January 11, 2011

Time for a Chinese bailout?

Posted in Banks · 118 comments ·
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Deep in the bowels of the earth, in a huge open cast mine in Port Hedland, Western Australia, the distinct sound of a lilting Cork accent crackled through the tannoy.

A group of exhausted miners were sitting down after a shift in over 100 degrees desert heat, talking about a Chinese offer for the company, while the man from Ballincollig was directing traffic for the next shift of miners.

These mines are so huge that drivers of the enormous Komatsu trucks communicate with each other via a central base.

The coordinates of the trucks are then relayed to the miners to prevent them getting run over, because the cabins are so high off the ground that the drivers can’t see the miners below.

At the epicentre of this elaborate traffic system was this lad from Ballincollig.

He had been in Australia for a year – a typical casualty of the building downturn in Ireland.

We chatted and, after about ten minutes, found out that we had two friends in common – an Irish quirk that made the Aussie miners laugh.

I was making a documentary for ABC Australia and the section we were filming was about the influence of China and Chinese investment, particularly in Western Australia.

Many Australians we interviewed, like these miners, conceded that Australia was China’s quarry and, over time, the Chinese would buy up, not just the raw materials, but the companies themselves in order to secure supplies.

The Australian miners were worried about this prospect, not having any idea about what working for Chinese bosses would mean for them.

Ballincollig’s finest interjected and suggested that it would be only a matter of time before the Chinese were buying stuff in Europe and that we in Ireland should welcome this.

He said this would happen sooner than people expected.

Last week, his prediction was realised when it was revealed that the Chinese are big buyers of Spanish government debt. While this is not a surprise, the announcement focused attention on the growing influence of China as the world’s biggest investor.

It seems like only yesterday when people worried about so much western investment going to China to avail of the cheap labour and immense power of Chinese manufacturing.

The story then – in its most extreme interpretation – was that China would suck in so much western capital that the western economies would find themselves starved of cash to finance projects at home.

Now the opposite is happening. This reversal mirrors what happened in Germany after World War II.

After the war, capital initially flowed in to rebuild Germany and the country ran a significant current account deficit. But within a decade or so, Germany was rebuilt and it was exporting all over the world.

Today, China is similar.

What might have been a net importer of global capital has become the world’s largest – and now quite aggressive – investor. China holds $938 billion of US treasuries alone. It is by far the biggest owner of US bonds and yet it knows that these US assets will deflate in value as the dollar falls against the Chinese yuan.

If you want to see why the dollar will fall, just look at the Chinese current account surplus. In 1993,when the world worried that China would suck in capital, China ran a current account deficit of $11 billion.

By 2008,Chinawas running a surplus of $426 billion.

Last year, the surplus fell to $300 billion because the Chinese reacted to the global slowdown by fuelling its own domestic spending.

With a change in policy expected in China this year, as it tries to rein in demand and cool down the economy, the surplus will rise again.

The significance of this is that the surplus has to be spent abroad.

So where will it be spent?

Well, a significant amount will have to be spent in Europe, particularly in the bond markets.

This is where Ireland comes in.

Last week, the Chinese signalled that they are examining peripheral European bond markets. As traditional investors abandon the European bond markets, others – like China – will fill the void.

The Swiss National Bank decided last Month that it would not accept Irish government bonds as collateral.

This is an extraordinary decision, that a central bank of a European country will not accept the government bonds of a member of the euro. But it is a sign of just how precarious our position is.

As we fall down the respectability pecking order, the type of buyers of Irish government debt will change. They will no longer be blue chip outfits, they will be emerging market countries that might see their own experience mirrored now in Europe.

Brazil, for example, a country that is accustomed to its bonds being rejected by the blue chip parts of the financial industry, is now so successful that it will be another huge buyer of out-of-favour peripheral government bonds.

Brazil is the Latin American China, and it has experienced so much cash flowing into the country that it announced last Friday it would actively sell its own currency to prevent the real from rising.

This is yet another example of the changing global economy where the so called emerging markets have emerged and are now financing the rest of the world.

There is something unpleasant in the pattern that is unfolding whereby countries with billions of poor citizens are financing countries with millions of rich citizens.

Classical economics predicts that the opposite should happen. But as cash flows from the likes of China and Brazil to America and the periphery of Europe, we in Ireland will get used to the idea that countries like China will be significant investors here in the years ahead.

The events in the Spanish bond market last week confirm this trend.

Given that the EU and the IMF are strangling us with 5 per cent-plus interest rates on the money they are lending us, there is always an option to talk to the Chinese who have so much cash that they are prepared to accept certain devaluation of their investments in the US dollar simply to diversify their portfolio.

After all, the Chinese will definitely make a loss on their US Treasury holdings and if they are prepared to buy geopolitical influence so expensively, who are we to deny them a toehold in Europe?

We might well need them soon.

As the Australians have discovered, the game has now changed irrevocably.


  1. Another thought inspiring article from our host. So what does Sovereignty mean to todays generation? Does it mean choosing which currency system owns the “Country”? What now indeed do we mean by a “Country”? Will mothers of the future seek to relocate to places owned by currency regimes which fit their ethos?
    Will Collins be thought alongside Mao Zedung? Will we eventually carry a little green book extolling the virtues of Oriental ownership?
    Changing times indeed with the prescience of Orwell now looking very inspired indeed.

  2. CitizenWhy

    China is only interested in extraction goods. Peat?

  3. [...] This post was mentioned on Twitter by David McWilliams, Seamus O' Keeffe, Karl E. Pants and others. Karl E. Pants said: RT@davidmcw: Time for a Chinese #bailout? http://dlvr.it/D52LD [...]

  4. Great article. I think we should look further than the selling of Irish bonds to China.

    For example, San Francisco is one of the main import ports for Chinese goods into the USA. Cork could be developed as a distribution hub for Europe and the UK for certain Chinese imports.

    Direct inward investment could partner with some of those China factories in recent years suffering the malaise of product recall.

    Managerial and technical expertise from Ireland/Irish universities could locate some offshore Chinese factories in Ireland to share their knowledge and expertise.

    DmcW should continue his journey and travel on to Beijing to have a word with Chinese leadership on how they can support us when we dump the euro and its IMF/EU limpet mine the EU attached to Ireland Inc!

  5. CitizenWhy

    Oh, forgot to mention. China lends/buys bonds only to help a country buy its goods. This is how the US economy has operated for a long time. Of course China’s purchase of US bonds also financed the wars in Afghanistan and Iraq, hence the huge national debt of “the world’s only remaining superpower.” A laughable boast, given the economic state of the US.

    On the other hand, when you owe someone a few thousand, he owns you. But when you owe a person billions/trillions you own him. He has to keep you alive, hoping that maybe just maybe you will be able to pay back. Sound familiar, Ireland? The ECB and the German banks tremble at the thought that Ireland will wake up and decide to default.

    Of course the Swiss won’t take Irish bonds. The current IMF/ECB “bailout” is seen by analysts as a death sentence for the Irish economy. Shrinking economy, shrinking jobs, mass immigration for the young, fewer taxpayers. Eventual default, after the country is bled dry. Oy vey!

  6. Mary (Mammy) O’Rourke wants a little Chinatown in Athlone, at least it’s a start

    • Deco

      Yeah, she was rabbitting on about it, saying how wonderful it would all be, without any clear idea of what was involved, and then made the comment at the end……”of course, there will be jobs for Athlonians”.

      Beijing is looking at the weaker elements of the EU and trying to use their weakness as a means of building influence.

      America, and it’s manufacturing bases, has been hollowed out, and represents slim pickings for the next decade. Walmart has done the damage. Now China needs a new market. Therefore China has to find a way to sell stuff into Europe.

      I am very sceptical about any of these business deals with the Chinese. The currency is deliberately manipulated. The labour laws with China are inhumane. The regime systematically denies it’s citizens their human rights. And that fool O’Rourke wants to give China a digout, because it makes her look like as if she is improving matters. I have serious misgivings about the regime, and I think that there are very important principles at stake.

      • MadaboutEire

        Politicians as a rule don’t do context, they just do elections.

        Self-interest, not the nation interest or human rights, rules.

      • adamabyss

        Yes, workers are treated very badly in China but there has been SLIGHT improvement in more recent years. Let’s hope that trend continues.

        Also, it might be fair to say that misgivings about the USA regime/s are equally valid.

        • Deco

          Well, as far as I am aware – you can form a “labor union” in the US, and you are protected by the US Constitution in doing so. You are allowed to form a political party in the US, and to fundrais as you wish. You are allowed express an opinion in the US that is contrary to that of the ruling regime – you can even get an Oscar nomination in doing so, and the regime cannot stop you.

          There is a President in the US who got there on the back of support from “organized labor”. He was in control of the congress until the people lost patience in him keeping his promises to protect the interests of the working people. Therefore I disagree concerning the comparison between the USA and China. There is a world of difference.

          The “improvement” in labour rights in China is marginal and is only for the sake of “optics”. Mostly it comes as a result of television documentaries in the West. A classic example being the factory that was subcontracted to provide Ipods for Apple.

          • MadaboutEire

            Deco, you make the US sound like a worker’s paradise, nothing could be further from the truth. Perception and reality.

          • adamabyss

            Yeah, my estranged wife works for Citigroup in Maryland – they get treated like dirt.

