have to concede that the lunatics who ran the asylum pretty much into the ground last year are back in control.”
Over at Morgan Stanley, equity guru Teun Draaisma thinks we are through the worst. “We were on course for a Great Depression in February, but Armageddon was avoided. Governments did not repeat the policy errors of the 1930s.”
“We have seen the lows of this crisis. This is a genuine rebound rally, and it has been short by historical standards so far,” he said.
Mr Draaisma, who called the top of the bull market almost to the day in mid-2007, has crunched the worldwide data on 19 major stock market crashes over the last century. They show that the typical rebound rally (as opposed to bear trap rallies, when markets later plunge to new lows) lasts 17 months and stocks rise 71pc. The 1993 rally in the US was 170pc over 13 months. Finland’s rally in 1994 was 295pc. Hong Kong rallied 159pc in 2000. This rebound is only five months old. The key indexes have risen 49pc in the US and 42pc in Europe. Mr Draaisma advises clients to stay in the stocks for now, but stick to telecom companies, utilities, and oil.
Yet he too expects a nasty correction once this rally falters. The usual trigger at this stage of the cycle is when central bankers start to make hawkish noises, typically a couple of months before the first turn of the screw (normally a rate rise, but in this case an end to “quantitative easing”. “As long as policy-makers are talking about how fragile the recovery is, equities are unlikely to go down much.”
This moment can be hard to judge. There has already been rumbling from some governors at the US Federal Reserve and from the European Central Bank’s Jean-Claude Trichet. Markets are pricing in rates rises by early next year.
The pattern after major financial bust-ups is that the rebound rally gives way to another fall of 25pc or so, lasting a year, followed by five years of hard slog as stocks bounce up and down in a trading range, going nowhere. Mr Draaisma suggests taking a close look at the chart of Japan’s Nikkei index from 1991 to 1999. Gains were zero.
We are in uncharted waters, however. Monetary and fiscal stimulus has been unprecedented. Russell Napier at Hong Kong brokers CLSA says a powerful bull market is already taking shape as the American giant reawakens. Perma-bears will be left behind. He said: “It is dangerous to be in cash.”
When the finest minds in the business disagree so starkly, the rest of us can only shake our heads in confusion.
Monetary authorities cleverly taken most of the residents’ 30 years of wealth
Aug/090
by Zhong Wei
Although the CPI in China 30 years on average 4.8 percent, however, there is no appearance of serious inflation, but the caliber of the speed of money supply growth, so that monetary authorities are still subtly, unknowingly took the majority of the residents of wealth, which species of the process is the so-called “monetization”
The early 1980s, China has been a popular vocabulary, called the “million households”, which was to become rich as a synonym for the “million households”, after 30 years of China’s financial baptism, their wealth may be growing and shrinking state?
We were selected 1981,1991,2001 and 2007 to study the four point, take a look at possible changes in monetary ways.
The first is: per capita income from the household perspective, the four time points are as follows: 500 yuan, 1700 yuan, 6800 yuan and 13,800 yuan. So “wealth million” to keep pace with growth in per capita money income, 30 years ago, a million, roughly 27-28 million, and now considerable. Of course there are other changes in caliber of the monetary income, for example, look at the average wage for urban workers, the four time points were 780 yuan, 2,300 yuan, 10,800 yuan and 21,200 yuan, so that the results of almost counts. The money wage workers in the past 30 years, every 10 years to grow by about 3-4 times, which in essence means that the savings up to 10,000 yuan inevitable derogatory followed. In other words, in 1981 1 million, was roughly equivalent to the wages of workers 13 years or 20 years per capita household income, according to the current level of wages or income projections should be roughly 10,000 yuan was equivalent to the current 270,000 — standard of 280,000 yuan.
The second, from the residents to see the per capita savings, the four point total household savings are as follows: 52.3 billion, 920 billion, 7.4 trillion and 17.3 trillion, after the changes take into account the population’s per capita savings of 52 yuan, 800 yuan, 5900 yuan and 13,000 yuan. This calculation, in 1981 the “million of wealth” was the equivalent of 200 times the per capita savings, equivalent to nearly 2.55 million yuan now.
Two from the above calculation is very rough, the “million of wealth” can not suffer a substantial shrinkage of time, it is assumed that China, like the United States with a similar inflation-indexed bonds (TIPS), then using 1981 as a fixed base, four of the CPI index point 100,199,390,440, respectively, that is to say, even if the Chinese people as early as 30 years ago will be able to purchase and CPI indexed government bonds, when 1 million to 4.4 now will only million. The assumption that the “million households” to take a rolling five-year regular savings deposits, even taking into account the preserve and increase the subsidies, when the 10,000 yuan into the bank today, it is difficult, at best, more than 100,000 yuan.
Examples may be rough, but the conclusion is obvious: the past 30 years, the money itself with the passage of time is indeed very “cheap” again!
Although the CPI in China 30 years on average 4.8 percent, however, there is no appearance of serious inflation, but the caliber of the speed of money supply growth, so that monetary authorities are still subtly, unknowingly took the majority of the residents of wealth, which species of the process is the so-called “monetization.”
The degree of a country’s currency and the related study on the effects of prosperity in the international arena in the 1960s to the early 1980s, after a significant cooling. A pioneer in studies of domestic Yi Gang was completed in 2001-2003, Yi Gang was determined by China’s economic reform, the process of monetary and exchange rate variations, currency and the relationship between price changes. For purposes of convenience, we may as well make things even more straightforward and certain.
The past 30 years, the process of China’s currency is the currency of a dimension of the use of the continually expanding. In the early 1980s, may only be useful goods money and other necessities of life, and rationing will have to have a ticket in order to send a on-purpose. At that time, education, housing, medical care is basically the public. With the economic and social reforms deepening, the above-mentioned areas are the currency of the whole, and your school, your doctor, more expensive houses. Not only that, but even many of the currency should not be fully monetized the field, and everything from bribery, buying and selling official posts, the money is the fundamental driving force behind. The expansion of the scope of the currency itself requires the monetary authorities to issue more currency, the original “high-welfare, low-wage” labor remuneration structure, and also gradually to a monetary income mainly as a supplement to Social Security’s structure has been tilted.
