An old Culture of Life cartoon from February, 2007

Brad Setser is my favorite ‘not so smart’ economics professor:  he focuses with a maniacal mind on China’s ‘evil stuff’ while totally ignoring Japan doing the exact same thing, even earlier.  Setser and I have debated in the past, why Japan is more important than China in this regard.  He now ignores me.  But I won’t ignore him!
  FOREX reserves have changed over the years.  Their function is explored by various central banks.  Like any tool, the human mind likes to find out how to use it in multiple ways.  Back when Nixon launched the Floating Currency Regime, the Federal Reserve had to keep ‘reserves’: gold and other nation’s currencies.  


For much of the Floating Currency Regime’s rule of international trade and finance, the US has stubbornly held nearly exactly the same reserve levels.  It sits at around $60 billion.  No matter how much inflation our currency games cost us, this number never inflates. No matter how much global trade grows in volume, the US sticks to this ancient accounting.  


Starting with Nixon, the US dealt with monetary/trade imbalances by strong-arming successful trade partners.  With the two top industrial winners of the post-WWII imperium, Germany and Japan, the US could force them to change the value of their currencies vis a vis our own floating fiat dollars via treaties: Bretton Woods II, the Plaza Accords and the Louver agreements.  We became accustomed to fixing our trade deficits via treaty agreements concerning relative value of currencies. 


There were nastier ways for the US to do this: the IMF has been a major tool we use to enforce floating currency values that benefit us in one way or another.  Or rather, benefits the ruling class who needs cheap labor and easy lending regimes to pad their own nests.  The rest of us may tag along and pick up the crumbs via FX currency trading or stock markets, etc.  But the major wealth comes from working in tandem with central banks and governments to manipulate these things and of course, due to the fact that the manipulators are also SPECULATORS, make lots of easy money betting on the outcome of things they deliberately control or do!


Those of us who can either guess or understand these games can also play along.  But we are outsiders, not insiders.  In any case, all rivals on the world stage use FOREX reserves to control global trade and even more important, the creation of funny money via lending.  For funny money created via loans is the true force at work when it comes to inflation or deflation.  This is the ‘liquidity pool’ we hear about so much.  


Brad Setser: Follow the Money

Tracy Alloway of the Financial Times’ Alphaville blog — echoing Robert Sinche of the Bank of America — thinks that spending reserves to defend your own currency and support your own banks is a form of economic nationalism.

Funnily enough, I always thought that building up reserves through thick and thin — and accumulating more reserves than a country ever needed for its own financial stability — was a far more egregious example of economic nationalism. A country that only adds to its reserves is presumably pursuing a policy of intentionally holding its currency below its equilibrium value in order to support its export sector. A country like China isn’t just accumulating reserves because it enjoys financing the US, UK and many European governments at low rates ….

It is rather sad, watching ‘brilliant minds’ struggle to figure out obvious puzzles.  This one is, in particular, pathetic.  First of all, ALL TRADE RIVALS OF THE US ARE NATIONALISTS.  Even within the EU itself.  Honest to god.  🙂  I hope US economists finally get that tidbit of information through their noggins.  


Even our NAFTA partners are nationalists.  They might have to ditch all pretense of being democracies to do this.  But they are nationalists.  For example, when Mexico sucks up US jobs, they do this because they hope to deindustrialize the US and industrialize Mexico.  What a stunning fact!  


And what the hell is wrong with ‘nationalist’ economies?  Eh?  People who pursue deals that make their own nations stronger and the US weaker are patriotic.  In the case of Europe and Japan, there is one huge fly in the ointment: neither has barely any ability to militarily menace Russia, China or the Muslim world.  So they rely on the US to do this for them.  And if they beggar the US too much, they will be forced to defend themselves when we go bankrupt.


So they want us to barely stay afloat while they take over all our economic systems. The hope is, we will be so totally dominated by them, they can continue to force us to spend all our money on protecting them, not fixing America or protecting us.


Setser is perpetually angry that mean, old China insists on putting China first, not coddling us while we stupidly keep only $60 billion in our FOREX reserves.  And stupid, mean China keeps buying our debts instead of fixing itself.  This is odd, since China has been upgrading and fixing itself steadily as it gains wealth via trade.  Just like Japan and Germany.