            Having said that, nothing compared to how the Chinese workers are treated so I respect your boycott of Chinese goods and I avoid buying stuff from there myself as 99% of it is cheap and superfluous trash.

          • Deco

            I am not making the US sound like a workers paradise – it is you that is saying that I am.

            I have offered a critique of the PRC which somehow or other seems to be strangely absent from the article and the commentary.

            Try organized a labour movement in China and see how far things progress before you get landed in the local prison for inciting the people to rebellion !!!

            You detestation of the US does not justify anything, least of all a preparedness to do deals with the regime in Beijing.

          • MadaboutEire

            Deco – Labour movements in the US were violently attacked in the 1920s and 1930s, people beaten up, killed, imprisoned, the history of this is very well documented and it goes on today in different forms. Union membership is down and for obvious reasons, while the means of excluding/undermining those who seek to go down that route are as long as my arm.

            There are a whole series of mechanisms at preventing pro-labour policies from being enacted in the Congress while lobbyists from big business ensure the wheels are kept greased. Indeed, the recent Supreme Court ruling which removed the limits corporations could donate to political candidates has been characterised as one of the most appalling assaults on democracy (http://www.chomsky.info/articles/20100124.htm).

            The internet is monitored closely in the West as are purchases and even books taken out of the library. It does have certain freedoms (a certain flexibility which quickly dries up when the rich find themselves challenged – oppression inherent in the system as demonstrated when police are batoning people over the heads, using tear gas and mass arrests during peaceful protests).

            Equally it presents non-choices at a election events ensuring the status quo of elite rule and is in fact a business run society. Just look at the impotence of the Irish electorate during the bailout, excluded, side-lined, marginalised. And still the Irish people don’t know what is going on at Anglo nor have any court proceedings been taken 2.5 years on. That is real democracy for the rich.

            As one commentator pointed out about the location of one Obama speech: “Obama spoke at a Caterpillar factory but there were no protests from the Labor Movement, it was the first factory in generations back in the 80′s to call in scabs, strikers did not get community support because of collapse of working class culture, that’s where Obama goes to give his solidarity speech”.

            I don’t detest the US, it is actually because I am so found of the place that I care so much, it is you who say I detest it, I am just pointing out some very basic truisms. Try starting a Union in a corporation and see how far you get.

          • adamabyss

            Non-choices indeed. Just like here.

          • CitizenWhy

            Not quite about Unions in the USA. Many states -particularly of the ex-Confederacy, which stood for absolute property rights – have what they call “Right to Work” laws which in effect bar unions. That is, those who join the Union are fired.

      • Black Cat

        My thoughts exactly Deco – I saw the documentary about Walmart – general motors used to be the big employer in the US paying on average $18 per hour – now it’s walmart paying less than half that – they are already in the UK under the name of ASDA – Americans fell for the promise of cheap chinese goods and now they have no jobs and no manufacturing left. Selling ourselves to the Chinese is a race to the bottom in my opinion. Their factories are run like military boot camps and workers throw themselves off the roofs in despair – the slight improvements in workers rights are purely cosmetic I expect. As for the project in Athlone – didn’t they say they would be bringing in a lot of their own people from China.

        • CitizenWhy

          The man appointed by Obama to straighten out the US auto companies (largely accomplished, including firing all top execs who blocked innovations) says he fears for the US worker. Why? Because he helped negotiate a deal between the union and the auto workers in which old workers would still be paid $28 an hour, but the newly hired would get $14 an hour. He was especially fearful because the same manufacturing, with the same quality production standards, can be done in Mexico at $7 an hour, without the employer having the additional financial burden of paying for health insurance.

          NAFTA (North American Free Trade Agreement), passed under Clinton, devastated the Midwest, stripping it of its manufacturing base, with the factories moving to Mexico (many now having moved to China & Asia, leaving Mexico in desperate straits). This got little media play because it was the Midwest, not a glamorous place to NYC and Los Angeles.

          Another aspect of NAFTA is a loss of US sovereignty. NAFTA has its own courts to settle disputes, and the only legal mandate is to remove obstacles to maximum profits. As a result NAFTA courts negated certain environmental laws of California. labour laws that diminish profits are also forbidden.

          NAFTA was a policy advocated by Republicans (but passed by a Democrat). Right wing Republicans go on and on about the UN taking away sovereignty from the US (which it does not) but they never complain about NAFTA.

          • adamabyss

            I was in Newton, Iowa in 2009, making a movie and we considered renting out a small part of the former Maytag (later Whirlpool) washing machine plant, to construct a sound-stage. It was a massive factory but Whirlpool pulled out in 2007, devastating local employment and the community. It was eerie to see these huge empty buildings; you could almost hear the voices of the workers of generations past echoing through the abandoned sections. It was in good condition too and fit for any industry to move in, although the lonely caretaker there wasn’t expecting anyone, anytime soon. We also demurred.

          • Gege Le Beau

            @ adamabyss – go to skid row in LA, visit New Orleans, Detroit you will see similar scenes, the financialisation of the economy and destruction of manufacturing has had an appalling impact of working people and their families, well documented in Michael Moore’s Capitalism: A Love Story.

            The Guardian had a nice series of photos on Detroit in particular
            http://www.guardian.co.uk/artanddesign/gallery/2011/jan/02/photography-detroit

            Johnny Knoxville has a nice documentary on the city
            http://www.youtube.com/watch?v=joMysMDHdb4

          • adamabyss

            Thanks Gege, I saw that Guardian collection last week and forwarded it to a number of people. Really bizarre in some ways. What is to become of the ‘richest nation on earth’?

            Will check out that documentary now.

          • CitizenWhy

            According to recent study a male who is the son of a low wage worker has a 24% chance to advance higher in the US, a 36% chance in Britain, and a 42% chance in Sweden.

        • adamabyss

          Negotiate with them to put a reasonable limit on what expertise they can import. Mind you negotiating with foreign ‘investors’ is not our strong point. Get Michael O’Leary to do it. In fact I’d put him in as the Irish boss, with Roy Keane as his deputy, seeing as Roy is looking for a new job.

          But seriously, a core amount of Chinese workers would be acceptable but the bulk of employment should go to local workers.

        • CitizenWhy

          Not all poverty in the US is dire. I live in a poor neighborhood, Hispanic, black, white. Low crime. Nice kids. Apartments are big and cheap (why I live there), if a bit run down (but still functional in all important ways). Most families intact, with two parents. Low paying jobs, hard work. The Hispanics especially are very good at managing poverty, helping each other out. They remind me of the Jewish and Irish immigrants where I grew up.

          • I think a lot of Irish people would relate to this

          • Gege Le Beau

            I disagree with your comment Citizenwhy, the US governments own statistics make for chilling reading (47 million Americans went hungry in 2009, 1 in 6 children are malnourished, higher infant mortality rate in Washington DC than Havana, millions unemployed, millions facing foreclosure etc) while other commentators have pointed to the increasing underdevelopment or Third Worldisation of the United States, while the gap between rich and poor is astounding.

            The US has long been a country of extremes but it is entering a new era of concentrated wealth in the hands of tiny percentage of the population, while the vast,vast majority face increased job insecurity, and paupurisation, especially as the middle class faces decimation. Obama has done little or nothing as a so called democratic president to arrest this development.

            Meanwhile tent cities are dotted around the country, increased ‘gentrification’ or the hiking of rents in the Manhattan and eleswhere is forcing minorities to the outskirts of major cities and beyond.

            Historically, there has always been a tight community spirit among Hispanics, I know well as I lived among them in LA, but they face their own problems of gang violence, drug abuse, domestic violence, criminalistion, the reasons for which are well documented.

            In societal terms, the US is entering a very damaging and insecure time, I fear for the country to be honest especially as political views become more polarised and extreme. The Spirit Level: How more equal societies do better (recently updated) is well worth a look.

  7. adriandecleir

    This solves nothing and goes against what you’ve been saying all this time. This just simply means moving our debt from one body to another with the only difference being a better interest rate.
    The whole issue is the tax payer taking on debt it shouldn’t be , not just the interest rate.
    Unless your referring to looking to China AFTER we default from the bank debt?

  8. Given the margins our European partners are charging ECB / IMF loan we should keep an eye on the big picture. Finance is the new form of warfare http://www.counterpunch.org/hudson10112010.html.The battlelines are being drawn and the prize is energy resources. China is way ahead with a planned strategy in acquisition through bilateral trade agreements around the world from Africa to S America to the new oil pipeline from Russia. Coal is vital and Australian imports which have grown as China depletes its own supplies has seen huge growth.China will not be at the mercy of markets and acquire the assets. In Oct China acquired Greek Port of Piraeus. There is a plan to use Ireland as huge trade exhibition centre gateway to Europe http://www.westmeathexaminer.ie/news/aroundthecounty/articles/2010/06/30/3998177-big-plans-for-little-china-in-athlone. This fits us as a tourist destination. The question of 8000 Chinese imperial workers manning the centre is not going down too well. Given there will be no investment available from ECB cartel for projects such as Spirit of Ireland would it not be interesting to use Chinese funds and technology to address our energy problem.I am sure the Chinese would be as interested as Shell in developing our natural resources in lieu of corrupt politicians exchanging it for brown bags of cash. China is no different than US in consolidation of position for post peak oil era which is upon us. The methods for now are more subtle than open warfare. Peak oil is bigger and integrated with global financial crisis. US military have now stated shortages will hit by 2015http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply?CMP=twt_gu. The world moves on while we await politicians who hope the longer they stay in power the less seats they loose in the next election. Unfortunately the next referendum will probably be on abortion instead of David Mc Williams excellent proposal for mandate to undo the undemocratic banking bailout funded by Irish citizens.