The process of China’s currency is the currency of another dimension of the phenomenal expansion of the scale. Running an annual net cash of view, in 1981 50 billion in 2007 compared with 330 billion yuan, an increase of 66 times the cash in circulation grew from 320 billion to 2.7 trillion, which also does not take credit card for cash great penetration and substitution effects. To the balance of broad money M2, the 1.9 trillion for 1981, 2007, compared with 40.3 trillion, an increase of 21 times in the past 20 years, even the lowest in the M2 growth rate in 2000, it reached a year-on-year increase of 12 %. Credit and broad money continue to run faster than the income growth faster than GDP growth, the past 10 years, China has always been M2/GDP ratio the highest in the world.
After sub-loan crisis, as the first half of 2009, M2 reached a balance of 57 trillion, up 28.5 percent growth rate, the credit balance of 37.7 trillion, up 34 percent growth in circulation up to 3370 billion cash balance, up by rate 11.5%. China’s economy seemed to be loose monetary supply and equally difficult to curb the over expansion of industrial scale, the economy was over-lubrication is similar to the wheels, fast forward. Unfortunately, the distribution of the labor factor in the proportion of GDP, the growth of monetary income workers, as well as distortions in the distribution of income has been difficult to conceal. In any case, growth and income growth can not keep up with the pace of the note-issuing.
China’s currency speed the process of bringing a lot of lucky things, First, the monetization of financial resources to enable the Government to concentrate in practice is not conducive to holding long-term government bonds or bank savings, which to some extent alleviate the deterioration of income distribution problem. The second is to enable the monetization of the total assets of the banking system continues to expand, is not conducive to rapid expansion of banks maintain a healthy capital adequacy ratio, but diluted to a large extent even in the banking system to cover up the problem of non-performing assets, Zhou Xiaochuan, has pointed out that the Before 2003, the banking system to resolve non-performing assets, to a large extent due to the expansion of asset size, and then the improvement is the management structure. From the past 30 years, China speed the process of currency is the government to continue to guide the economic reform of the very important factors lucky.
Economic and financial operation of the fun lies in the fact that this is often between the government and the private sector you have a policy, I have the game process of countermeasures. On the million households in the 1980s, if he indulge in consumption, in very rare at that time to buy color TV, refrigerator and tape recorder, then to the residual value of these assets today, close to zero; if he is looking to preserve the value of the buy and hold gold at that time since the 1980s, I remember about 60-70 grams of gold per million, is currently about 270 yuan, less than 5 times the value; if he had to buy rice and rice can be assumed that the long-term non-degenerate, then 30 years, the price per kilogram of rice has increased by about 0.5 yuan to about 3.5 yuan. Even if the choice of savings or bonds, the erosion of the currency under 30 years will still be eroded the value of 2 / 3.
Rapid monetization in the process of holding cash or low-risk low-income savings, bonds and other financial assets, and to give up most of the wealth difference is not significant. Currency can be used to purchase large-scale industrialization of consumer goods, is almost equivalent to extravagant spending.
China speed the process while the currency has been going on for 30 years, but it is hard to imagine another 30 years, the financial system of over-bank and investment in economic growth is too prominent position in technological innovation can be slow poor structural adjustment, income distribution can hardly be genuine concern for reform. Of greater concern is that local governments, businesses and even residents have been in more than three decades of personal experience, have taken note of the use of “long-term financial liabilities” and even to use to counter the rapid monetization of its basic concept is nothing more than fortune today is not money, the debt is not debt tomorrow.
In my view, China’s monetary policy must be returned to a large extent to the classical quantity theory of monetary return, so that economic growth, income growth and money supply remained relatively stable and reasonable relationship between the monetary policy tools should not rigidly adhere to the so-called indirect control, but should the price of tools and simultaneously the number of tools, internal balance and external balance, and attention to asset prices and inflation expectations may be the risk of abnormal changes.
“9.11″ and Enron’s secret
Aug/090
by Han Yuhai
2009-5-29
2 December, 2001, Enron’s sudden bankruptcy court in New York filed for bankruptcy protection, which has become the largest in U.S. history, a bankruptcy case. September 11, a symbol of glory and the dream of the United States of the World Trade Center twin towers in the world’s attention in the fall. Today, the growing financial crisis, terrorism and counter-terrorism in international politics is still a main line of evolution. The face of it two things have nothing to do, but had lived in New York, Professor of Beijing University Han Yuhai article “secret Manhattan”, the 9.11 and the back of the Enron case are strong “capital” at work, now going through all, long ago buried a foreshadowing.
Just a huge insurance policy in force, the World Trade Center on the exploded
Empire State Building was built in the years 1930-1931 during the Great Depression, as a means of stimulating the employment of Keynesian policies to deal with one crisis, the Empire State Building and Rockefeller Center at the same time started at the time provided hundreds of thousands of people jobs, but also created a ” ten ten-storied building, “the myth of the history of skyscraper construction, but after completion of the Empire State Building has been vacant for many years but until 1933, Hollywood’s King Kong was a climb out and fell, the Empire State Building managers have finally found a media age in a new way of making money. Because Wall Street is located at the entrance to the World Trade Center is now up in smoke, the Empire State Building is still the tallest building in New York today, has received 150 million visitors to climb up and down.
Of course, the myth of a more magical than the construction of the things that I am afraid that we do not believe it: as if God received in advance, the White House, Osama bin Laden or one of the secret telephone tipped off the general, the owner of the World Trade Center buildings, the super-wealthy Larry A Silverstein not early not late, just before the month in the 9.11 – to the World Trade Center on the huge 3.5 billion U.S. dollars of insurance, that is, 3.5 billion U.S. dollars just the entry into force of the huge insurance policy, which the World Trade Center expericenced a disaster suddenly as on self-exploded.
At the same time, 9.11 the day before, American Airlines to sell shares to be large, transaction volume increased by 10 the first day of double today’s perspective, even a fool should also think about afterwards, took place the day before 9.11 Airline stocks sell-off of the Prophet of God, if not, then it must be someone else.
Of course, after the vast majority of American people do not want to here, but easily the generosity of President Bush’s remarks to the war in Iraq cheating large pit in the. This, of course, is not to say that developers own the World Trade Center bombing, but if they say not even in Manhattan’s wealthy do not have the boldness of vision, then it is to look down upon the United States.
