Hard Landing for Who?

July 15, 2011

A friend sent me a link to a CNBC piece, and said, “I’m concerned how we are all so linked together economically.  if the republicans and democrats don’t come together, and the US defaults at some level of government, that could screw up China and other places as well setting off some sort of global chaos—that really scares me.”

After reading the CNBC piece, I could see why my friend was concerned.

On June 14, CNBC played on the “fear factor” and it worked.  The headline for the CNBC piece was ‘Meaningful Probability’ of Hard Landing for China: Roubini.

In the third paragraph, CNBC tells us “New York-based Roubini is closely followed by Wall Street because he predicted the U.S. housing meltdown that precipitated the global downturn.”

After establishing Roubini’s credentials, the piece focused on the US’s economic future and the language changed to “it is a glass that is half full and half empty,” while Europe is described as “kicking the can down the road”.

After reading the CNBC piece, if you were to pick one answer as the one with the most dire potential consequences, which would it be?

A.  ‘Meaningful Probability’ of Hard Landing for China

B.  The US is a glass that is “half full and half empty”.

C.  Europe is “kicking the can down the road…” (so is the US)

However, a clearer picture appears after reading what “The DailyTicker” published June 13, 2011, at Yahoo.com, Roubini Says “Perfect Storm” May Clobber Global Economy.

Henry Blodget wrote, “Roubini’s perfect storm consists of four factors: The U.S.’s basket-case of an economy and budget deficit, a potential slowdown in China, European debt restructuring and stagnation in Japan.”

Roubini predicts there’s a one-in-three chance that these factors will clobber the global economy in 2013. One-in-three means there is a 33.3% chance this will happen and a 66.6% that it won’t.

As for “Kicking the can”, Blodget writes that Bloomberg quotes Roubini saying, “Everybody’s kicking the can down the road of too much public and private debt (except China). The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.”

Does a “potential slowdown in China” mean the same as CNBC’s “Meaningful Probability of Hard Landing for China”?

Consider that in January 2011, the Economist’s View said, “China’s current-account surplus … is the largest in the world. … China’s external surplus stands at $316 billion, or 6.1% of annual GDP.”

Then Ethics Sage says, “On February 1, it was reported that China’s foreign currency reserves totaled $1.2 trillion. That’s about 8% of the US National Debt,” which is $14.3 trillion and growing.

Bloomberg paints a better picture for China of $2.85 trillion in currency holdings.

Who is going to land harder if Roubini’s “Perfect Storm” strikes?

A. China

B. Europe

C. the US

D. B and C

E. none of the above

Now that you have read more than what CNBC had to say, your answer to this question stands a better chance of being correct.

Isn’t it interesting how easy it is for a major element of the media (CNBC) to  be misleading?

Learn more from A Panel Discussion on China’s Economy

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Free to Lie – Part 3/3

July 14, 2011

I found it ironic that the truth about Social Security came from FDR’s grandson.

James Roosevelt Jr. says, “There is a saying that if you repeat something often enough it becomes the truth.”  Then later in the piece, he points out that “Social Security’s critics have been casting the same aspersions (an unfavorable or damaging remark; slander, which means a false and malicious statement) on the program for 75 years.” Source: Social Security’s Enduring Truths

I also learned that Social Security costs are funded out of its own dedicated revenue stream, which is paid by workers and employers.  It does not and cannot borrow money to finance its operations. There is no deficit financing in Social Security and by the end of 2010, the fund had a positive balance of $2.6 trillion and enough money to pay full benefits through the year 2036.


How the media lies to manipulate us – length about one hour

Compare that with the US National Debt, which carries a negative balance of more than $14 trillion while Social Security has no debt and carries a positive balance, yet, thanks to echoes in the media and on the Internet, many people believe that Social Security is almost broke and is a burden to the taxpayer.

There is a lesson to be learned here.

Next time you hear or read something about China from a US politician, a critic of China or from the Western Media, do not accept it as the absolute truth. Check the facts first—that is, if you can find them under all the lies.

After all, in the US where freedom of the press is protected, that means lies are also protected as long as they do not slander another individual.  Everything else is fair game for manufacturing the truth regardless of the facts.

Return to Free to Lie – Part 2 or start with Part 1

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Free to Lie – Part 2/3

July 13, 2011

I learned that three presidents caused most of the National Debt we have today: Ronald Reagan, who increased the National Debt more than $300 billion in two years; George H. W. Bush, who added another $700 billion in two years, and the last Bush that increased the National Debt by more than $5 trillion in eight years.

