Posts Tagged ‘multinational’
China: the main Capitalist partner to the US (January 11, 2009)
“Communist” China is the largest accumulator of dollars with a reserve of two trillions or two third of its GNP. With such a reserve China is currently the main capitalist partner to the USA; China has interest that the dollar does not devalue, that its currency the Yuan does not increase in value which would make Chinese products less competitive, and that the financial system does not break down. “Communist” China is catching up quickly on Japan for the purchase of Treasury Bonds, a way of lending the US the needed cash to resume a Capitalist financial policy. China is not only the factory of the world but also the prime banker to the US.
The Chinese Wen Jiabao PM stated after the financial crash of Wall Street: “We have got to unite. In these difficult times, China has joined the USA. We believe that our financial rescue will aid at stabilizing the economy and world financial system and thus, preventing a major chaos. I believe that cooperation is indispensable”. China is expecting full cooperation of the US in erecting a new Capitalist system and it has more muscles than the European Union in enforcing the re-structuring of the financial system that would guarantee its investments in the USA that amount by the trillions of dollars.
Many of Chinese investments in the USA are in the red after the crash. The US multinationals that China invested heavily in have been saved with Chinese influx; Fannie Mae and Freddie Mac were saved too. Lehman Brothers was not spared for reasons. The Bush Junior Administration had selected Lehman Brothers to artificially increase oil prices to $150 through speculation in order to hurt the ever voracious China in oil demands. China reacted vigorously. The world financial system was rotten and China demanded to cooperate in the timing of the crash if the US wanted China to stabilize the financial system after the crash. Lehman Brothers was the sacrificial messenger of the impending financial crash.
The financial strength of the US was based on the dollars as the universal currency in world economical exchange. Bretton Woods (in New Hampshire) agreements in 1944 on the financial rules consecrated the pivotal power of the dollars; the British economist John Maynard Keynes tried hard during this conference to create a new world currency the “Bancor” but the US imposed its hegemony. Since then “the US administrators could decide what they wanted and it was up to the rest of the world to pay up the deficit”; Treasury Secretary John Connally stated it clearly “The dollar is our currency, but it is your problem”.
In 1960, the French President De Gaulle denounced the “exorbitant privilege of the dollars”. Since the 1980’s investment capitals have been going into the USA and then the US multinationals would re-invest the borrowed capitals wherever they desired; 90% of US Treasury Bonds are purchased by foreign States. Nixon was very comfortable de-linking the dollars from the value of gold and the world had to go along with whatever the US Administrations thought was beneficial to the US regardless of the ultimate danger that exposed the world financial system.
Consequently, States opted to save the surpluses of their dollar in “Sovereign Funds” meant to purchase foreign companies and enhance the flux of technology and know how and the latest management and financial methods. In one decade, the weight of the dollars in the reserve of world exchange has decreased from 71% to less than 61%. Still, the currencies of the EU, China, and Japan are not that widely used and adopted to counterweight the power of the dollar in trade exchange; but the center of gravity is clearly shifting toward China.
President Elect Barak Obama wants to re-invigorate US economy with major State investment (with Chinese cash); he must be closely cooperating with the Chinese on the amount and ways of re-launching the US economy.
Note: The Chinese regime was mute on the atrocities committed in Gaza; apparently, China is not hot on matter of human rights and crimes of wars and does not want to open the Pandora Box of its own horror stories.
Wall Street Multinationals milking the cows (October 11, 2008)
Note: The talking heads in host shows would like you to believe that by explaining the mechanism of the crash of Wall Street then that should be an excellent alternative to avoiding telling their version of main cause of the crush; or at best, they expect you to draw your own conclusion so that the main cause becomes essentially an individual deductive prowess. The three following articles are meant to stating simply the main cause of the financial crash of the century and then to offering a well tested resolution that add real values to the economy.
The American multinationals and many in Europe affiliated to them saw the financial crash coming in the speed of a bullet train since before September 11, 2001. Do you remember that in 1999 the US government and Congress passed a revised law of 1933 (that was meant to regulate the stock market after the crush of 1929) that allowed commercial banks to switch to investment banking with much looser accounting and regulatory rules? Well, many multinational commercial banks jumped to the opportunity that suited their pleasures according to the development of the markets worldwide under the code name “Free Trade Agreement”. It is then that the US multinationals, in tandem with the US Administration, knew that in order to conquer the world financially they would ultimately pay a price but it won’t be that expensive financially to the US treasury since all the stock markets would be linked and sharing in the risks; though the multinationals opted not to analyze seriously or didn’t pay much attention to the angry political backlash and an eventual change in the capitalist system.
The multinationals foresaw the catastrophe but they wanted first to milk the cows in the Asian markets and the petrodollar sovereign funds of the oil producing countries. They figured that, in due time, when the free non-regulated financial system fails then the other developed and rich States would participate in the bail out. Fundamentally, if you do the math then you will discover that the swindled profit that the multinationals generated during a decade correspond to the long term bail out funds that Europe, Asia and the petrodollars countries would pay from their citizens tax money to bail out their failing institution in order to stabilize the markets that should take quite a long time. I suggest that you start adding all the money shelled out by the world States and also include what the US government contributed since 1999 and you would get the general figure of the astronomical super highway robbery of the century.
It is this vast pool of middle class investors worldwide in stock markets that accounts for the biggest financial loss. If you are not in the board of directors for at least one multinational company then you should not play Russian roulette with stock market. Casual, naïve and smart ass investors in stocks remind me of a story involving chimpanzees. A white colonizer paid $10 for every chimpanzee caught; the natives were glad and worked hard to satisfy the demand of the purchaser. By and by as the number of chimpanzees dwindled and the commercial minds on both sides settled for a higher price of say $40 per chimpanzee then the manager of the colonizer convinced the natives to buy back the whole lot of chimpanzees for $30 apiece on the ground that when his boss returns then the natives would resell the chimpanzees to him for $50 apiece. The natives shared their funds and did the deal. The trick is that the white boss never returned!
Congress passed a monstrous bailout package where the white bosses are not to be prosecuted! Everyone is a sucker once in his life but in capitalist America the odds of repeat “suckered ness” is very high and the plain American citizen is the most prone to fall frequently in these easy to play games of stock gimmicks. Well, all you need is a computer hooked to internet and plenty of happy satisfied greed stories propagated in all the media! If you have noticed that the most recurring remedy of the talking heads is to regain “trust” in the financial market system! Yes, trusting multinational professional embezzlers is a sure way to stabilize your life saving balance to zero dollars.
Now the US government wants the world citizens of tax payers to share in the resolution of world financial stability! Why? Is it so that the few hundreds of billionaires and the select classes of capitalists around the world may maintain their high life style? Have we reached a new phase of world class capitalism versus the other hard working nationals?