    • Peter R.

      Reminds me of some old words of wisdom:

      “Wars are not a fight between countried, wars are a fight between the rich and the poor.”

      There may be no war but the concept is alive and well in 2011.

      • MadaboutEire

        Or Orwell:

        “The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure of society intact.”

        George Orwell
        English essayist, novelist, & satirist (1903 – 1950)

  9. MadaboutEire

    China has strengths and weaknesses. Strong economic growth (which my sources indicate masks massive underlining structural problems and a housing bust which is going to make the one here look like Lego land), buying up Western debt like no tomorrow (for which the US is putting the Chinese under pressure, a lot of that debt will be worthless and they may yet be left holding the baby), strong export sector (despite problems with quality control from time to time) but they also have massive internal problems.

    Huge population, massive income inequality, substantial unemployment, sizable illiterate peasant class, separatist movements in the Western provinces and an economy dependant on Western markets for manufacturing goods.

    It could well be the Chinese century as some writers have predicted especially given the West’s sociopathic tendancies which could result in its own implosion vis a vis foreign wars, recklss banks and enormous internal income inequalities or growing ‘third worldism’ of developed countries just look at Ireland (health service, roads, education, housing, social services) or the US.

    The BRIC nations are making hay while the sun shines and yes, there is a geo-political power shift. Ireland can only hope to play off such massive powers but is ruled by such a corrupt and inept bunch that we struggle to even get crumbs from the plethora of economic tables.

    We either grow up and elect people of ability and class – rarely if ever do such people put themselves forward – or remain in the self-imposed bubble of ineptitude complete with RTE-PRAVDA with non-stories of car crashes, medical negligence or latest piece of government propaganda followed by house make-over programmes and spin the wheel.

    Sad for it is all there to be won but we are our own worst enemies, it is worth remembering that the magnitude of our current crisis is largely self-inflicted, it wasn’t all Lehman Brothers as the apparatchiks keep repeating as if some Gregorian capitalist chant. As one person correctly pointed out, we are like the Soviet Union without the natural resources, meanwhile, the people suffer.

  10. adamabyss

    subscribe.

  11. Malcolm McClure

    Let’s assume that just 1 percent of Irish people are really smart entrepreneurs; ie 45,000 people like Denis O’Brien, with the know-how to make things happen,. If China were to have the same ratio of really smart people, there would be 13 million of them, ie three times the total population of Ireland.
    Perhaps they could spare a few thousand to sort this place out?

  12. Deco

    I disagree with the article. I think that we should instead be doing business with regimes that have cleaner records with respect to human rights, labour rights, market economics, and political representation. Doing business with Beijing tends to end up as a one way traffic – with Beijing becomming more powerful, and the manufacturing base of other countries being repeatedly hollowed out. This produces social disintegration, like we see now in states like Ohio and Michigan in the US. This has caused very serious problems.

    Therefore, I recommend boycotting goods from the PRC until there is political reform and democratization. And that is my personal stand on the issue. Taiwan, Singapore, and South Korea are OK – but the Mainland China – no thanks. Even if the alternative costs more, and even if I have to live without. I am not buying something where the workers are living in abysmal conditions, where the environment is polluted to the point that the peasantry are dying of cancer, and political opposition is dying in prisons.

    Then there is Chinese Foreign policy, something which makes the CIA look like a collection of alter boys. But nobody, in the media in the West seems to take any notice, except George Clooney on the issue of Sudan. The top 2000 corporate entities in China are controlled by the regime in Beijing. In addition, the various manufacturing concerns are owned by people, many of whom pay bribes to government officials on a consistent basis.

    The world might be in love with the China story, but there is a lot going on to it than we are told. And in this context, I think the moral thing to do is to ensure that the truth is released.

    DavidMcW – you talked of “amoral” in a recent article. A term “amoral” can be used to define much of the policy framework coming from Beijing including all of it’s foreign policy. I am amazed at you tolerance of ‘amoral’ from China, and your critique of it at home. This is logically inconsistent. The overriding objective is always the maintenance of the power of the Chinese Politburo (the Party).

    As I say, there are very important principles at stake, pinciples concerning human rights, democracy and the rule of law. And these are the basis of economic progress. These are not principles that can be expedited for the sake of cheap toys and faulty iPods that look cool !!!

    You also castigated the government for being under the control of the IMF, the Brits, and the Germans. But these are democracies, with institutions that are based on the need to show humanity and respect to their citizens. In the case of the first two they have signifincant populations that are supportive of us. Despite the hurt to our overinflated pride, this is something that we can live with. We are tied by common bonds concerning what defines society, and the purpose of the state to represent the interests of the people.

    To be honest your willingness to be at the foot of a country that is not a democracy, that has rampant controls on it’s people, and that becomes accountable only when there is a threat to it’s power or wealth, than requires it to be accountable – this is much worse.

    It is better that we learn to live within our means than that we take money from such a regime. There is a quotation from Benjamin Franklin that perfectly captures this choice, and we must be prepared to choose the moral and difficult path – not the easy one that will lead to decadence.

    We don’t want a bailout from a regime that, frankly speaking, stinks !!

    • MadaboutEire

      “I think that we should instead be doing business with regimes that have cleaner records with respect to human rights, labour rights, market economics, and political representation.”

      Name one. Iceland maybe? Anything the Chinese have done (not that I condone) has been easily surpassed by US operations in Iraq alone, yet virtually our entire economy is dependant on them. We’ve no issue, everything goes down the memory hole while the glass of champagne is lifted for the toast.

      The world is a deeply imperfect place. When you sip with the devil just make sure you bring a long spoon.

      • adamabyss

        I’m with you MadaboutEire – there’s not one country or government on the planet that doesn’t have innocent blood on their hands and the Yanks are near the top of the hit parade.

      • Deco

        Well, how about a regime where people can vote in free elections ? How about a regime where people can see view whatever pages on the internet that they wish to view ? How about a regime where you can buy any book you want without fearing that the regime might feel that your obedience will be compromized ? How about any of the societies where people who form opposition parties don’t get locked up or placed under house arrest ? How about regimes that don’t have special days to show off their military hardware ?

        You asked me to name one. I reckon the 80% of the countries of the world would have better human rights records than the PRC !! And the ones that don’t have human rights records that are as bad as that of the PRC…let’s see…North Korea, Burma, Pakistan, Sudan, Iran, Zimbabwe, Russia, Sri Lanka…do they have anything in common…they are all countries that get active support in military and diplomatic terms from Beijing. In fact, without it they would probably be freer places.

        I suespect that your hatred of the US is blinding you !!! Of course if the world is an imperfect place, then the behaviour of Beijing is acceptable.

        • adamabyss

          Nah, don’t hate the US Deco. My (estranged) wife is American and so is my little daughter, not to mention my first cousin. I worked there in 2009 and met some wonderful people, especially in the Midwest region. Their political, economic and military policies leave a lot to be desired though (although admittedly they might not be as ‘bad’, relatively speaking as China et al). I’m just hoping for improvement from them, from all countries and governments and for the benefit of all men, and I’m somewhat optimistic too despite the current travails. Hating nations or individuals would be a total waste of my time and a distraction into negativity.

          • Deco

            Actually – I meant that for MadaboutEire – who decided to bring the US into this. So I am sorry for not being clear in my comment about that.

            I too hope that the Chinese people get more freedom, more autonomy from their regime, and better working conditions.

            I agree with you concerning the negativity comment.

        • MadaboutEire

          Don’t put words in my mouth Deco, it is not acceptable.

          It is simple analysis worthy of a 1st grader, 1.2 million dead in Iraq at the hands of the West is simple mathematics, I can’t think of a single country except maybe Iceland who hasn’t violated human rights in a most extreme fashion. You seem unable to even countenance Western crimes, which is not ununsual for those in the West. The Chinese are no angels of course, and the regimes you list are despicable, but the West supports oppressive regimes to an enormous degree and has done so far longer than the PRC.

          If we are anyway serious, we should apply the standards to ourselves that we are quick to apply to others, otherwise the whole exercise stinks of hyprocrisy and moral blindness. Time to look in the mirror.

          • Colin

            MadaboutEire,

            And what major country has an unblemished record in anything?

            Why don’t people who are quick to denounce the actions of the West go live somewhere other than the West? Why not try Egypt where you can be murdered for attending church? Or Iran where you can be executed for being gay?

          • MadaboutEire

            @ Colin – People have a hard fought a right to expect the best of their governments, just like the Egyptians agitate for better conditions in their country, and Iranians likewise.

            I am free to express, argue and agitiate in Ireland as an Irish citizen for better standards of governance without having to hold a flight ticket in my hand because people like you are uncomfortable with people challegning the status quo.

            The ‘move on’ argument is an absurdity.

          • Colin

            MadaboutEire,

            You’re talking nonsense and you didn’t even have the manners to answer my question.

            I’ll just have to ignore you.

