Congress Wants ONLY China To Stop FOREX Hold Dollars

One of the funniest things on earth is watching the US Congress struggle to fix the economy.  Of course, being thoroughly corrupted both by domestic bribes and foreign funny money, Congress can’t fix what is wrong nor educate itself or the public in what is working and what isn’t working.  What isn’t working is now painfully obvious: the floating fiat currency/free trade/perpetual war machine is totally broken.  But what has the greatest support in Congress?  Why, floating the currency, more free trade deals and of course many more wars and assassinations.

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Why, there was yet another assassination success yesterday!  YEMEN: Airstrike kills terrorist Awlaki, military says, the American citizen was finally assassinated by a robot predator drone.  Ah, peace at last, no?  No.  Puzzled as to why the War on Terror isn’t making us rich nor happy, 90% of Americans say economy stinks – Poll – Sep. 30, 2011.  Of course, it stinks.  To high heaven.  Has stunk for a long, long time.  This stench was covered up by ridiculous tax cuts, perpetual government and private debt accumulation, cheap credit and fake inflation statistics plus, of course, the importation of cheaper consumer goods.

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So, the average American used credit to charge their accounts so they could buy lots of things and live a high-end lifestyle, all while running everything in the red and selling off or bankrupting all internal systems.  Now the devil wants its due.  And we don’t want to pay. We want to continue the floating fiat currency free trade carnival.

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Both the GOP and DNC read the tea leaves and even though they know there are really no third parties to worry about (the Tea Party is entirely fake), they know that Congressional popularity has hit a historic low, approaching the single digits.  It is increasingly unpopular.  So, in order to pretend they are not corrupt and in the firm grip of lobbyists and foreign powers, they decided to selectively go after China about FOREX holdings:  In Senate vote, a win for the middle class and a rebuke to China – The Washington Post

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On Monday, the Senate will take up legislation that would impose tariffs on Chinese goods so long as China depresses the value of its currency. Despite the partisan polarization that grinds lawmaking to a halt these days, the bill’s support is thoroughly bipartisan, with sponsors ranging from such conservative Republicans as South Carolina’s Lindsey Graham to liberal Ohio Democrat Sherrod Brown. The legislation is expected to clear the Senate’s 60-vote hurdle for a floor vote and move on to the House….As China’s productivity soared during the past decade, the value of its currency should have risen correspondingly. Instead, China purchased dollars, which had the effect of depressing the yuan and making Chinese exports about 28 percent cheaper than they would be if the yuan had been allowed to appreciate, William Cline and John Williamson found in a study for the centrist Peterson Institute for International Economics.

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Here is my comment to this article:  Pray tell, which country figured out, holding US trade dollars in their FOREX accounts would cause the YEN to be weak? Ah, the Japanese. I know, through my associations with the Chinese back in the 1980’s, that the Chinese figured this out and understood the mechanism for holding trade dollars so that trade would increase and this is due to the floating fiat currency regime’s own rules.

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That is, the US no longer needs gold to back trade dollars, Nixon ended this. Now, the value of a currency depends on how many units are floating around the world in trade. ALL our trade partners now hold immense amounts of dollars so that virtually everyone, not just China, has huge FOREX holdings. There are literally $6trillion or so FOREX dollars sitting in various accounts.

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If Congress attacks China on this issue, China’s response may be to weaken the dollar…fatally. That is, dump all their FOREX dollars into the world’s markets by buying up everything in sight, forcing all the other traders to do the same and then the dollar will be worthless. And then we can kiss our cars goodbye. No more oil for us.

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Here is another comment from this story in the WP:

.Wacko Liberals love tariffs since they are a tax – that’s all it is.

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If you think for a second that this tax is good for America and/or you then you are a wacko Liberal who has no logical thinking ability at all.

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Raising taxes in the middle of the Obama Depression is stupid – but what else do you expect wacko Liberals to do – they would die of starvation if they couldn’t steal money from others………………that’s how pathetic they are………………..