The fall of 2002, I have experienced in Shanghai of a Chinese super-rich, he now wanted to come to the message is still worth pondering. He said: From the perspective of the real estate business, Mao Zedong to complete the “demolition”, Deng Xiaoping, the completion of the “land”, and the rest is “building and decoration,” it – to engage in real estate all know, than the building demolition difficult, if not caused by Mao Zedong do revolutions nationalization of urban land, you are in the city had to move a single inch of bloodshed, let alone engage in what the Olympic Games, so engaging in real estate today, the first people who should be grateful Mao Zedong is. This shows once again that: scholar – including Professor of Economics at the Institute’s vision certainly true capitalists, however high.
“Das Kapital” “original”, in fact, is a “Fragments of Fragments”
New York University, Head of the Department of East Asian Department of the old study of Robert Moses, New York is probably the originator of one of modern art. Professor Moses or “Mao Zedong’s Political Economy of the Soviet Union reading textbooks,” the translator, is “Romance of the Three Kingdoms” and “Outlaws of the Marsh,” the translator. In accordance with his own statement, he was the be a “by the scientists.” He taught for the first time, that is, on the writings of Marx’s version of the problem – that we may or may not come to believe that today we can see that the “capital theory” should be called “theory of capital”, it only Marx’s “Das Kapital” in a small part of Marx’s “Das Kapital” writing the original plan is the first part called the “theory of capital”, the second part of “On the real estate”, the third part “of wage labor,” the fourth part of “On the State”, the fifth part “of international trade,” Part VI “On the world market and its crisis.” Now published three-volume “Das Kapital”, in fact, only Marx’s “Das Kapital” the first part of the “theory of capital” and “edit version.” Marxism alive when looking at the publication of their own, but in fact only the first part of the first volume, the latter two volumes are by Engels and Kautsky the two “close ally” in the struggle for Marxism Marxism behind personal representative, by collation, editing Marx’s manuscript and published. – In other words, we are witnessing today is the so-called “Das Kapital” “original”, in fact, only a “residual residual Total Part”, at best, merely part of the book Introduction to the theory only.
Moses of old, the real “secret Marxist,” who is said to have been sealed in a small town museum in Germany a large number of manuscripts Marx never published – on the world, on the ultimate fate of capitalism, Marx actually wrote what ? What is the power to force a powerful version of these residues such fear, and thus had to seal its long-term confinement? It appears in Moses, the powerful forces of both the enemies of Marxism, including Marx’s successors, especially in the collation of his ideas, the editor and administrator. “There is a way by editing Marx buried or buried Marxism” – the old Moses said. Thus, the current task to defend the heritage of Marxism is to break the “Marx’s writings and legacy have been the existence of an objective and comprehensive, where the” illusion of a return to simple residual chapter off Marx, Marx returned to the “unfinished work.”
Old Moses recently wrote a book re-read Mao. He packed in the “Re-reading the works of Mao Zedong” class forum, the old Moses from “development” and “equality” that the two main themes of the modern world – or start with these two words about the origin and history: freedom, equality and fraternity is the ideal of the Enlightenment, and the “development” in 1945 but only after the emergence of new goals. Nevertheless, since 1945, it was widely believed that equality and development go hand in hand, the People’s Republic of China three decades ago as an example, that is, I believe “the more equal more development”, and then three decades is the Chinese people believe that the more “development “more” equality “, but this is not true. – Today is “both positive and negative experience” requires us to re-read the writings of Chairman Mao Zedong, in particular those who asked us to return to Mao Zedong’s “unfinished work”, including the identification and re-read by Chairman Mao and crude unpublished talk, presentation and “Fragments.” Most in need of today’s China is the “horse statue reading”, “Mao statue reading” and not “reading statue hole” – not “reading” how horse statue? Marx’s original works from, where we find Marx and “Marxism”? The so-called “reading”, that is, Textual Research on the text to explain the text, one word sentence, then be honest and read down in such a way with Marx and Mao go together about as “exposing the secrets of the world” and “decipher the residual tutors Chapter “is actually a process of synchronization.
No exaggeration to say that for me this had just arrived at that person, to enter New York University, Broadway at the East Asian Department of the academic buildings, especially in East Asia Department of the old Head of the Department of Moses, the current Head of the Department of Zhang, historian Rebecca packed Kakkar the classroom, feeling as if the first is returned to the Yan’an era, “Kang Da” and “Marxist-Leninist Academy” General.
Moses most displeased the old man thing is a New York University’s China Center of Chinese culture in a high-ranking officials before the speech, after unexpectedly high civilian say eulogize Lotus Lincoln, Washington, the end of Mao Zedong did not forget about condemning say without duty for the First Qin Emperor old Moses no longer on the spot ridiculed Road: old lady you can be forgiven for Lincoln, Washington, know nothing about, but unforgivable is that you actually forget that Mao Zedong is your own Washington and Lincoln! Agitatedly out the old account of Moses not forget: After his speech requested the use of public funds must not be allowed to eat after high-ranking officials.
After listening to these teachings, who dare challenge old theory of Marx and Mao Zedong? Not to mention talk about Lincoln, the Washington.
China and India are fundamentally out of the Opium War also did not
And the following to say, like Moses, Professor David be interesting old man (David M Pidcock). Known for many years, my feelings are: Moses and the old mixed before such a person less aware of learning, listening to David Paper “claimed” to know the water depth of capitalism.
David Paper is an exceptional banker, called to “Topsy capitalism” superb investors, professionals dug a London stock market on Wall Street and the corner of the old mole. Paper old paper founded by David “rational economic research institute” were in London and with offices in New Delhi, India, and the work of the center is the core of the operation revealed the secret of capitalism, especially the specialized financial markets analysis and revealed The Inside Story.
Paper from the banking family of David, his ancestors is important to the British East India Company shareholders, to participate in the activities of colonial India and the Opium War against China. On before and after that period of history in 1840, David headed paper will be able to understand many of our family tree do not know the truth.
David in the skin, the Sino-British Opium War is certainly not a war between the two countries, but China and the Bank of England and the East India Company in London’s financial market-led war.
In 1830, the East India Company and the Bank of England through the company’s stock and futures exchanges, re-organized a contact British – India – China – United States and the Americas – in Africa the new world economic structure and the world trading system, the system of cotton — Tea – Silver – Cotton – the slave trade, by the East India Company and the Bank of England stock and futures exchanges dominated, that is to say: In this system, which, in addition to the United Kingdom is the “control account”, the rest of you the whole is “the run.” The surface of China is a force to defeat by the British, and in fact the whole of Asia economic and trade system was the Bank of England-led new world economic system and the complete subjugation of the marginalized. The lack of military technology so that China and India have been incorporated into the British-led force in the world geopolitical system, but more important is: the lack of soft power in China and India can not make a strong currency credit system, which in cross-border regional trade can not form independent regional currencies, in turn will have to rely on the Bank of England and the East India Company of the bills of exchange and stock, this is the real reason for the decline in Asia is located.
