Feng

Shift in U.S. - China Dialogue Is Louder than Words

good article. Very rate to see a Western citizen taking an honest/critical view on American policy and hipocricy.

However, the China situation is not as rosy as the impression one could get from reading this article. There is huge asset bubble blewing due to massive government mandated lending. Most of the loans go to state owned company, who subsequently funneled the fund to real estate & stock market. The private small businesses who are in most need of funding still couldn't get any of these loans. China's policy reacting to the crisis was fast and probably better than the US's, but still has tons of problems. The government missed opportunity to distribute the government's wealth to low income people across the country, therefore boosing both society welfare and internal consumption. Instead, it creates huge real estate bubble, eating away middle class's effective purchase power and making rich even richer, and poor even poorer.

Not to mention how dominant State owned companies are in the China economy. Even after the massive bail out, US economy is still much more private sector heavy than China's. I would say, however, that China's government is much more captalism friendly than the US government, which is more socialism. How ironic!

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.

My 2008 Predictions and Investment Plan, Part II - Emerging Markets, Gold and Ag

nice article. Last year 100% of my portfolio is China, this year I will put 30% into Agriculture. China up, agriculture up, $ and US market down.

I laugh at the conventional wisdom that international investment is risky. to me, continuing to invest majority of asset in $ and US market is the biggest risk.