A necessary rate hike will occur in stages within the next 18...

A necessary rate hike will occur in stages within the next 18 months which will be followed by all western countries including Japan as a means to contain China.

The war in Irak for all intents and purposes has been declared lost. The control of Iraki oil will never be in the hands of the US and the investment made by China prior to the war in Irak will have to be acknowledged.

China has control of significant pools of oil from Venezuela, Sudan, Nigeria, Iran, Algeria, Saudi Arabia and other major suppliers. They are emerging as the largest consumer of oil and American business has been underwriting their access to oil to satisfy American outsourcing of its business to China.

The fact that the Chinese now have over $1 trillion in foreign reserves and is expected to increase their holdings and reserves by another half a trillion within the next 18 months to 2 years is frightening the west especially the US which has no anti dote to the Chinese juggernaut. China can do what it wants to any economy once it reaches the 1.5 trillion mark.

Calls for China to revalue its currency to reflect its true value has fallen on deaf ears. American businesses will not move out of China to other less stable and effective manufacturing environments. China won't revalue the Yuan.

The only mechanism available to the Americans and other major western industrial powers is now to significantly shock their consumers by increasing interest rates, creating a huge flow of capital from places liket China to western banks to benefit from the higher rates.

Westerners will be forced to curtail their spending on consumer goods from China when higher interest rates are introduced reducing demand. Chinese workers will hopefully rise up when laid off work and the Chinese economy will be stressed to the point the west will be able to negotiate with China.

The softly softly approach has not and will not work. Brace yourself for what is simple yet the only solution to correct a huge unfair economic balance in foreign trade with China and the west. The Falung Gongs and other clandestine organisations have been preparing for the backlash and the repercussions and the day when they will perform their obligations as they see it.

China will survive it though and our pain will get worse.