    • Black Cat

      Hear Hear

      • Black Cat

        I agree with Deco – I cherish the freedoms I have in the west and they are worth more than any money – we shouldn’t be so quick to sell what we have to whomever looks to be the most powerful/wealthy – its dirty money.

        • adamabyss

          I am in agreement too, I don’t think it’s a case of taking sides here. I wouldn’t want the Chinese coming in to Ireland at will either. I was just making the point that the USA is far from perfect.

          Having said that, I wouldn’t be against some Chinese investment in Ireland – employment, R & D, education, technology, infrastructure etc. etc., if it was in the right place at the right time under the right circumstances.

          • MadaboutEire

            Is this not hypocrisy? You’ll take some investment money but don’t want the Chinese ‘coming to Ireland’. The Irish State takes the US dollar but makes no noises about human rights violations, illegal wars? Maybe the country deserves to be where it is, fumbling in the greasy till.

          • adamabyss

            No I just said coming ‘at will’ MadaboutEire. I’ve no objection to them sending a few managers and workers, etc. But no need for 8,000 workers when there are plenty of people here out of a job, but educated and willing to work.

          • adamabyss

            My classification of Chinese investment would be inclusive of whatever human capital would be deemed necessary to get things up and running. I’m not expecting us to be able to influence positive change in Chinese industrial relations and conditions, no more than we can affect what goes on in the US. However, any lucky Chinese worker that gets a job in Athlone is welcome to it in my book if it means they can avoid being treated as a battery hen, like in their homeland, and so long as they don’t squeeze out the local ‘Westmeathians’. I’ll leave the details for someone more experienced and qualified than me to work out.

          • Deco

            MadaboutEire – you are fixated with the any flaw that can be found concerning the US, even if it is almost 100 years ago. This fixation is blinding you to the extent that it is your reference point for everything else.

            The wrongs and flaws of American Foreign policy do NOT under any circumstance provide any justification, however you might moderate it, for the machinations that arise from the regime in the China.

            If you have a problem with the US government, you can go there, meet up with Americans who share your opinion, and organize a march in Washington DC, directly under the noses of the US government. You can chant. You can speak. You can say whatever you like. You can make it up if you wish. You can make jokes about political figures, and dress up as them and mimick them. And the police will stand aside and make sure that nobody does you any harm, and that you harm nobody else. Their only objective is that the whole thing is peaceful, and that it is respectful of the rest of the populace. And they can watch if they want. And the media can cover it. In fact they will probably cover it anyway, even if not asked to. The authorities have absolutely no interest in what you say – as far as they are concerned you can say whatever you like about whoever you like, as often as you like.

            In marked contrast there has been no anti-regime protest in China since in Tianemen Square in 1989. We all remember how that ended. And that was a peaceful protest. Most of the leaders of that protest are now dead, or rotting in prison. I can remember the pictures of young unarmed students running for cover while tanks and machine guns were turned on them. That regime still has it’s reins on power. You can go there to discuss business alright – but human rights, environmental rights, and labour rights are a complete no go area. And no mention whatsoever about politics, or the rights of the Tibetans, Muslims, those who live in the territories annexed illegally from India in the 1950s, or anybody else who is regarded as capable of even the slightest disobedience to the regime.

            There is a world of a difference. Your efforts at comparison are severely belittling the human rights of ordinary Chinese people.

          • adamabyss

            Yes, I love free speech too Deco, but one small point – ‘the authorities have absolutely no interest in what you say, as far as they are concerned you can say whatever you like about whoever you like, as often as you like’ – this is all true, the reason being one cannot have any positive influence whatsoever on the system, the game is completely sewn up, you can join a party and turn into an arsehole over 20 years and line your own pockets, but you will rarely be able to improve the plight of the common man or contribute to the greater good. The system is rigged and has been for generations. We can say what we like.

          • Colin

            adamabyss,

            I’m not the only one here who thinks Deco should stand for election, I’d give him my No. 1 if he was in my constituency. If he was elected, he would have to be listened to. Now, ask yourself, can that happen in China?

          • adamabyss

            No, not a chance Colin. Yeah, I’d vote for Deco too.

          • MadaboutEire

            The killing of 1.3 million people in Iraq is some flaw.

            The PRC is to be condemned for its human rights abuses/violations, but we should apply the standards we expect of others on ourselves first and foremost before with adopt any sort of high moral ground, the US is one example, the UK, France, in fact, just about every single Western country could be used as an example, the US is possibly the worst offender given its size, reach and superpower status and therefore an easy example which seems to have flown over your head. But equally you could talk of France’s treatment of Haiti, Britain’s treatment of the Diego Garcia islanders, Belgium’s involvement in Rwanda etc

            It is simply a case of hyprocrisy, we rightly get upset about human rights violations in China but give the red carpet treatment to US troops in Shannon. The Nobel Peace Prize goes to Obama and elite opinion here is delighted, the following week he escalates the Afghan war with 30,000 troops while drone attacks have allegedly/reportedly killed hundreds, all of which goes virtually unnoticed in the broadsheets/public opinion, it is quite a mental block. Yes, freedoms are restricted in China to a large degree, it is an oppressive regime but surely equal standards is a good place to start when it comes to so called ‘business ethics’.

  13. AthruMor

    Worlds Debtor Nations- Ireland 1305% versus China 5%

    This article triggers an issue that has been around for a while now.
    Perhaps I missed it but I don’t recall any mention being made of this analysis of the
    “Countries Overloaded with Debt” (October 2009)
    http://www.cnbc.com/id/33506526/Countries_Overloaded_With_Debt
    and the related slideshow on the
    “Worlds Biggest Debtor Nations.”
    http://www.cnbc.com/id/30308959?slide=1

    Some will doubtless argue with the stats used but Ireland was number 1 in debt terms with an external debt (as % of GDP) at 1305% , yes that 1305%
    Another perhaps more interesting feature of this table is that most all the European countries feature in the top 20 (UK number 2 – 429%; Germany number 15 -179%) with Australia and the US featuring also (US number 20 – 98%)
    Furthermore India and China don’t feature in the table at all but have apparently external gdp% of 4.6 and 4.7 respectively according to the article.

    I’m not an economist but this strikes me as a very significant issue.

    Is this table to be completely disregarded or does it confirm that the western world has been living beyond its means for some decades now?
    I’m assume that as the industrious Chinese work and save their money .. this is being lent to European Banks (inc the German Banks) … who in turn have lent to the Irish etc.
    For now this makes plenty sense to the Chinese and Germans as they sell their goods to those who have the easy credit or over-inflated wages in the West.
    However, this appears wholly unsustainable.

    Eventually the inevitable consequence appears likely that the only way for European countries to survive, they will need to cut their borrowing, cut their costs, become much more competitive and start generating real value added services that can be exported world wide.
    If this principle applies across Europe, adding to EU debt simply defers this inevitability need to shift.
    Ireland is therefore clearly at the forefront of needing to cut borrowing, costs (eg public sector bills) and a shift towards value adding innovation from within.

    (Little new in this analysis, other than it may put Irelands wrangle with the EU into a wider international perspective..)

  14. Chinese puzzle:

    Biffo and Seanie golf while Anglo burns! Question: Knaves or Fools?

    If they discussed Quinn’s CFD possible €3bn losses on those bets, or Permo interbank loans, they were crony knaves. If they didn’t, they were fools!

    Answer: They were both knaves and fools. QED.

  15. SOMK

    “Classical economics predicts that the opposite should happen. But as cash flows from the likes of China and Brazil to America and the periphery of Europe, we in Ireland will get used to the idea that countries like China will be significant investors here in the years ahead.”

    Just goes to show how nonsensical and utterly divorced from our current reality “classical economics” are.

  16. wills

    David.

    Excellent analysis on the ebb and flow of money through the veins of a sick disgusting rigged jailor economic plutocracy.

  17. juniorjb

    Have to agree with Deco, it has been too readily forgotten in the rush to praise Chinese wealth and power that the PRC has an appalling human rights record and we surely should acknowledge the huge qualitative difference between their rule and the political freedom enjoyed in western democracies, however flawed that may be. Small signs of improvement are encouraging but we should hold them at arms lenght until we see a great deal more.

  18. Colin

    David, not one of your best ones, have to agree with Deco. We give out when Umbro and other football kit manufacturers make massive mark-ups on child labour in India making footballs, so why are we burying our heads in the sand when we know the Tyrranical Chinese Government who possess billions of spare Euros from the backs of Chinese Sweatshop industries. Are we not concerned about the Chinaman who has to work 12hr shifts 7 days a week?

    China can easily be knocked down a peg or two by attempting to make their worker bees aware of their awful situation. If “Das Kapital” can be translated in to Mandarin and distributed across China, I predict huge social unrest. Social Unrest is a time bomb waiting to explode in China. We just need to communicate to the workers of China their true predicament, and show them how the goods they work hard to make end up in the homes of the leisurely people of the Western World.

  19. China’s FX Realities

    I agree with David that China’s FX reserve will be devaluated. In Q4/2010 alone their treasure chest was filled with a additional record 199 bln which brought it to $ 2,847 trillion in 2010 according to Peking Central Bank last week.

    When we are mapping the global capital markets, we see a capital flow into countries like Brasil, which they do not like and started to fight against of course.

