Unique Insight Into China Strategy

I make it clear to anyone who suggests otherwise, that whatever I teach I learned from others.  I might have a link between macro - and micro economics in my writings, but who cares.

I think I am on to something that not even the powers that be have figured out, that has been clear to me for a while, and I have blogged on it previously, but some rather overwhelming evidence has come in, as noted by Mish Shedlock.  The the question whether the chinese are secretly buying US Treasuries, the answer seems to be yes, via foreign countries, most notably, the UK.

My previous notes suggested, as negotiable instruments, the Chinese were using their US Treasuries to finance infrastructure that pointed to China, in other words, our money to promote the Chinese economy.

Now pause and reflect for a moment, treasuries are debt instruments, meaning the USA owes someone money, and will repay at some time.  It gets to the heart of our system, fiat money.  I like having people owe me money, because it means they will pay it to me (almost always), for something I sold them that I did not want (my inventory) and as long as the debtor is solvent I can plan ahead on advancing my business.
And recall a few years ago when a crew (still not sure who) were caught in Italy smuggling a hundred billion or so of these bonds into Switzerland.  The story was hot for a day or two until the bonds were declared to be fakes. End of story.  No follow-up.

But wait a minute, smuggling fake bonds into Switzerland is about as likely as trying to pass off catnip as ganja to the Hells Angels.  "Before you leave let's smoke a little..."  Click...  There is not a child in Switzerland who could be fooled by fake bonds, so why would anyone risk bringing in fake bonds?  The more likely story is they were real.  If there were Chinese and real, then they represented about 1% of China's holdings.  Only Switzerland could fence such amounts.

I can sell my accounts receivable (what people owe me) just as the Chinese can trade their bonds (what USA owes China).  Usually debts are discounted when traded, but if China prefers a railroad from mines in Peru to a newly built seaport managed by Chinese with a Chinese language school for the local kids, and equipment on the docks to match Chinese shipping, instead of US Treasuries, well, I would too.

China can move or trade it's US Treasuries any time and anywhere it likes, no permissions needed.  The actual pieces of paper have to move, and perhaps that is what alert Italian cops saw when searching the Asian bearers of those bonds (variously identified as Japanese, Korean, Chinese and Filipino, in a distressing ignorance of physiognomy).

Is China out of US Bonds?  Have they spent them worldwide reordering the world economic system, is there a new world order of which only USA is now unaware?

Our wee satellites are falling like bowling pins: tunisia, argentina, brazil and so on, rather ignoring us, even contemptuously (if we no longer matter, it is difficult to get angry.)

So is China is buying bonds through the UK, our staunchest ally (although Obama has proclaimed France as 'We don’t have a stronger friend and stronger ally than Nicolas Sarkozy, and the French people.')

So the UK banking system is adding billions of USA bonds to its books.  Good for their balance sheets and profits.  Gotta love China for spreading the wealth.

So what is the end game?  When USA gets into economic trouble for the system the lawyers have engineered, all of those bonds, spread out all over the world, will be discounted by whatever percent.  The worse things are, the more the bonds are discounted.  The less valuable they are the more USA is hated, by those worldwide holding those bonds.  The more Timmy Geithner and Paul Krugman and Bernanke condemn the Chinese, for our friends and enemies plight at not being paid by USA, the more foolish we will look, worldwide.  And hated.

So here it is:  we've been surrounded, our supply lines are cut, our intended victim is on top, with a choke hold.  The people who got us into this mess will now start trading away our resources and sovereignty so they can stay in power.  Enjoy that Bowl Game!

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Anti IPR Lecture

Here a patent attorney gives a background on intellectual property rights, and people's misunderstanding of what the laws are to begin with, and where the laws come from.  It is a good introduction for those who have an opinion one way or another.  Of course intellectual property rights are evil, but those who advocate such should t least understand what they are advocating.  Find out here.  The video is an hour long, and gets better as it goes...

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Swine Flu Hoax Dangers

Infants are going into seizure due to the parents conditioned to obey the doctors on swine flu shots...  we re conditioned to believe inoculations and vaccinations are necessary.  But...but ...but...  these diseases pop up attendant to war, and given the vast array of disease that lurk suppressed in our systems, ones we've inoculated against may be suppressed when war compromises our immune systems, but another nasty will take over.  Africa is full of inoculated kids who die during war of something else.

Of course, avoiding war is the trick, but that is nearly impossible if we allow big govt, which give rise to big biz, which give rise to disease hoaxes...

As usual, the comments are the best part of the cited article...

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Why China is Beating Us

Lawyers are government workers, which makes them reactive, not proactive.  Take a look at a breakdown of the USA top leadership, and the communist party top leadership, and their education.  No wonder we are being outclassed.

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Revolution

The storming of the Bastille is celebrated July 14 in France every year as the French version for the 4th of July.  The Bastille is the symbol of French royal oppression, and overthrowing it an act of liberation.  In fact, the last king was the first king to use the castle as a prison, and storming of the Bastille did in fact release the prisoners, all seven of them: 2 forgers, 4 lunatics and the son of an aristocrat who disobeyed his father.  What the 8800 people who stormed the Bastille wanted was weapons and powder to defend themselves against rumored invaders.  No such invasion.  The story of the Bastille got better with ever telling.