David Paper concluded that: the West is not the most powerful artillery, but the bank – stock, bills of exchange, futures, securities and other credit instruments of this series, but in fact this thing called “capital.”
David in the skin it, no matter what today’s China and India on the completion of a military revolution, regardless of whether these two countries is the rise of trading power for the world economy, and as long as their trading activities in Asia and the world also have to rely on U.S. and the euro, as long as China and India is still the so-called “BRIC” key members of China or the U.S. than any other country, then their fate is bound to rely on Wall Street in New York and London Stock Exchange, they are still being exploited objects and pass Western countries the basic objectives of the economic crisis, that is, in this sense, today’s China and India is also fundamentally a matter of fact has not really out of the Opium War (caused by the structure of the world system) – unless they one day be able to between Asian countries is different from the dollar and the euro a regional common currency – which is easier said than done.
Enron stood behind the Pentagon and the U.S. Treasury Department
David Paper, after 9.11 points in the first shot is for the Enron Corporation. Later, as he said, the Enron bankruptcy case is the current U.S. financial tsunami of the real harbinger.
Enron Corporation is the U.S. energy giant, its own assets of 90 billion U.S. dollars, operating income each year over one hundred billion U.S. dollars, which was founded in 1985, President Bush’s Texas home of the smaller companies, using the U.S. government since the late 1980s, opening up the energy ( the upcoming privatization of energy), deregulation (that is, shares of) the policy of the United States quickly monopolized the energy (including electricity, oil and gas) supply, energy supply and the introduction of the stock and futures markets. In a decade, the rapid outbreak of the Enron Corporation, whose operations in the United States and around the world, the company stock increased from a few dollars to 89 U.S. dollars per share, which shares an astounding value, not only in the bubble era of the knowledge-based economy overriding all the leading IT enterprises, and 9.11 after the United States in a state of economic depression, the Enron is thriving. 9.11 to attract a large number of investors in energy stocks after the pursuit.
The rapid rise of Enron What is the secret? David Paper concluded that: in fact close to the operation of the Enron mess, it is the rise of an outbreak of type is not the real secret of the nature of products and business philosophy of innovation, but it is the relationship between the network behind the all-conquering: Enron’s energy privatization In fact, the giant company is a tool for political and economic domination, in the so-called “free market” behind the Enron is the night watchman CIA, the Pentagon and the U.S. Treasury Department.
David Paper collected in accordance with the available information, Enron’s CEO “mine the total” I am the Department of the Pentagon officials, serving in Vietnam during the war here. Enron and other important members of the Board of Directors, “Wei total,” the father, that is, former CIA head of the “old president Wei”, in other words, “On the surface, the total”, in fact, President George W. Bush as a CIA compound playing a major “cadres of their children.” At the same time, “On the surface, the total” is also holding many important posts – He is also the U.S. insurance giant AIG Board of Directors, and for all to see AIG’s military background, which in World War II and the Cold War played role, including the Chinese Nationalist Party and the financial links between the big four family are well documented. In addition, as a former U.S. Treasury Secretary Robert Rubin, Citigroup’s “independent director”, it is Enron, “the total mine” intimate friend of many years, and because this layer the relationship between Enron and Citigroup, AIG became one with all, a crash are destroyed cousins, and Enron’s “cousin” is not all of these enterprises, more well-known is Vice President Dick Cheney’s company Halliburton Dayton – is well known that even the U.S. soldiers fighting in Iraq are in the company dining make arrangements for the.
“the big four family” standing behind the increase in the Pentagon CIA, with our great “Dream of Red Mansions” in the small package about the words of men Zi: Whether you’re Obama or oba cattle, but in fact is a new faked person If you want to have nothing with understand what the whole great democracy – even if you are impatient to live. They monopolized the energy, but also holds the leadership in the military and secret police agencies, will engage in a matter of course who want to, since you can “democratic” table, you can also “democracy” continues.
David Paper is based on a survey, in 1998, Enron Corporation, through the relationship between President Bush to persuade President Bush to force the Argentine government will build a natural gas pipeline contract awarded to Enron, and in return, the Bush family have become a close friend president of the item. In 1993, members of the Bush administration, the former Enron finance department in charge of the Government of Kuwait will be forced Thomas Kaily reconstruction Shuaiba (Shuaiba) power plant project orders to Enron, even though Enron’s offer is much higher than that of other companies, the Government of Kuwait can only be slaughtered according to a single admission. In 1991, Enron had great hodginsii India (Dabhol) power plant project, tens of thousands of local residents and the streets to protest against the destruction of their homes, and Enron is the employment of the Indian military and police to respond to greater suppression mass demonstrations, “the world Human Rights Watch “of this backed by the U.S. government’s crackdown on protests loudly, but the Bush administration turned a deaf ear to this. In 1992, Enron in the general election to provide both political contributions – and the result of an enormous amount of money to prove that it is not white, the Clinton administration took office, immediately positive to persuade Suharto family in Indonesia will be the largest energy projects in Indonesia to the ride. That same year, also说合President Clinton personally, the Enron won by Russia to the European natural gas pipeline construction project, therefore, the United States with the Enron Corporation have the connection between Russia and Europe’s energy channels, which signed a contract decade – Vladimir Putin turned to the natural gas pipeline today would like to change on a line simply can not do. – And in 1998, the World Economic Forum in Davos, the Enron “total mine” back, Top Gun prospects look the company said: “We have taken place in the Soviet Union, Eastern Europe, Central Asia, the pace of market liberalization quickly the optimism of its into the market liberalization in trade in energy and power for our company and the world to provide more attractive opportunities for development, I firmly believe that: The Chinese will catch up then the pace of market liberalization, if it does not want to remain outside the world of words . ”
This tone of entrepreneurs is larger than Bush, but also more fully exposed the collusion between the Government and the nature of elite interest groups, this is in fact the weather in just ten years the rapid rise of the outbreak a secret.
