China stimulus package "strategy"

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Rob Z's picture
Rob Z
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Joined: Nov 30 2008
Posts: 49
China stimulus package "strategy"

Another interesting comment made on Market Watch: 

China may announce another stimulus package as soon as tomorrow. Why is that important to us?

Well, if they use their dollar reserves to buy the commodities that are sold in dollars globally, it could mean they are "dumping" dollars in a way that will keep their value up while doing it. If they sold debt, it would hurt but, not buying debt and instead buying commodities sold in dollars, they solve two problems. One, they need the commodities and could even stock pile them while they are cheap for later use and they get rid of dollars that are still flowing in even if in reduced amounts. But, that hurts our ability to get the loans we need. At some point this will damage the dollar if the Chinese keep avoiding the buying of more and more debt as we seek more and more loans. That means the debt that China has already bought would be hurt if the dollar starts falling.

 

plantguy90's picture
plantguy90
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Posts: 271
Re: China stimulus package "strategy"

They are hoarding, no different than a lot of us here on the forum.  What do you mean by "loans we need?"

RSLCOUNSEL's picture
RSLCOUNSEL
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Posts: 41
Re: China stimulus package "strategy"

To add to this discussion, perhaps the point is "What is your strategy based on China's Strategy"?

Part of my analysis from 2009.02.25 is posted here: http://tedbits.blogspot.com/2009/02/mad-money.html

To add to that, the recent energy agreement with Russia is also significant.  They can use foreign currencies held by the CBOC to lock up raws and mineral rights.

Bottom line, China is going to build their own consumer class and not wait for the consumers of the word to re-emerge.

The above link is part of an investment strategy I have to this regard which I "timidly" began to engage this week with real money.

My advice to the US?   Consider selling Alaska to China... it is clear you are not going to use it for anything.

 

 

Ruhh's picture
Ruhh
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Posts: 259
Re: China stimulus package "strategy"

CIA factsheet on China

https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

caroline_culbert's picture
caroline_culbert
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Joined: Oct 2 2008
Posts: 624
Re: China stimulus package "strategy"
RSLCOUNSEL wrote:

To add to this discussion, perhaps the point is "What is your strategy based on China's Strategy"?

Part of my analysis from 2009.02.25 is posted here: http://tedbits.blogspot.com/2009/02/mad-money.html

To add to that, the recent energy agreement with Russia is also significant.  They can use foreign currencies held by the CBOC to lock up raws and mineral rights.

Bottom line, China is going to build their own consumer class and not wait for the consumers of the word to re-emerge.

The above link is part of an investment strategy I have to this regard which I "timidly" began to engage this week with real money.

My advice to the US?   Consider selling Alaska to China... it is clear you are not going to use it for anything.

Technically... I think we owe them a lot more than Alaska but that doesn't mean I think we should give it up.  Well I wouldn't put it past the Chinese for starting this whole endgame to gain the leverage it needs to acquire the things they want. (speculation)

RSLCOUNSEL's picture
RSLCOUNSEL
Status: Bronze Member (Offline)
Joined: Sep 26 2008
Posts: 41
Re: China stimulus package "strategy"

This a repost from something I posted somewhere on this wildly successful community site; so forgive me for duplicating but here is a repeat in the event it may help someone interested in this topic:

In January, I posted a reply that said:

 

Friends:

This summer I had the extraordinary opportunity to spend some personal one-on-one time with Richard Armitage (Former US State Dept employee) and Robyn Meredith author of "The Elephant and the Dragon".   I am not in a position the exactly quote either but let me share 3 things I learned:

(1) Think of the United States as a Pacific Rim country.   Look at the map.   Go west! young man.

(2) The US and China are like a husband and wife.   Each sleeping in the same bed but dreaming different dreams.

(3) China's government is un-elected and the only thing that keeps them in power is a happy population.  China's larget problems are pollution, water and food.

 I would be interested in any thoughts you may have to build on some of these connections but here is what I see:

(a) The US and CHINA have a lot of common interests but not necessarily the same problems.

(b) The US and CHINA are very different from one another at many levels.  Interactions between the countries and the peoples of these countries will ensure that no one "falls asleep" or "takes anything for granted" because we are so different.

(c) Discussions in the press about a G2 vs. G7, G8, G20 seem like a "trail balloon";  notwithstanding US government comments about "getting tough" with China --- that's for public consumption; other things are going on that do not get reported.

 RSLCOUNSEL

PS: I hold a multiple entry visa to China and have been there many times for business; so I am not speculating from afar.

 

Rob Z's picture
Rob Z
Status: Bronze Member (Offline)
Joined: Nov 30 2008
Posts: 49
Re: China stimulus package "strategy"

All, thanks for your comments. The China post is not my thoughts or strategy, I plucked it from another site and posted it here because some people here seem interested in the topic and have interesting insights. I think the relationships between China and the US are very important, for obvious reasons, but its the "not so obvious" things that go bump in the night that make me sit up and pay attention.   

RSLCOUNSEL's picture
RSLCOUNSEL
Status: Bronze Member (Offline)
Joined: Sep 26 2008
Posts: 41
Re: China stimulus package "strategy"

Rob Z

It is an important topic you raised.  The US and China are two countries that need each other.  Hopefully the egos of men do not get in the way of working together.  Neither the US government nor the Chinese government are angels but healthy co-existent inter-relationships are possible and mutually beneficial.

Governments notwithstanding, the people of both countries are basically good and want the same things.  Simple things.  Simple freedoms.  None of which is possible in a government controlled society.

Each country is facing historic challenges. 

RSL

plantguy90's picture
plantguy90
Status: Gold Member (Offline)
Joined: Jan 27 2009
Posts: 271
Re: China stimulus package "strategy"

So we have a drunken spendthrifty husband who is still living off his good family name and fortune, and a shrewd wife who is stuck in a bad marriage, but where is the "love?"  She has been taking money and tucking it away somewhere, but for what purpose?  To take it back to her family...

China's population is disarmed, so where is the revolution coming from?  Social unrest?  Their govt. has sucessfully engineered the return of China to prominence from the backwaters of developing nations.  The people's pride in their country has never been higher.  Relatively speaking, the population is very happy compared to other times in history.

China has a long memory, and while polite, memories of how the western powers completely humiliated the country a hunderd or so years back may resurface in interesting ways. 

 

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