There is lots and lots of commentary and opinions online. Every once and a while…well, nearly constantly, I go to charts and graphs to see if my analysis is based on some shadow of reality. Keeping things real is life and death when things are going wrong. The only way we can get out of a trap is to first, understand the trap. The US is like a bear caught in a leg trap. We yank and yank and will eventually tear off our leg, to escape. We won’t be able to do much tree climbing, afterwards.
There is an immense effort to convince people, social programs are destroying our economy. Despite obvious proof to the contrary, this propaganda is being pushed because stopping the US imperial war machine will kill vast profit generating systems the ruling elites depend on for their cushy lifestyle. Below is a Federal Reserve graph that I added some historical data to, showing how war spending interacts with our debts:
We had social programs since the Great Depression, which grew. The Vietnam War debts were big, at that time, but our tax base with high taxes post-WWII, easily carried the bulk of the Pentagon overhead. But then, we dropped the gold standard and thus, the need to balance any of our books. Our deficits took off.
Remember: Reagan and Bush Sr both increased military programs like Star Wars which, as I predicted at the Columbia University Club Space Program meeting in 1976, I warned everyone to not jump onto the Star Wars space ship. It was stupid. The Russians agreed with me that it would be rather simple to overcome the system via messing up the radar detection system. I even said, ‘If only 10% of the MIRVS make a direct hit on a city, it could eliminate much of NYC, DC, LA and several major ports, anyway!’
William Safire was sitting next to me and he told me, I was stupid. This is what he said, ‘If we set up this system as fast as we can, we can trump the Soviets and defeat them with a first strike.’ I was horrified. ‘This means, before we finish building it, they MUST annihilate us by shooting off all their nukes at us!’
No, there is a long record of US officials and top writers plugging their ears when reality intrudes. The US has misspent immense sums, trying to defeat everyone on earth and have the world’s biggest military empire. Has this stopped? NO! Obama is increasing, not decreasing, military spending. Our wars with Muslims are increasing, not decreasing. Bombs are going off all over the place and we are back to 2-4 US soldiers dying in Iraq, every day, while Obama and Cheney hide the records and photos of US torture of Muslim prisoners of war or civilians we arrest and charge with resisting imperial occupation forces.
Yield Curve Steepens to Record as Debt Sales Surge (Update1) – Bloomberg.com
The difference in yields between Treasury two- and 10-year notes widened to a record on concern surging sales of U.S. debt will overwhelm the Federal Reserve’s efforts to keep borrowing costs low.
Since the invention of lending money and getting interest payments was first invented in the City of Ur, thousands of years ago, the dream of all deadbeats like NYT reporters, is to have super-cheap loans for as close to 0% as possible, so the deadbeat can overspend like crazy. See the graph above to see what this looks like. The cheaper the lending, the more the US went into debt, for example.
The so-called yield curve steepened to 2.75 percentage points, surpassing the previous record of 2.74 percentage points set on Aug. 13, 2003. Yields on 10-year notes have risen more than 100 basis points since Fed officials said in March they would buy up to $300 billion of U.S. debt over six months to drive consumer rates down and lift the economy from recession….
Fake interest rates based on making money out of thin air which is what this business of the Fed buying the Treasury bills and the Treasury then giving the Fed back various little deals, all designed to hide the fact that they are simply making money out of nothing and thus, are imitating Zimbabwe.
I was going to include information from the Zimbabwe Central Bank but alas, their website is now officially dead and no information exists, anymore, just their opening page. Here is a photo from the Telegraph of England, showing the result of printing money based on no capital:
This is the end result of paper money backed by nothing. This is what deadbeat nations do when backed in a corner.
Treasuries fell for a fourth day amid concern record supply will overwhelm investor demand as the economy begins to show signs of stability. –In other words, the Chinese won’t buy this stupid paper money. I suspect, they have plenty of toilet paper already. The U.S. will likely sell $3.25 trillion of Treasuries in the fiscal year ending Sept. 30 to fund bank bailouts, stimulus spending and a record budget deficit, according to primary dealer Goldman Sachs Group Inc.
It is nearly impossible to get straight numbers these days. $3.25 trillion is a LOT of borrowing! And we want it at ZIRP rates, too! Only, we won’t get this. Amazing, isn’t it? Who would want to do this? No one, of course.
Ten-year notes have lost 10.3 percent this year, according to Merrill Lynch & Co. indexes, while 30-year bonds have lost 27.5 percent. Two-year notes have gained 0.2 percent….
The sole and only reason Japan and China bought up and held so many US dollars and Treasuries is very simple: they wanted to run immense trade surpluses with us and this was the best way! Otherwise, forget about it.
The Treasury plans to increase its debt sales after selling $1.9 trillion securities maturing in one year or less in the fourth quarter. Officials have boosted the sizes of all auctions and moved 10-and 30-year bond sales to monthly from eight and four times a year, respectively.
Classic deadbeat nation: have more and more sales of debt. Make the loans longer and longer in duration. Have more and more short-term loans that turn over rapidly and beg for cheaper rates, while doing all of this. Another trick all deadbeat nations and NYT reporters resort to is to outright lie about finances. For example, tell everyone, ‘Inflation is good! See how people spend money faster and it is cheaper, paying off debts if you cheat your creditors!’
President Barack Obama has pushed the nation’s marketable debt to an unprecedented $6.36 trillion and raised estimates for the deficit this year to a record $1.84 trillion.
So, here is the number, $6.36 trillion! This is NOT on our budget deficit since this is NOT US government spending, this is US government BAILING OUT of the very richest Americans, the very same crew that destroyed our economy in the first place. If this immense sum of borrowed money were to not be paid back, in full, where does it go?
