Feng

World War III: U.S. vs. China?

Hmm... So any american believes that the US government and media will give an easy pass to a China sub-marine detector 75 miles off a US navy sub-marine base? If you are one of them, I have a lot of admiration to either your hypocrisy or ignorance.

This kind of small skirmishes can easily get out of control. And nationalism in both countries could carry a small misjudgement into a major conflict. Some politician in the US probably also has some incentive to destroy China's development to stop it from becoming the #1 superpower in the foreseable future, and help itself dig out this economic turmoil.

China is no match to US millitarily at all. US can easily lock up China's raw material supply and trade route on sea, and destroy a significant portion of China's manufacturing capability by air force without sending one single soldier to China soil. (I do believe sending troops to China soil will not be feasible to the US, hey but if your goal is to build but to destroy, you don't have to send troops). So what could be China's response? Nuclear? Unless US is threatening China's survival, China is unlikely to use Nuclear first because China's capability is not enough to guarantee a complete destroy of US while US can destroy 10 China for sure. But China can send weapens, troops to middle Asia, middle east to build proxies to fight the US.

I hope it will not happen, it is truely an ugly picture. However, we can't completely rule out this possibility if economic environment continue to worsen and this thing becomes a deep depression.

On Mar 12 01:27 PM Buckoux wrote:

> Posted by vaughn: " Last time I checked the US navy will expel any
> military ship within 200 miles without prior permission from the
> US navy."
>
> Then you were not the commander of a US naval combat vessel when
> you checked.
>
> What's the matter with you non-military types, Do you really believe
> the Hollywood stereotype about the military. I can speak for most
> military personal, enlisted and commissioned, and testify that we
> prefer peace much more than combat. The only caveat to that is that
> once a fight has started, it is our duty to go to the fight and win.
> Even if politicians, New York Media and Hollywood tie one hand behind
> our backs. Our burden is not only the battle, but the notion that
> we must win, "fair and square" in a "democratic way" in a short period
> of time, against an enemy that cheats, is totalitarian and has lots
> of time because it controls its own media.

Welcome to the New China

I am one of those who bet on China. I short heavily on S&P and hold a lot of CAF. I will hold my short position till Dow goes to 7500. While CAF may sink with it in short term, long term I am quite confident it will give me good return.

In the recent 5 days, S&P is down 5% while CAF is up 10%. I think the market starts to realize US has a bigger problem and worse growth outlook than China. It seemed quite obvious to me but I guess people just don't believe it.

China Gets It Right, But Hurts America

I agree with canb888's comments.

Many people confuse a country's foreign reserve as the government's money. They are different things. China needs to pay $ or euro out (take in chinese yuan) from its foreign reserve when foreign investor wants to withdraw their investment, or domestic companies needs $ or euro to buy foreign goods.

Yes china's foreign reserve is heavily invested in US treasury. But China's fiscal stimulus package is not using the foreign reserve. there might be trickling down effect in the sense more domestic companies need $ to buy foreign goods due to the expansion, hence less reserve. But there is no direct relation on fiscal expansion and foreign reserve investment.

China Gets It Right, But Hurts America

"At last count the U.S. had a $14.3 trillion dollar economy. China has a $1.3 trillion dollar economy."

Where did you get that number? from 1990? In fact, the author's number is correct the GDP of China is roughly 1/5 of the US. It doesn't take any one much effort to check it out on google.

Can China Weather a Downturn?

The Chinese banks don't have as high leverage as their Western peers have. In fact, they were not even close. In China buying a house/apt requires 30% downpay.

This articles reminded me of the old rhetoric from the Western officials who have been lecturing the Chinese bankers/officials for its banking system's lack of openness and NPL over the years. And it's very funny to hear that again.

China for sure will be impacted by the global slowdown. But China will continue to grow at >7% and I don't see a financial crisis in China's banking system in the short term.