Inflation Chicken

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–Today Australia finds itself riding shotgun in the passenger seat of a Chinese car speeding at breakneck pace toward a brand new General Motors land-crushing vehicle piloted by Ben Bernanke. The Bernank is driving a money bomb. The car is rigged with billions of inflation bomblettes (Federal Reserve Notes). He’s stepping on the accelerator.

–So who is going to blink in this game of inflation chicken? We were disappointed/satisfied to see Albert Edwards of Societe Generale use the same metaphor we’ve been stewing on for the last few days about the great currency game between the United States and China. It’s high-stakes game with more than just financial assets on the line. We’ll get to what’s at stake for Australia in just a moment.

–Last week as we left the office with Slipstream Trader Murray Dawes, he mentioned that one explanation for The Bernank’s behaviour is that the U.S. is sticking it to the Chinese good and hard. That is, the U.S. is exporting inflation to China and unleashing socially destabilising rising prices in food and fuel to force the Chinese to do what America has been asking for all along: allow the Yuan to appreciate. It’s War, which as Clausewitz wrote is the “continuation of politics by other means.”

–If you’re scoring at home, it’s not hard to see who’s winning the game. According to the almost useless official statistics from the United States Bureau of Labour Statistics, consumer price inflation in the U.S rose just 0.6% in the last year. If it were true, it would be the lowest level of inflation in consumer prices since the U.S. first started keeping/manipulating the figures since 1957.

–Why so sceptical of official inflation figures? Inflation happens by design in a fiat money system with fractional reserve banking. The gradual weakening of purchasing power is not something most consumers notice or worry about, as long as it’s accompanied by higher house prices and stock prices. This allows inflationary monetary policy to keep a low public profile while still eroding the value of middle class savings over time.

–The other more obvious reason to be sceptical of the official inflation figures is that they exclude food and fuel. The official statisticians remove them from the calculation because they are “volatile.” But you suspect they’re also removed because if you actually included them, inflation would be much higher.

–Why, you ask, would the producer of money in a financial system (the central bankers who are, in fact, the private banks) be worried if inflation were “too low”? Because they sell money. And in a deleveraging, disinflationary environment people hoard cash, or trade it for tangible goods like gold and food. If money isn’t circulating quickly enough (new loans, demand for credit) then the producers of money aren’t pushing enough new product/dope/smack.

–As one speaker at the Gold Symposium put it a few weeks ago, you should expect to see inflation in the things you need and deflation in the things you want. Cars and white goods and plasma TVs are getting cheaper in a world with excess productive capacity and over production. But where the rubber meets the road in daily life for billions of people, inflation is pushing up food and fuel prices.

–The bogus U.S. number is important because it gives the Fed covering fire to engage in QE2 and beyond without having to answer the accusation that it’s feeding inflation. See! There IS no inflation. And with the news out of Ireland that some sort of blah blah blah deal has been agreed to postpone a debt reckoning there, the markets reversed their bias for a stronger dollar last night. The result?

–Stocks were higher. Silver is up 7% after making a two-week low on Tuesday. Silver is up 60% in the last twelve months, by the way—a sure sign that in the trenches of the real economy savers are hedging cash positions with precious metals. Gold—which is up each of the last ten years—was up overnight too.

–But the main reason you’re not seeing any QEII related inflation in the American economy is that the inflation has been directly exported to China. According to statistics released this week, the food component of China’s consumer price index rose 10.1% in October.  That was the fastest rate in two years.

–This is getting pretty serious for the Chinese, it would appear. Average wholesale prices for 18 types of vegetable in 36 cities surged by 62.4 percent year-on-yea, according to figures released by China’s Ministry of Commerce and reported by Xinhua. Chinese officials are worried that “hot money” capital inflows are pushing up prices, which is socially destabilising.

Another Xinhua story reveals a rather Pavlovian command economy response to the problem:

Efforts would be made to ensure market supplies, improve subsidy systems, make price controls more targeted and strengthen market supervision, said a statement released Wednesday after a State Council, or Cabinet, executive meeting presided over by Premier Wen Jiabao.

The statement said the government would further support agricultural production to maintain steady growth of agricultural output and put state reserves of grains, edible oils and sugar on the market when necessary in order to guarantee supplies.