This, of course, is the bottom line: we know from our deadbeat history, where it will go! And that is obvious in all our charts and graphs below. We will go through them one at a time. First, some more news: U.S. Stocks Slide as Mortgage Delinquencies Climb to Record – Bloomberg.com. Yes, the march of the deadbeats goes on. Many people now losing their homes are losing them due to losing their jobs. The original people who triggered this crisis like, say, Mr. Deadbeat Andrews of the NYT, are now all finished with dropping the ball and wrecking entire cities. Now, as the devastation spreads, people who were much more careful are now going bankrupt thanks to the collapse in world trade and financing.
FDIC Funds Drop to $13 Billion in Three Months – washingtonpost.com
The nation’s deposit insurance fund declined 24 percent in the first three months of the year, to $13 billion, as the number of banks failing mounted, the Federal Deposit Insurance Corp. said today.
The agency, which ensures that depositors do not lose their money up to a limit if a bank fails, reported 21 banks failing in the first quarter. And the agency has taken further hits since the close of the first quarter March 31. Last week, Florida-based Bank United collapsed, costing the FDIC $4.9 billion.
Overall, 36 banks have failed this year.
The number of “problem” banks — those at risk of failing — increased in the quarter from 252 to 305.
OK: Obama wants the world to buy over $6 trillion in new US IOUs while our FDIC is now at only $13 billion for the impending collapse of more US banks? Actually, if the Bank of America went under as it should have, the FDIC would long ago, run out of funds. Ever since Lehman Brothers went belly-up, the US government has capitalized the biggest banks and AIG via selling massive debts to foreign powers. This ‘solution’ means, we will kill the US rather than let our bankrupt banks die.
Not only is this graph unprecedented, for nearly a year, now, the amounts have jumped from under $100 billion to a trillion, repeatedly. This is a ten-fold increase and didn’t happen gradually but rather in less than three month’s time! And, as I said in the graph, it is getting WORSE, not better! So much for the green shoots. Stocks are up only because the system is being flooded with funny money.
Mortgage-Bond Yields Jump, Jeopardizing Fed’s Housing Effort – Bloomberg.com
Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after exceeding for the first time yesterday their levels before the Federal Reserve announced it would expand purchases to drive down interest rates on new loans.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.55 percent as of 3:15 p.m. in New York, the highest since Dec. 5 and up from 3.94 percent on May 20, data compiled by Bloomberg show.
Rising mortgage-bond yields, driven higher in part by climbing Treasury rates, mean the Fed now “faces a challenge to its ability to sustain low mortgage rates,” according to Jeffrey Rosenberg at Bank of America Corp. The central bank, seeking to use lower home-loan rates to stem the housing slump and bolster consumers, said March 18 it would increase its planned purchases of so-called agency mortgage bonds by $750 billion, to as much as $1.25 trillion, and start buying government notes.
See the bear trap here? We tug and tug and bite the leg stuck in the trap. The hope that printing funny money would lead to a ZIRP system is PURE INSANITY. The Japanese ran a long ZIRP system that still is running but to do this, they killed the domestic markets, prevented Japanese from borrowing money and real estate there fell by 90% and never recovered! We can’t have it both ways: if we want ZIRP, we have to crush domestic borrowing. If we want funny money, we have to pay savers high interest rates. Period. I see no other system available. Another graph:
I got a Bank of International Settlements study of the Japanese borrowing/lending system which I will cover, later. It is very nasty reading. We do not want this system so we must forget about ZIRPPING our way to prosperity. Won’t happen. The key to what is going wrong is two interlocking systems: the end of the gold standard and free trade. The above graph shows how the end of the US gold international standard is directly tied to the growth in foreigners holding US debts so they can play currency/trade value games! And is it getting better?
NO! It is now getting very rapidly worse!!!!
Hu Jintao meets U.S. House Speaker_English_Xinhua
Chinese President Hu Jintao on Wednesday met with visiting U.S. House Speaker Nancy Pelosi.
I bet she said, ‘Mr. President, I pledge allegiance to the Chinese Star flag! The sun is rising in the East!’ Of course, both Republicans and Democrats work for China, not the US. They saw how the Japanese bought Reagan’s services. And they bought the Bush clan long, long ago.
Hu highlighted the remarkable progress in bilateral ties since the two nations forged diplomatic relations 30 years ago, saying the two had “worked closer” on many fields in the new century.
HAHAHA. The US leadership and financial giants couldn’t wait to throw their lots with the communist Chinese while denouncing communism! HAHAHA.
He recalled his meeting with U.S. President Barack Obama in London last month, saying the two had agreed to promote a “positive,” “cooperative” and “comprehensive” relationship to set the tone for development of bilateral ties.
He basically ordered Obama to not meddle with free trade or do any currency tricks. Including, creating hyperinflation.
China was willing, along with the United States, to make unremitting efforts to forge a positive, cooperative and comprehensive bilateral relationship in the 21st century, Hu said, stressing that mutual effort should be made based on equality and mutual respect.
The US cannot treat Hu as an equal, in public, in the US. But bow in private, in China. Then, Hu broadcasts this to the Chinese, Korean and Japanese who understand perfectly, who has lost face and who is triumphant. Look at how Pelosi leans towards Hu, who is very relaxed and confident, she will obey his orders. The need for this stupid $6+ trillion in bonds sales means we kiss Chinese Dragon’s claws and bow very deep indeed. Will this save America? Look at the graph below:
Free trade took off right when we dropped the gold standard. Our debts took off. Our currency collapsed. If we have no inflation, we have double the destruction of our industrial base. The Chinese learned, at my house, what really matters in the end: the industrial powerhouse rules the world. No exceptions to this rule.