This means that President Obama came into office with a National Debt that was more than 10 trillion and the annual interest payment on that debt was about $400 billion or $1.2 trillion since he’s been in office, and the GOP and the Tea Party make it sounds as if the National Debt is his fault.

How many people in the US think of Social Security as a burden on the taxpayer? I admit, until I read a piece from the AARP Bulletin’s Social Security’s Enduring Truths by James Roosevelt Jr., the grandson of President Franklin D. Roosevelt, who gave us Social Security, I thought the taxpayer was responsible to pay for Social Security of the program went broke.

However, I learned that was not the fact, which I will explain in Free to Lie – Part 3.

Meanwhile, did you know that China has a Social Security system?

In fact, China’s social security system is broken down into five distinct categories, which are:

1. Pension
2. Medical insurance
3. Unemployment insurance
4. Maternity insurance
5. Occupational injury insurance

To learn more, visit “China Briefing” and read Adam Livermore’s “Understanding China’s Social Security System”.

Continued on July 14, 2011 in Free to Lie – Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Free to Lie – Part 1/3

July 12, 2011

China’s central government is often criticized in the West for filtering the Internet and controlling what is published in China’s state-owned media.

The West should also be criticized for the exact opposite, which is allowing too much freedom to lie, which often leads to hate, bad politics and worse economic policy.

In fact, we seldom hear any criticism in the media of the lies and misinformation that appears in the West where abusing freedom of expression to mislead the public has become the art of repeating something that is not a fact until it is considered the truth.

Recently, I wrote “A Short History of the National Debt” and posted it at Speak Without Interruption, Authors Den and Scribd and plan to add it to Gather.

Before I researched the history of the National Debt, I asked myself how President Obama ran up the National Debt to $14.3 trillion dollars, because that amount was about all I was hearing from the Western media, the Tea Party and the GOP. I never heard an explanation of where that National Debt came from.  What I was hearing made Obama seem responsible for the entire amount.

After doing some digging, I learned a few facts.  I hesitate using the word “truth” to define anything, since the “truth” seems to be whatever anyone wants to believe, so I will stick to a few facts and let each reader decide what his or her truth is.

Continued on July 13, 2011 in Free to Lie – Part 2

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Kissinger on NPR’s “Talk of the Nation” with Neal Conan and Ted Koppel – Part 3/3

July 11, 2011

NPR’s Neal Conan said the deaths from the Cultural Revolution were between 20 to 40 million, which demonstrated his ignorance since that many deaths took place earlier during The Great Leap Forward (1958 – 1960).

The Great Leap Forward was supposed to be a 5-year plan, but it was called off after just three tragic years. The period between 1958 and 1960 is known in China as the “Three Bitter Years”.

The loss of life during The Cultural Revolution (1966 – 1976) was about 2 (or more) million and many were suicides due to the denunciations and persecutions and the fact that society had been turned upside down. The Cultural Revolution deeply damaged the country economically and socially. Sociologist Daniel Chirot claims that around 100 million people suffered and at least one million people, and perhaps as many as 20 million, died in the Cultural Revolution but there is no way to prove this claim.

The deaths from the Great Leap Forward were mostly from starvation due to a famine, which may have been caused by a combination of Mao’s failed agricultural and industrialization policies and poor weather leading to crop failures and a famine. Since no one knows the exact number of deaths due to these blunders/weather, some have said 10 million while others have claimed 60 million. Most experts agree that the number was about 20 or 30 million.

What one believes about the results of The Great Leap Forward and the Cultural Revolution has to do with prejudices, or personal political opinions. One thing most can agree on is that this period of China’s history was a failure and a tragedy.

During the interview, no one asked or mentioned how the Communist Party led by Deng Xiaoping after Mao’s death in 1976, repudiated the Maoist Revolutionary thought that was responsible for the tragedy, and then opened China to world trade, joined the World Trade Organization (WTO) and launched the Chinese Capitalist Revolution leading to the economic miracle China has become today.

If you are interested in hearing the entire interview, visit Henry Kissinger appearing on NPR’s Talk of the Nation or read the transcript.

Return to Kissinger on NPR’s “Talk of the Nation” – Part 2 or start with Part 1

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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