The authorities should keep a close eye on winter vegetable production to increase supplies through the winter, take measures to cut delivery costs of agricultural products, and increase cotton transportation from Xinjiang Uygur Autonomous Region.

They should also continue to reduce prices of power, gas and rail transport for chemical fertilizer producers, ensure coal supplies for power generation companies and increase production of oil, especially diesel oil, to guarantee a sufficient supply.

–Chinese officials have also agree to sell sugar from China’s strategic sugar reserves (who knew they even HAD a strategic sugar reserve), crack down on speculators and hoarders, and figure out a way to prevent excess liquidity (Fed money) from driving up consumer prices.

–Do you see the problem here? That is an awful lot of micro-economic management to engage in for a nation of 1.2 billion people. The government is trying to decide, on a daily basis, how much of what key goods and services should be available and at what price. It’s impossible.

–Not only is it impossible…it is an enormous act of cognitive hubris, or just arrogant. This, of course, is what Hayek referred to as “the fatal conceit.” He was simply pointing out the problem of knowledge in a command economy. No one man or group of men and women can ever have enough knowledge to allocate the productive resources of an economy efficiently. The more control you assert, the more scarcity you generate.

–By contrast, in a more open market system (we acknowledge there really aren’t any free markets left…just weird corporatist hybrids) there is only single factor which determines the allocation of resources and production: the customer. Based on his ever shifting tastes and preferences and substitutions, the customer tells business what he’s willing to buy and at what price.

–It’s really the only truly benevolent dictatorship ever produced by civilised society. The dictator is the economic liberty of every man and woman in the economy. And they don’t exercise their power autocratically. The order and prices generated by this system happens without the design or oversight of a State committee.

–Of course every time we write something like this some crank writes in accusing of us being a free market fundamentalist and/or a tool for big business. But those people are generally socialists and morons. And more importantly they are betraying the fact that they believe the State ought to exercise control over what people produce, what they can buy, how much they should pay, and many other more private and intimate aspects of your life.

–The important economic point is that even though not everyone perceives it as equitable, a free market system (which necessitates a liberal political order guaranteeing personal liberty and the rule of law) produces better outcomes and improving standards of living for people.  The State doesn’t control prices or production. An economy’s resources are allocated based on the aggregate likes and dislikes of millions of people living their lives in the way they choose.

–The trouble today is that there is no free market anywhere. In the West, unsound money and an intrusive State have cozied up in bed with big business, big banks, and big weapons manufacturers to systematically put people in debt and create a permanent Welfare/Warfare state. This is not capitalism. It’s gangsterism.  It’s the War of the State against All, all the time.

–And the model in the developing world, especially China (where the political model is still the war of the State against all and has been since Mao’s revolution) seems to imitate all the worst elements of the unsound money policies of the West. Of course the Chinese have a long tradition of treating gold as money. Culturally, the idea of sound money has deep roots in China.

–But politically and economically, it’s a pretty open question of whether this generation of Chinese central planners can manage the transition from the command model of export growth at any cost (air and water quality, labour standards) to an equally flawed central bank system that tries to manage the economy with unsound money and force everyone into permanent financial servitude to the banks.

–What is Australia’s position in all of this? It’s along for the ride. Yesterday’s capital spending figures from the Australian Bureau of Agricultural and Resource Economics revealed that Aussie firms are planning nearly $133 billion in new resource projects. Seventy percent of those projects are in Western Australia and energy projects dominate the list with mining chugging along nicely.

–But the success of all those projects—indeed the assumption that there will be steady demand for those resources down the track—assumes that Ben Bernanke will not drive the Chinese economy off the road and into a ditch by exporting uncontrollable inflation. Of course if the Chinese allowed their currency to appreciate and de-pegged from the devaluing U.S. dollar, they could avoid a lot of this suffering.

–If, however, inflation goes from being merely problematic to the kind of social force that causes people to start fires and break windows, well then we’ll have reached a brand new phase in the currency wars. And while everyone will eventually lose a lot, the immediate loser could be China and by extension, Australia.  Until next week…

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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Comments

  1. Correction re: free market.

    Ebay my friend.

    If we remove gummint and shoddy figures like the FR, person-to-person enterprise is entirely free.

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  2. Consumers in the west do purchase pretty stupid things though.. However if spending is restricted, the purchases become more intelligent.