So, how is our manufacturing going since cutting the gold standard and starting free trade and low taxes?
Yikes! We had a small, initial spike in the very begginning but that has now been on a relentless downslope that is accelerating. The present collapse barely shows but I am betting it will simply be a road sign on the downslope to 0% manufacturing owned by Americans and a feeble amount being done here at all. This downslope, if I were to remove the statistics for Japanese automakers using the US to assemble cars, it would be doubly worse.
Asia Times Online :: Asian news and current affairs
By Henry C K Liu The conventional terms of inflation and deflation are no longer adequate for describing the overall monetary effect of excess liquidity recently released by the US Federal Reserve, the nation’s central bank, to deal with the year-long credit crunch.
Aw, Liu, just cut to the chase. Say, ‘This is the road to Zimbabwe.’ This is because the approach adopted by the Treasury and the Fed to deal with a financial crisis of unsustainable debt created by excess liquidity is to inject more liquidity in the form of both new public debt and newly created money into the economy and to channel it to debt-laden institutions to reflate a burst debt-driven asset price bubble.
Beijing has accepted the surrender of the US. No more talk about protecting our markets from foreign domination. No more demands the yuan rise in value. The yuan is actually dropping now, after being forced upwards for several years.
The Treasury does not have any power to create new money. It has to borrow from the credit market, thus shifting private debtinto public debt. The Fed has the authority to create new money. Unfortunately, the Fed’s new money has not been going to consumers in the form of full employment with rising wages to restore fallen demand, but instead is going only to debt-infested distressed institutions to allow them to deleverage from toxic debt. Thus deflation in the equity market (falling share prices) has been cushioned by newly issued money, while aggregate wage income continues to fall to further reduce aggregate demand.
The gnomes who were the richest people on earth in 1914, stole the Treasury and by 1933, all US gold reserves. They force the Treasury to sell public debt to them so they can skim the public into perpetuity. The Federal Reserve gets 6% every year. The closer to ZIRP the system is, the better off they are. They create inflation only to keep the public quiet. They envy the Bank of Japan which ignores the public. Though, the government of Japan is teetering on the edge of collapse. But then, so is deep-in-debt Britain! More MPs had to resign this week, several a day. Due to corruption, of course. Imagine if our own corrupt politicians fell, too?
When we have falling wages, we get the Long Japanese Depression. And this is the ultimate plan! After all, are the Japanese fighting their own rulers? Not yet! Until the Japanese demonstrate how they can pull down their own tormentors and crooks, we will see similar systems set up here. To maintain the corrupt system, our rulers will imitate the Soviet Union where the powerful flew in private jets, drove past everyone at high speed in armored vehicles with black windows and held secret conclaves, surrounded by troops while kidnapping people, torturing them, etc. Another graph:
It is pretty obvious, what is going on. The monetary base graph is a classic hockey stick graph. It goes up and up and suddenly, shoots to the sky. Ditto, the M1 graph. The instant the Japanese carry trade ended, the US private central bankers had to flood the economy with funny money!
2009/05/27 16:57 – 102 Japan Firms Seen Vulnerable To GM Default Risk
TOKYO (NQN)–A total of 102 Japanese firms are vulnerable to potential default risk on their accounts receivable due from General Motors Corp. should the carmaker go bankrupt, Teikoku Databank Ltd. said Wednesday. According to a survey conducted by Teikoku, 133 domestic firms have business links with the U.S. automaker that is teetering on the edge of bankruptcy. GM is a key client for 102 of them. Most of the 102 firms are small or midsize companies: only five post over 1 trillion yen in annual sales; 24 log more than 100 billion yen; and 34 post less than 1 billion yen.
See how internationalism works? Japan is making the auto parts for GM! They are NOT BEING MADE HERE AT ALL! If we look at China, Mexico, Brazil, etc, it gets worse. This is why our trade statistics look lousy and why the manufacturing base statistics stink, too. Free trade is killing the US working class.
Rattner Worth at Least $188 Million, Disclosures Show (Update2) – Bloomberg.com
Steven Rattner, head of the U.S. Treasury Department’s automotive team, has a net worth of at least $188 million and held shares in an investment fund run by the majority owner of Chrysler LLC, according to his financial- disclosure statement.
Rattner, co-founder of Quadrangle Group LLC, also sold guarantees of as much as $15 million on a credit-default swaps index tied to the secured debt of 100 companies, including General Motors Corp.’s senior secured loans, the filing shows.
That rat, Rattner, is a hedge fund hell hound. Literally, a Cerberus devouring creature at the Gates of the Cave of Wealth and Death.
Junky, loud music of the howling of ever-hungry gnomes and their doggies. Fie on them all. They screwed up and should be arrested, not be allowed to deal with the clean-up. Their idea of cleaning up is to shovel the sh*t under the bed and then have wild sex.
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We are so fucked. Servants to China. Pelosi is a traitor and should be arrested along with everyone else on Capitoline Hill except Ron Paul and Dennis Kuchinich. 50 years ago if I had said openly in public “Japan will one day make cars that rival US cars” I would have been laughed out of the room. They not only make cars now that rival ours, they have BANKRUPTED AMERICAN CAR MAKERS!!! Who won ww2???
Our future is not too unlike that of colonial India’s, except the Chinese will probably not need to send administrators over here. They are too subtle for that. They will use our own rulers and pay them well to keep us enslaved. It will take hundreds of years for us to free ourselves from foreign rule again, but it will happen because every country undergoes this fate.