    For a better understanding, It is necessary to understand global capital flows in context, and you may find some reports such as the Global Wealth Report by the Allianz Group issued in 09/2010 worth your time reading.

    https://www.allianz.com/static-resources/en/economic_research/images_englisch/pdf_downloads/working_papers/v_1287392031000/agwr_eng.pdf

    When we talk about the financial asset power shift that has emerged from 2003-2010 for the clear benefit of China, we should not forget another aspect in this picture, the prosperity disparity needs to be described at the same time.

    I guess, this is also David’s point when he write There is something unpleasant in the pattern that is unfolding whereby countries with billions of poor citizens are financing countries with millions of rich citizens. It means that the financial per capita assets in countries like China and even more so India are quite small compared to countries like Germany for example. In other words, the wealth concentration in fewer hands is higher in this fascinating country with the most widely spoken language on this planet, mandarin.

    China faces a lot of problems on a scope that are beyond comprehension for the average european civil servant mindset. It is estimates that half of China’s population, around 600 million people, live and work in rural areas which are underdeveloped, in parts they have a living standard like people in Europe had in the 19th century. China is so huge and holds such a variety of different ethnic groups, may be it can be best described as highly controversial, without passing judgement.

    When we think of China, most of us will think of the urban centers like Shanghai or Peking, and chances are that more European saw these places than Chinese citizens themselves. It does put things into perspective and explains that per capita assets are somewhere on place 100 in the global comparison. China faces the enormous problem of wealth distribution. Inflation puts additional pressure on the people living in areas not blessed by the constant two digit growth. China tried to tackle this with minimum wages. However, a substantial amount of people in China need to spend their entire disposable income to buy food.

    In March 2011 Peking will publish it’s five year plan, and it remains to be seen what additional measures they come up with to tackle the disparity.

    To a large degree China’s success is based on it’s strong exports, low production costs and a undervalued currency. This makes China vulnerable to externalties such as the weak US growth and the debt crisis in Europe. Their value chain however can’t be compared with productions in Europe.

    The biggest questions mark over all is the change in political leadership in 2012. It looks like the chief of the central military commission Xi Jingpin will succeed Hu Jintao. We know too little about these internals, and it remains to be seen whether Xi will continue to decentralize or prefers to centralize power again. No one can predict that in the West. However, at the moment, and from the little we know, it would appear that Xi is not necessarily in favor of strong democratic reforms at all.

    The currency war that we witness has the inherent potential to turn into a trade war, and the rare earth elements are only a very small aspect of such an unpleasant scenario, raw materials in general are an issue, and alone this week, prices for copper, wheat and other commodities are sky rocketing. There are no winners in a trade war.

    There are voices who imply moral issues when it comes to Chinese investments in European countries, pointing to human rights questions, China not really being a free market system etc.

    I would like to provoke the question, since when has real world economy ethical fundaments? I fail to see this, and I find it somewhat bigot to quickly point the finger to China in that respect. Human rights are ignored in the US as well as in Europe, we have not exactly a clean track record to show for, so this argument in itself is not really valid to me.

    But it opens another catalogue of questions that are valid with reference to the lack of a fundamental ethic in our foreign trade relations and global finance system.

    Joseph Ackerman recently declared the global economy to be stabilized, the programs and ECB measure to be successfully implemented, but warned to be complacent. Right. I guess I missed something over the Christmas period.

    We are confronted with a situation where energy limitations, the most obvious are liquid fossil fuels, uncover the inherent design flaw of economics that is based on exponential growth. Here, 95% of industrial production is dependent on fossil fuels one way or the other. Overpopulation is the other factor in this equation.

    My spontaneous reaction would be to suggest to slow down for an interim period! Slow down financial markets and productions, and re think our global trade and finance system.

    One interesting headline recently came also from China, it would appear as if they found a way to recycle fuel from nuclear power plants. I know too little on the story to go into details, but if a commercially viable recycling becomes reality it would be no less than a breakthrough for nuclear technology and could help us bridging the energy supply crisis we inevitably face.

    The renewable hype and subsidy rip off will not solve the energy problems we are confronted with as they are facing the simple law of diminishing returns.

    In my view the entire system is failing, on many fronts, and only if we are honest to ourselves and stop pretending that our patchwork attempts will bring back social cohesion and prosperity to the Nations of this planet, we have a fighting chance to get through this war that was triggered by vested interests.

    I am not an optimist, neither am I a pessimist, but I know that time is running out, the clock is ticking and we need to get our act together as a global community.

    Only by learning from the lessons of history we can apply new wisdom to the challenges of our time. If we refuse to learn them, we pave the way to a predictable outcome, and this would be tragic.

    Best
    Georg

    • CitizenWhy

      Not all of vast rural China is poor. When there I took the sleeper train from Beijing to Tonglao in Inner Mongolia. I was the only Westerner on the train but I was with a Chinese friend so it was possible to talk with people (friendly, prosperous). The train does not go directly from Beijing to Tonglao but instead goes to the coast (Dalian) and then back out into the countryside. In brief it covers a huge swath of northern China where very good Mandarin is the native tongue (not simply learned in school). Everywhere there were small villages with 5-20 very handsome brick farmhouses, of varying sizes, in a strangely California/Spanish style with red clay shingle roofs. I wondered where that style notion came from until we passed by a huge Catholic church in a small city, done up in California/Spanish colonial style.

      The poverty is severe in the central and west of the country. To offset the dire rural poverty there are many huge industrial cities that are horribly polluted, beyond the imagination of a western European. In fact it is pollution, and the rotting sicknesses it causes, that has caused the most public protests in China. Yet the government is vigorously engaged in developing green technologies. It fears the social unrest that its pollution engenders. But green concerns do not extend to the industrial cities of the interior.

      One problem of poverty in China is language. There are many languages in China, with huge areas of the south and west where Mandarin is not the native language. They are the poorest and the least educated. The government is making progress in spreading Mandarin (a necessary gateway to good jobs) but it has a long way to go. Of course the words in each language are written exactly the same (but pronounced totally differently). Learning to write Chinese is daunting and many cannot do so.

      Another problem is brutal corruption. Everywhere some corruption is tolerated but in the poor rural areas the local Communist party officials are not only corrupt but brutal, beating people and stealing as they please. These party thugs are the most fervent believers in Communism, vaguely akin in their fanaticism to the racist “white Christian identity” sects in the US (none of whom hold official power). In fact it is best to think of the Communist Party as the official state religion, with many pious rites, and with the educated being faithful members but not believers and many of the uneducated often being fervent and fanatical believers. The government vaguely wants to reform the Party in these backward areas but does not get around to it. No educated person would want to live in these areas.

      Another problem is education. China has selected just a few universities to be first class. Graduates of these universities have the doors opened for them. Graduates of the second tier of universities – most by far – are often unemployed and bitter. Among other things they cannot speak English and often speak poor Mandarin. English is required for entrance to the few elite universities. The prosperous have normally sent their child to private high schools, where the ability to play two musical instruments is required, English is well taught, math and science are emphasized, Chinese and some Western classics are taught, and facilities are lovely. These schools are very similar to the elite gymnasia in Germany, but there is no comparable system of quality vocational training. The government, under its “widespread prosperity” policy, has taken over many of these private schools in order to make them tuition free for the talented and diligent children of the poor. But only the talented. The government fears the inequality in its society and wants to reduce it. But above all it wants to advance science and engineering. it is uninterested in spending money on those who are not very smart and very talented.

      The Red Army holds the country together. Previously the troops were largely drawn from the poorest of the rural poor. Not any more. There are now high educational standards and education is continuous while in the Army.

      ETHICS

      No one is perfect, but there is a scale of behavior that runs from the nastiest to OK to virtuous, with most of us sliding toward OK. The lack of ethics in China is most comparable to gangsters in the USA although a case can be made that lobbyists and certain business leaders (Wall St) act without any concern for the common good and often subvert it, with no remorse. Studies have shown that sociopathic personalities often rule in the executive suites of the USA. Nonetheless, on the whole, there is no consistently outrageous violations of human rights in the USA comparable to China’s. We prefer to export our violations of human rights rather than put them too prominently on display at home. As the new saying goes: “Poor USA, so far from how Canada is governed, so close to how Mexico is governed.”

      • CitizenWhy

        It is a not yet fulfilled dream of mine to spend time in China’s and do some landscape and people photography, the abundance of bizarre – Five colored Mountains comes to mind – and breath taking beautiful landscapes is mind blowing.

        I would love to be able to spend some time with tribes still living in inner mongolia, a truly harsh and unforgiving landscape.

        As for human rights, well, I guess the true level of violations is certainly unknown, and sadly probably much higher than what we estimate.

        As for pollution, I saw this level of jaw dropping insanity after the wall broke down in germany, as a consultant in R&D reporting to ‘Unter den Linden’, I will never forget my first visit in Bitterfeld, ever!

        Thanks for your interesting write up!

        Best
        Georg

        • CitizenWhy

          Thanks for your kind words. Tonglao in Inner Mongolia used to be in Manchuria and is a clean, modern mid-sized prosperous city with an excellent school still teaching the Mongolian language, script, writing and culture. The city is lit at night with a variety of beautiful lampposts, manufactured there for use in sophisticated urban areas throughout the world. It is also a center for the production of Manchurian milk, considered the premium drink in China and trusted not to be tainted as dairy products can be from other areas. Wages are high.

