User 142738

China Becoming a 'Middle-Class' Nation

If the U.S. and Canada were to use China's definition of poverty (living on 2 yuan, or $0.30 per day) the poverty rate in those countries would be near zero. I would invite you to a "refresher course in arithmetic" yourself, and possibly a remedial Social Studies course since you are confusing the U.N. definition of "poverty" with each country's independently determined definition of "poverty."


On Sep 09 11:20 AM Jeff Nielson wrote:

> Huangthomas,
>
> You obviously could use a refresher course in arithmetic. I will
> accept your figure of 100 million Chinese living in poverty - and
> point out that is SIGNIFICANTLY less than 10% of the population.
>
>
> Neither the U.S. nor Canada can match that poverty-rate, and I doubt
> there are many European nations with such a low poverty-rate.

China, Shipping and the Great Commodity Carry Trade

“In Ancient China the gold/silver price ratio was 2:1.”

The Chinese monetary system fixed the price of silver to copper, not to gold. There was no fixed silver-gold exchange rate in China until 1930, and it only lasted until the end of WWII. The exchange rate was 5,590g silver to 90.28g gold, or about 62:1.

Just Call Us Subprime Sam

>So why isn't everybody outraged?
Probably because being an armchair activist has never solved any problem in the history of mankind, ever.

"Somebody should do something! Yeah, somebody! Oh no, not me; I'm busy! Don't criticize me for not doing anything! If you criticize me for not doing anything you're a government shill!"

Write a letter or something.

Could Apple and Google Replace GM and Citi in the Dow?

Based on market capitalization, Microsoft and Apple should replace General Motors and Citi, respectively.

U.S. Hyperinflation: Is Faber's Prediction Realistic?

On May 28 09:17 AM Did U Think The Ponzi Scheme Would Last? wrote:

> "It is hard to equate the market savvy Obama administration with
> the corrupt court of Robert Mugabe..."
>
> WHAT???? You have to be kidding!
Mugabe’s reign of terror is decades in the making. Unless Obama makes it illegal for white people to own farmland and denies the existence of cholera I would say the Zimbabwe-U.S. comparison is ridiculous at the very least.

> It is not the new money printing that causes hyperinflation.
You are partially correct. An extremely high money supply growth rate is merely a symptom of hyperinflation. The loss of faith in the currency is also a symptom. Like influenza, nobody knows how it started: it just exists.

> People outside the US are not obliged to accept our currency in trade for their stuff.
Actually, they are. Zimbabwe’s rampant inflation was a result of the breakdown of the agricultural trade between Zimbabwe and other countries. Mugabe confiscated fertile land and gave it to inexperienced farmers, which caused the agricultural sector to shrink slightly every year. The rate of shrinkage accelerated in the late 1990’s, which coincided with the sudden rise in inflation. With lower demand for Zimbabwean goods and a constant money supply, the value of the Zimbabwean dollar began to fall. Mugabe (actually, Gideon Gono, the president of the Reserve Bank of Zimbabwe) actually instated a policy where military personnel would receive continuous pay raises. Most of the printed money simply went into the hands of militants, who then used it to buy South African rand, Botswanan pula and the U.S. dollar almost immediately after being paid. Very high money velocity multiplied by very high money supply growth equals very high inflation.

The amount of debt relative to the economy (tens of thousands of percent in Zimbabwe versus 80% or so in the U.S.) and the money supply growth (several quintillion percent in Zimbabwe versus about 12% in the U.S.) The money supply growth in China is 26% — does this mean China will experience superhyperinflation? Russia's money supply growth, as well as the money velocity, is even higher than that. Will Russia experience megasuperhyperinflation?

No economist can possibly give a solid definition of hyperinflation. Its definition can only be compared to the definition of “obscene material” as by the U.S. Supreme Court (“I know it when I see it”). We know the symptoms and the damage, but there are so many exceptions to every rule that it simply cannot be defined.

> I cannot believe the level of gullibility that some Americans display.
Leading by example, I see.

