Tuesday, August 07, 2007

China Threatens to Dump Dollar on International Market

With 44 percent of the American foreign debt in foreign banks, China sees the US as a very vulnerable adversary. China holds $1.33 trillion in foreign reserves and has announced today they are not afraid to use that clout to beat America into submitting to their wishes. Prepare yourselves, folks, for more inferior and dangerous products, and poisonous foods. If we object, China is threatening to dump their greenbacks on the world market devaluing the dollar far below a survivable level.

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.

He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

"China is unlikely to follow suit as long as the yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," he told China Daily.

The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being "held hostage to economic decisions being made in Beijing, Shanghai, or Tokyo".

She said foreign control over 44pc of the US national debt had left America acutely vulnerable.
The power of the American economy cannot be ignored, however. We have found ourselves in very bad economic situations before and we prevailed. China, too, is in a vulnerable position. They hold far more dollars than is healthy for a chronically sick economy. If you owe the bank $100.00, the bank owns you. If you owe the bank $1.33 trillion, the bank can't afford the loss. China however, has always played the long game and may be willing to take the hit to have the chance to bring down the great American economy.

Buckle your seat belts. It's going to be a bumpy ride.

The Telegraph

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Take the Monet and run

Art thieves stole five priceless paintings from the Beaux-Arts Jules Cheret museum in the Riviera city of Nice Sunday. The daring daytime robbery at 1PM targeted one painting each of the Impressionist painters Claude Monet and Alfred Sisley, and two by the Flemish master Jan Breughel the Elder. A second Sisley painting was removed from the wall, but was so heavy that the thieves dropped it and the frame broke.

The staff was ordered to lie on the floor at gunpoint while the bad guys removed the paintings from the wall. This one Sunday was a free admission day to French museums, so there were about six visitors in the museum at the time. Despite the loss of the paintings, French museum patrons continued their rounds of the treasures of Western Civilization. This woman dutifully read the tags posted next to each vacated art space. (Read more at Indigo Continuum.)

Speaking to Eleanor Beardsley of America's National Public Radio, one French gentleman who had witnessed the robbery said, "I didn't think it was a robbery. It just seemed they were taking the paintings away to restore them or something. But, it was a little strange how they were wearing motorcycle helmets and masks."

A little strange? Yeah, I'd say it was a little strange. Strange that a grown man can stand there, witness an armed robbery, and not think anything was wrong. What about the museum guards lying on the floor, buddy? Geez! Is it any wonder that so many French don't see their country disappearing into the Islamic

Times on Line

The stolen paintings:

Monet's 1897 "Cliffs near Dieppe,"

Bruegel's 17th century "Allegory of Water"

Bruegel's 17th century "Allegory of Earth"

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Monday, August 06, 2007

If You Can't Stand the Heat, Get Out of the Sauna

After having searched the world high and low for a return story appropriate to my blogosphere stature, I have found the perfect story.

On this August 6, while the rest of the world is condemning America (again) for the first atomic bombing of a civilian populated city - Hiroshima, Japan in 1945 thereby saving millions of lives potentially lost in perhaps years of close quarters fighting - and preparing to condemn America for the second atomic bombing of a civilian populated city - Nagasaki, Japan in 1945 thereby .... (see Hiroshima above) - as well as condemning America for selling arms to Saudi Arabia (HEY! what about France selling arms to Lybia?); America's war in Iraq (well, maybe it was not such a bad idea after all, say the Democrats, as we now seem to be making headway; in fact, maybe we should bomb and invade Pakistan, too); America's war in Afghanistan, America's war on Terror (because these three wars are separate wars, you know; at least, that's what the Dem leadership wants us to believe); continued condemnation of America for the handling of Hurricane Katrina that damaged an area the size of England (while England garners praise for failing to evacuate flood victims from an area the size of Rhode Island...okay, Connecticut); condemning Hillary Clinton for exposing herself on the floor of the Senate, cleavage has its place and it apparently isn't the floor of the Senate (hear that Ted Kennedy - NO cleavage, and that includes butt cracks! On the other hand, we might find Jimmy Hoffa in there); and condemning America for having structurally deficient bridges (ONE fell down; one for goodness sake, and at least we don't have a song about our bridges falling down); and finally, condemning America for potentially having a chance of winning in Iraq because that would be really bad for the Democrats.

So the great story I found? The World Sauna Championships were held in Finland recently. Seventy-one entrants from around the world competed in the sweat-soaked competition in Heinola. Battling it out for God and country inside a glass panelled sauna placed on a stage, men and women from Sweden, Australia, Morocco, Germany, and Egypt. The simple rules are to remain seated and don't wipe the sweat from the face. The temperatures increased from the starting low of 110 degrees Celsius (230 degrees Fahrenheit) and ended in the final round at 130 degrees C (266 degrees F.) and every 30 seconds, water is poured over the hot stones.

Two individual contests caught the imagination of the international audience. Competition became heated in the men's division when the two Finns, Timo Kaukonen and Markku Mustonen, went head-to-head. Proving to be the more heat resistant, Timo Kaukonen beat out the competition with a time of exactly 12 minutes and 26 seconds when Mustonen escaped the hellish sauna after only exactly 12 minutes and 23 seconds.

In the women's division, another Finn-on-Finn battle royal played itself out between Leena Kautianen and Leila Kulin. Kulin held on for as long as she could, but went down to defeat and exhaustion to Kautianen. The winning time for Kautianen was a very respectable 10 minutes and 31 seconds.

The parboiled contestants said the real challenge was not the high heat, but rather, the high humidity.

In a world gone mad, it's good to know that some people still have a firm grasp of the important and life affirming.

Spiegel Online

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.