Japan, not China, was the first to morph the FOREX reserves into a tool that could be used to isolate US dollars gained via one-way trade.  This way, the trade never triggers a weaker dollar and it could continue.  Japan’s export profits depend on a weak yen.  On top of that, UNLIKE CHINA, Japan dropped interest rates into the cellar.  At levels never seen in the history of banking.  


Today, increasingly, 0% financing is becoming the norm as all trade partners hope to restart global ‘free trade’.  This ‘free trade’ comes at a very high price: the destruction of the world’s biggest and most expensive empire.  And this destruction of our empire is causing all trade systems to break down.  For the dollar is stronger than the Zimbabwe pound only due to global FOREX reserves and the buying of most of our national debt by trade rivals who hope to destroy our industrial base.




Our demented leaders have insisted on ‘free trade’ for the longest time.  I suspect, it is so we can continue to import oil from OPEC and NAFTA partners with total impunity.  One third of our trade deficit is energy.   We keep energy artificially cheap by not taxing it properly.  This means, we are energy gluttons.  




I point out frequently, the US must imitate our greatest trade rivals: Germany, Japan and China.  We must study them and then imitate their tax systems, etc.  If they use very little energy due to high taxes, we must do this, too.  If they have a Value Added Tax, we must do this too.  If they have hidden trade  barriers or customs, we must erect similar ones.  If we wish to lead to anther level, we must first look to see if it has one major effect: 




Any innovation or deviation from what our rivals are doing must first insure that it doesn’t dump us into a system that generates red ink.  The US loves to trumpet how many Americans work in export industries.  Whatever we export, no matter how much it is, if we have bigger and bigger trade deficits, this is bad!  We can’t boast about anything if it doesn’t correct the original problem.


For the US doesn’t need to import all that much.  Unlike England and Japan, we have many, huge natural resources, including energy as well as food.  The US has no need to import food.  None.  Japan and England can’t survive without food imports.  And Japan restricts this as much as humanly possible.  This is why, for 35 years, we have to keep renegotiating deals over beef sales there.


The US doesn’t need to import many industrial goods. We have the raw materials for much of what is used for manufacturing!  Indeed, a lot of our trade export markets are us taking commodities in America: mineral, energy-based or food, for example, and exporting them to trade rivals who turn it into value-added products and resell these raw materials back to us!  With a price mark-up and profits for them!


This week, China is, again, forcing us into bad trade deals because US negotiators are traitors who think deficits of all sorts don’t matter.  Also, China is buying our debts.  We need this now.  So we accede to all Chinese demands.  And these demands are all about expanding China’s economic sovereignty while destroying our own sovereignty.  This is the price we pay for running in the red.


The Raw Story | China, US pledge 20 bln dollar trade boost

China and the United States on Friday ended key economic talks with vows of 20 billion dollars of trade financing to boost commerce amid uncertainty over whether the biannual discussions would continue.

As the two sides pledged to cooperate on the worst global financial crisis in decades, it was still unclear if the high-level Strategic Economic Dialogue would take place after president-elect Barack Obama took office in January.

“With regard to the financial crisis, the two sides worked together very well through this process,” said Treasury Secretary Henry Paulson, who headed the US delegation at the talks.

The last thing on earth, the US needs, is for our ‘trade’ to increase.  Remember: all increases in US exports are hammered by huge jumps in imports pouring into the US.  Every deal we have made in the last 20 years has had this effect.  This is why I call for a moratorium on trade deals.  Then, after we figure out how to add and subtract and figure out what red ink really is, once we smarten up, we can resume negotiations with a new team.


A team of NATIONALIST players who believe in SOVEREIGNTY.  What a shock.  How dare any intellectual twit call nations that protect and grow their own industrial base, evil?  I wish we had this sort of realistic nationalist sovereign currency and trade deals!  I implore everyone to look at these nationalist functions and see their obvious utility!


China, U.S. end high-profile economic dialogue with “important consensus”_English_Xinhua

 Both sides said that they would fight trade protectionism, and actively promote a successful Doha round of trade liberalization talks, which hit a deadlock in July on differences between the United States and India over measures to safeguard subsistence farmers in poor countries from a surge in imports.

    As a step to support trade amid the current financial crisis, the two sides announced an additional 20 billion U.S. dollars would be churned out from the Export-Import Banks of the two countries to finance trade. The financing would particularly favor “credit-worthy importers in developing countries,” they said.

    Paulson said he also discussed with his Chinese counterparts “the importance of domestic-led growth, and the importance of a market-determined currency in promoting balanced growth in China.”