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And my reply:   Actually, tariffs are an old idea going way back in time. They were designed, from day one, hundreds of years ago, to protect domestic industries and to fund governments. We threw this away and have run government deficits ever since and lost most of our native industries.

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Due note that Congress is not demanding ALL countries holding FOREX accounts in the multi-billions, cease doing this.  Especially, Japan.  No, Congress pretends only the Chinese do this.  Recently, Japan has dared to openly say, they intend to manipulate their own currency very heavily in order to deliberately weaken it against the dollar and euro and to do this specifically in order to flood both economic venues with Japanese export goods!  Not a peep from Congress or the White House, of course.

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This fatal indifference when our ‘allies’ ravage our home markets is exactly why the US is going bankrupt and industries are vanishing…except when foreign powers like Japan plant factories here to assemble their trade goods.  Bit by bit, even what was once ‘American’ businesses are actually now owned by foreigners.  This includes our auto industries which are increasingly owned by and run for foreigners such as China.

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Even after harrowing police brutality, the Occupy Wall Street demonstrators soldier on and good for them!  Now, the idea is spreading, to the great discomfort of the elites:  Occupy JPMorgan Chase Lexington, Kentucky #occupywallstreet, #occupylexky – YouTube

I hope we see more of this.  Pandering to the bankers destroyed our economy.   Over in Europe, I noticed this story about a competition for recognition for doing trade with China:  Open for entry: Cathay Pacific China Business Awards 2011 – Telegraph

Yes, England still manages to make Rolls-Royce cars!  The rest of the auto industry in England has either vanished or is now owned entirely by foreigners.  Once upon a time, England was the world’s #2 auto maker after the US which used to be #1.  Today, the foreigners who now own legendary UK brands like Jaguar are trying to find some Asian buyer for them but are failing.  Most UK production today is coming from Asian factories planted in England.  All profits flow to Asia, mainly Japan, not China.  But China is playing catch up, buying defunct UK auto manufacturers, one by one.  Eventually, they will own it all.

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Meanwhile, as Britain struggles to stumble along somehow, Brussels threatens to sue Britain to let in ‘benefit tourists’—that is, people who float about the EU seeking to suck into welfare systems of the more generous countries are supposed to move freely about which, of course, destroys any welfare systems.  This is going to get much, much nastier as southern tier and east European poor run riot, seeking shelter.

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Anti-Roma riots engulf Bulgaria after teenage tragedy: riding on top of the roiling poor are various Mafia-type operations and in general, the ‘Roma’ tend towards criminality due to cultural past coping methods and just like with any underclass, there are many criminals that rise out of it, and in Bulgaria, while racing around town, a crime boss ran over a young lady and killed her and dashed off.  This set off sectarian riots that hammered the innocent and helpless, as per usual.  The EU expanded quite wildly in the last two decades and this is a bubble event.  It grew way too fast and this growth was entirely sectarian in nature, deliberately leaving out all Muslim communities, for example.

And today:

This is an impossible situation.  The integration of various states has been nearly impossible to engineer.  In the US, we had the same internal problems: generous states were punished by mainly the former slave states by being forced to take in welfare families while the former slave states provided minimal services.  Then, Mexico began exporting its poor who now gain full welfare and state benefits just like aliens in Europe enter host countries, hands out for state support, too.  This is a real problem and will eventually cause the collapse of all welfare benefit systems as well as public schools, hospital services and nearly everything societies need to function fully.

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Taxes in say, Bulgaria, don’t fund social services in the UK.  Nor do taxes in say, Alabama, pay a penny towards welfare in NYC.  Indeed, in the US, the ‘red states’ that vote welfare restrictions also suck down more federal tax money than the generous welfare states such as NY or California.  So the flow of money has been highly negative for these states and California, in particular, slit its own throat by expanding services to illegal aliens on top of taking in people from low-service states!  The state is now going bankrupt.  And this is the fate of any EU state that has any social services higher than Bulgaria or Romania.