Strong Work Ethic at BYD, Maker of Electric Cars

About the Foxconn-BYD issue: there was a lawsuit filed in China in 2006 claiming BYD had hired employees from Hon Hai Precision Technology, Ltd. (a Foxconn affiliate) who had supposedly "[stolen] more than 10,000 documents...". To quote the article:

"In June 2006, Hon Hai took BYD to court in Shenzhen, China, saying BYD stole commercial secrets from Foxconn. The Taiwanese company has complained that the mainland court is dragging its feet in the BYD case." (from an AP article titled "Taiwanese tycoon challenges Buffett's investment")

If you recall, in 2005 Malcolm Bricklin, the same person who had brought Subaru and Yugo brands to the U.S., touted Chery as being a reliable automobile maker that whose "QQ" model was in no way similar to the Chevy Spark/Daewoo Matiz. He planned on opening Chery dealerships in the U.S. by 2008. Long story short, crash tests failed, his investment soured, the plans crumbled and he owes his fellow investors a very large amount of money.

China Counterattacks With a 'Buy China' Policy

coreopsis: U.S. Steel has won at least one case recently. Companies typically go up to the World Trade Organization to press charges if the government is not cooperative.

Gold Is Moving, Treasury Bubble Bursting

“Due to Seeking Alpha editorial considerations significant portions of the original article have been omitted regarding the increase of political risk due to Obama's assertions regarding preventive detention assertions.”

(Translation: I’m trying to compare Obama to Hitler by referring to a piece of hearsay.)

Nouriel Roubini's Bullish on the Chinese Yuan: Think Twice Before Buying It in ETF Form

If these are bonds, why do they pay 0% interest? Are the expenses for these ETFs so high that any interest is canceled out?

The Seduction of America

User 283977: “For example, back in 1955, bread cost 30 cents per loaf, it now costs over $4 per loaf!”

[citation needed]

China Looks to Electrify Our Cars

coreopsis: “In the US, the grid is not only outdated…”

False. Outdated grids have the following characteristics:
• Extremely high variable costs per kilowatt-hour.
• Large subsidies for residential users.
• Spotty coverage or unreliable voltage during non-peak hours.

In the “centralized” areas of the European Union, Asia and Europe you have any combination of those characteristics. In the U.S. and Canada there is none of that. But if you think paying 72¢ per kilowatt-hour is the sign of a great power grid, I’d love to know the name of your utility company.

Gold ETFs vs. Fort Knox

GMiki: When you lease something, the original owner still owns it.

U.S. Consumption Seems to Be the Greatest Currency

“Consider that the US has no real oil reserves…”
If you exclude the 8 million barrels or so pumped per day…

“no gold or silver…”
…ignore the mines whose production is only exceeded by South Africa…

“…little gas refining ability…”
…erase the Gulf of Mexico…

“and no manufacturing base.”
…and pretend airplanes don’t exist…

…this author would be absolutely correct.

The Perversion of American Capitalism

My God. The author is absolutely correct. I was about to post a quick comment about Japan's huge national debt (180% of GDP vs. 68% of GDP for the U.S.), but have any of you even been to Japan? Does it even exist? Could the Illuminati have created an entire country meant to make the U.S. debt levels look "not so bad"?

I would have mentioned the huge number of high-growth, low-debt industries in the United States such as Google and Apple, but have you even seen Apple's headquarters? Is Steve Jobs nothing more than a hologram? And Google... do they exist either? I thought Baidu copied Google, but it could be the exact opposite: Baidu created Google! Can you travel back in time to prove otherwise?!

I loved the comment the author made about the British pound becoming the new reserve currency. It was the proverbial nail the coffin for the author's credibility.

Savings Rates Surge: Who Is Going to Consume?

"Savings," in the absolute simplest terms used by the Fed, is income minus expenditures. This excludes investments (even in savings bonds) and any debt payments, which would merely be lowering debt in exchange for raising equity. (Assets equal liabilities minus equity.)

If savings was defined as raising equity then the savings rate wouldn't have been zero since people were borrowing money to buy houses and stocks that were appreciating in value faster than the debt was appreciating in value.