“Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.” - George W. Bush

Wednesday, April 28, 2010

Beware of Greeks Looking for Gifts

Euro dithering of the first order. German angst as to what to do. Greek labor intransigence. The Russians and Chinese bailing Greece out, and now talk of shifting it to the IMF which means more US bailouts.

Folks, forget the nonsense you hear about the Greeks being the birthplace of democracy. They may have invented it but have rarely practiced it and then only in short spurts. Greece has been ruled by tyrants and Turks and since the early seventies, socialists under the dreadful Papandreou family.

The current Papandreou has been a lifelong Socialist and is the president of Socialist International, a grouping of national Socialist parties.

His father, the late Andreas Papandreou, founded the Pasok party. His grandfather was prime minister in the 1960s before he was thrown out by a military coup.

They have been ardent anti-Americans. Greek intellectuals are the worst of the US haters.

Greece has yet to learn the lesson about socialism and the US may not be far behind, but this is a European and Greek problem of their own causing.

No gifts to Greece.


  1. US Treasuries prices shot higher as a deepening fiscal crisis in some euro zone countries and a sharp stock slide whetted investors' appetite for safe-haven US government debt.


    Bank of Tokyo/Mitsubishi UFJ chief financial economist Chris Rupkey said Treasuries prices peaked just before the two-year note auction, adding the market had gone too far on fear about Greece.


    At its highs, the 30-year long bond was up nearly two points on the day and was last up 1-8/32, yielding 4.59 per cent versus Monday's close of 4.67 per cent.

    Euro-zone Fiscal Crisis

  2. China is undermining the dollar by the back-door

    By Gerard Lyons

    Published: April 27 2010 15:50 | Last updated: April 27 2010 15:50

    There is a ticking time bomb under the dollar. When it explodes depends not just on the US economy but also on policy actions in Beijing and Washington. Over the last year the Chinese have undermined the dollar by the back-door, questioning it as a store of value and medium-of-exchange.

    Although the Chinese are not advocating the renminbi as the alternative to the dollar this may be only a matter of time. One needs to focus on what the Chinese do, as well as listen to what they say. A key development is China’s encouragement of international use of the renminbi, although they prefer to call it invoicing.

    This may be from a low starting point but one Chinese saying may be worth bearing in mind: “A march of 10,000 miles begins with one small step”. Early signs are promising.

    China is encouraging exporters to invoice in the renminbi and is setting up systems to allow trade payments in renminbi. This make sense. China’s trade is soaring. New trade corridors may soon require new means of payment. When the Chinese and Brazilian Presidents met last year they agreed to use their own currencies to settle more of their bilateral trade, rather than invoicing in dollars. Although viewed as symbolic, it is a sign of things to come....

  3. The crisis also saw China sign a host of bilateral currency swap agreements with countries ranging from Indonesia to Belarus and Argentina. China’s growing trade and financial links with the rest of the world will make the renminbi more acceptable.

    Gradualism dictates the Chinese approach to most policy measures. The process is logical. Look at the theory, examine the pros and cons, debate the issue, implement slowly and observe. If the project works, roll it out. On that basis, there is more to come.

    Since a pilot programme started in July 2009 the volume of international trade settled in the Chinese currency has totalled Rmb11.6bn ($1.7bn). Although only 0.1 per cent of Chinese trade in that time, it has gathered momentum. This has encouraged the authorities to expand the programme.

    Renminbi invoicing has been restricted to 400 mainland companies in five cities: Shanghai, Shenzhen, Guangzhou, Dongguan and Zhuhai. It will soon widen to cover thousands of mainland companies and more provinces, including Heilongjiang in northeast China which has sought approval to settle trade with Russia in renminbi.

    These are still early days and China will need to clear a few technical hurdles to make the renminbi widely acceptable. For instance, guidelines for invoicing and settling trade in renminbi need to be harmonised.

    Hong Kong is the main beneficiary as the renminbi gains acceptance abroad. It has the natural advantage of a renminbi deposit base, well-established trade links with China and a head-start in developing renminbi financial products. The city’s regulators are ensuring it retains its edge...

  4. Since February, the Hong Kong Monetary Authority has made it easier for its banks to process trade transactions in renminbi, to develop renminbi based financial products such as bonds, and to extend loans to and take deposits from local companies in renminbi.

    In January, China implemented a free-trade agreement with ASEAN, the Southeast Asian grouping of 10 countries. Rising Chinese trade with the rest of Asia will boost renminbi settlement in Hong Kong.

    There will be future tipping points. Convertibility of the renminbi on both trade and capital accounts would be the ultimate hurdle to cross for China to make its currency globally acceptable. This will eventually happen. China also needs to develop its capital markets and financial infrastructure.

