Whistling In The Dark

Mr. Prime Minister, the U.S. Special Representative is a . . . Bernie Madoff

It’s rarely the first pebble that people remember. Chinese concerns about the integrity – safety -of their U.S. holdings and their chief addict’s health (“unsustainable model of development characterized by prolonged low savings and high consumption”) come overlate.

In her defense, even China’s worst case mongers could not have envisioned so much irresponsibility created by so many for so few. So China is riding a proverbial tiger bloated on Tyvek housing insulation and utterly disposable knick knacks from Guangzhou. Whither the beast? It staggers now towards the hyperinflation savannah but it also is poised to tucker out and slough it all off in the stagflation lowlands.

Beijing’s three concerns are: what to do with over a trillion in currently held dollar denominated assets?; what to do with trade surplus-generated holdings going forward?; and finally, what about the bloated tiger’s appetite in the future? Some of the short term problem will take care of itself with export contraction and reduced pressure to recycle trade deficits. Beijing is unfortunately screwed should it wish to play an even semi-status quo role in the global economic order – to wit, its current holdings by almost Newtonian physics will depreciate regardless due to U.S. fiscal policy. Whether they are merely reduced or eviscerated will be determined by U.S. (in)ability to pull back from hyperinflation. Going forward, in for a penny in for a trillion – Beijing hesitancy to buy more U.S. paper to finance a soft landing is a gun to its own holdings.

All muted about today as Beijing ponders the ultimate wipeout – U.S. default (a concept people immediately dismiss now but which will become a common place analytical possibility quite soon). We happen to agree with Naked Capitalism that China is laying down a marker. To be called in later.

Comments

  1. Anon says

    Some of Bremer’s stuff is ok – like his “walk in the woods.” Not bad – Yeah, maybe sad.

    He should paint Michael Rubin, but he probably lacks the dark sensibility.

  2. Aldershot says

    Don’t get me started on Kincaide. And now he’s whoring for Disney. Ugh.

    The second example in the Bremer slide show (a walk in the woods) just makes me feel sorry for him.

  3. DrLeoStrauss says

    Aldershot, bless you! That piece made my morning, oh the lack of self awareness is priceless! ‘Art is hard work!’ With your permission this is one definitely for the quote database.

    It’s also perfect that he embraces and enthuses such kitsch qua art. (The carefully name dropped Cezanne needed for self-validation). He’s the Thomas Kinkade of his ‘class’ as it were.

    http://www.thomaskinkade.com/

    It’s temptng to go buy a few pieces and perform some Gustav Metzger-esque autodestruction for YouTube.
    http://www.anti-thesis.net/texts/notes/autodestruction-metzger.txt

    But even $300 is too steep. That’s 10 velvet Elvis pieces at the local Exxon.

  4. Anon says

    We think Conrad Black gets the better of this exchange – He’s just far smarter than Powell and a far better writer – independent of the various arguments.

    Powell fails to ask ‘what if’ scenarious in a serious way to consider what would happen if FDR did what Powell wanted – Powell also takes an angry tone and suggests that Black lacks the reading or understanding
    http://corner.nationalreview.com/post/?q=MDBjZDM1ZjA1NTJmNDk4ODIyZTIyMjIzOWRmMjQzMzc=

  5. Anon says

    W’e not really fans of IQ theories – esp when the devolve into tendentious political tracts read by think tankers – but you can see the Bell Curve sometimes in practice when certain limitations of imagination and analytical understanding led to reductive and silly stuff like this – It’s not hard to imagine the well-meaning simple minded “show me” type who put this together

    http://www.antiwar.com/blog/2009/03/15/if-you-are-reading-this-you-may-already-be-a-terrorist/

  6. Aldershot says

    24In the year of the jubile the field shall return unto him of whom it was bought, even to him to whom the possession of the land did belong.

    25And all thy estimations shall be according to the shekel of the sanctuary: twenty gerahs shall be the shekel. Leviticus 27

    (I don’t know nothin’ about no economics.)

  7. Anon says

    Don’t worry about inflation, Doc – Progessso soup is selling for a 1.50 a can (split pea/black bean) at Kings – and even whole foods has pretty good soup for 2 bucks a can.
    We’ll be awright.

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