I remember visiting East Berlin. A friend and I were at the Tomb of the Unknown Soldier when a bunch of black Mercedes Benzes with dark windows pulled up in front. The streets were empty and we were the only people around. We had not seen any West German cars in East Berlin, so we did not know what was going on.
The doors opened and soldiers, bodyguards, photographers, and what appeared to be East German officials rushed past us up the steps to do a photo-op in the Tomb and then left as fast as they arrived. They did not even seem to notice us. Maybe because we were not East Germans. I was only 21 at the time, and I had no idea what had just happened.
I doubt this will be our future, but anything is possible. The separation between the super rich and the rest of us only grows, and like the East German officials, who were protected by the Russians, our rulers will be protected by the Chinese and other creditor nations. And like the East Germans, we will know where and when not to be present.
More monetization of debt.
Rise in US Treasury yields may trigger more Fed buying (May 28, 2009)
“…concerns over how the United States will fund a towering budget deficit have led to a bond market bloodbath.
The U.S. Treasury is expected to borrow about $2 trillion this year as it seeks to cover a fiscal 2009 deficit of around $1.8 trillion.
The Treasury yield curve has steepened dramatically, with the spread between two-year and 10-year notes hitting its widest point on record on Wednesday, a sign investors have grown increasingly nervous about holding U.S. assets at a time the government is issuing record amounts of debt.
—
The U.S. central bank has vowed to buy up to $1.25 trillion of mortgage backed securities and $200 billion of debt issued by government housing agencies Fannie Mae and Freddie Mac by year-end, in addition to the $300 billion of longer-dated Treasuries it has said it would purchase by autumn.
As of Wednesday, it had bought $130.5 billion of longer-dated Treasuries, while purchases of mortgage backed securities totaled $481.5 billion as of May 21.”
http://tinyurl.com/nlp465
Ralph said:
“They not only make cars now that rival ours…”
No. They surpassed them in both quality and reliability, and most of the technology and parts for yours are not solely made in the US, and haven’t been for some time. Chrysler is an example where you have Mitsubishi engines in what you thought was a so-called ‘American’ car.
“….they have BANKRUPTED AMERICAN CAR MAKERS!!!”
You can thank your own politicians for that. As well as NAFTA and other free trade agreements (FTAs) that they signed. Not Japanese auto makers. Very few GM cars are actually made in the US. Think Brazil. Also know that Daewoo, in South Korea, now accounts for a quarter of ALL of GM’s [soon to be formerly] worldwide automotive production? China’s next, come 2011. Then they’ll ship those vehicles right back here to you. And you, somehow, think you’re buying an ‘American’ car. There are deep intertwinings of US automakers and foreign automakers. The flag-wavers never want to hear that truth. “It’s mah Chevy! It’s as Amerikhun as Apple Pie!” NOT.
“Who won ww2???”
Not who think, according to your tone. Britain, France, the Soviet Union, China, Canada, Australia AND the U.S. as well as others were the “winners” of World War 2.
The Silver Bear Cafe has a long article about what went on at the Bilderberger meeting in Greece. The most interesting part is what the reporter experienced while trying to report on it and how it changed his view of the Bilderbergers.
They are Nazis. Pure and simple. I hope the Chinese and the Russians defeat them, not because I like communist dictatorships, but because I am sick and tired of Nazis.
Mortgage Market Locks Up
http://tinyurl.com/d8q6j
May 26, 2009
“And now they’re coming for your pensions”…
http://tinyurl.com/n45ezk
damn…. i wish i could be a banker
http://www.marketskeptics.com/2009/05/history-of-mispricing-risk-and-fending.html
sorry wrong one
http://www.marketskeptics.com/2009/05/bailout-insanity-and-bank-arrogance.html
But I thought the “quantitative ease” is going to work? Why borrow the money when you can print? what is going on here? 🙂
Lizard Fritters
http://www.321gold.com/editorials/willie/willie052809.html
‘The Chinese learned, at my house, what really matters in the end: the industrial powerhouse rules the world. No exceptions to this rule. ‘
The deep deep river of sagacity that you wade is unfathomable. Lapping at the banks of treason. Thanks again, for selling us out.
‘Free trade is killing the US working class.’
You mean the people whose hard toil you mocked, whose religiosity and family values you put up to derision? They are gone. Your part is as much as the part of the financiers.
And apparently you have nothing to say about spending a billion to decommission Russia’s chemical weapons? Why are we paying for that one?
Without Elaine, are you sure there won’t be an Emily or Emile to talk with the foreigners? What’s the point of blaming someone long time after the fact?
I think I’ve found my “handle”—-
Follow the bouncing ball….
“And it’s one, two, three, what are we fighting for…
Don’t ask me I don’t give a dam, Next stop is China mainland…la la la”
You write, “Look at how Pelosi leans towards Hu, who is very relaxed and confident, she will obey his orders.”
I chuckled at your observation and recalled my corporate PR days in NY. The one leaning forward is always the one doing the “sell job.” The more leaning and smiling – the more desperate. HA, HA.
I wonder how successful she will be? Who in the world dispatched Pelosi for this job – Obama?!. Talk about sending in the bench — the Junior Varsity bench no less. What in the world could she offer that others before have not? Washington must be panicking – Pelosi to be followed by Geithner next week.
Appears that FED (with assistance from other central banks) becoming the buyer of only resort for long end treasuries. My question is: can the domino effect of this happening to shorter and shorter treasury maturities be stopped now or are we at a point of no return? Is this out of Bernanke/Geithner’s control and why hasn’t gold broken out and why are equities still going up?
