Monday, November 16, 2009

The Chinese Century & Obama

On his visit to Japan, President Obama bowed from the waist down when greeting Japanese Emperor Akihito. Obama has also bowed from the waist down when meeting with the King of Saudi Arabia. Obama apparently has not learned the lessons of history. Americans fought a revolution so that we would never have to bow to a prince or potentate and all other Presidents have followed this tradition. Obama thinks he is being culturally sensitive because he wants to be a "different kind of US President" in keeping with global traditions; but what he does not understand is that this is a signal of weakness not strength. But let's face it. Whose bread you eat, whose song you sing. Obama needs these countries to keep buying treasury bonds to fund the trillions in deficits necessary to fund all of Obama's Socialist Schemes because the reality is that if Obama took every dime away from working Americans in taxes, it would not be possible to finance the trillions of dollars in deficits on the horizon.

Ironically, Communist China is in a position to lecture this young, inexperienced President about US finances. And, why not? China holds over $700 Billion in US Treasury Bills. Without China buying our Treasury Bills, there would a financial crisis like none we have ever experienced before and even worse than the financial melt down in the last few years. The wasteful spending would have to stop immediately and/or the Federal Reserve would have to start printing even more money than is occurring now. We would see sky high inflation and interest rates and another Great Depression. If the trillions in deficit spending persist, we are going down this road anyway and China knows it. The Chinese are scared to death that the US could default on its debt. As it is now, rating agencies are predicting a downgrade of the US credit ratings from our triple AAA rating by 2012. As such, the Chinese are attempting to slow their purchase of Treasury Bills and are instead buying companies and commodities like gold. The Chinese see this tsunami coming as the dollar is collapsing. They are also pushing for a move away from the dollar as the world's reserve currency.

In fact, hours before Obama's visit to China, their top banking regulator, Liu Mingkang, Chairman of the China Banking Regulatory Commission, issued a sharp critique of US financial management and he doesn't work for Fox News. Mr. Liu said that a weak US dollar and low US interest rates are leading to massive speculation that was inflating asset bubbles around the world, which is causing "unavoidable risks for the recovery of the global economy, especially emerging economies." Mr. Liu went on to say that the situation is "seriously impacting global asset prices and encouraging speculation in stock and property markets." Isn't it ironic that a Chinese Communist banker is lecturing a Democrat Socialist President. Most important, when China speaks, President Obama is forced to listen and must bough down whether he likes it or not.

I have been to China and I can say that the development in China in the last ten years has been remarkable. The Chinese are extending their reach around the world through trade deals while the Obama Administration dithers on trade negotiations. And, of course, while most Chinese are not rich, China is a rich country with money to invest. President Obama said in a speech in Shanghai said "that we do not seek to contain China". Given the bankruptcy of the United States, which is the result of Obama's trillions in deficit spending, we could not contain China even if we wanted to. Not that we should contain Chinese advancement, but how can the US contain its banker anyway? And, how can we push the Chinese to practice fair trade, proper currency valuation, increased human rights and more democracy, when we need them as much or more than they need us. I do not fault the Chinese for their global positioning. The Chinese have been smart and our politicians have been very dumb and naive.

The 20th Century was the American Century. President Obama and the Democrat Socialists that control Congress, unless stopped from enacting all their Socialist Schemes, which will result in trillions in deficit spending and the bankruptcy of the United States are insuring that the 21st Century will be the Chinese Century. If we don't stop the fiscal insanity occurring in the United States, we will see our nation become a banana republic. Don't think it can't happen because in history it has happened. The Soviet Union fell apart not because it did not have a strong military; but because of economic collapse. We have to take back our country. The only way to do it, aside from the election of Conservatives, is through Constitutional Amendment to clean up the mess. We need term limits to stop the corruption. We need a balanced budget amendment to stop all the deficit spending. And, we must place a limit on federal authority to raise taxes without approval of the majority of the states. Clearly, we need more checks and balances. Unless and until these changes are made to the US Constitution, the madness in Washington will never stop. It will be a tough fight; but we can do it. We must do it to save our country from becoming a third rate nation.

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