Enron bankruptcy case, the United States is the real harbinger of financial tsunami
However, it is the Enron investigation and follow-up of long-term skin makes David realize that: the prospects are not good in Enron, Enron’s growth and expansion to the world relied behind the myth is to maintain social relations, and the maintenance of social relations that are Enron spent a huge overhead, resulting in a large number of stealth financial expenditure, which made Enron’s financial system, if not a mess, I am afraid that is a lot of accounting and accounts, a rare sight, and Enron is not only long-term to the Democratic and Republican two party to pay political contributions, but also to the neo-liberal policy-makers to provide a strong public opinion support, it needs to support the Institute to provide the so-called “non-governmental organizations” fund to support including the “Davos Forum” that the capitalists speakers, Enron’s “non-governmental organizations,” including the United States Entrepreneurs Association, Association of American policy innovation, the United States, “structured finance entities”, which is both a think tank of Enron and the U.S. government to open up the world market of soft power vehicles, and with its affiliates around the world, and its spending and increasingly large expenditures – with the words of David Paper, with the secret of Enron, more and more in order to protect the secret of its costs incurred will be getting higher and higher. He asserted: Enron’s financial reports must be false, no matter how obscure it is, there will always be走光Pandanus day.
But not the only problem, when the target pegged David Paper Enron CFO Andrew Fastow, the alarming side emerged. The surface, the Enron Chief Financial Officer Fausto Andrew (Andrew Fastow) – we are referred to as “total-fu” – is a very low-key acting figures. The 40-year-old lawyer, the father of two sons, will serve as the spare time for his son’s sports coach, or simply soak up Gallery of Modern Art in New York to support a variety of academic institutions. His wide social circle, but the only people in the business community is most familiar with him, even though a lot of feeding the media, the main characteristics of the wealthy is never on TV – even after the Enron incident, as the main responsible , Fuk general counsel is still invoked to avoid the bill, so he was able to remove the exposed face of the television camera. However, the survey found that David Paper, if we say that “the total mine”, who represents the public face of Enron, then the “total-fu” This constitutes a mysterious figure who may not safely see the other side. The mysterious “Fuk total” is actually responsible for corporate finance long-term become a principal member of the Board of Directors of the personal treasury, and the performance of the company in charge of falsification of statements, and through such means, Enron was not at the top of the company’s profit, and is the stock and bank loans – the so-called non-profits can not afford an early member of the Board of Directors of Enron day of course, capitalism will not忙活white.
After 9.11, when in the pursuit of global energy stocks, the paper put decisive David Enron stock at the same time, he will be safely collected by their own secret language known as a “next world war” and “illegal publications “distributed around, see who and to whom one of the Frontier – the very beginning we thought that he is nothing more than to make money doing nothing special to play,” Practical Jokes “, the surprise is that Enron was the fate of his unfortunate true.
Subsequently proved that the details of the Enron accounting case is extremely complex, but the general idea is simple: First of all, the “total-fu” is actually under the management of more than 30 small companies, LJM is only one of its losses on the one hand, Enron is zoned account of these small companies, but on the other hand, the profitability of smaller companies and then transferred to the Enron name, and only this way, Enron’s financial statements can be long-term red Durian. And so long as Enron’s financial statements on the flag Durian, then Enron could be big on the use of such financial statements of the “Red Flag Music” in exchange for ultra-high credit rating, with a high credit rating, Enron will be able to get the stock market on the circle to a large sum of money, while low-interest loans from the banks, which then in turn continue to write off bad debts of smaller companies.
In fact, from today’s point of view can clearly see, by playing the game safely in fact, in September 2008 triggered the global financial tsunami since the Wall Street’s big companies are doing exactly the same, but at that time, Enron was only to be regarded as to deal with a case, did not attach great importance to the world, which cover their behind-the-scenes power and “settle” a great relationship. This cycle ride and play the game the key is whether or not the disclosure was to, if no one has discovered the secret, the game may continue to be eternal, and if there is talking about, and persistent, and finally we started talking about a skeptical, even if the final result only led to SFC symbolic “informal inquiries”, are facing the end of the game immediately. Because the key here is: even if only a token U.S. Securities and Exchange Commission to intervene, it will also lead to Enron in the Standard & Poor’s, Moody’s rating agency, where such credit rating dropped, and once the decline in credit rating, then companies will face an immediate three fatal consequences: First, companies can no longer low-interest loans from the bank; Second, after the expiration of the loan will be in advance; three, against the confidence of investors, the company stock fell.
The chain is broken in the capital, debt and assets in advance due to combat shrinking triple, in less than a month, the energy giant Enron generally exposed on the huge avalanche of bad debts and losses, and make any attempt to save it had to hold back the forces, and ultimately had to allow its bankruptcy. At the same time, Enron was missing a large profit, and include “the total fu” get out, including senior management, and there has been no accountability, only shareholders of a large number of tragic shouting only miserible life of themselves.
“Credit is the life of capitalism, and the U.S. capitalists are not exactly the most trust”
September 13, 2008 is my second day in New York, David Paper dinner that evening, after酒足饭饱with a walk to the Hudson River. As a result of China’s Mid-Autumn Festival the next day, back in Manhattan, facing New Jersey, it seems to me that look, they say that this is indeed the United States is not the moon also won. David Paper sneer at the side of Road: This Chinaman had just arrived at that, but also show the situation was there to see the moon, I guess ah – this time you will be able to get their wages miles are a problem.
I said do not you? David smiled Paper: wait and see it – two days, the Wall Street big happens there. At that time, I thought he drank higher, say Wall Street customs个屁I do, in addition to shopping, I would not go around (in Manhattan’s Chinatown, Canal Street from Wall Street across the street only).
Sure enough two days after the September 15 Wall Street financial tsunami broke out, the same day Merrill Lynch and Lehman Brothers went down. Since then the history of mankind to turn a new leaf.
One month after the bye, is the famous 42nd Street in the Chinese restaurant “唐亭.” Paper, David asked me on the financial crisis in China, I naturally did not elaborate, but according to everyone that it is but a “confidence crisis” and so on.
David was a look of fake skin laugh, laugh I asked him what the paper out of a first finger of David: “Firstly, the credit crisis. Credit is the life of capitalism, and the U.S. capitalists just do not trust the most.” And then He also extended the second finger: “Second, the class struggle. a small number of people swept away most of the people’s money, but they are never to see the way do not understand.”
