Geiger
There is a least one thing thats certain and thats this chess on a grand scale
They play a very dangerous game, historically this time has bought nationalism, free trade , integrated economies, floating currencies , low tariffs are a growth phase phenomena
If there are echo's of history here we will see the kind of contraction phase policies that have emerged in past epochs.
Countries play the strong strategic pieces, the Americans will play it as ruthlessly as we have come to expect of them, so will the Chinese.
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"The inherent problems of the international economic system have not been fully addressed," said China's president Hu Jintao. Indeed not. China is still exporting overcapacity to the rest of us on a grand scale, with deflationary consequences.
While some fret about liquidity-driven inflation, Justin Lin, World Bank chief economist, said the greater danger is that record levels of idle plant almost everywhere will feed a downward spiral of job cuts and corporate busts. "I'm more worried about deflation," he said.
By holding the yuan to 6.83 to the dollar to boost exports, Beijing is dumping its unemployment abroad "stealing American jobs", says Nobel laureate Paul Krugman. As long as China does it, other tigers must do it too.
Western capitalists are complicit, of course. They rent cheap workers and cheap plant in Guangdong, then lobby Capitol Hill to prevent Congress doing anything about it. This is labour arbitrage.
At some point, American workers will rebel. US unemployment is already 17.5pc under the broad "U6" gauge followed by Barack Obama. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.
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Most folk think that the tariffs of the depression era were a stupid mistake on behalf o the policy makers, the policy makers had nothing to do with it, faced with massive unemployment the political psychics create overwhelming demands on the political class by the middle and working class to stop the bleeding of jobs overseas.
America and China are heading for a massive showdown thats likely to be unavoidable, if history is any guide all of the reforms of the last 30-40 years are in danger of being rolled back.
At some point the Americans will have a choice between taking a stand while they are still powerful or whither/wimp into economic ruin. My guess is that with the November elections coming up there will be a much tougher congress elected, the debt to China is now recognized as a national security issue, we should be expecting the mother of all trade wars between the west and China to develop, capital controls will be put in place , the expansion of Chinese government economic ownership across the west will start to meet major resistance, America in crisis always finds a new enemy, its shaping up now .
http://breakfornews.com/forum/viewtopic.php?p=62542
Similarly if China is to implement harsher economic policies it needs to distract its people , what better way than to pick a fight with the west
http://www.timesonline.co.uk/tol/comment/columnists/bill_emmott/article7018411.ece
The Chicago philosopher Leo Strauss was the grandfather of modern American foreign policy (many of GWB's 1st cabinet were his students), he thought that the best way for ordinary human beings to raise themselves above the beasts is to be utterly devoted to their nation and willing to sacrifice their lives for it. He recommended a rabid nationalism and a militant society modeled on Sparta. He thought that this was the best hope for a nation to be secure against her external enemies as well as the internal threat of decadence, sloth, and pleasure. A policy of perpetual war against a threatening enemy is the best way to ward off political decay. And if the enemy cannot be found, then it must be invented.
A new cold war is beginning.
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