China questions the dollar’s value – Part 2/2

October 7, 2010

In the second half of Al Jazeera’s Inside Story, the commentator asks Max Keiser in Paris what it would take to replace the U.S. dollar with an IMF managed global currency.

Keiser says, doing this would cause risks for the U.S., which has extraordinary privileges–writing checks that are never cashed since the U.S. just prints new dollars to pay the bills. This has been going on since the end of World War II.

Because of this, Max Keiser says, America has everything to lose and will resist China’s proposal to have a more stable global currency managed by the IMF. 

He points out several instances of the U.S. using its military to solve these types of problems when another country wants out of the U.S. dollar.

Then Robert Scott in Washington D.C. was asked if this new global currency would work. He said the U.S. has the deepest financial markets in the world– about 40 trillion dollars making the dollar the currency of choice.

Andrew Leung said that a global currency managed by the IMF using SDRs would be more stable as a global currency. However, it is a bold vision that requires extraordinary political courage from Beijing. We can’t get there soon.

Back to Paris, Max Keiser gives an opinion that China doesn’t have enough gold to make this happen.

China has about 600 tons of gold while the U.S. has 8,000 tons.  To be taken seriously, China would need to buy more gold and boost its reserves.

See The Reasons Why China is Studying Singapore or return to China questions the dollar’s value – 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. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Posted by Lloyd Lofthouse

China questions the dollar’s value – Part 1/2

October 7, 2010

I find Al Jazeera English, the 24-hour, Arabic-language satellite television news network, an interesting place to find an objective view of China.

The history of Al Jazeera is also interesting.

This Al Jazeera “Inside Story” from 2009 is about China questioning the value of the American dollar.

In fact, the Chinese prime minister blamed the U.S. financial system for the 2008 global recession and said a new world currency was needed to replace the dollar.

The Al Jazeera commentator questioned if China was just playing politics challenging U.S. dominance of the global financial system.

China suggested that it would be better if the dollar was replaced with the IMF’s (International Monetary Fund) Special Drawing Rights called SDRs.

The value of the SDRs would be based on a basket of currencies. China said that basing economic reserves on a group of currencies would prevent a financial crash like the 2008 economic meltdown from happening again.

Zhou Xiaochuan, the governor of the People’s Bank of China said, “The outbreak of the crises and its spillover to the entire world reflects the inherent vulnerabilities and risks in the existing system…”

There is a clip of President Obama speaking in defense of the U.S. dollar.

Al Jazeera’s “Inside Story” had a panel of guest experts from around the globe.  There was Robert Scott of the Economic Policy Institute in the U.S., Andrew Leung, an economist and a China specialist in London, and a Paris based financial analyst, Max Keiser, who writes for the Huffington Post.

Read about 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. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Posted by Lloyd Lofthouse

The Growing BRICs

October 7, 2010

Until recently, I didn’t know what the BRIC was.  Now, because I spend so much time researching topics about China, I often run into the BRIC.

The BRIC is Brazil, Russia, India and China. In the next few decades, these countries could become the wealthiest nations on the globe alongside America.

Jim O’Neill, who works for Goldman Sachs, talks about the BRIC in the embedded video.

In fact, O’Neill is the one who thought up the acronym for BRIC.

When he stepped into his position at Goldman Sacs, he wanted to know how the world might change economically by 2050.

They discovered that China would become the world’s largest economy before 2050 possibly reaching 45 trillion dollars–twenty times larger than today, and the rest of the BRIC economies would have a much larger share of the global economy too.

Projections also show that India, Russia and Brazil would become larger than the current G7 bypassing Canada, France, Germany, Italy, Japan and the United Kingdom.

Only the US would remain in the top five.

If you are a doubter, consider that the BRIC economies are already having a huge influence on the world, and the potential growth of the middle class in the BRICs could explode four hundred percent in the next decade, which would increase demand for cars, energy and oil.

See Business is a Global War

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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. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Posted by Lloyd Lofthouse

Brazil’s Growth Depends on China

October 6, 2010

In America, we often hear complaints about the trade deficit between China and the U.S. but seldom China’s trade with the rest of the world.

One example is Brazil.

On the streets of Sao Paulo, Brazil’s largest city, which is the commercial heartland of Brazil and home to 17 million, people are in a fever over China–but that fever is not the same as in the U.S.

With limited resources , China has been buying raw materials from all over the globe helping keep raw material prices up.  This has benefited Brazil.

China is the world’s most populous nation but only has 7% of the world’s fresh water, 3% of the globe’s forests and 6% of the land that grows food.

However, Brazil has what China does not have–water, forests and land to grow food on.

Today that has made Brazil the largest national economy in Latin America. In 2009, China moved past the U.S. to become Brazil’s largest trading partner. Source: Telegraph.com.uk

Trade between China and Brazil is not a one-way street. China is also investing in Brazil in areas such as telecommunications, pipelines, shipping, manufacturing, the oil industry, etc.

In fact, a BBC, World Service poll explored people’s opinions in 33 countries and discovered that China had almost twice the positive influence globally that the U.S. has. Source: Global Scan.com

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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. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

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Posted by Lloyd Lofthouse

China’s Green Challenge

October 6, 2010

After reading chapter 15 in, “Hot, Flat, and Crowded“, I decided to learn more about Thomas Friedman, the author, and discovered he has been the recipient of three Pulitzer Prizes and writes a foreign affairs column for The New York Times.

I’m sure it will come as no surprise to discover that Chapter 15 in Friedman’s book is about China.

He has visited China regularly since 1990—nine years more than I have, and in chapter fifteen he writes in detail why it is so difficult to get things done there.

The China he describes is the one I’ve learned about since 1999 – not the China that the Western media and American politicians paint as dark and forbidding, while they pander to many Americans who suffer from Sinophobia.

Friedman mentions how China’s government is authoritarian but quickly dispels the power of that image by pointing out the lack of control China’s leaders have over the rest of the Communist Party scattered across a country the size of the US with a population five times larger.

China’s leadership in Beijing became aware of the environmental problems years ago, attempted doing something about it and was ignored by most of the 73 million Party members.

Friedman also justifiably pointed out how unfair it is to criticize China for pollution when the Western industrialized countries started long before the Chinese did.

He also says that the West shipped most of its dirtiest manufacturing industries to China.

The chapter concludes with Friedman urging China’s leaders in Beijing to enlist the help of more than a billion people in a partnership that would force the entire Communist Party to obey the environmental laws and clean up China’s air and water.

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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. 

If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.

Leave a Comment » | China, environment, government, politics | Tagged: , , , , | Permalink
Posted by Lloyd Lofthouse

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