Fortunately, New York University, thanks to the shrewd management of the authorities, I finally received their wages, and my colleagues in the United States but, unfortunately, lost the protection of their future – pensions. It is said that there would be no New York University, Harvard University, so lucky, because their school will be funded the Council to put in the stock market on Wall Street, which once again shows that college is not the intellectuals of the rival capitalists.
○韩毓海text excerpts from “End of the World” in 2009 the first three
China and the United States, whose economy would collapse?
Aug/090
by Huang Weidong
2009-08-11
In today’s world, a dominance of the United States, we are inevitably dealing with Americans. “Rivals and emerge victorious in every battle” to understand themselves and their opponents strength, is very important. “The world is flat in nature, if not since the collapse, the elimination of no one who can not.” (Appendix 1) Mr. Zhang Wenmu the point of view is justified. Sixty years ago, we just set up the Republic, but also nothing we can in North Korea resisted US-led United Nations forces, the sixties of last century, our economy is still weak, insignificant compared with the West, we will So the two tyrants, the ability to resist the United States. Today, we are every day in the mainstream media propaganda and the development of the so-called achievements of reproduction age, our steel industry is already far beyond the United States, our economic strength is far more than the founding of the early best. With nuclear weapons, the West will never be fully grasped in the absence of eradication of China’s nuclear arsenal before the choice of a military confrontation. As long as China remain vigilant, worried that the U.S. invasion force is no longer exists. However, the U.S. is no longer any time to carry out economic and cultural moment of aggression, in a vain attempt to split China. How to deal with the United States campaign, we need to fully understand the strength of their own and the United States. U.S. military strength is not terrible, the Mao Zedong era has already proved this point. Mr. Zhang Wenmu for this period of history on a very good (Appendix 2), this paper analyzes the economic front.
One of the reasons the United States is a strong U.S. economy is strong. 30 years ago, we go out of the country’s elite, deeply impressed the economic success of the United States. So we have chosen to reform and opening up, learning experiences in economic development of Western countries. 30 years ago, after the media publicity, it seems that the effectiveness of our forward-zhuo. However, the fact is that, compared with the previous 30 years to an important rate of physical development, our economic development rate decreased significantly, food, energy, iron and steel dropped by nearly half, etc. (Appendix 5). Of course, in the ever-expanding, declining purchasing power of the RMB to calculate its growth rate is beyond history. Moreover, we produced a large amount of wealth for export, by 2008, exports have accounted for the wealth of the wealth produced by 40 percent, they turned into a U.S. dollar can not be used. Elite to invest in the United States, by the Americans in a financial crisis, investment businesses going into bankruptcy or nationalization, on the part of do not admit, in part, through the continuous depreciation of U.S. dollars, so that the U.S. dollar in our hands the wealth represented by the gradual disappearance of . Over the past decade, ordinary people to pressure on the three big mountains, no improvement in basic living standards. During this period, the greatest achievement is probably soon elite gather the wealth of the wealthy, 0.4% of the elite 70 percent share of wealth, the elite-controlled media, for singing the praises of this great reform. The previous 30 years, we have the wealth produced, the more equitable distribution to all people, our people will be the average life expectancy from 35 years of age increased to 68 years. Growth from the average life expectancy of view, these 30 years, we have almost fixed in situ, which is far behind countries such as Cuba. U.S. financial crisis, we face the economic development of unprecedented difficulties, it is very much doubt that our reform and opening up, the harvest of wealth, or fleas?
Reflect the economic strength of the United States, where? Today, on behalf of the U.S. economic strength of the manufacturing sector accounted for only U.S. GDP13%, half of them or arms manufacturers (Appendix 11). Judging from the kind of wealth production, the United States has significantly lagged behind China. The American people daily consumer goods mainly from China, had the Americans not to try Chinese goods a year, they found very difficult (Appendix 8). Large value of the U.S. (GDP), mostly virtual. China’s exports to the United States one dollar of goods, to the hands of the American people, it becomes dozens of U.S. dollars, the difference will become the United States GDP. Therefore, after the U.S. financial crisis, many people believe that the U.S. will not be long before the collapse of the economy.
However, the United States firmly control the production of key commodities. In food production, the United States less than three hundred million people, the production of food each year than the 1.3 billion Chinese only less 16% (in 2007 490 million tons to 4.1 tons), is the world’s largest grain exporter. The United States each year to subsidize the United States 10,000 U.S. dollars per capita of farmers, through subsidies destroy the Third World countries, many farmers bankrupt Third World countries, have to rely on the U.S. food supply. Last year, the United States a little speculation, the world food supply, forced many Third World countries have to bow my head to follow the command of the United States (Appendix 10). U.S. to launch food war, U.S. hegemony has become one of the key elements (Appendix 7). China’s edible oil market by the U.S. occupation, used in the production of the main raw material for edible oil, soybeans, mainly from the United States, domestic consumption accounted for more than 70%. Because after the soybean oil cake is the main source of feed, China’s meat production is also controlled by the United States. Under the control of the U.S. capital in recent years, the two products in the domestic prices continue to beat, waiting for the United States defeated the capitalists of our remaining domestic enterprises, so that we can grab excess profits.
In the energy supply side, the United States by force tightly control the world’s major oil-producing countries, through capital controls a lot of oil production, grab most of the oil production profits. In the collapse of the Soviet Union before the Soviet Union as a result of oil exports is the key to the economic development of the Soviet Union, in order to combat the Soviet Union, the United States down oil prices dealt a heavy blow to the Soviet economy; after the collapse of the Soviet Union, the United States continue to raise oil prices, access to excess profits, at the same time by large expenditures in the oil field in China. A large number of oil resources in the United States, but a major importer of oil, oil-producing countries through the use of force to force the U.S. dollar clearing, which can be free of oil.
The United States also produced dollars, investing around the world, control of national economies. At the same time, financial markets, so that the hands of the U.S. States run in a virtual space, without the use of. Inflation as a result of the U.S. policy, the number of countries in the hands of U.S. dollar although the increase in wealth represented has been declining.
Last year, the United States triggered the so-called financial crisis,did not admit a large number of countries in the hands of U.S. debt. First from the hands of large U.S. dollar by the purchase of material wealth countries, financial crisis erupted, the United States for some enterprises have closed down and the hands of the creditor countries have become waste paper, so the United States succeeded in looting the wealth of all countries. As the United States has the world’s most powerful force, States can not be helped. Therefore, the so-called financial crisis, the crisis in the United States, but the loss of wealth of the world crisis is the outcome of China’s opening up the disappearance of the so-called crisis. That save dollars, save China’s fallacy is not ignorance, that is, with ulterior motives. As early as last year I have been on the analysis (Appendix 12).