Volcker should be sent because he is old, he is canny, he is Bilderberg but also he is GRUMPY. The Chinese are scared of grumpy old men. If the grumpy old guy uses a cane and plays Go, the Chinese just fall apart. 🙂
Actually, Pelosi is playing her role in the Chinese version of ‘Dancing with the Stars’ only, this is dancing with the Commies. 🙂
As for explaining how industrial base is important: Professor Kennedy’s famous book about all this, the Rise and Fall of Great Empires covers the topic perfectly and this was our reading materials at that time. But I knew all this from hanging around German industrialists from the Ruhr. Note that they built it all back very, very swiftly after WWII.
And the US tore down our own system faster than we bombed the German system to smithereens. Talk about stupid. I can’t fix that sort of stupid.
The politburo is lined up with old men, they make it their specialty in dealing with grumpy old man
I think this case you are mistaken
No one is afraid of Goldman Sachs, except for those in the US
What is this weakness that our wimen have with communist leaders? Maggie Thatcher comes to mind.
As far as Pelosi “leaning” towards her “master”.
Check out out close she is to Cheney during the 2008 State of the Union address. I thought she was going to fall out of her chair. You can’t see thier faces but I believe they were making “googly eyes” at each other–ha ha.
I remember thinking, “What are they going to ‘make out’ afterwards?”
P. S. Also anyone know how to put up the youtube link directly?
Despite obvious proof to the contrary, this propaganda is being pushed because stopping the US imperial war machine will kill vast profit generating systems the ruling elites depend on for their cushy lifestyle.
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Or whatever alot of our ‘GDP’ is really made of ‘bombs and douchebag accountants’… we do make a nice bed for our technically insolvent debt purveyors, its a shame they cant invest our capitol into a fair structured market for such a bargain… its not criminal because they own the constitution, but its close
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who will recognize the people right to destiny… maybe the CIA just before they hire 10k more illiterates to ‘rename’ eternal bad politics and unfair chains of a deluded system
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http://www.dailymotion.com/video/x7gqts_immortal-tyrants-graspop-2008_music
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shields up
“Volcker should be sent because he is old, he is canny, he is Bilderberg but also he is GRUMPY. The Chinese are scared of grumpy old men. If the grumpy old guy uses a cane and plays Go, the Chinese just fall apart.”
I did two masters level Japanese history and culture courses under a professor who taught at the University of Yokohama. She taught us the Japanese negotiating style.
I went through this a little in a previous post…and I would guess that approaching a Chinese negotiation would work in much the same way since Chinese culture is a major basis for Japanese culture.
You approach the Japanese in a respectful warm manner and you don’t, under any circumstances, give away the store on your first proposal or even the second or third. Make it barely attractive enough for them to consider…and have all of your ducks in an absolute, straight row to the nth degree…and know what you are doing before you say a word.
They will smile and be agreeable and positive (just SOP), but will not, under any circumstances, take up your offer at the first meeting….or maybe even the second meeting….because they will carry your proposal to everyone concerned and it will all be hashed out in private….and it will not be accepted without unanimous agreement by all concerned….and the Japanese will absolutely know what they are willing to give before they come back to the bargaining table.
Ideally, you should meet on neutral ground or on your own ground…not on the other fellow’s turf.
And, as Elaine has noted, body language is of utmost importance if one is to be respected. Be reserved, articulate, minimum of words, long pauses between sentences…..straightforward eye contact and a friendly poker face…..and when you shut up, shut up….don’t start talking again until you receive some sort of signal or word from the other guy…and from then on, say only a bare minimum…..here is where most Americans lose it….they don’t have the guts to sit it out and wait, and start pushing for a quick close…and they start giving concessions….don’t ever do this or you will lose their respect immediately.
In Asian culture, older people are still respected for their wisdom. People with big ears are thought to have long lifespans…and many other nuances mean a lot in those cultures…..So, Elaine is right when she says grumpy old men are a challenge to Asians…..they are culturally trained to see old men as having wisdom
(if they act and present themselves appropriately in a reserved manner).
Watch the bowing, if you bow lower than the other fellow, you have acquiesced to him or her.
If you go onto the other fellows turf as Pelosi did, you are expected to bow first, but it should be a very stiff, tiny, formal bow….barely a bit more than just a serious, but warm nod….no leaning forward grinning with teeth as Pelosi, the beggar did….just a hint of a no teeth smile and stiff nod.
In Asian culture, men most often do the public negotiating. What is Pelosi doing there with a begging cup…and on Chinese turf…..that is kowtowing to begin with…and shows desperation….and now doubt, brings knowing smiles from them.
Has Obama invited Hu to Washinton or to a neutral location where they can talk as equals?
No, our elites are kowtowing like servants….and no doubt, the Chinese have noted that they are hiding information from the American masses ….and this might invalidate their legitimacy to some extent as far as deserving respect is concerned.
This is all so sad to watch…since I am old enough to remember when our leaders at least acted like leaders when they met foreign heads of state….and, in my opinion, these guys have a long way to go.
In my opinion, Chinese, who value “face,” view this running to them with cup in hand, as being foolish and uncultured, and maybe even as deserving of less respect than normal.
This is how Japanese negotiation would work
This is not how all Chinese ones will work, however
Note China is extremely diverse, people have different tactics, I’ve noted as a negotiation tactic, they can simply appear brash and ill-mannered to unsettle the first time novices.
This is unheard of in Japanese circles. Protocols are set and not to be broken, even if the demands themselves can be ill-tempered and aggressive
The Chinese are much much more flexible. I’ll give an example.
