The China Game

This article is for more information for those that are interested in China Inc.

It is interesting to read various analysis such as this. It is true that China has America in a tight spot, however, the plunge protection team will without a doubt have thought of something in its secret meeting rooms. Have faith, and think about what the analysts are saying.

As always, "Follow the Money!" The next run up in the metals could be dynamic. Thursday the 15th is my guess for when the start of the push will begin. The Chinese may use derivatives on metals, but delivery of the real commodity has always been China's shown strategy. When done, the fundamentals of supply and demand in true form will come to play.

This is all part of a history we cannot as of yet fully comprehend. After all, this is just the start of the long war. International trade can be used for operations other than war. China may just be trying to wage just that.

This does not mean doom and gloom for America. Indeed, the opposite is true. Our financial engineers are invisible and invincible. We started this game, and have our own back up plans.

One example in the current economic infrastructure is the argument that outsourcing is bad because it makes America vulnerable. This is not necessarily true. While we will delve into this in a later post, for now keep the following account in mind.

It is the case that America has built up the Chinese infrastructure to a point that its newest factories are the products of American foreign direct investment. With such investments in place, it is possible, and quite likely, that American companies have the blueprints to the factoris. The point to this case is this: in times of war, these open sources of intelligence will allow for American war planners to target with great efficiency all of China's industrial production.

And in this exactly is the danger in allowing China to begin divesting from T-Bills and investing in American companies. If they have the same opportunity, the American advantage will have been nullified.