U.S. financial crisis, the U.S. unemployment rate increased, the people to reduce spending, purchasing power declined, and the world, particularly China’s supply capacity is still very obvious oversupply, declining demand for a variety of materials, excess capacity, bulk materials, such as oil, ores, such as speculation difficult to maintain high prices, and the actual short-term deflation, all kinds of commodity prices down. The closure of a large number of domestic export enterprises, a large number of workers lost their jobs, purchasing power has dropped all the way, how will lead to a substantial devaluation of the dollar collapse?
The only possibility of the collapse of U.S. dollars in China to stop exports, while China’s use of short-term dollar markets in the United States a large number of procurement, the people free of charge to domestic use, while the United States to refrain from interference. This is impossible, the elite will never do so, this would lead to U.S. military intervention. Britons have been comments in the article, China’s massive sell-off if the United States Treasury, the United States may declare that China is a hostile act, the right to take hostile measures, including confiscation of Chinese holdings of U.S. Treasury bonds (Appendix 6). Therefore, this led to the collapse of the dollar is unlikely to happen.
Even if the future, a large number of the closure of the factory production line corrosion can not be used, at the same time countries such as China or the United States to substantially increase the income of a large number of people to make the world a significant increase in the purchasing power of the short term, which may lead to a short period of tight supply, but, as a result of this productivity highly developed, but also the ability to quickly increase the supply, the occurrence of hyper-inflation, especially the United States firmly leading food and energy supply, the possibility of the collapse of the dollar is almost non-existent.
Only food supply problems, and the hands of ordinary people around the world have enough dollars or enough purchasing power, will lead to the collapse of grain prices, leading to the collapse of U.S. dollars. Although the U.S. is now a lot of the world, but concentrated in the hands of a small number of people, concentrated in the United States a virtual financial market, the world’s population more than 80% of the ordinary people of modest income, the lower the purchasing power. Is unlikely to result in crisis and the collapse of U.S. dollars.
A lot of people think that bilk the United States financial crisis, people get a clear understanding of the world after the United States in real terms, the U.S. dollar will result in credit problems, will lead to dollar crisis. However, the United States control of the elite and the media in many countries, these elites will be the fate of their own closely linked with the United States, they follow the United States, it is also supported by the United States, also seized a large number of personal wealth, even if they will realize that whether or not willing to go back, but also a question mark. Moreover, they prefer to believe that the United States, they were reluctant to rely on the people. China’s elite are also efforts to increase export subsidies to increase the dollars, 2 quarters of this year and an increase of 178 billion U.S. dollars (Appendix 9).
However, the continuous depreciation of the U.S. dollar will, it is the United States has done, 100 years ago, 10 billion U.S. dollars, if we are to preserve to the present, the purchasing power of even 100 years ago, the purchasing power of less than 1 percent. 10 billion U.S. dollars will be saved for 100 years, of which 9.9 billion U.S. dollars of the wealth represented by the United States took in our hands the one hundred million U.S. dollars only. 40 years ago, is the ounce price of gold (equivalent to 31 grams) 30-35 dollars, it is 1000 U.S. dollars. 40 years ago, we use 10 billion U.S. dollars for about 300 million ounces of gold, but for now only 010 million ounces of gold. Therefore, if we are holding U.S. dollars, will be plundered by the United States. The United States the use of U.S. plundering the wealth around the world. We have an independent economic development. U.S. dollars to change the current use of plundering the world, but also the needs of the Chinese people stand up, the establishment of China-led world economy.
For our economic strength, although this 30 years, compared to the first 30 years, with a growth rate lower, but after 30 years of growth, or more than 30 years ago with a greater economy of scale. Our production capacity has been ranked the highest in the world, and some key commodities, such as iron and steel production, lead in the international arena. Steel is a key resource for the war, but also the key to large-scale production of industrial goods and materials. Is the first 30 years of restricted economic development, one of the key products. Of a country it is important that material wealth is food, energy and steel. Food is the basis of our survival, our energy and iron and steel in a large food production but also to services. It is reported that 40% of U.S. energy expenditures for the agricultural services. Modern industrial production, the use of machinery to replace human production, production and high efficiency. Most machines are manufactured using steel, not steel, there will be no modernization. Drive the machine work in the energy, we use energy, such as oil, coal and electric power production to drive the machine work, no energy, machinery has become a pile of scrap metal. However, the past 30 years, our rate of decline in food self-sufficiency of our energy imports has become the world’s second, and the United States is different from most of our oil comes from the United States under the control of oil fields, its large number of means of transport is also controlled by the United States, energy and very prominent economic security.
The domestic economy itself by the US-led Western countries to control. Most of our industry by foreign control, we have the gradual disintegration of the technical system, and now we are producing goods for Western factories. Technology from the West, the key equipment from the West, the key components of many products also comes from the West. There are a lot of corporate assets belongs to the western capitalists. 40% of product markets is also Western countries, the majority of the fruits of their labor by Western capitalists away from hard labor in exchange for that dollar, but also can not be used because people have low incomes, there are no purchasing power, even if the imported goods, but also no one to buy and into the backlog of waste. For U.S. exports, the people in addition to providing free labor, nothing. Our so-called economic development, is to keep the meager resources of the domestic export processing, while the pollution of their environment, have no longer be able to continue.
Wealth is created by workers. The quality of workers is one of the key factors. Compared with the beginning of the founding of the PRC, the quality of our people has been greatly improved. Nation-building, our people are sick man of East Asia, deprivation, the average life expectancy is only 35 years old, 80 percent are illiterate, to master modern science and technology, very little knowledge. On this basis, the development of modern industry, it is very difficult. We were unable to develop the leadership of a group of illiterate mechanization and automation of modern industrial production. With modern knowledge workers is one of the keys to economic development. Moreover, at that time, we are also affected by the threat of foreign aggression and strength, our limited technical staff, but also for the defense industry. Therefore, at that time, we have universal education, while the use of limited technical talent, focus on the development of heavy industries, large industrial machinery for the production of preparatory work, including steel, energy and machine tools – machine tools (machine tool is used in the production of mechanized production equipment tool) production. In the civil context, we mainly address the industrialization of agriculture-related issues, to resolve the chemical fertilizer industry, agricultural machinery, chemical fiber industry, focus on resolving the issue of people dressed for dinner. In these areas, we have made rapid development. However, in the production of civilian consumer goods, has just started, for example, has just begun the production of television sets. The first 30 years of media propaganda and the expense of farmers, but is also out-and-out lie. As a result of 30 years ago, we have universal access to basic education and basic elimination of illiteracy, today, higher education is also significant growth in our higher education has greatly increase the number of personnel. We have no reason to worry about our ability to independently develop the technology.
