China will soon get its hands on US weapons technology; all the jobless weapons researchers will be moving to Beijing to help pay off the USD 1.9 trillion dollar deficit. To make it faster to pay off the debt, just sell all the aircraft carriers and stealth fighters at one go!!

“and you cannot predict the future of (e g) the dow jones index because the index is already the prediction”

These statements seem like common sense – but they aren’t true. I called stock market bottoms in Oct 74, Oct 82, & Jun 84. I called the bottom in bonds Sept 81. I called the market fall in 87. It only took 1 trade to beat Robert Prechter in 84. (he had 200+ when he won a trading contest).

I used bank debits. The cycles for real-gnp & inflation never vary (they’re always exactly the same). They are the same for legal reserves and bank debits.

The FED discontinued the series. Almost no one at the FED used the debit series (Paul Spindt was an exception but he didn’t know how to construct a time series.

We would never have gotten in this trouble using bank debits. That is the Holy Grail.

Future Nobel Prize winners, CEO’s and members of the Politburo.

DJC: High-tech US exports are mostly prohibited for export to China so the biggest US export to China is literally recycled garbage paper, and even more paper US dollars bills.

And Russia will not sell China its latest military technology, and even what the US can sell China is better than what the Russians can offer.

China ultimately needs to stand on its own and have world-class aerospace industries and not be dependent on Russia, the United States, or Europe. This requires a skilled workforce, and the US/UK is providing China with that, and Russia isn’t.

What the IMF needs to do is to deliver a massive general SDR allocation to ensure that all IMF members have enough reserves to meet their short term needs. Such a measure would both reassure the markets and simultaneously ensure that there would be time to put together a proper long term package for countries in trouble without worrying about how the troubled country would pay its import and sovereign debt bills. Considering the size of the crisis, an additional 500 billion SDR (roughly $750 billion) would go a long way towards ensuring the economic stability of the world financial system.

Russia supplies Oil, natural gas, uranium, but also industrial products like weapons and nuclear reactors.

What does the US supply to China? Some Boeing aircraft, and tons of fiat paper US Dollars. High-tech US exports are mostly prohibited for export to China so the biggest US export to China is literally recycled garbage paper, and even more paper US dollars bills.

At least Russia supplies China with raw material and industrial products of “real economic value”, whereas the US supplies China with fiat US dollar paper printed in unlimited quantity by Helicopter Ben Bernanke.

This is unrelated to the CDO, and is an example of operational risk. What happens in these swaps, is that bank 1 will wire over $400 million on day one, and the very next day bank 2 is obligated to wire back some amount say $390 million or $410 million on day two.

If bank 2 goes bankrupt between days one and two, then you have a problem. What bank 1 should have done is to stop the wire transfer, but no one thought to do that…. Technically bank 1 is legally obligated to make the transfer, but if it doesn’t, then there isn’t that much bank 2 can do.

Someone goofed up….

This isn’t the first time this has happened.

Personally, I think it would be a bad idea for China to get too close to Russia (or to the United States). For China to have an independent foreign policy it means maintaining good relations with both Russia and the United States.

In particular, if China gets too close to Russia this means supporting Russian activities in Georgia which would set a very, very bad precedent for the Taiwan issue. Also, other than oil and weapons, there is not very much that China can get from Russia.

I’m not insisting that the PRC is a democracy. Quite the opposite.

When I use the term “democracy” I mean “liberal democracy.” This involves multi-party competitive elections in which the opposition parties have a strong influence on policy, the PRC outside of Hong Kong is not a “democracy”, neither is Singapore.

The thing is that I don’t like into a definitional war so if you have a different definition of “democracy” I’m not going to spend too much time arguing whose definition is the correct one. If you argue that Singapore is a democracy then you are using a different definition than the one I use, which is fine as long as we both know what we are talking about.

One way I do this is that my definition of democracy is “liberal democracy.” This makes it much easier to have a discussion, since most people from the PRC will agree that the PRC is not a “liberal democracy” just as if someone wants to argue that the PRC is a “socialist democracy” I’m not going to argue very much against it.

My question is that if someone has a definition in which Singapore is a democracy, then it is very difficult for me to see how the PRC is not a democracy using that definition. On the other hand, it does seem that people who consider Singapore a democracy, don’t strongly object to the PRC also being considered a democracy.

Russian president Dmitry Medvedev said that the “economic egoism” of America’s “unipolar vision of the world” is a ”dead-end policy.”

China’s massive foreign exchange reserves and its strong position in manufacturing have given China the leadership role in Asia. The deputy prime minister of Thailand recently designated the Chinese yuan as “the rightful and anointed convertible currency of the world.”

Normally, the Chinese are very circumspect in what they say, but on October 24 Reuters reported that the People’s Daily, the official government newspaper, in a front-page commentary accused the US of plundering “global wealth by exploiting the dollar’s dominance.” To correct this unacceptable situation, the commentary called for Asian and European countries to “banish the US dollar from their direct trade relations, relying only on their own currencies.” And this step, said the commentary, is merely a starting step in overthrowing dollar dominance.

The Chinese are expressing other thoughts that would get the attention of a less deluded and arrogant American government. Zhou Jiangong, editor of the online publication, Chinastates.com, recently asked: “Why should China help the US to issue debt without end in the belief that the national credit of the US can expand without limit?”

http://www.counterpunch.com/roberts10302008.html