    According to a fact sheet issued by the U.S. side, the United States recognized that “currency movements would be uneven over shorter periods”, but also encouraged China to “continue, and accelerate” the appreciation and flexibility of its currency, the yuan.

So, the US will give some unknown sum—knowing the Chinese, I bet we will end up paying the full $20 billion!—to increase imports to developing nations like in Africa.  HAHAHAHA.  Whew!  The hope is, when we are competing with China for this $20 billion prize money which we create out of thin air via adding to the US taxpayer’s debts, we will open markets for our goods.


Only China will be the one winning this race.  We do have something interesting to sell, by the way: military stuff.  A huge hunk of our export trade is military or Boeing jets.  China even hopes to buy this stuff from us.  Only we won’t sell to them.   Part of their negotiations with us is over this very issue.  They keep suggesting, we do have stuff they want.  We keep saying, we want China militarily weak.


Commerce chief: Yuan’s depreciation “small and normal”_English_Xinhua

The recent depreciation of China’s currency against the U.S. dollar was normal and China won’t rely on a weaker yuan to boost exports, Commerce Minister Chen Deming said on Thursday.

    “The recent small fluctuation of the yuan against the dollar was completely normal. I’d call it the dollar strengthening, rather than the yuan depreciating,” Chen told reporters at the fifth China-U.S. Strategic Economic Dialogue (SED).

    China has taken a self-initiated, gradual and controllable approach to exchange rate reform since it ended the peg of the yuan in July 2005, and the principle has never changed, the minister said.

    The yuan has since gained more than 20 percent versus the U.S. dollar as a result of market forces, Chen told reporters.

As per usual, the US has its ritual demands that the yuan be stronger.  Alas!  We can’t ship zillions of dollars to China and make that demand so long as Japan gets to keep a huge FOREX reserve.  People suggest, China is losing money in this reserve fund because it doesn’t keep up with inflation.  And if the dollar dies, the FOREX reserve loses value.


So…why on earth should either the Japanese or the Chinese make their currencies stronger?  Japan, by the way, is tearing her hair out by the roots with rage as she screams about the Japanese carry trade unwinding as all major banks head towards the ZIRP Japanese banking system’s low, low interest rates.  England, for example, hasn’t had rates below 1.5% since the days the Bardi Bank of Lombardy lent to King Edward II.  


ZIRP is totally unreal and is wrong, yet the world is falling into this system, helplessly.  And China didn’t do this.  They had normal interest rates. They, too, are imitating everyone and dropping their rates to zero.  As I keep saying, all smart systems tack to the winds and imitate others.  The yuan won’t strengthen against the dollar in a market where commodities are cheaper and cheaper.  The question here is, how to increase exports.  Just like Japan did when it had a financial collapse.


Indeed, I keep saying, the smartest thing the US did in the Great Depression was to block imports so they wouldn’t destroy our national markets.  Sovereignty was required when all the banking systems of the European empires failed all at the same time, due to the overload of debt from WWI and the German Weimar inflation mess. / Asia-Pacific – China lectures US on economy

As expected, Mr Paulson urged Beijing not to abandon efforts to let the renminbi appreciate, said US officials, amid fears China might want to let its currency weaken to help local exporters weather the global slowdown…..The dialogue was dominated by the global crisis. Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. “Over-consumption and a high reliance on credit is the cause of the US financial crisis,” he said. “As the largest and most important economy in the world, the US should take the initiative to adjust its policies, raise its savings ratio appropriately and reduce its trade and fiscal deficits.

HAHAHA.  Very true.  The pathetic thing here is, the Chinese are 100% correct.  This advice is good advice.  Will we listen to this at Xmas time?  When we struggle to over-consume with a vengeance?  Of course not.  We want to have our floating currency and eat it, too.  Or rather, eat the entire planet.


U.S., China Are Confident of 2008 Doha Round Completion, USDA Chief Says

World Trade Organization negotiators have been trying to reach an agreement since 2001 to cut agriculture subsidies and tariffs on industrial goods. WTO Director General Pascal Lamy has said he is considering calling a ministerial meeting of the group in the second week of December to complete the talks.

“The U.S. is prepared to make the appropriate commitments on subsidies for the Doha round, but those commitments must come with increased market access for our products in other countries around the world,” Schafer said.