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The solution to these many problems will eventually be nationalist.  That is, nations that protect themselves will succeed whereas, nations that dissolve their own borders and let in everything, unregulated and uncontrolled, will flounder and go bankrupt.  Defending one’s own turf is extremely important.  The main issue I see here is, what is a citizen, what are the relations between citizen and state and how do we protect the citizens from the state and from the outside world?  And of course, the concept of ‘What is a citizen?’ is also paramount.

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I fully denounce the Israeli definition which is, only people of a select religious or tribal grouping can be citizens and all others are sub human.  And I don’t want the EU, ‘No one is a citizen, everyone floats around freely’ model, either.  For example, many Brits including government officials in particular, move to low-tax, warm and dry states (yes, humans love warm and dry!) while collecting pensions which bleeds the home state of revenues.  Many, many people are lured into retiring in foreign lands, Americans do this, all sorts of people do this.

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This weakens the home state, very  much indeed.  It also breaks up society, reduces the power of citizenship and having dual citizenship is totally fatal, one can’t be a citizen of two countries, one must choose and live with this choice!  Something will shift and then collapse and eventually, I predict that all countries that still want pensions and social services will have to defend themselves including cutting off money and services to citizens who move away.  This will happen or the alternative will happen: no one will have these services at home and then, of course, no one will have these overseas, either!  Duh!

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The fact is, states have to defend themselves.  The Northeast US sat passive while good paying union jobs moved into anti-union states which celebrated this as if they were geniuses or something only to see these non-union, now poor-paying jobs migrate out of the country entirely.  This is the story, everyone.  Congress is not fixing this at all.  They have zero motivation to do this just like all political parties in Europe except for the rising fringe parties will not stop the mess there and the loss of citizenship protections and rights.  Eventually, nationalists will attack the system and it will collapse.  As it must.  It can’t continue onwards like this, forever.

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15 Comments

Filed under .money matters, Free Trade, Politics

15 responses to “Congress Wants ONLY China To Stop FOREX Hold Dollars

  1. CK

    National Socialism by any other name still smells the same.
    One citizenry believes its superiority comes from the sand under their feet. The Fatherland ( Motherland ) is the end all and be all. One People One Nation One Leader.
    An citizenry group believes its superiority comes from the genes running through the blood in their veins.
    And yet another group thinks its greatness comes from bragging about its constitution and its amendements thereunto that protect the people from that very government … Today not so much eh? 5th amendment go by by today.
    Sing loudly: my government tis of thee, sweet land of thievery how brave thou aren’t. From a distance behind a video screen — a nation of drones flying drones to kill pixels on a screen; somehow the irony sings loudly.
    Tariffs are a very old form of thievery. When real goods flowed into real ports in real ships, it was easier to steal at the docks than to try to steal from all the folks downstream from the trade. Thanks to SCIENCE, it is now easier to steal from everyone, so tariffs have assumed a lower profile; not eliminated but just less useful for wholesale theft.

  2. csurge

    “Eventually, nationalists will attack the system and it will collapse. As it must.”

    Yes. And then what? This has all happened before after all. I see a big three letter word on the horizon… no matter what happens:

    W.A.R

  3. csurge

    I just saw this. I small slip up that some poor sod will undoubtedly pay very dearly for back in Beijing….

    http://www.bbc.co.uk/news/world-asia-pacific-15123830

    Funny, though. The essence of the story is still ominous for those who see past the silly mistake. China’s star is rising while the West is falling.

    I mean why bother with an international space station, when you can have your own.

  4. csurge: The choice of music was hardly a mistake, rather classical propaganda and a shot across the bow for the US elite.

    The US has just scrapped it’s last space shuttle. The Chinese are saying “Look what you cannot do anymore. We are winning through science while you militarist brutes are declining”.

    The point is, there is no way for the US to restart a serious space program. There are no funds for it…

  5. csurge

    I thought of that as well… and then decided it’s a very childish way to put a diplomatic shot across the bow. Play an iconic American song on a historic day for the Chinese people? C’mon. That’s ridiculous.