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  3. Dan is as close to being a Thomist on money as I’ve seen him. Aquinas argues ursuers confuse ends and means making money for the sake of money. He asserts money bears no fruit andand its function is to measure the fruits derived from other activity and hence making money out of money is a crime against nature. He contends also that money is also a substance, the fluctuations of teh economy and the correlative changes in the purchase power of money are material. Non geld money is a non vendible commodity the measure of things but not saleable itself and he uses the Roman legal distinction of goods consumptible in use and its opposite for goods not consumptible in use. Money by its nature bears no fruit. The only problem he had was convincing main street who kept worshipping money as they did other trinkets (like gold).

    And at least the Chinese have practiced it before in living memory and know how to fail but survive or “fall with style” as a certain toy said as he went “to infinity and beyond”. Not one buck seen in the US economy though and anything that makes it will just be used to bail out munis and California like states first

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  4. Suspect it tells one why both BB and DD and have basically put their heads between their legs and kissed their bunties bye bye? Given that stocks and bonds and bullion probably can’t be expected to fare better than housing. And just could perform worse.

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  5. Here’s one on ageing Ned. http://www.economist.com/blogs/dailychart/2010/11/japans_population

    Note the comment on the Kite “looks like a coffin”. By the way I reckon that the baby boomers were really the second wave. It was those born in the late 20’s and 30’s that did the 70’s residential house price boom and it wasn’t built of first home buyers but rather steep rises in public sector wages for those holding whole term of housing loan fixed interest rate loans for housing loans that were lower than prevailing market interest rates and inflatiuon under stagflation for those in their 30’s and 40’s. This were the group that became the keepers of the lore that house prices always go up because they paid about a third of the cost of their house owing to their subsidised fixed loan rate. That fixed loan rate sank the banks who ran out of credit to lend in the real economy under Fraser so Keating and his hacks like Garnault et al were really forced to deregulate banks and lending rates rather than some act of economic liberalism. In ten years the house price in Sydney tripled and that was the match of the 80’s where double incomes started kicking in and the younger ones were also dragged in as the decade rolled on becoming DINKS in the second half of the decade so they could afford inflated prices at an earlier age. Cheap funny money credit and Howard’s middle class welfare did the same job as teh earlier decades job in the 90’s and early norties.

    I agree with you however that you are better off with land during hyper inflation and deflation will most likely lead to that anyway. Picking your time is the issue as an investor and I think you are giving shoes good counsel. As oft stated I think Jewish grandmothers who own low cost housing in areas of highest demand are the smartest right now.

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  6. High price houses under pressure

    http://www.guardian.co.uk/money/2010/nov/19/chester-square-london-house-prices

    Its notable that in the UK where they are attacking the nanny state and government spending that the rich are taking a hit on their assets and there is less extend and pretend overall whereas in the US and Australia the super rich and the government workers are increasing their share of national income throughout the crisis.

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  7. Read all this with interest, since we’re both BBs.

    So far, what I’ve read appears to miss some likely outcomes. One which may be considered I’ll term the ‘inheritance factor’. While we don’t need any lotto wins, my missus and I, in our late fifties / early sixties, both have a parent in the mid-late eighties. I suspect that’s the case with most BBs. The hope that unprepared boomers may be destitute seems to ignore this likelihood.

    We do know BB couples who have already retired and downsized. In both cases they sold mil plus homes, moving into 3 X 2s. They paid over $600K for these. If downsizing (rather than sea-changing, or tree-changing) theories eventuate, it’s probably the ‘middle’ sector of the housing market which will rise. Perhaps the sellers* will then upgrade to larger, more expensive homes.

    Retirement of BBs may see increased property turnover. Those who visualise people of my generation simply moving en masse into retirement homes may again be accused of wishful thinking, particularly when we consider that our own elders haven’t yet done so, close to ninety. ;)

    * In both cases, that’s what apparently happened.

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  8. I’ve got pretty strong suspicions that a lot of the economic theory that was developed over the last 100 years may not have taken into account the practical effect of a declining population in a region. With that being one reason it doesn’t really seem to have worked for Japan? (While there seems OK, their government debt probably indicates it has only been kept that way by having a pretty big cheat?)