When Khrushchev went to China to negotiate a new treaty… a treaty that the Chinese knew they were going to sign, what did they do? yes, they publicly humiliated him.
He was noted to hate swimming pools, so Mao invited him to negotiate on life savers, in a backyard pool
He was completely unsettled and in a hurry to leave the situation, gave away more than originally planned for, thus paving road of rapid industrialization for the communist regime
Off topic, a bit but a few anecdotal reports on how things are here and there. Locally there is not much sign of recession , an industrial park [gloucester estates langley bc] near me had stopped construction over the winter has now resumed. Plus we have a booming berry industry, real
estate is down 30?% or so. Stores are still open in the malls. I overheard some fellow at a swap meet say things were tough in the US but not here. On the other hand the governments are building huge deficits and the Canadian consumer debt is running 1.2 tr. So i guess its all running on credit cards for now.
We were talking to some british tourists today, they said things were running fairly well there.
Its easy to see how people get used to the notion that as long some one is handing out currency things will just run on.
I can’t decide who is sleazier, Pelosi or Hillary Clinton. But I can well imagine the level of contempt the Chinese hold ANY US politician/banker who comes to them, hat in hand.
The Chinese also like to pull little tricks like when they left Bush alone on stage with FAKE doors and he just pulled and pulled at them and then looked very stupid. This was in retaliation for him insulting Hu in America. The Chinese played the video over and over on their official TV, focusing on Bush’s very stupid, drunken, befuddled face.
As a culture we love to show off how open and friendly we are (sarcasm) and the standard negotiation tactic is to appear with a smiley face and eye contact and shake hands and all that.
This is designed to catch the other side off guard
It is too bad this tactic now is widely studied across the world and you notice every paper describe the Chinese as “very pragmatic and down to earth”
This roughly translate to: They see through the warm fuzzy Western bullshit and only care about the bottom-line, the formulaic appearances are not taken into account at all.
Putin: Post-US World Blueprint
http://tinyurl.com/mgbmsh
Ah, After dogging around the American people and turning us into beggars for nearly 10 years now, we are seeing our greedy elites being photographed as they become beggars themselves. Seeing a photo of a second tier politician like Pelosi beg was both sad and satisfying at the same time….sad for our nation….and satisfying seeing this very arrogant person being humbled.
The law of Karma….for every action there is opposing reaction that brings balance.
What you sow, so shall you reap….
What goes around, comes around.
When you create hubris, you are causing your eventual nemesis.
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Now Nancy, No teeth when you smile Nancy! No teeth….and loosen up the back so you can bow real low.
Wouldn’t it be nice to see the really rich on a begging trip?
Industrial zones with real jobs or agrarian sectors will do good during recession
It is the paper shuffling masses that will suffer during any crisis.
As for the elites of course they get richer with every transaction, barring a revolution.
Pelosi?
She become Speaker for one reason – to stop wasting money and lives in Iraq. A popinjay and a nonentity.
I tried to explain to you that you better crash somebody big soon, and I suggested BoA. Since you chose to ignore good advice, get ready for 3/ gallon fill ups. While last summer that was a minor concern on your way to the Monster truck smash up, this year credit lines have been pulled and home equity is has gone underwater. Crude futures up another eighty cents, or 1.2 percent. Loonie is on a rampage up 1.12 percent. Euro is up 1 percent. So once again, crash somebody and force derivatives settlement in dollars. Since that is the only pool that can soak up the two trillion dollars that you are printing.
Pelosi?
She become Speaker for one reason – to stop wasting money and lives in Iraq. A popinjay and a nonentity.
I tried to explain to you that you better crash somebody big soon, and I suggested BoA. Since you chose to ignore good advice, get ready for 3/ gallon fill ups. While last summer that was a minor concern on your way to the Monster truck smash up, this year credit lines have been pulled and home equity is has gone underwater. Crude futures up another eighty cents, or 1.2 percent. Loonie is on a rampage up 1.12 percent. Euro is up 1 percent. So once again, crash somebody and force derivatives settlement in dollars. Since that is the only pool that can soak up the two trillion dollars that you are printing. Finally, the little game with bidding up the futures overnight, from Asia and Europe, as the world turns, is going to run into the Marianas Trench.
“The only way for the government to stem the tide of Treasury note losses without raising rates to unacceptable levels – other than doing something sensible like cutting the stimulus spending – is to encourage mass public participation in the Treasury market.
I believe that a media campaign will soon be launched enticing the public to swap out of ‘unpredictable’ equities and invest their retirement savings in ‘safe’ Treasuries. Perhaps rules will even be decreed that IRA accounts must be fully or partially invested in Treasury Notes.
In other words, equities and equity-holders will be thrown to the wolves.”
http://tinyurl.com/n9xbnz
I love your grumpy old man comment and recall that saying ‘old age and treachery always beats youth and skill.’ Old timers can be dangerous.
The best old age treachery is to get a young guy to die in your place.
Elaine, do you think the Japanese mistakenly pulled the plug on the carry trade? Did they overlook the effects of that move? Did they fail to project the effects of America’s burgeoning debt and credit defaults in the sub-prime, and all other to follow markets? Wasn’t their bubble in 1992 a practice run on all things collapsing? If China has a 50 year plan, why would anyone think the Japanese only plan 5 years forward? They are among Asia’s oldest empires. Lost a World War. Got nuked. So how does one decouple without getting nuked a third time? A country whose population has an average IQ of 102, a full 8 points per capita than their handlers is not stupid. Subtle, but not stupid. Everything is not what it seems. In anycase within 5 years we shall see the end game of all this.