    It was a mistake. But whatever. It’s no big deal. Let’s not argue, okay?

  6. Well, your take is as possible as my surmise no doubt.

  7. csurge

    And therein lies the problem. It’s a very mixed message, if it is a message at all. When a government sends a public message, they should make sure it is crystal clear to everyone…. or they risk embarrassment.

    Ah, it’s cool. Like I said, whatever.

  8. Paul S

    “they know that Congressional popularity has hit a historic low, approaching the single digits. It is increasingly unpopular.” This is one of the main reasons Congress is creating the so-called “Secret Committee”. Just what you would expect in a free and open society, eh? Perfect for a Democracy, dontcha think? Creating this ‘Secret’ Committee is the ruling class’ way of acknowledging that it is going to become more obvious to greater numbers of people that Congress–and the groups that own them–have an agenda totally at odds with what the American people or voters want. Of course, this has been the case for a long time, but apparently, the ruling class has decided they can not continue with the pretense that they give a rat’s tail about the will of the people. Very sad. Can martial law be in the USA’s future?

  9. ‘the American citizen’ just killed…………
    Yes, he was an anchor baby turned ‘preacher’, Infiltrator.

  10. thanks,,,,,,,

    ‘ In the US, we had the same internal problems: generous states were punished by mainly the former slave states by being forced to take in welfare families while the former slave states provided minimal services.

    Then, Mexico began exporting its poor who now gain full welfare and state benefits

    This is a real problem and will eventually cause the collapse of all welfare benefit systems !!!!!!!!!

    as well as public schools,
    hospital services
    and nearly everything societies need to function fully.’

  11. JT

    “British luxury car maker Rolls-Royce has been sold to German giant BMW for £340m – despite promises of a higher bid from rival Volkswagen.
    The owner of Rolls-Royce Motor Cars, Vickers, is expected to face anger at Wednesday’s annual meeting from shareholders who wanted it to hold out for a higher price.”
    http://news.bbc.co.uk/2/hi/oldbusiness/85439.stm

    Rolls Royce cars was sold to BMW in 1998.
    Mini is BMW.
    The rest of the british brands are owned by Ford nowdays.
    So Rolls Royce cars are german nowdays 😉 .
    ,

  12. Alex Yam

    Someone here said big companies are moving out of China earlier, what is actually happening is they’ll shop around the world and then climb right back into China’s bed.

    http://www.reuters.com/article/2011/09/29/us-brazil-ipad-foxconn-idUSTRE78S4O420110929

    Brazil’s $12 billion iPad deal is in trouble

    (Reuters) – A much-hyped $12 billion plan for Taiwanese manufacturer Foxconn to produce iPads in Brazil is “in doubt” due to stagnant negotiations over tax breaks and Brazil’s own deep structural problems such as a lack of skilled labor, government sources tell Reuters.

    “The talks have been very difficult, and the project for a Brazilian iPad is in doubt,” one official said. “(Foxconn) is making crazy demands” for tax breaks and other special treatment, the official added.

    What Foxconn meant by “tax breaks and other special treatment” was basically just “do it like China”.

  13. csurge I see a big three letter word on the horizon… no matter what happens: W.A.R

  14. Alex Yam

    They’ve been playing this number game with themselves for so long they forgot there are other people on earth, for example JPM holds 80% of the gold derivatives and 69% of the non-gold precious metals derivatives.

    It was basically just one group of people flipping the switches, that’s all they do, after a few generations they suddenly realized they don’t know how to do anything else anymore.

    source:
    http://www.occ.treas.gov

    Click to access dq111.pdf


    http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/derivatives-quarterly-report.html

  15. DeVaul

    Hey, I just passed the demonstrators outside JPMorgan here in Lexington a few hours ago. They are in the fountain area with signs because the bank is closed on Sunday. I did not know why they chose that spot, but now I do.

    I will keep an eye on them when I pass by on my scooter this week, unless I get whacked by a police officer, tasered, and dragged away for “being on the street”.

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