Tuesday, November 15, 2011

Look Both Ways

While everyone is talking about a European collapse I consistently find I'm the only one warning people that the Chinese are in trouble, too.  Pretty much everyone talks about the Chinese coming here to collect on the bonds they're bought, by taking everything from our land to "our wimmin".  I'm not going to sit here and say that's impossible.  I ain't that foolish. 

But the Shanghai market is on the verge of a big decision point.  Within the next couple of weeks at most. 
When these triangle (also called flag or pennant) patterns appear, the tracked data has to break out of it; there is simply no way it can't.  Which way is it going to break?  That's the bazillion dollar question.  No one can answer that based on this chart.  In the larger sense of what drives investment in the Shanghai market, capital from US and EU sources certainly flows into that picture.  As EU wealth gets sucked up into the ponzi scheme to keep the EU alive, will there be any to look for opportunity in China?  Same question about dollars? 

When the EU collapses and the dollar follows, which way do you think it's going to go?

The simplest way to put it is, if no one has money to buy the cheap crap they produce, how will China have any growth? 


  1. War?? Seems a great way to improve GDP, worked for us a time or two.

    Not sure how this one would turn out though. My what a tangled web we weave when at first we do deceive.


  2. Seems to be one of the standard answers. That and "inflate your way out of the trouble". That only kills savers.

  3. Most definitely war. Greece will go down the road of coups, or the rioting will get so bad in there and Italy that France and Germany send in the troops to 'restore order.'

    For China, resorting to war is a given simply because the Chinese Communist Party needs an outside scapegoat to keep the population united and under the party's boot. Otherwise China will go into civil war.

  4. I've been thinking about China for a good while. Like the magician, I wonder if all the attention on Europe (Greece brings down the world???) is merely a distraction away from the real action. China's economy is based on selling. That requires customers...with money.

    I agree with Osmium: war. Was it just yesterday a new arrangement with Australia was announced? I always assumed Australia was like Great Britain and Canada...no one messes with them without messing with the US.

    The only question is whether we still have the ability to really protect ourselves anymore.

  5. Australia has always been one of the closest allies of the US, so yes.

    As for fighting the next total war, the US is both financially and politically unable to do it. The US military is also becoming politically corrected (just google 'US military stress card'), but that could be a silver lining should they become a tool of the Marxists (it can happen; Adolf Hitler turned the German Army into a tool for his regime).

  6. Sending a few thousand troops to Australia to "balance China" seems like putting a speed bump on the Interstate. Just like we do in Korea, I suppose. But I'm with you, Osmium, we have neither the financial resources nor political will to stand against China.

    The only remotely credible deterrent we have is our nuclear force - and the president is dismantling that.

    We are a toothless old creature, unable to project power.