Within a year or so the revolutionaries slaughtered some 1500 people held in prison one day, although this is usually told as an aberration in the history books.  Simon Schama demonstrates is was a necessary development in the revolution.  I'll review the book CITIZENS more fully when I finish it, but an interesting moment in the revolution is when the French organized a group of 1200 special assassins to kill every king and aristocrat in Europe, a sort of pre-emptive strike on any counter-revolution.

Did the French revolution introduce international terrorism?

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Hong Kong Wine

Education is key to developing the wine market in Hong Kong, and here a USA company is devoted to providing just that.

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Curious Defense

AS the President of the People's Republic of China visits USA, Taiwan launches missiles to show what it has, and the missiles either miss their target or go dud.

It is an open secret that USA and Israel wrecked the Iran nuclear production facility with computer worm.

The Russian submarine Kursk sunk itself, and conspiracy theory has it by a return missile.  Shortly thereafter, USA began taking the nukes off USA subs.  Since our weapons systems are are computer driven, has a stalemate been reached where everyone can control everyone else's weapons systems, so no one dare fight a real war?  Sort of like a gun battle where everyone has his hand on each others gun in holster?

Wouldn't that be wonderful?

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Ota Benga and Martin Luther King

Slavery is America's original sin, and it is kept alive by people who gravitate to political power to exercise racist eugenics.  There is a pretty horrifying story of a African pygmy exhibited in a New York Zoo with apes and labelled the missing link by racist eugenicists, in the early 1900s.  How could people be so cruel, back then?


Last week the head of the ailing New York schools suggested "Sophie's Choice" like decisions, and birth control be used to solve economic problems.  Margaret Sanger launched the birth control movement in USA expressly to advance racist eugenics, so when people call birth control a solution, it is clear code for who is the problem.


We have an industry processing black males into prison. We flood the ghetto with joblessness, crack and welfare checks,  make crack offenses nine times longer than cocaine, plus 3 strikes you are out. White lawyers and professionals who use cocaine get treatment and diversion... blacks using crack get hard sentences, and recidivism means a life term.  Welcome to America.


Washington Post quotes liberal "Sociologist James Q. Wilson, who in the 1980s helped develop the "broken windows" theory that smaller crimes must be punished to deter more serious ones, agreed that sentences for some drug crimes were too long. However, Wilson disagreed that the rise in the U.S. prison population should be considered a cause for alarm: "The fact that we have a large prison population by itself is not a central problem because it has contributed to the extraordinary increase in public safety we have had in this country.""


But, but, but... crimes statistics are rife with inaccuracy, misrepresentation and falsification, since they are reported by political entities.  Crime rate has not gone down, the rates have been lowered by those who report crimes.  And since most people in prison are there for nonviolent drug offenses, how can Wilson claim and extraordinary increase in public safety, when there was never a threat to begin with?


According to the New York Times, "By their mid-30's, 30 percent of black men with ... a high school education have served time in prison, and 60 percent of dropouts have..."  The people who would put Ota Benga behind bars are still active in government today, in particular the criminal justice system. Government is big enough to be a great platform to operate if you want to effect racism and eugenics.  


The Jim Crow laws in the south were laws, not business practices.  It was government that required racist policies, not business.  Government laws were overcome by civil rights legislation.  Businesses were more than happy to finally be allowed to take black folk greenbacks.  And after casting out one demon, seven came back and took its place.


LewRockwell has a review of a civil case in which the court found that several citizens and various government agents conspired to murder Martin Luther King.  Analyzing the findings in the court case, the author says King was murdered for his plans for wealth redistribution in USA and his antiwar stance.


Ahem.  Nobody gets murdered for advocating wealth redistribution.  Such a plan can be defeated politically.   But certainly being nonviolent, antiwar can get you killed, because it is an idea that the powers that be cannot deal with via the political process.  But I am more interested in what King had to say, or what we did not get to hear, about his economic plans.


In a free market it is not possible to amass exceptional wealth, nor to aggregate the excess necessary to mount assassination operations and the necessary cover-up.  In a free market wealth is experienced as access to a far wider range of goods and services than a managed economy affords.  In a free market it is division of labor, not love of money, that obtains the widest spread of ever widening selection of goods and services.


Free markets do not perfect humans, it merely gives them freedom to act as they would free from coercion and free to pursue the good, the true, the beautiful.  People commonly behaved in nazi germany in ways they would never do in Hong Kong today.  The system matters, some system are superior for people than others.


I think King should not have argued equal rights for blacks.  He should have argued for equal rights.  Equal rights for blacks can be ignored, and the proposition plays into the original sin of USA that blacks are a unique case.  They are not.  The problem was not one of lack of rights for blacks, but lack of rights. Only now, as whites experience what blacks always have (at airports, lack of opportunity, etc) are whites objecting to the system.  

An excellent recounting of the civil rights movement is the controversial book by Rev. Ralph Abernathy, the brains and courage behind King's charisma and eloquence. Read the book and you see quickly why it is controversial, but enlightening.  Jesse Jackson has some explaining to do.