The Japanese warlords who run the country and were not removed after WWII [their children literally run it] miscalculated. This happens! They thought they could reduce the majority of the population back to the sub-middle class level and literally lord it over them all. This is why they allowed and encouraged lower and lower car ownership until there are FEWER car owners today in Japan than in 1983!
But a strong middle class is what a country needs. The Chinese understand this. The Japanese rulers don’t understand this.
How embarrassing that we beg from nations and can’t spend a modicum of time to respect and honor their protocol. It is an insult to that nation, and as per usual as of late, very arrogant, ignorant and desperately, trashy. That seems to be the overall impression most foreigners have of Americans, and now of those whom, unfortunately, pretend to represent us, ala Pelosi and other desperados. What a cluck she looks like, with her teeth hanging out and falling over in her seat.
. Well, I must ask, did the US get their $6 Tril???
.
I hope not.
How much will we owe now in flesh and blood? And to who (HU), for how long?
Well, we ran a nonstop howl about the Olympics and were very, very smug as well as ill-tempered about it all and on top of that, we supported an outright rebellion against China just three months prior to the Olympics.
Pelosi may think the Chinese suffer from amnesia like she does [What torture?] but they don’t. They have excellent memories.
Agree fully with your middle class position. No country can grow and prosper without it. Unfortunately, the formula of having an elite in any society, specially the variety that exists in the world today does not support a thriving middle class, rather it destroys the middle class over a period of a few generations. That is plain a day. As the elite members grow they want more, their children want more. This is not sustainable per the elite per capita wealth to population. Greed is a sickness of the mind, any leadership contaminated with it is doomed to fail, regardless of culture, ethnicity or religious beliefs. It is a cancer that feeds on its host.
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I agree as well with your Chinese following the middle class path. This was the Japanese plan; it’s how they built Japan, Inc. They protect their local market tooth and nail, to this day. Financing America to its final conclusion is very Go. I will reserve my final interpretatation for 2014.
Japan is not an old empire
It is the same age as Europe, get over it
Only the fans like to think of Japan as a shark, in fact it’s just an ill-tempered seabass
A seabass? Ever fish those? I did in the Gulf of California, when I was a girl. True, there were harder fishes to reel in. But they fought very tenaciously and one could spend at least an hour, if not more, trying to reel them in without losing the grip on their mouths which is very tricky since they zig and zag a lot and will slow down and then plunge deep…the reel whirrs as they take off and you just have to feed them the line, patiently.
I thought the Bushes were big time fisher guys but obviously, they learned nothing from that just like other activities they do.
this is the most amazing thing i have ever read about china.
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“…In recent years, the Chinese government has shifted from persecution of Christians to subtle—and sometimes even open—encouragement of Christianity. Christianity never will be a state religion in China, to be sure, and the Communist party in China is still officially atheist. But it is not an exaggeration to say we are near a Constantinian moment for the Chinese Empire, as the government looks to Christianity—particularly Catholicism—for an instrument of social cohesion…”
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and this: “…In the official version of the text, Hu is quoted as saying that the party must mobilize the positive elements of religion for economic and social development. Thus, religion can play an important role in realizing the “harmonious society” that is the new political goal of the party.
Two months later, on December 18, 2007, the Chinese Politburo held an extraordinary meeting. All twenty-three members of China’s top leadership gathered for a daylong set of lectures on the subject of Christianity—and, even more significantly, announced that it was doing so: an unambiguous signal to the public that the Communist party now approved of the practice of Christianity alongside Buddhism and Confucianism…”
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life is amazing. see how any and all “religions” become used by the rulers of society. and last comment about jews and christians and islams and “what they believe” david. look at the earliest writing ie. rumi and saadi for muslim mystics and gads, is there anything more mystical than the Kabbalah? and the christians its all allegory. see how china is going to “use” the christian religion to help control its population? and china is going with the catholic church, as the most institutional branch of christianity. hahahhahha! the free-booting protestant evangelicals cannot be trusted with their snake handling and healing and speaking in tongues no telling what that could lead to in china. hahahahha!
http://www.firstthings.com/article.php?year=2009&month=05&title_link=chinas-catholic-moment-1243211148
Would you rather swim without a cage with a Great White than a seabass, is the question
True story: one day, the summer of ‘Jaws’, I was swimming in NY in the ocean when I spotted a sand shark that was swimming funny. So I glided through the water, alongside it and then grabbed it by the dorsal fins and lifted it out of the water and said, ‘Hey, I got a shark!’
Everyone around me ran out of the ocean and the life guard swam over to see the shark. We then decided [I was much younger back then] to swim up and down Coney Island and lift the shark out of the water for fun.
The beaches were cleared of all swimmers, fast. Then the lifeguards thought it was so funny, they wanted to put the shark in a car and drive east to the Long Island beaches and repeat the fun. I don’t know what they did with it, by then, I went home.
Sharks attack when they see blood or if you swim funny like, thrashing about, for example.
CC and Elaine:
“Agree fully with your middle class position. No country can grow and prosper without it.”
Agree with both of you….
It’s all rather simple. Elites, because of their limited numbers, cannot spend and buy enough to support a large economy…there are too few of them to keep prosperity going.
A thriving working and spending middle class can buy products and pay taxes to support a sovereign national infrastructure and government…
That is, if that government gives something back to them by protecting their jobs and the people themselves from foreign invaders and from others, including their own elites, from cheating them out of their labors and enslaving them.