China’s Commerce Minister Chen Deming said on Dec. 4 that an agreement had been reached with the U.S. to push forward on completion of the Doha trade round by the end of December, according to the Xinhua News Agency.

Chen said he hoped the U.S. would also show flexibility and noted that while the U.S. was concerned with agriculture and non- agricultural market access issues, China hoped for more focus on concerns of developing countries, Xinhua reported.

The Doha dumbness plods along.  The US has to say ritual things.  US farmers get huge subsidies.  Soon, they won’t.  End of story.  And one thing we had in the Great Depression was subsidies for farmers!  As well as tariffs and barriers.  We were not super-rich but in the end, we were the strongest nation on earth and were able to win not one but two major wars on opposite sides of the planet, all, in the space of just 4 years.


Imagine that!  None of our wars, since then, have ended so quickly.  Most of our wars drain the coffers, run up debts and destroy our domestic markets.


Chinese premier to attend tripartite summit of China, Japan, South Korea_English_Xinhua

Chinese Premier Wen Jiabao will attend a tripartite summit of China, Japan and South Korea in Japan, Foreign Ministry announced here Thursday.

    The summit, scheduled for Dec. 13 in Fukuoka, will also bring together Japanese Prime Minister Taro Aso and South Korean President Lee Myung-bak.

    The leaders will exchange ideas on the cooperation among the three countries, regional and international issues of common concern, Foreign Ministry spokesman Liu Jianchao told a routine press conference.

And the Asian Co-Prosperity Sphere continues to be built, this time, by the Chinese.  The Japanese did it with brutal military methods.  The Chinese are doing the whole ‘Talk money and carry a big stick’ shtick.  


A reader sent me this blog:  Cassandra Does Tokyo

My reasons are overly simplistic and undoubtedly, many will argue to the contrary but I believe a meaningful chunk of the carry trade has been unwound (and if one hasn’t unwound yet, one probably won’t!!); macro-specs are now all long; risk-avoiders are long it as an alledged safe-haven; and systematic traders and trend-followers are long because of the alignment of highs and lows. Strategists are yen-bullish. So who’s left to buy? Not exporters, that is for certain.

So who? BoJ? Ummm, no one needs reminding of their own current long USDJPY position, and the fact that they foolishly sold NOTHING in the intervening years of massive yen weakness. Moreover Japan itself has, for the past decade been diminishing their own home bias, undoubtedly a financial sojourn they deeply deeply regret. Then there are the fundamentals.

And for Japan, they suck. Over-dependence upon exports, horrific and deteriorating demographics, worst Govt Debt to GDP ratio in the developed world, scarily making Italy appear positively prudent, and interest rates that as unappealing as anything out there, not even mentioning a political process almost as dysfunctional as that which enabled the sub-prime fiasco (exemplified by the near-suicidal attachment to whaling and the seeming inability of the Keidanren to garrot the lot of them in the name of Japanese self-preservation. 


A funny blog that does accurately recognize that Japan is the Mother Ship of the Free Trade mess we are in.  But there is one gigantic difference between Fortress Japan and Open Door  Anti-sovereignty US: Japan’s debt is about 92% owned by the Japanese people or their central bank.  It is not parked, like some time bomb, in some foreign vault.  


The US can’t negotiate anything with anyone if everyone is holding trillions and trillions in US debts!  This is a total loss of sovereignty!  And why can’t people figure out the difference?  If Japan’s government goes bankrupt to the Japanese people, they will suffer.  


But they will NOT lose their sovereignty!  The US goes bankrupt to Asian and OPEC powers and you can bet, we won’t have any sovereignty at all!  We cannot dictate terms since they are quite happy to roll over our debts…so long as they get their way in trade negotiations!


Below is a recap of some of my older cartoons that illustrate our problems with FOREX reserves and Asia:


February, 2006:  Culture of Life Financial News: Stocks Down, Housing Stalling, Energy Unstable, Asia Unstable: Bad News Bears Down

February, 2007:



From my blog, April, 2007:

September, 2007:

June, 2007:

December, 2007:





Filed under .money matters, Free Trade


  1. Shelby

    Elaine, I wonder how accurate is this summary published today by CNN Money?