    But either way, little tricks like intentionally targeting inflation are going to become increasingly unpopular in countries with increasingly aging populations. And as previously stated by a number here, it simply won’t prove acceptable to target lower immigration in Oz long term, if only because that continues to kick the can down the road.

    Government workers? Yes, median household incomes pa (gross I assume) ranged from $51K in Tassie to $92K in the ACT in 2007/08. Follow the money to find the source of the smell hey? ;) :

    http://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand

    Not sure about the inheritance effect Biker? But must admit it wouldn’t surprise me too much if Aussies effectively wee it up against the wall anyway. One off chance to have that new car, nice holiday, renovate the house etc. Might stimulate the economy as it flows through but not too sure it will add significantly to real wealth in the hands of a lot of those who might actually get it? (With it being a bit of pipe dream to figure that those who most need it because they never managed to save much of their own loot are likely to save too much of any windfall that comes their way???)

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  9. There’s a chance that folk our age over here are slightly better off than on the east coast, Ned. I’d accept that a percentage may blow a couple of mil inheritance quickly, but I really doubt it.

    Funnily enough, the BBs most unprepared for retirement here appear to be the very same folk whose parents own multi-million dollar beach properties… so you may be correct there. These aren’t people who’d ever figure they could survive on a pension, despite owning their own homes.
    Their achilles heel isn’t so much alcohol, but naive, high-risk investments; dodgy FAs and stock market folly.

    We don’t see the potential BB Downsize as anything but a likely windfall.
    If it’s widespread, 90% of our holdings will be their new market.
    There _are_ threats to property, but BB exodus isn’t one we take seriously.

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  10. “I’d accept that a percentage may blow a couple of mil inheritance quickly, but I really doubt it.” – If I’m reading that correct, your take on it is that most baby boomers have seriously wealthier parents than those I know Biker? :) Especially if they had more than one BB child as a potential beneficiary. Which was mainly the case as I understand it.

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  11. Ned: “…most baby boomers have seriously wealthier parents than those I know Biker…”

    It’s true that I inferred that in my leading sentence, Ned. No slight or offence was intended. Our coastal development strip is surprisingly wealthy and that ‘BB parent’ age group holds far more equity than most BBs I know.

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  12. Accepted and acknowledged. But a relatively small number of wealthy parents of BBs passing on significant inheritances to their their children isn’t going to be a game changer. There is more likely to be a dissipation effect than a wealth effect is my thought. With one (hopefully) quite extreme instance I know of being a sheep cocky I know who retired maybe 20 years ago and his family muse over the fact that he could have bought 20 houses back then but chose to sit in cash as the return was very good (plus bought a yacht which he and missus enjoyed) but is now hoping to flog off his retirement home in one of QLD’s seaside retirement areas (for about $300K) so he can move to a retirement village close to one of his daughters.

    Some very strange things can happen over time. With the case I mention above, not even going close to the tale of (comparative) family impoverishment I know of a bloke who had built up serious ag assets and could have bought maybe 200 houses when he sold up but chose not to.

    My gut feeling would say that most BBs who get $50K inheritance (in today’s dollars) should count themselves fortunate. And if they get $100K they are blessed? With such sums being altogether to fritter away of course.

    The story is getting long; But one more – Reminds me of the man who I worked with in the dot com days who knocked off work to trade stocks. He was back at work doing a bit of contract stuff a few years later – Asked how he was going – Most would have interpreted it as an enquiry after his general health and well being I imagine? But not him; He could tell me he dropped $400K but his Dad had died and every dark cloud has a silver lining as the old boy had left him $200K. Nice enough chap in most ways; But don’t actually recall ever speaking to him again after that?

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  13. Errata: “if they get $100K they are blessed? With such sums being altogether to fritter away of course” => “if they get $100K they are blessed? With such sums being altogether too easy to fritter away of course.”

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  14. Certainly a very different situation here, Ned. I really can’t see the BB retirement issue as a threat. Now death duties would utterly ravage the West, but no government would survive that… .

    Despite our preference for alternative energies… and our major expenditure on same, I find myself more anti-Green every day. Their latest crap is a bumper sticker: “I’m a fisherman and I support Marine Reserves”.
    I’m thinking of retaliating with a green t-shirt emblazoned in white with “I’m a Greenie who bludgeons dolphins with native forest GM harpoons!”