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S Inquires About Competing on Aesthetics (Superficial Design)

S Writes:

My question to you concerns my passion for design, namely design of household items that exploit surface design like textiles, pillows, quilts, curtains, linens, and lamp shades – products that are subject to the dictates of aesthetics (the 'colors' or 'lines of the year'), rather than the merits of their functionality.  ... I'm guessing my passion for surface and interior design is a different animal than design for objects whose functionality can be improved upon, since changing an objects surface design doesn't change or improve its functionality.  But I could be wrong.  Does 'new' (theoretically, improved) surface design 'count' in the same way as new, innovative 'functional' design?  That is, does new surface design enhance a product and provide added value in the same way that enhanced functionality of a product design does?

***Yes, the element is aspiration.  Surface design, superficial, aesthetic, whatever you want to call it matters very much.  When my late great boss said, cheap material, lots of design, he was hitting on superficial.  Iconography is the study of images and what they mean.  There are esoteric images, with meanings only to a select group, or a secret society, such as the strange images all over USA currency, meaningful only to Masons, and then there are exoteric images everyone instantly understands, such as a hammer and sickle.  

Let’s look at functional vs. aesthetical.

People have always loved toast, patiently held over the fire, and cooked to perfection.  With electricity one clever person lined up 4 heating elements and invented the electric toaster.  Lots of toast quickly met the aspirations of a housekeeper to please many at once.  We do not recall this today, when perfect toast is cheap and plentiful.

So it is with surface treatment.  Aesthetics communicates information, and color and texture are only two elements.  There are volumes written on this, and for my part, a good designer already has these skills naturally.  What the aesthetics communicate is why the customer buys.  

The Ford Thunderbird, the Jaguar S and the Lincoln LS are the exact same car, made in the same factories by the same workers, with the same engine, drive train, brakes, shocks, etc, with only superficial aesthetical differences.  But the buyer of each version possesses different aspirations: one the sportster, the other the serious go getter american, he other the cosmopolitan Brit...  Aesthetics, if ordered to feeding aspirations, is big money.

The most common experience of aspirations met superficially is wall coating.  What does the color (or surface) chosen say about the resident whose walls express a certain tonal quality? Design is both form and function, and sometimes form is the function.

Apparel fashion is very much tangled with all of this.  The little black dress becomes a subtle power with a string of pearls.  A little white dress with a string of black pearls disorients he who encounters it.  Aesthetics is a key to competing on design.***

Although I'm very interested in it, I don't have any experience in surface design and I don't feel strongly that I need to be the surface designer of the beautiful materials these household items are made from, but I would LOVE to be the one to bring these objects to market.  

***Division of labor: the one thing all of those mighty design talents lack is the ability to bring it to market.  Bring it to market is your role and value, it is part of what you get paid for.***

Although apparel is a very close second, I can't think of any objects I love more than these domestic objects that have been around and unimproved upon in forever.  I guess I'm wondering if there's a place for me in the import business where I can deal in these products whose major appeal is aesthetic design rather than innovative functionality.  Aren't the beautiful, 'unimproved' household objects (and apparel) sold by Nordstrom's, Macy's, and Z-Gallerie purchased by their buyers who buy from sales reps who in turn buy from importers?  Although I haven't checked into it, being an independent sales rep sounds interesting, but I'm not sure I'd want to work as a buyer for a large corporation.

***Such store buyers cannot warrant the time to source and process a purchase form o overseas of say $5000 with of goods, even if they can sell them for $20,000, assuming they can, since at this point saleability is an unknown, given the item is new.  (No one ever knows what will sell, any who believes he can predict such is delusional.)  For the same five days worth of work, they can process a million worth of goods, although only $200,000 in net profits. 

 You can buy $5000 worth of goods and sell for ten that the stores sell for $20,000, making $10,000 profit.  The simply cannot locate the resources for what is a net $5000 margin.  And to add to the complexity, no store would take $20K retail of new to test. You can and will gladly work 5 days for $5000.

The stores first orders, test orders, to you, are small.  Over time, years in fact, you improve the item with iterations to the point that it becomes worth the stores while to go directly and buy their own version from the factory, since the volumes are now worth it.

One element that surprises me perennially is how people are frozen in fear of events that do not and cannot occur in business.  “Won’t they steal my idea...?”  and  “they can just go around me...”  Neither happens in the real world, at least at the specialty level.***

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Unsustainable False Economies

The New York City School system is built on an unsustainable model, and is falling apart.  They have a new leader.  The leader is calling for "Sophie's Choice" decisions and more birth control to solve the problem.

Sophie's Choice refers to a scene in a book by William Styron in which a woman is asked to decide which of her two children will die, upon entering a concentration camp.

If there is any question as to who she has in mind regarding practicing birth control, well, read the comments section.

Education, like medicine, is a service and belongs in the free market, not provided by government provision.   It is widely claimed that the Prussian State compulsory Education system, which USA adopted, led directly to the ability of the Kaiser to raise an obedient army that would fight the universally declared pointless WWI.

One step toward freedom is separation of education and state.  A wide open job opportunity is start a school.

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