          Inner Mongolia is huge! Other parts have people still leading the tribal life. But outside a few small cities the huge country is very sparsely populated. I hope you can ride a horse over rough terrain. Maybe the Rubberbands should tour there.

          The Monglolians never quite bought into Mao, and are very entrepreneurial. In fact they have pioneered non-profit charities as well as businesses.

          Many successful green businesses have been founded and developed in Inner Mongolia. In fact this area produces green air conditioners which do not release freon into the atmosphere. These air conditioners are relatively inexpensive and are used in developing nations everywhere. They cool but they do not produce freezing temperatures so they are not in use in the US but may be in Europe. Air conditioning in the US means freezing temps, which means much freon released. Another business takes discarded shipping palettes, reduces them and produces beautiful woods that are hard to tell from the original hardwoods. The recreational lodge/event hall (open to all workers) at the factory is beautifully and richly decorated with these woods.

          • Fascinating!

            I can not remember the name, but there is an entire city in the desert that grows wine. If memory serves they built 2,000 miles of aqueducts from the nearest mountains to channel the water there. These aqueducts were build under ground for the water to stay cool and not too much to evaporate in the blistering desert heat. – Geeze, I hate it when the name sits on your tongue and you can’t recall it. –

            China’s rich culture is as diverse as it’s people. Would love to learn a good mandarin, but I guess I am past sell by date (grins), and it would take me too long to make considerable progress.

            A friend of mine is a Prof. for History in Italy, his wife holds PhD in Geology, they were traveling China and with a great longing I listened to their brief descriptions. Do you visit China on a regular basis?

          • CitizenWhy

            Sorry, I should have said Mongolian milk, not Manchurian milk.

        • Deco

          I was once considering going to China – but by good fortune, I ended going to India instead. I was glad that I did. Because it was a really positive experience. I have heard people who went to both places say that they would prefer to return to India.

          I would heartily recommend India. It is not just about the scenery – which incidentally, is amazing. Mostly it is about the conversations, the depth of the culture, and the warmth. You are free to go whereever you want, to meet whoever you want, and to say and read whatever you want. [ And there are no restrictions concerning what parts of the internet the government wants you to see, like in China].

          • CitizenWhy

            I know what you mean about India. One of my Irish aunts grew up there, and we still have some out-of-touch cousins there. My aunt loved talking about all her Indian friends and their varied views on religion and life. She was particularly amused when a well educated Indian would ask her, “Who is this Jesus Christ? I’ve heard of him but don’t really know anything.” Needless to say they found her explanation of Christianity quite irrational. But very charming. Not everyone knows or cares about Christianity. Of course the country is still cursed with the caste system, poverty, and now a growing Hindu fundamentalism which justifies violence and thuggish acts against Muslims and Christians.

      • Colin

        George,

        Its strange that when you looked for a foreign comparison to Chinese Communist Party thugs, you chose “white Christian identity sects”. Now, can you please tell me how many people have been murdered in the last 10 years by these awful dreadful “white Christian identity sects”, and then have a guess how many people have been murdered by Islamo-fascists in the last ten years? And then you might be able to explain to me why the Christians came to your mind first when looking for a non-Sinic comparison, rather than the Muslims.

        • Colin

          Sorry Georg, that was meant for CitizenWhy.

          • Colin

            sigh….. once again, I didn’t bring it up.

          • CitizenWhy

            To Colin, I clearly nmntioned the Ft Hood killer, not claiming he did not kill anyone, but pointing out that he was a psyciatric case as well as a psychiatrist and that there should have been intervention in the case of a this closely observed person.. And yes, people have been killed in the name of Christianity, including the anti-abortion killers and the Christian identity killer in Indiana. The number killed in the US is not right now the point. The point is that an intellectual framework exists that controls the thinking of millions, and that framework says that only Christians have the right to rule in America. Hence, Obama, accused of being a Muslim, would have no right to be President. This kind of intellectualizing of slavery and suborning of legitimate authority preceded the US Civil War for decades before war broke out. And the justifications given by the seceders in South Carolina, the first breakaway, named the north’s opposition to slavery as interfering with their sacred property rights and states’ rights and the Constitution, which did indeed at that time allow for “permanent bondage” (they could not bring themselves to use the word slavery. There was also a concerted campaign to justify slavery by denying that blacks were humans, or at best claiming they were a degenerate and subordinate form of human fit only for bondage. Intellectualized framing preceded action. That kind of intellectual framing of the sole authority of Christianity in the US is what is happening now. according to many on the right our last two Democratic Presidents had no constitutional right to the office, since they violated the covenant made by the Christian God with the US. Sounds like the British justification for conquering and enslaving Ireland, doesn’t it?

          • Colin

            How many abortion practitioners have been killed in the last 10 years?

            Simple Question, now give me the simple answer please instead of your lefty liberal nonsense.

        • CitizenWhy

          If you believe that Christ redeemed only white people, then you can call these US sects Christian. It was not too long ago that black people were regularly murdered without redress in the USA in the name of Christianity. On, and some Jews and Catholics. Thuggery is not dead in the US. Just lurking for the right opportunity.

          Right now the right wing have chosen to fight for absolute property rights (a foundation principle of the Confederacy and the brutal laws of England in the 1800s). These “rights” include the right to “freely” enter into contracts of low wages and effective bondage dictated by the rich and powerful. Just like in China. Just like the property laws alluded to in “The Fields of Athenry.”

          The claim that Obama is not an American is part of a drive to convince people that he must not be obeyed as the US President and should be resisted in every way as a non-Christian traitor, even by the military. Is that fanatical enough?

          Islam is a scary phenomenon because it does not separate religion and the state, and thrives in backward countries without a tradition of human rights, giving the thugs a moral license to run wild. But Islam in the US and Canada is moving away from this tradition toward seeing separation of religion and state as a good thing. For islamics. For all.

          Joining church and state is also a goal of many fundamentalist Christians in the US. They fully intend to enforce their religious convictions on others. And many want to secede from the US in order to implement their goals. The white identity sects are just the leading edge. And US Islamics have not killed many people in the US (I can’t think of any). The fanatics on the whole want to go abroad and fight the US. And the white identity people have killed a few.

          The Ft. Hood Muslim psychiatrist was clearly mentally unbalanced, just like the shooter in Arizona. They are not really acting out of conviction, their surface convictions just feeding their underlying mental illness. They will find something to fit their disturbed view of reality, religion, politics, space aliens, whatever. The Ft Hood psychiatrist showed many symptoms of his disturbance and there should have been some intervention. Meanwhile many army officers are forcing troops to attend fanatical and political church services conducted by fundamentalist Christians.

          And yes, the US has carelessly let Saudi Christian-and-Jew hating fanatics take over many of its mosques due to the influence of lobbyists and money more than popular laxity. These places are breeding grounds for crazy religion but they have so far bred few effective act of violence.

          • Colin

            “and US Islamics have not killed many people in the US (I can’t think of any)”

            So you’re saying the Ft Hood psychiatrist didn’t kill anyone? Wrong, he killed 13 and came close to killing another 32. Many more too, but thankfully they have been prevented from doing so, like the case of the underwear bomber on the plane and the dude with the car bomb in Times Square.

            Americans have let fanatics take over mosques? Ahem, are you serious? I suppose you think Mossad have their say in the selection of those wonderful mullahs who instruct their followers to violence against Christians and Jews.

            Now, answer me, how many have been murdered by Christians running around shooting and shouting In-the-name-of-the-Father-and-of-the-Holy-Spirit in the last 10 years?

            You know, its people like you, who clearly dislike American policy and history that is the greatest obstacle to further foreign direct investment from the USA, and attract tourism from the USA which would boost our economy.

          • Colin

            “and US Islamics have not killed many people in the US (I can’t think of any)”

            A quick google search would help your memory a little bit. This goes back to the 60s, hey, I never knew a muslim terrorist assassinated Robert Kennedy until now.

            http://www.freerepublic.com/focus/news/1993321/posts

          • Gege Le Beau

            Colin – I’ve heard there is a new church in town, a broad one incorporating Foreign Direct Investment, Low Corporation Tax and No Labour Organising i.e. the Holy Trinity of the Neoliberal Way, the congregation can attend for 12 hours shifts with no overtime paid for true believers.

          • Colin

            Wow Gege, are you moving in neo-liberal circles now?

          • Gege Le Beau

            @ Colin – like Jonah in the belly of the whale, you can only know the opposition by moving among them and reading their literature, why do you think I am on this site ;-)

          • Colin

            I thought you were on this site to promote Communism and Atheism.

            “You will know them by their fruits” Mt 7:16

        • In deed SIGH Colin!

          You quote Freerepublic?

          Welcome to Free Republic! America’s exclusive site for God, Family, Country, Life & Liberty constitutional conservative activists

          Yeah right! LOL

          • Colin

            Extended Sigh……

            Look, they happen to have collated all the information that Citizen Why had deleted from his Islamophile mind.

            Are you telling me that that information is false, just because its hosted by people who you appear not to share an ideology with?

            Grow up Georg.

            The site turned up high on google’s list on a search for islamic terrorism. I have not heard of them before, so don’t start accusing me of belonging to a group who I have no knowledge of.

        • coldblow

          Colin

          Quite right. It is interesting how this particular comparison is made in CitizenWhy’s otherwise excellent and informative posts. Nobody’s perfect.