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  15. $100K inheritance:

    Me and missus would like to do a cheapy trip OS every 5 years – Total $5K per trip for 4 trips over next 20 years – Tat ta to $20K

    Hmmm – To do the salad bar thing at Sizzlers with a drink or two once a month doesn’t seem unreasonable at a cost of $600 a year – There goes $12K over 20 yrs

    And we’ll buy fish and chips for two once a week – Another $10 a week or $500 a year or $10K over 20 years

    Plus a meat pie and flat white each once a week over 20 years is another $10K

    So there’s half the inheritance gone without a blink or a think? Or servicing any little lifestyle enhancers like I’m a bit old and a bit incontinent so hanging out to use the loo is a hassle – Think I’ll put a second one in. Up front cost isn’t too bad. Especially if I do it myself. But I reckon the additional water and sewerage charges will add up to a lot over 20 yrs or 30 yrs?

    Plus Jeez, being bits of old ‘cruisers’, we both both fancy one of those new fangled 4 wheeled go cart type things with the big high flags that stick up at the back that ya poke down the shopping centre to buy our groceries and stuff eventually maybe? Before we have to fork out for wheelchairs anyway!

    The list is endless with the missus thinking some new curtains would be nice to see us through our retirement and me really thinking that a nice welder that I’ve always manged to get by without to date really would be handy (as opposed to the poxy arsed thing that has been both sticking on and/or blowing holes in any bit on low gauge metal its touched for the last 20 years.) Plus Jeez, I’ve ALWAYS wanted an oxy. And a decent chain saw and a mulching machine, ETC … Heck a lathe would be GREAT!

    Plus I really WILL get to be a bit old to do exterior house repaints one of these days. And have to begin to think about what it will cost to get the grass mowed monthly and the trees trimmed yearly – By outside labour? (Sorry – You simply won’t be able to have those curtains after all love – Or a new hotplate so ALL the elements work! ;) )

    And if there is any sort of genuine and serious and ongoing medical problem for either of us, then any totally non existent $100K fantasy ‘inheritance’ could get hit reasonably severely.

    Good thing neither of ‘us’ drink or smoke or gamble hey? ;)

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  16. Well, we all gambol, mate.

    The trick is to _never_ touch the principle. Spend some of the cash generated by the principle. I agree that $100K wouldn’t last long.
    A mate of mine swears it’s the minimum amount (tax free) he could live on, annually; but with a nice yacht and YC membership he may be right.

    Riesling night. Dinner for eight. All the fresh delicacies the Indian Ocean can provide. Love the simple life… . :D

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  17. “Certainly a very different situation here, Ned.” – It’ll be interesting to have a look over your way eventually one day mate. Would like to have some more info on the potential wealth effect of inheritances flowing through subsequent generations. While the BBs could get a bit(?), my punt is that with there being so many of us, we’ll by and large be forced to consume what we’ve acquired and there’ll be less flow on from us. With the forced consumption seeming to suit governments anyway – At least in the West to keep their economies ticking over.

    The really debatable point seems seems to be whether governments should go into large amounts of future debt as an alternative. With Japan seeming to have done so as one of the first to hit the rocks. And lots more quite recently (including the US) having since shown an inclination to follow.

    But with us still always having to go back to the thought that no nation, ultimately can consume more than it produces I guess – Unless it pinches something off someone else history seems to say! :)

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  18. There are certainly US cities, even today, where centuries of accumulated wealth persist, relatively immune from bad government, Ned. It also occurs to me that we see the same financial immunity in far western Canada.

    It’s likely that what we’ll see here is a continuation of The Great Divide in Australia. The comfortable will become more so; those who fail to grasp the nettle will attribute their loss to well-organised conspiracy against them. Ross hinted at the immunity of our rich in an earlier post.

    Never having been constrained by feelings of powerlessness, inadequacy or paranoia, I find it difficult to relate to those who are. We still haven’t discovered a more amenable financial climate in which to thrive. With Asia rising, we may have a few more decades of relative bliss. Let’s hope so! :D

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  19. I wonder how clever it it is to keep poking China in the eye.Bernanke was in the middle of his witless speech in Frankfurt, about 30 seconds into it when China announced their RR raise. Rather obviously timed.