    Date Bailout: Money Allocated

    December 2007
    Term Auction Facility: $1.6 trillion

    February 2008
    Economic Stimulus Act of 2008: $168 billion

    March 2008
    Bear Stearns bailout: $29 billion

    March 2008
    Discount window: n/a ($148 billion daily average)

    May 2008
    Student loan guarantees: $9 billion

    July 2008
    IndyMac failure costs: $8.9 billion

    September 2008
    Fannie Mae and Freddie Mac bailout: $200 billion

    September 2008
    Foreign exchange dollar swaps: Unlimited
    (Fed increased amount from $620 billion to an unlimited cap)

    October 2008
    FHA housing rescue: $320 billion

    October 2008
    Auto industry energy efficiency loans: $25 billion

    October 2008
    Troubled Asset Relief Program: $700 billion

    November 2008
    AIG capital investment: $40 billion

    October 20080
    Bank capital investments: $250 billion

    November 2008
    Citigroup capital investment: $20 billion

    November 2008
    TALF loss provisions: $20 billion

    October 2008
    Money market guarantees: $719 billion

    October 2008
    Commercial Paper Funding Facility: $1.4 trillion

    November 2008
    Unemployment benefit extensions: $8 billion

    November 2008
    AIG: $152.5 billion (includes $40 billion under TARP)

    November 2008
    Citigroup loan-loss backstop: $300 billion

    November 2008
    Term Asset-Backed Securities Loan Facility: $200 billion

    November 2008
    GSE mortgage-backed securities purchases: $500 billion

    November 2008
    GSE debt purchases: $100 billion

    November 2008
    FDIC Temporary Liquidity Guarantee Program: Unlimited

    FDIC bank takeovers: $15.5 billion

    This list does not include bailout for Automakers

    Total: $7.2 trillion to Unlimited (see above)

  2. PLovering

    China is in a crash program to grow hemp to fuel their new ethanol cars.

    This program will employ millions of Chinese, cut oil imports, cut pollution, and create vast amounts of fat and protein for animal feed.

    In a few years, when oil runs out, China will not only still have the money, but food and fuel into the bargain.

    Drink this, you fucking Reptiles.

  3. emsnews

    We build prisons and they grow pot. HAHAHA.

    Sounds like Afghanistan. Back in my hippie days, they had lots and lots of hashish and had psychedelic colors on everything like clothing or buses, etc. Then the grim Taliban took over.

    Sad, isn’t it?

  4. emsnews

    Shelby, the tab so far is in the trillions. Seriously big. And the government should publish this in public. They won’t. Bloomberg News is suing them to force them to do this. I hope they win!

  5. dffacti

    Did you see this?

    Chicago factory workers take over factory:

  6. milo

    did i read somewhere that the taxpayers paid 7.2 trillion dollars to buy 2.4 trillion of assets and those assets went 75 percent down in value????????????????????????????????????????/

  7. PLovering

    Yep, the Taliban took over Afghanistan and all but eliminated the poppy and opium business.

    This revolting development enraged the Reptiles at Morgan Chase Bank.
    Now, the Talibans are back living in caves.
    And the Afghan poppy and opium business is back to funding yachts again.

    The big fight these days is over the Pakistani heroin business. Which of the Intelligence Agencies wins this prize is still up for grabs.

  8. emsnews

    Milo: we haven’t the FAINTEST IDEA what toxic tranches Bernanke and Paulson dumped on us. We want to know and I fear, will know only when it is far too late.

    The banking gnomes kept all the ‘good stuff’ that is still profitable, so I expect the junk we got will only get junkier as time passes.

    Yes, Plovering, wherever the US supports dictators etc, we get ‘illegal drugs’ which are profitable ONLY when ‘illegal’.

  9. GK

    This pretty much sums it up and explains it all.

  10. Rowan

    The supression of hemp began at the same time as synthetic (oil-based) fibers for textile manufacture were developed in the early 1930`s. Hemp is a very useful plant, with many, many applications….THE BASTARDS!!!

  11. nah


    vote your paycheck

  12. Karmaisking

    Think about this farmers of the world:

    Read history. Read Hitler. Study carefully the post WWI British naval blockage of Germany and the horrible starvation of German people to get them to sign the Treaty of Versailles. This barbaric act started the destruction of a people whose hertiage included Mozart and Bach. Look at them now. Name one creative talent from Germany today. One.

    There are none. They’ve been suffocated. Or destroyed. Or they’re building fucking dirty oil-burning cars, where most of the profits go to Anglo-American oil companies.

    There is absolutely no question WWII was over arable land. That is why Germany took over the Ukraine. The bread basket of central Europe.