          Here are a couple of links from last Sunday’s Observer about the latest case in Pakistan.

          Nick Cohen is always good on this (albeit from an atheist’s point of view – see last line):

          http://www.guardian.co.uk/commentisfree/2011/jan/09/nick-cohen-blasphemy-laws-inhuman

          And the following suggests that a bit of old-fashioned land-grabbing is at the bottom of it, the method in the madness as it were:

          http://www.guardian.co.uk/world/2011/jan/08/salmaan-taseer-blasphemy-pakistan-bibi

          • Colin

            Thanks Coldblow,

            I never bring this up, but when someone here posts something that has a go at a group (in this case Christians) when there is another group who get conveniently overlooked due to Political Correctness, then that gets my back up and I have stated before and I’ll state it again, I never bring up religion here, but when someone takes a cheap shot at a group who does not deserve it, then I will highlight the issue and deal with it truthfully and honestly.

            You know, down through history there have been many self-hating Jews, but now there’s a new phenomenoen in the Western World, the Christian-hating Secularist/Atheist.

        • It turns out, not that many.

          http://www.vancouversun.com/news/great+Islamist+menace/4084610/story.html

          Why ten years Colin? Why not 50, 100, 100? Or you could just go back to your Daily Mail for your “facts”.

  20. An interesting article David offering a solution which might help to fix the debt problem but there are some problems with it

    You are selling the Irish people the idea that there is no problem at all in accepting billions of investement from a country that denies freedom of speech to it’s people by locking down the internet and throwing pro democracy journalists in jail

    You fail to mention any of this so for me your aticle is not complete because I bet there are plenty of Irish people who would have issues with these points. Then again a lot of people would not bat an eyelid especially if there is the chance of some of the folding stuff in it for them. There seems to be no cure for this problem mindset

    You can’t talk about the world economy and globalisation while ignoring the human rights issues and mass poverty in Brazil and China

    I worked in the industrial city of Chungli, Taiwan for three months and lived like the natives as myself and my mate were the only white people for miles. We worked with engineers and techs in various departments and often had lunch and a walk down main street in the evenings with these guys and would go to the market or to a food shack and eat noodles and fish together

    Most of these guys had degrees and like me they were classed as engineers yet they never knew what it was like to own a car and every morning I used to watch amazed as thousands of these little 50cc moped whisked people in to work in this huge noisy factory with working conditions that were far worse than anything you would imagine being tolerated in Ireland

    Someone people in debt would have no problems with your idea and you might have a large audience there among people in that situation who will agree with you and if that is the case then I will stand alone and wish the herd good luck

    Enjoy the rest of the journey and spend some time with the locals

    • CitizenWhy

      Yes, there is mass poverty in Brazil but the government has implemented policies which have greatly reduced the number in dire poverty (to 7%). Right now the efforts of the police to take back the slums of Rio from the drug lords is working. But the rents have jumped up now that the rich and middle class feel free to shop and eat there. The streets and alleys ofv these slums are not all unpleasant.

      What is truly lacking in Brazil, and needs immediate action, is granting official property deeds to the slum dwellers and to the rural poor who have built homes and worked the land for generations. It is too easy for the rich to cheat these people out of their property (but you might say that this has been done in Ireland and the US in a less crude way). Granting these deeds and assessing the property’s sellable worth would greatly increase the GDP of Brazil. With property deeds the poor could also borrow for home improvements or for operating small businesses.

      Globalization means many things, including evening out capital, jobs, unemployment and poverty across the globe. Hence unemployment and poverty are growing in the US while diminishing in certain well endowed, civil-war-free developing countries such as Brazil. The same may be true for western Europe if social democracy is scrapped and US style raw capitalism (accompanied by lobyist cronyism and bleeding the taxpayer) is adopted. Right now top banking execs seem to have become the real ruling class in the advanced countries.

      • Right now top banking execs seem to have become the real ruling class in the advanced countries.

        Bingo!

      • No stand up person would deny that it is only fair that the slum dwellers are entitled to the property deeds

        It would hand them a start in life and let them take their chances in a prospering economy. Some will have the discipline to stay level headed about their good fortune and some will just fritter it away

        @Georg yes the Brotherhoods Bankers are running everything. Good man

  21. irishminx

    David,

    Your creativity expands my own thinking all the time and for that I am grateful and thankful.

    In truth, I have my own doubts about why China would want to invest in Ireland?!? I come back to this question all the time, What is their real gain?!? I don’t have that answer and maybe I am being cynical, however, I am cautious too.

    I keep coming back to who gains? When my own marriage was breaking up, I was in Maynooth college at that time studing counselling, sociology, community development, family law etc etc and it was there that I was first introduced to the concept of gain.

    My truth is that the concept of gain shocked me.
    I was asked why was I staying in my marriage, what was my gain? When I was asked this question, I said, I don’t have any gain. However, on reflection, I realised that my gain in staying in a marriage I needed to leave, was this…………………

    I didn’t want to be poor! That was one hard self truth to realise for me. However, having realised this “shadow side” of who I am, it enabled me to move on eventually.

    If collectively, human beings including me, realise all aspects of their being and are HONEST about our fears and vulnerabilities and what it is we want to gain and have the courage to put it out there to the world, then I suggest, our world, would be quite a beautiful place to be.

    It is I believe, our human challenge and learning here on earth!

    What is China’s gain, in investing in Ireland?!?

    • idij

      Isn’t that a bit like asking why banks lend money? Because debtors pay interest is the usual reason why. Irish bonds are available for purchase at an all time low. If they buy them, then esentially you are putting a percentage of the Irish economy flowing into China’s hands. Why wouldn’t they want that? (and why would we, more to the point).

      It’s easier to see for the horror it is when it’s expressed in nationalistic terms like these, but that’s what we are giving away to a bunch of banks anyway.

      They are not “investing” in Australian resource companies either. They are buying them up, so they can have the resources. I’m sure they would be willing to buy up our resources too (and I’m sure we are foolish enough to sell them).

    • Seven

      Well, it ain’t the fast food :)

  22. CitizenWhy

    Just a reminder. China always wants something in return. What does Ireland have to offer? China wants ores and oil. And in some cases the ability to control/influence foreign policy. But Ireland is not high on the list of serious international influencers.

    Get your house in order. Look to Iceland or Norway, not to China.

    Why, in the 60s, were a family related to me the only Irish family operating a fully modernized farm on some of the richest land in Europe? The neighboring owners were all northern Europeans. Yes, my elatives were fortunate to be excluded from Irish politics, having been Collins supporters and favoring some sort of socialism. So they turned their talents to productive businesses of various kinds and have done quite well, even in the latest mess.

  23. ex_pat_northerner

    Will the Chinese Bailout really turnout to be a Chinese Takeaway ? Not convinced that the Chinese don’t have problems of their own.. Aspiration is breeding a housing boom similar to the one Ireland experienced. True we could do with the tourism. Perhaps the Chinese recognise that if Europe goes under (and the Euro looks mighty shaky) and with the US economy f**ked there’s no one to buy the next gen mobiles/3D tvs/consumer goods etc. Whether it be US or China or Germany doing the bailing out, lest be assured, they may bailout the boat, but they’ll keep control of the bucket, and steer the boat where ever is in their interest.. and that may be to scuttle it at the right time.
    China is the bookmaker, trying to lay off some of its dollar bets at the moment.

    • Gege Le Beau

      As one poster alluded to, there is suspicion of a Chinese housing meltdown of epic proportions, it may be the greatest ‘Asian Tiger’ in human history, but one has a sneaking suspicion that not unlike Ireland it is built on a house of debt, the Chinese may be in need of a bailing out themselves in time to come while sales of those bottles of jet black hair dye their leadership is found of may not be able to disguise the worry greying their heads.

      I wouldn’t believe any of their official figures, as one Chinese friend said to me in relation to this: “only a fool truly believes a fool”. These are the same type of people who covered up an entire famine and planted grain on the sides of the rail tracks so Mao in his country visits could see food aplenty complete with smiling peasants strategically dotted endlessly in fields, enabling local party hacks to keep their positions and their heads. As the Buddhist story goes ‘we will see’.

      • CitizenWhy

        Real estate was one area in Chin left to private enterprise, with most large corporations still in government (that is, Communist Party) hands. The real estate entrepreneurs have made their millions or billions, often stealing land from peasants (through a corrupt court system). So the abandoned real estate developments (often gorgeous), including the world’s largest mall with just 1% occupancy, do not really impact China’s core economy much, as the real estate crash has in the US and Ireland, where ordinary people dumped their life savings and potential for savings into overvalued properties. In effect the Chinese government enterprises, like Wall St in the US, are doing fine even as abandoned properties mount. The main thing to remember is that no one one bought into these abandoned Chinese properties while in the US people did buy into what are now rapidly deteriorating real estate developments. The Chinese properties went on sale and there were no buyers. Meanwhile the developers did make money and many workers were employed. They would now probably not be employed or employed at lower paying jobs.

        The banks that lent for these properties are government owned, and they suffered losses, but the government still makes money through its other enterprises. In fact foreigners have bought shares in these enterprises so the government’s capital has been replenished. The elite Communist Party members who run everything know how to take care of their own. Sound familiar?

        • Gege Le Beau

          Yes, I have heard such things from several sources and more besides but all from Westerners. The Chinese I have spoken to are in no doubt however about what is slowly unfolding. I am not ‘expert’ enough to say but I am curious.