Elites to engage in reform and opening up access to the grounds that the Western advanced technology, the so-called market for technology. The actual effects of our enterprises have closed down and the gradual disappearance of the original technology. Western countries is not possible to capture excess profits will be able to sell our technology, we must develop its own technology. We are not without technical capabilities, we are able to carry out manned space flight, but can not run an independent production of the cars on the ground. We rocket into space, launching the same number of cases, low prices, high reliability and shows that we can produce high-tech products. 30 years, we have forgotten the independence and self-reliance. This is the main reason. And fundamentally different from the first 30 years, our technical staff has been an unprecedented growth in the number. 30 years ago, to establish a modern industry, all walks of life are the lack of technical personnel, college students are precious. Now, many of our students graduate unemployment. Technology developers do.
Today, the main reason for embarrassment caused to abandon the principle of independence, at the same time believe that the Western theory of the so-called free market so that our forces dispersed, so that all break the Western capitalists. In the international market, we export products, its internal fight against each other, low prices. While imports of raw materials, by Western capitalists together, resulting in what we import goods, the significant increases in commodity prices on export commodities, commodities on the decline.
Many people worry that the development of our economy to the United States and the Western level of consumption, the world’s resources are not used in China. Such worries exist, but we can solve. Specifically, that is, non-renewable energy resources is the cycle, they will not have the face of the earth will not disappear for no reason at all. Our consumption of resources will not always be on the increase. Japan, the United States in the land the building is completed, the production of steel and other raw materials resources are significant decline in demand, the production of raw materials, mostly from the domestic recovery, such as the United States iron and steel output dropped to 100 million tons, far less than China’s annual output of 500 million tons, and the use of more than 75% recovery of waste iron and steel production. We need to address the issue of alternative fuels, we can the development of solar energy to solve the power supply (Appendix 4). Solar energy from the sun, taken from inexhaustible. The production of solar energy equipment will be consumed, but the use of solar energy equipment, access to energy, only 1-2 years added on to the production process of solar energy equipment energy consumption. We estimate that only 50 thousand square kilometers desert, we can solve our energy supply. Desert area of our country more than 1 million square kilometers, to meet China’s growing energy needs. In addition, we should learn from Japan, the development of rail transportation to reduce motor fuel demand, thereby reducing dependence on oil.
In general, the economic collapse of the United States will not, but it’s high welfare, high-enjoyment is dependent on the free supply of China is the parasitic body in China (Appendix 11). China to continue the current economic line, to keep our material resources into commodities, given away free of charge the United States, continue to pollute their environment, it is not sustainable to continue, from the economic collapse we will not be far behind. The United States triggered the financial crisis, it is also aimed at China’s economic crisis triggered to speed up China’s economic collapse. China, as a long history, there is the world’s rich countries of human resources, natural means to prevent the United States as the hegemonic power of one of the key is the enemy of the United States, one of the main strategies. Illusion depends on the United States to develop the economy, is absolutely stupid. However, the development of our sixties, especially the first 30 years of efforts, we have a good foundation, as long as the change in the development of the wrong line, China’s economic development over the United States, and will not be too far away, is likely to the hands of our generation will achieve. We need to change the following:
1, restricted foreign investment, foreign investment away until gradually. The existence of foreign investment, the main role is to take away the wealth created by workers at the same time control of the Chinese economy. China’s economic development, not a lack of foreign investment is needed for the lack of material resources and technology. Foreign investment will not provide technology to allow access to the disappearance of the monopoly profits. Foreign investment will not provide the resources. Technology needs to develop independence and autonomy of our resources we need to directly deal with the third world countries directly. Today, we have two trillion U.S. dollars, but also concessions to attract foreign investment, which is a wealth given away free of charge folly. There is no government support, foreign investment in China can easily be expelled. 30 years, Western countries continue to surround China, we get a clear understanding of the people has long been the scourge of the United States and other Western countries the nature of China.
2, adhered to an independent development path of self-reliance. The history of mankind, there is no state-to-state relations selfless. China, the world’s most populous country, the country’s oldest, has become the dominate force in the world of the natural basis, which inevitably become the greatest enemy of the United States hegemony. The United States from the beginning of hostilities, to recognize the effect of force is not confrontation, in the Mao era, a joint initiative with China against the Soviet Union was pressing offensive. At a time when the collapse of the Soviet Union is about to begin a new round of lay siege to China, only after repeated setbacks before they change their tactics, for the psychological, cultural and economic aggression, mainly, at the same time the military has been testing. Rely on the United States to develop China’s economy is the history of our country and the world’s biggest joke. We need to self-development, the need to address the issue of technical self-reliance.
3, provide significant benefits and income of ordinary workers to resolve the overproduction problem. A large number of our wealth into the hands of a small number of people, their spending power is limited, and ordinary people have a consumer demand, but have no income, so that new production capacity there is no market. Modern society, capacity building is highly efficient, we only need very few people will be able to produce enough supply of their main commodity. Bottlenecks in the development of our economy is the spending power, as long as we ensure that food production, modern society is unlikely to result in economic collapse. We should learn from Japan and Scandinavia, the income gap control to prevent the gap between rich and poor is too large. Tax policies should be adopted to reduce the affluent class of property, including property tax and inheritance tax, such as cumulative. This is the key to modern socio-economic development.
4, we take the initiative to establish an independent economy, from the West, especially the United States of plunder. This requires our military to go abroad for us to protect the international economic activity, we should first of all to defend the South-East Asia and the Middle East routes, to increase our oil security. Secondly, should be established based on the RMB in the international monetary system and trade system, and resources to achieve our national direct trade, to bypass the U.S. hegemony. Can not export to the United States and we need resources, Third World countries to export oil is mainly used for production of our commodities, we have the two sides complement each other Third World countries through the U.S. to carry out transactions, only the Americans profit. To bypass the United States, is to avoid the only option for economic losses.