    They failed.

    WWIII will yet again be over arable land. And the US and South America and Africa still have some of the best arable land on earth.

    China and Japan do not.

    I wonder what’s going to happen?

    How is this stuff difficult. I cannot understand how people can be so stupid.

  13. David

    In the above article, Elaine kept emphasizing one very important aspect of the US trade debacle.

    Wise nations look out for their own people, just as ordinarily prudent people look out for themselves and their families.

    Most of us attempt to deal somewhat fairly with others…in other words, get the best deal possible without cheating everyone around you until they won’t do business with you. It’s just good capitalism and good sense.

    Well, somewhere in our recent past, our “expert” economic thinkers began to believe that that we were so powerful that our trade partners wouldn’t take advantage of us. This is total stupidity.

    Muddled up in this ideal is the naive belief that “the world could be brought together as one.”

    Added to that belief is also the cynical corporate belief that “yeah, the world can be brought together as one, but under iron-fisted, globalist, US corporate control.”

    Also stirred into this belief system is the recent “personal responsibility” philosophy that really meant “I’ve got mine, so screw you if you can’t get yours, because I’m here for me, not you.”

    Add to this mix a new generation of clever, but historically ignorant, self-serving weasels who are now in charge of our financial system and in control of our trade policies.

    And finally, always waiting in the wings are the military contractors and government agencies that are daily trying to justify the need for their multi-trillion dollar existence.

    That just leaves us a majority of the citizens of nation down here on the bottom of the economic ladder. We all sit here and keep wondering when someone, anyone, will begin thinking about creating jobs and real wealth that we can use to continue to survive inside the US.

    Right now, even the simplest Bubba among us realizes that nobody in the hallowed halls of government or in US big business, gives a flying fuck about us.

  14. emsnews

    Sad, but true, David.

  15. ralph

    It doesnt take a brain to figure out that the OIL execs and US govt teamed up to flood the world with oil,crash the price, and bankrupt Iran,Russia,Venezuala,OPEC,etc… However, the consequences of this are not good. Bernanke already is buying all the new govt. debt. There are no buyers, besides China. They dont have the firepower. This will lead to OPEC,Russia,and others to never again buy the interest on our national debt. We will experience and Icelandic scenario here in a year or two. China might have $2 trillion in Forex, but its not that much when you consider their population. Crude Oil is the worlds currency, not fiat money. The oil producers will not accept $40 per barrell, now that they have increased the amount of this “nothing money” by a factor of 5. Obama, and his zionist owners will destroy whats left of Amerika. We must work within our local communities for “CHANGE”. The Federal Government is a disgrace. Its in our hands. We must believe in ourselves and our traditions. God bless the American people, and FREEDOM.

  16. Paul S

    OPEC announced they will be slashing oil production. Get ready. The automakers seeking $34 billion from the taxpayer tells you all you need to know about the people who run the country. Congress is skeptical about spending this money. They want ‘transparency’ and accountability. Really?? Isn’t this the same Congress that whipped out a $700 billion check (excuse me, $865 billion) to Wall Street, no questions asked? Yes. Our ruling elites have contempt for manufacturing; this is something peasants do. Besides, if you have manufacturing you have to deal with unions. Our ruling elites LOVE sticking it to Labor. But Members of Congress don’t have the nerve to say so openly–might cost them votes. So they mask their hatred of Labor and manufacturing under the guise of “free trade”. But if you look below the surface, that isn’t what they are REALLY after. It’s about the race to the bottom for the peasants. This is why the ruling class does nothing about illegal immigration. I can still recall the Perot/Gore debates over NAFTA. Gore lied and lied and lied some more about what a great thing NAFTA would be for the US. I believe Gore knew he was lying even at the time.

  17. DeVaul

    I read the news stories about the recent trade agreements on China News (Xinau?) and noted all the photos of the participants, which the Chinese apparently wanted everyone to see.
    The Chinese, who rarely laugh or show their teeth, were either desperately trying to restrain themselves, or simply bent over guffawing with their mouths wide open. And Paulson, probably drunk, was joining them in this hilarathon.
    I did see one American negotiator looking sideways at the Chinese as if he wanted to slit their throats. The others just smiled when told to.
    I think Paulson enjoys being a traitor. Maybe he views himself as a famous pirate and not a puppet. Who knows what goes on in his demented mind?

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