          But thanks for the comment and other ones, very thought provoking.

  24. Good post

    You need oil to grow an economy and oil is now approaching triple figures at a time when the US is about to raise it’s debt ceiling. Again.

    Having Chinese people in Ireland is not the problem because they would show us how to be a bit less bullish and teach us some humility and better manners

    The US is in decline and has had it’s day. It seems fated to become the land of call centre workers who say ‘have a nice day’ all week long and visit Walmart on weekends

    We all grew up doped by American Culture and it has it’s attractive points, such as Bruce Springsteen music and Bourbon Whiskey, but people like Michael Moore help the drug to wear off

    America is a gonner and their political representatives don’t care about a little guy in Flint Michigan driving a banger and wondering how to feed his family.

    This happened in Scotland years ago and the same thing is now happening all over. Some of the old industrial landmarks were too awkward to dismantle so they decided that instead of being sad reminders of a proud and glorious past they were become ‘cultural centres’ for tourists. This works but the US in it’s paranoia has turned itself into an unattractive place to visit

    Anyone could be forgiven for perceiving them to be swanning around the globe cutting deals for their corporate clients using dodgy collateral and threatening to kill them if they don’t accept. I suspect the reality is not that different

  25. Gege Le Beau

    It surprises me a little, when the Irish numbers are brought up in articles they are invariably linked to the human face, the struggle of the citizen, the damage done to the society, the criminal ineptitude of the government, the lunacy of civil servants etc

    But when international numbers appear as in this article and in the example of a recent article on Chile, the human context, the face behind the numbers tend to vanish and apparent ‘success’ stories once again appear.

    However, in reality, the two, the profit and the human story can never be separated, for behind the mountain of supposed profit are countless stories of human suffering. It is often this lack of context, this absence of the human story/condition which proved so dangerous during the so called Celtic Tiger, a period which was in fact a huge amount of debt masking the enormous internal issues, strains and problems in the Irish economy, things which have now come home firmly to rest. Fitzpatrick and Drumm are not altogether wrong when they say they are being convenient scapegoats for politicians and the media who are eager to satisfy public desire for someone to blame. They are all to blame, the politicians more so because they are the legislators and custodians of the Republic who should have been watching for all threats both domestic and international to the sovereignty and viability of the State.

    We should never practice economics or finance or business without humanity at the very centre of all such things, failure to do so this naked drive for profits above all else has brought the world to the edge of a moral and financial abyss while the age old refrain: “what profit a man or a country like the US, the UK, China or Ireland if their treasuries grow but their collective souls and consciences diminish or to echo the late John B. Keane from ‘The Field’: “what is the point of becoming millionaires or billionaires if we lose our values”. This is indeed deeper than most people think.

    The call must always be people before profit.

  26. mr_amaz1ng_grace

    For someone less advanced in economics, why do you expect the US dollar to depreciate against the Chinese yuan? Is it due to the fact that when the treasury bills are repaid, the Chinese will want to transfer this $ into Chinese yuan or some other currency. Thus creating an oversupply $?

    • CitizenWhy

      Oil and other valuable commodities must still be purchased in US dollars. When oil goes sky high in 2011 0r 2012 China will have the dollars to buy. The US might also, if it simply printed money, jacking up the price even more, leaving only China and the US able to pay the price. The fact is that by 2015 oil production will hit a peak it cannot exceed and the demand will still be growing. The peak has nothing to do with oil in the ground. The production capacity to convert oil to fuel will be overstretched. No new new refining capacity is in the works.

      Good luck Europe. Climate change is real, and its first great effect will be severe winters in Europe. Why? Because the melting Arctic ice is being converted o huge snowfalls in the highlands of Siberia. Cold winds sweep down from those highlands across northern Europe and much of North America. in the US we call this the Siberian Express.

      • When the glaciers in the Himalayas are gone hundreds of millions of people in Asia will have no more fresh water access. This will probably be the first bigger of many more tragedies that we might see in the not too distant future.

        The retreat of the glaciers is happening at an unprecedented speed, it is so fast that even the worst case models did underestimate the retreat. The climate models are undergoing permanent fine tuning, and so far, most of the modeling was way too conservative, underestimating positive feedback loop effects that bring considerably acceleration.

        http://www.extremeicesurvey.org/

        • Gege Le Beau

          Look to Bangladesh, 165 million living on one giant flood plain will be washed away, the world knows but what is it doing about it, well the Malthusians wait and watch expectantly.

  27. Lunacy Cycle Re-Appears :

    Tomorrow Wednesday the ‘Pull’ starts again until tomorrow week when after which its glory will turn away its face to hide its secrets once more.

    These days ahead will liven out the present Moon Wobble that we have read about since November and we must wait to find out whether it departs like a roar of a lion or or a whisper of a giant .

    Watch your compass change directions where the east becomes the west and west becomes the east and the Yangtze flows into the Shannon and directions of all the flights arrive in HongShan .

    • Hey John :)

      What would we do without your moon cycle forecasts!

      Did you hear that jaw dropping news about anti matter created by thunderstorms on earth?

      Here: http://www.nasa.gov/mission_pages/GLAST/news/fermi-thunderstorms.html

      • Good Morning Georg :

        Many thanks for your insight and interesting information on your url.

        People forget that the Earth is a living organism and we just inhabit a part of it .Property is part of that Earth and Ghost Estates are a blight on its landscape.It is only now that the beginning of the Real Depression is starting and now most of us are not in denial anymore.We as people have caused this blight and we must undo that .Our mindsets need to change and new values commenced again.Property never contaminated itself .Cash Flow is liken to the ‘feel good factor’ and that riverbrates into the Earths energy and resonates positive vibes when there is plenty of it.

        The heavenly forces in the outer space inject daily messages too and we all touch that matrix in our daily lives.Economics can never ignore it and ancient ghost estates like the Valley of the Kings in Egypt are still standing uninhabited .

        Today in places in Ireland where only a handful of people have ever been such as Southill in Limerick had good houses originally and more space and fields that private estates had but there was no culture and no values and money could not undo that for the people living there .

        The change mst begin inside us first before you begin to live again.So lets get a life.

    • Excellent moon forecasting, John. Keep it up, a little more of them please:)

  28. The economy is soooo bad …

    The economy is so bad that parents in Bevery Hills are considering raising their own children.

    … that wives are having sex with their husbands because they can’t afford batteries.

    It’s so bad, McDonalds is introducing the 1/4-Ouncer.

    … Exxon-Mobil laid off 25 Congressmen.

    It’s so bad, a stripper was killed when her audience showered her with rolls of pennies while she danced.

    …my sister had an exorcism but couldn’t afford to pay for it, and they re-possessed her!

    The economy is so bad, people are standing behind George Bush wherever he goes hoping for free shoes.

    …Sarah Palin is only shooting moose for food, not for fun.

    … 7 of 10 houses on Sesame Street are in foreclosure.

    … the only company hiring this week is the one that sends people to scrape bankers off the sidewalk on Wall Street.

  29. The economy is soooo bad …….

    Due to a financial coup detat, the constitution is suspended and the Dail is now to be redesignated as Anglo Irish Bank now taken over part of a global corporation ANGLO LLB

    The economy is soooo bad …….

    All financial transactions now come under the Official Secrets Act. Due to commercial sensitivity, all bank accounts are frozen and cannot be accessed, except by the Minister for Finance.

    The economy is soooo bad …….

    All Irish children will be sent abroad for education and work

    The economy is soooo bad …….

    All Irish business meetings will be conducted on golf courses, minutes/records of same banned and FFer mindwipe pills taken immediately afterward.

    The economy is soooo bad …….

    All public buildings will be sold and liquidated to pay for toxic loans owned by the banks

    The economy is soooo bad …….

    The right to vote is suspended and will be vested only in members of the government.

    The economy is soooo bad …….

    The Greens have a plan to turn the ghost estates into a new holding company, Sherlock Homes, housing made energy efficient by pouring bio degradable manure over them – paid for by farming subsidies and a tax levy on taxpayers equivalent to 50% of GNP.

    The economy is soooo bad …….

    All td’s will retire on a pension equivalent to 1000% of their current salaries

    The economy is soooo bad …….

    The government have pledged all earnings and all taxes of unborn Irish people to pay for a new bailout to pay interest coupons on recent bailouts.

    The economy is soooo bad …….

    Tesco is to be turned into Taxco with goods sold only to those holding verifiable tax receipts. Tax receipts will become a new legal tender.

    The economy is soooo bad …….

    All public utilities will be sold, ESB, Gas, Hospitals, Schools, Colleges, Coillte, Public Parks, Roads to be owned and managed by our new corporate parliament, Anglo LLB, a private corporation run by Mr RotChild.

    Not Funny?

  30. paul

    Well it’s obvious what the Chinese have to gain by taking over Ireland…water!Dev promised to drain the Shannon but never did,another broken ff promise. Just wait til the chinks send over the supertankers to the Foynes estuary and start sucking,ye’ll be able to make silage in Cavan and Leitrim in October!!

  31. Freethinker123

    ” There is something unpleasant in the pattern that is unfolding whereby countries with billions of poor citizens are financing countries with millions of rich citizens”.
    -but David my good man thats how its always been- (evil laugh) muwhahahahahahahahaha!!!!!

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