    Slightly off topic, but i always have wondered if greenspan became the preposterous enabler that he is because he was, well, lets face it, butt ugly as a teen and young man, and showed little to no improvement over time. He was running around with a clever crowd, Ayn Rand and the like, but i guarantee you the closest he got to a girl in those days was old reliable five fingered mary.Evidently it left an impression on him and he has been agape ever since.If we could somehow have found him a nice fast tramp in his 20s, this would be a very different world today..

    But to return to China, its generally accepted that Pearl Harbor was some sort of unprovoked sneak attack. Je le doute.

    The United States was blockading Japan,who were admittedly flexing their muscles, by cutting them off from oil, and natural resources .

    They accordingly responded.The similarities with provoking China today are ominous. .

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  20. China’s main interest is in its ongoing financial advancement I imagine?

    It has reserves. So can buy what it needs to advance for the foreseeable future in a relatively free trade environment. Unless its debtors (including the US) default. But even then it’s overall financial credibility would remain better than theirs’ perhaps? No need for those who are highly productive and living well within their means to panic and do anything stupid that plays into the hands of their debtors.

    Though unless something changes, their debtors are shaping up to have a REAL problem! :D

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  21. Imagine a US default – China says We really don’t trust your promises to give us Hawaii and Alaska and California and Manhattan and Cuba and Canada sometime over the next 100 years if you really can’t make good – So we’ll settle for ALL your patents over everything and your aircraft carriers and subs and military aircraft and nukes, NOW! :D It’s bedtime … ;)

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  22. Comment by Ned S on 21 November 2010:

    “So we’ll settle for ALL your patents over everything and your aircraft carriers and subs and military aircraft and nukes, NOW! :D It’s bedtime … ;)”

    “You can have those things when you pry them from our cold dead hands!”

    Would be the US response….

    Stillgotshoeson
    November 21, 2010
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  23. Further to China.

    I have always taken the position that Asians are smarter than us, or certaainly in a lot of areas.Possibly due to the complexity of their language and its impact on child brain development..
    While its admittedly unscientific , I sat in enough classrooms where they were the smartest guys in the room. Perhaps we can out innovate them, or could, but they generally get hold of the patents through student exchange programs anyway,crank up a dozen factories and its goodnight irene for that transitory advantage.

    In short these 1.3 billion people look like a formidable opponent, and if I were a betting man…well, lets be serious, these people will bury us,be it sooner or later, assuming their society holds together, which admittedly could be a bit of a problem.

    So to declare economic warfare on them has parallels to what Reagan did to the Soviet Union, namely draw them into an arms race their economy had no hope of supporting. It worked, and they collapsed.Without launching. probably lucky, and they are reconstituting fast
    anyway.

    But how a debtor holds a gun to their prime creditors head and backs them up on their currency rig , this seems a bridge too far.I hope to God we are not trying to do a Soviet Union on them. It seems clear that China is getting plenty pissed off, and right now.

    There is an assumption that China owns so many treasuries that they are hamstrung, and unable to sell them lest they commit economic suicide.

    Highly doubtful. They are far too smart. A trillion two is a lot, but its a lot less than it once was, and my guess is that China has entered into a blizzard of hedging arrangements around the world and has been doing it for several years.

    So, is the United States blackmailing China with an empty gun? If so, we are going to regret finding this out.

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  24. Gord: “Asians are smarter than us, or certaainly in a lot of areas.Possibly due to the complexity of their language and its impact on child brain development.. While its admittedly unscientific , I sat in enough classrooms where they were the smartest guys in the room.”

    Doing postgrad in Canada, I thought so, too. It was explained to me thus:

    The _really_ smart Chinese emigrated from China to Hong Kong. Then the very smartest Chinese emigrated from Hong Kong to Vancouver. This ‘siphoning off’ effect is measurable. Tests indicated higher IQs for Chinese uni students in comparison to Caucasians.

    Remember that this small cohort, just over one million out of 3.1 billion, represents a real brain drain. You’d anticipate higher intelligence in a BC cohort which has almost doubled since Hong Kong was seceded to China.

    Add to that, the Chinese were almost the only students still studying at the campus at 3:00 am, even on Sunday. Not sure it was necessary for them to be there, but their diligence gave them another head start that was difficult to match… .

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  25. Biker pete

    Surely this is why the Internet is so fascinating.No matter what you know, you will run into people that know more, or other, complementary things.I live on an island visible from vancouver.