    As international reserves soar I detect among reserve managers a desire to shift away from the dollar. Yet they do not want to actively sell the dollar, lest it triggers the crisis they fear. Instead fewer net new reserves are being placed in the dollar. I call this passive diversification but until the renminbi becomes convertible it is unlikely to take its rightful place in reserve holdings.

    International use of the renminbi will also rise as Chinese firms invest overseas and its government increases support to other countries. This is already happening. For instance, China recently signed a $20bn financing deal with Venezuela, half to be paid in renminbi.

    Furthermore, renminbi use has increased despite the currency’s peg to the dollar. Once the renminbi starts to appreciate it may receive an additional boost as a store of value. This de-pegging of the renminbi to the dollar could occur soon, but it is more likely to be a gradual and ongoing shift than a big one-off move. It would signal a trend appreciation of the renminbi. “Made in China”, the three most common words of the last decade, may soon be joined by “Paid in renminbi”.

  5. All this brought to you by the architects ofthe theory that it is not important where you manufacture.

  6. I wonder how that Chinese copper mine in Afghanistan is doing?

  7. Pamela Anderson is on Dancing With Stars tonight. She's gonna get elimintated.

  8. Not too badly, thanks for asking:

    President Hamid Karzai of Afghanistan is on a visit to China seeking investment for his war-torn nation. This is Karzai’s first visit to China since his re-election last year, and his fourth as Afghan president.

    President Karzai is also due to present the Chinese leadership with his plan for reconciliation with the Taliban.

    China has been increasingly seen as a key player in maintaining stability in Afghanistan, particularly in the future when US troops pull out.

    China recently participated in a six-nation talks on Afghanistan’s security and future. The participants included Pakistan, Iran, Russia, Tajikistan, Saudi Arabia and the United Arab Emirates. The meeting was held in Istanbul in the last week of January.

    As part of Karzai’s visit to China, Beijing announced today more investments in Afghanistan and pledged to continue aiding reconstruction efforts in the war-torn neighboring country.

  9. We go into a country , spend billions blowing shit up, finance it by hocking ourselves to the Chinese, guaranteeing them a future cash stream.

    The Chinese, take the cash flow, invest it into the reconstruction of the wrecked economy, generate good will, and end up with a long term investment and more cash flow.

    While the Chinese build their copper mines, they receive protection from the US military, strengthen their currency, grow their economy and use the profits to build up their own military, which our rulers and masters assure us will never be a threat to the US.

  10. Trying to merge disparate groups is always like stuffing wildcats into a burlap bag and hoping they fall in love. That rarely happens.


    This nation has tried itself, its taxpayers -- and especially its military personnel -- dearly over the past six decades, trying to pound square pegs into round holes. Isn’t it time we tried something completely different?

    Isn’t it time we stopped trying to re-create ourselves everywhere we go?

    Failures of Understanding

  11. O/T--My wife wants me to take dancing lessons with her. I guess I will, but she better have boots on. She always watches Dancing With Stars, and dreams, of being danced right off her feet.

  12. Some of those dancers are dang good.

  13. China has the same problem we do. They are a Major Oil Importer. They import about 5 Million barrels of oil/day, and every car,and truck they build they have to import a little more. And, they're building a whole lot of cars, and trucks.

    This time in 2012 they'll be importin about 7 Million bod, and global production will probably be a couple of million b/day less than it is now. By the time we hit 2015 The Wheels are completely off - everywhere.

  14. More bad news. China uses oil much more efficiently than we do. Those little cars use a lot less petrol, and they aren't driven as much. They, also, have a couple of Trillion in the bank.

    They can definitely (in the short term, at least) outbid us for the marginl barrel of oil.

  15. NOW, for the Good News: China has One huge glaring Achilles Heel. Being a Socialist/Communist Country they have a pitiful Agriculture system.

    From readying the field for planting, to delivery to the supermarket/kiosk, their system is pathetic. AND, it won't get much better.

    As we transition to biofuels (fairly easily, once we get started) they will lag way behind. They just don't have the equipment, and expertise on a widespread basis to readily change over.

  16. I know this about farming. The family farm is best. When your life and income depends on it, you will get out there and work your ass off. That's what I know. If you don't do it, the wife will get pissed, then the whole thing might go to hell. You got to get our there and work your ass off, some government/corporation isn't going to do it. There is no incentive, and that's what counts, makes you get up in the morning.

  17. "They have been ardent anti-Americans. Greek intellectuals are the worst of the US haters."

    true. the greeks i knew had much malice towards us.

  18. They run good Coney Islands and I love their salads.