Also, this is why liberal socialism works so well…it keeps the money distributed among the masses better than conservatism which means that elites control most of it and let it trickle down at their discretion…
Which means a minimum amount gets to the lower classes….so the masses have less to spend and drive the economy…and so manufacturing and real wealth shrinks while paper wealth grows as does speculation among elites who compete among each other for control of what exists…competing for stocks, bonds, etc…and since, real wealth has shrunk, they begin creating fake wealth to scrap over…and to keep the masses under control….and it goes downhill from there…as we now see.
And they don’t share. Or pay much in taxes.
You would have a contempt for taxes as well if you had designed the taxation system
Simon said: “Japan is not an old empire
It is the same age as Europe, get over it”
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Who said anything about Europe? I said “one of the oldest in Asia” to be exact. You had dinner yet? 🙂
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Simon said: “Only the fans like to think of Japan as a shark, in fact it’s just an ill-tempered seabass”
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Compared to? The US in Vietnam, Afghanistan, Iran and Iraq. And thanks OH, lets not forget the Grenada one win wonder. Too much angst and misplaced anger Simon. Lets do this by the numbers, assuming the Japanese corrupted your officials (this is the view of some, I personally know it to be a protection racket) then they are 1/3 guilty. The other 1/3 is the American politician, and the final 1/3 the American voter who put them in office and who refuses to hold them accountable. You are a party to this party. China executes and arrests billionaires for corruption. So it is not a matter of getting over it, but hopping to it, Simon-chan! 😉
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“Would you rather swim without a cage with a Great White than a seabass, is the question”
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Depends on who the Great White is, I am not fond of anything or anyone that shits in its own backyard, it’s a filthy habit. The Japanese have a slang expression, “Kuso shite shine”, translated, “eat shit and die”. Thats what happens when you swim with that kind of a Great White, kinda like what we are watching unfold before our very eyes, yes? LOL. 🙂
Most of the Asian civilizations predate European ones. So if Japan do not predate Europe, no way in hell do they qualify as a civ in Asia
Now hop to it, Cromartie boy 🙂
It’s funny you should mention shitting in the backyard
Living on a volcanic island for millenia with only cousins to fuck will do that to ya
They do predate Europe. Do your homework; really not Beida material. 🙂 But hey, I have a good shrink who would love to meet you.
You don’t even know the name of the school until I said so. Palawan Polytech student?
Really not worth my time, to be honest. And you think the average IQ of a nation can be 102?
LOL
Please, don’t insult yourself further
Major Asian Civs
Sumerians
Persians
Assyrian
Indian
Chinese
Khmer
and the Jews! heehee
Major European Civs
Rome
Greece
various Germanic tribes…
Oh I think I will have an excellent dinner now. 🙂
Actually it’s 105. Hong Kong’s is 107. Korea’s is 103. But I will leave that for your future education. And please don’t take it so personally, I like Chinese, when you learn how to read English properly you will know that to be true. 😉
All nations have their IQ test normalized to 100
Please don’t take it personally either, I have no problem with Jap fanbois, just not those that don’t know what the heck they are talking about
It’s no wonder you never met anyone from Beida, since most Chinese would choose to go to US instead of Japan, I heard the universities are better.
I bring balance to the table which has a tendency to lean against the Japanese, not because I am a fan, but because I know them up close and personal. Reading knowledge is different from experience. But hey, believe what you want, no sweat of my back. BTW, the elections are soon. Looking forward to your win. 🙂
Japanese go to the US to learn engrish, just like Taiwanese Chinese name their children Simon to sound more Western. 🙂
Hey, if your facts are completely wrong, it doesn’t matter if you know them up close and personal
🙂
Here is the big Japanese victory you were looking for:
War in the Pacific, 1941-1945
Don’t let facts get in the way of emotion, or anything, ciao
🙂
Japanese go to US to pay protection money, remember? Strike two, uh huh 🙂
Anyway Simon, it’s been fun fencing with you with never any intention of being personal. I can be direct, candid, stubborn and like my Monkey sign, mischievous, but never personal. I do listen. I can throw things out there to get a reaction, make people think along lines that are uncomfortable, how else does one learn in this manipulated world? Here we try to learn from each others experiences, those we share. It’s voluntary, man. Take it in that light. And whatever you are, Chinese, American, Jewish, makes no difference to me. We all breathe the same air.
I try not to personal either, it’s just pure mischief on my part. Apologies if anything I said can construed to be attacks.
Still, if Elaine can go to gymnasium to study uber socialism, so can Simon “walk up to dragon” and demand its knowledge 🙂
Copy that. I have to tell you, some of the biggest school yard fights I go into later became my best buddies. Go figure. Peace.
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Here are two very good vids to watch:
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It is of supreme interest that the two sectors of Eurasia that took over the planet in the 20th century were all extremely barbarian until fairly recently and also, quite violent and chaotic with raging civil wars on small areas.
Britain and Japan are mirror images of left and right vis a vis Eurasia. Both were much more barbarian, longer, than the mainlands. Both were wracked by violent civil wars from 1000 AD to 1700 AD and both exploded outwards in massive imperial building events from 1800-1945.
We are supremely lucky that we are outside of the Eurasia dynastic cycle and hence have not experienced real terror that gripped the human history.
The Depression vs the Mongol Horde, I’ll take Depression thanks
The bad side of all this is this relative peace has left us without antibodies to really deal with the rot from within.
And thus we travel to Eurasia to find answers, some of us go to Germany, some to Japan, and some to the UK
“In other words, the Chinese won’t buy this stupid paper money. I suspect, they have plenty of toilet paper already.”
Yes, but is it squeezably soft?
Came clueless, left worried. Thanks for the post. – I’ve never been an intellectual but I have this look. – Woody Allen Born 1935