Global Blood Suckers

September 8, 2010

It looks like Goldman Sachs & Co is under attack from the two most powerful countries on the earth.

Recently, the SEC in the United States penalized the Wall Street firm $550 million to settle civil fraud charges.

Meanwhile, in China, a book called the Goldman Sachs Conspiracy has been published and is selling well.

“The nearly 300-page, highly dramatized account covers much of the same ground as a widely cited piece by Matt Taibbi last year in the Rolling Stone magazine that portrayed the Wall Street institution as a ‘a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.’ ” Source: The Huffington Post

The Young Turks reported that Golden Sachs conspired with John Paulson, who made $3.7 billion dollars in profits when the global economy collapsed and bought into Bank of America with some of that money becoming the bank’s fourth largest investor.

According to the Young Turks, Goldman Sachs set up clients, who lost billions while Sachs made billions from the clients’ losses. 

The Young Turks read one email from a Goldman Sachs’s employee, who calls himself the Fabulous Fab. “The whole building is about to collapse anytime now. Only potential survivor, the Fabulous Fab, standing in the middle of all these complex, highly leveraged, exotic trades he created without understanding all the implications of those monstrosities.”

The Young Turks say that there will be more court cases to follow the SEC case. Maybe China will also take a few Sachs employees to court using some of Sun Tzu’s strategies and put that well-known death penalty to use.

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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. 

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Posted by Lloyd Lofthouse

Keeping China’s People Working

May 30, 2010

Marginal Revolution (MR) posted his or her “China fact of the day” and just about everyone who left a comment got it wrong—as usual.

“Of the 22 Chinese corporations listed on the Fortune Global 500, 21 are controlled by China’s central government or state-run banks.” Source of quote: New York Times

I read the The New York Times piece that was quoted by MR and the gist was that China is going through something similar to what Japan did for the four decades after World War II, and that China cannot depend on manufacturing and exporting goods to the rest of the world to maintain a healthy economy indefinitely.  China “needs” to grow a domestic economy that supports itself and that is what the Chinese are trying to do. If they get it wrong, they will pay a steep price.

The first comment to MR’s “China fact of the day” said, “So much for the triumph of capitalism.”

True, so much for capitalism. After all, it was the Republican, Reagan, Bush, Wild West, capitalist system in the US that caused China to start pumping money back into state-run businesses.

Creating Jobs for China's People

In April 2009, Time did a good job explaining why China’s state owned companies are making a comeback.  When the world’s conomy burst and deflated in 2008 thanks to Wall Street greed, exports from China fell by almost 20% and an estimated 300,000 small and medium-sized private sector companies in China collapsed. “The Crisis hits China’s private sector really hard because China’s private sector accounts for a larger share of China’s manufactured exports, says Yasheng Huang, an MIT professor.

What did China do?  China started to put the people who had lost their jobs in the private sector to work in State Run Companies.  Duh! All anyone has to do is see what happened in the United States during the Great Depression when Herbert Hoover was president to understand why China is acting this way to keep people working and earning money.

See Jobless in America and Angry at China

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Lloyd Lofthouse is the author of the award winning novels My Splendid Concubine and Our Hart. He also Blogs at The Soulful Veteran and Crazy Normal.

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Posted by Lloyd Lofthouse

Cultural Differences, the Ignorant American and the Architect who Hung Himself

May 20, 2010

Another day, when our daughter was seven, we were hiking in the hills above a park in Southern California. On our way out of the hills along a steep-dirt trail leading toward the park, our daughter rushed ahead.

Minutes later, she was back looking shocked. She took us to her discovery.

An Asian man had hung himself in a tree beside the trail. He’d used an electric cord. It was obvious that he had climbed into the tree, tied the cord to a limb and around his neck and leaped off.

I called the police on my cell phone. They came, identified who he was and went to his mother’s house. The mother and sister arrived and my wife talked to them (for the police) since the mother and sister didn’t speak English.

The dead man was a Chinese architect from Taiwan. He was a partner in a business that had gone bankrupt and he could no longer support his family. Because he had lost face, he killed himself.

In fact, since the global economic crises caused by US, Wall Street greed, family suicides have been on the rise in Taiwan.

See how Power Corrupts

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Lloyd Lofthouse is the author of the award winning novels My Splendid Concubine and Our Hart. He also Blogs at The Soulful Veteran and Crazy Normal.

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Posted by Lloyd Lofthouse

The American Assault on China’s Currency

May 6, 2010

For weeks, I’ve been watching the brouhaha about China manipulating its currency and taking jobs from Americans.

The truth is those jobs were lost due to American Wall Street banking greed. After all, China’s currency policies have been around for decades. The housing bubble burst in 2008. Without the economic collapse, many of those lost American jobs would still be there in spite of what China does with its currency.

It’s always interesting to watch politicians and pundits play to the mob. Looking for a scapegoat to the truth, Senator Charles Schumar (D-NY) leads 130 other lawmakers who want to punish China, and Tristan Yates wrote at Pajamas Media that America’s Socialists are bulling China’s socialists.

People Protesting

On April 13, Obama reacted to the pressure by saying it’s in China’s interest to let the market determine the value of the yuan, but he also said he would not hold Beijing to a deadline for action. “I have no timetable,” Obama said at a press conference following a nuclear summit. Source: Market Watch

Since I’ve traveled to China often and love the buying power my American dollars have when I convert them into yuan, I’m not going to follow the mob demanding currency changes in China. Prices for most essential goods in China are low allowing those living near the poverty level a means to survive.

If China caves in to these demands, what we are looking at would be a reevaluation of the yuan so the exchange rate would be 5 to 1 instead of 7 to 1— a small change for the world but a huge impact for more than a billion people.

China has kept the exchange rate steady for years. If China’s currency controls were lifted and prices shot out of control, many in China might starve. For sure, there would be more unrest and riots, and China’s government doesn’t like that.  What government would? I’m sure President Obama is not happy about the Tea Bag people running around shouting slogans about big government and so called Obamacare.

In China, “Thousands of workers have lost their jobs and many have taken to the streets to demand unpaid wages.… Street protests and demonstrations at local government offices have been a daily occurrence in many townships in the region… More such protests are on the cards in coming weeks and months.” Source: Green Left

If push comes to shove, who do you think China will attempt to appease—some overweight, out-of-work American several thousand miles away or tens of thousands of Chinese workers who also lost jobs and have families to feed and rent to pay? I guess it depends on how far a rock can fly.

The real reason behind bashing China over currency is politics.  Many Americans unjustly blame China for jobs lost in the US. Although China’s currency policies may be partially to blame, America’s high level of consumption leading to high consumer debt, deficit spending and protectionism is also to blame. Source: Politico.com

Discover Why is China Studying Singapore?

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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.

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Posted by Lloyd Lofthouse