    There was , if i remember correctly, this professor called Shockley i think who caused huge trouble with educational racial profiling.Kind of a well named guy.

    Its a bit like the hundred yard freestyle in Olympic swimming. Solid white guys in the finals …slow twitch muscles. And the hundred yard sprint? Solid black guys,… fast twitch muscles.

    What do you do? maybe just chuckle. Strange creatures us bipeds. How we try, we really do… and how we consistently f… up, imprisoned by our natures.

    Will the Internet take down the society. In my opinion yes it will.

    The governments have no hope of keeping up.

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  26. Which island, Gord? I’ll be on Gabriola in July. Family have a holiday cottage there.

    I’ve sailed through most of Georgia Strait in the past, visiting most of the US and Canadian islands, anchoring in some beautiful bays.

    I’ve lived in Kerrisdale, Shaughnessy and Campbell River over the years. Still have family in Quebec and BC. Crossed Canada E to W last year.

    What do I do? I’m an Australian property investor who builds rental homes when the timing is right. At the moment it’s not… . :D Apart from that, I’m working towards self-sufficiency. Toothpaste, dark chocolate and alchemy are a challenge.

    NB: You may know Charlie Ungerleider. I was required to take one of his courses to demonstrate I had sufficient background knowledge of Canadian immigration history. Despite my doubts and protestations, it was well worthwhile… .

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  27. Helz a poppin’ alright Biker:

    http://www.theaustralian.com.au/business/property/rba-intervened-to-avert-housing-slump/story-e6frg9gx-1225958005881

    FOI – No wonder my mate who sometimes rubs shoulders with some higher forms of life in Oz reckons that governments and policy makers quite necessarily need discretion to keep their little secrets hidden! :D

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  28. Chinese – Only bloke I’ve ever had to give credit for solving a problem in a uni assignment that I couldn’t was one of them. Though, truth be told, the smartest blokes (in terms of raw intelligence) I ever come across in my time certainly seemed to be three white Aussies (with me having tripped over lots of them), two indigenous Aussies (with me having tripped over lots of them too but significantly fewer than white ones), and two Scotsmen (with me only having tripped over rather few of them so I’m happy enough to put it down to a chance happening until proven otherwise?)

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  29. I think one of the fundamental issues Gord, is that if things are allowed to continue on their merry little (though natural enough?) way, the per capita GDPs of the developed nations will go down and those of the developing nations up. Until they all sort of meet somewhere around the middle. Given that GWB’s thesis about a ‘Rising tide lifts all boats’ seems to have had lots of bloody great big holes blown in the bottom of it?

    Could have been been overrating one of those Aboriginal lads? – He was certainly cluey. But a hopeless pisspot with considerable general knowledge when sober when I knew him – Who his ‘raw intelligence’ type brother in law just could have coloured my perspective on by commenting how really cluey HE reckoned said pisspot was??? When said pisspot wasn’t taking another sip off the top of his beer and promptly ‘spitting’ it back up into the stainless steel trough that ran all round the bottom of the bar for accommodating cig butts etc plus any such little accidents that would help a lad have another sip.

    That was a heck of a pub! Only one in hard core white fellah land I’ve ever known where a bloke could buy a bottle of bottle of chilled metho as a 10 PM takeaway! :D

    Still, I’ve not seen anything to indicate intelligence is limited by race?

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  30. Funniest thing was their willingness to award a four-year-doctoral SSHRC scholarship ($48K was a lotta money back then) to an Aussie, on the basis of Canada assisting someone from an undeveloped country, Ned. No, I wasn’t at all offended. ;)

    Gord, my query re location was out-of-line. My guess is Saltspring, but there’s no need to provide a location. Guess you get over to Whistler frequently, as we do.. .

    Interesting RBA story, Ned. Thanks!~ :D

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  31. “assisting someone from an undeveloped country” – Maybe us and the Yanks can look forward to the day when China and India and Singapore and Vietnam all do the same to cheer us all up a bit maybe mate? :D

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  32. Does anyone know why a country borrows money at interest from another ?

    Why print a Bond when you can print a dollar ?

    Why are they borrowing and what happens if you choose not to borrow ?
    Who is in charge of the world money suppy ?

    Reply

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