Saturday, August 25, 2012

Economic War: Blame Game by Erick San Juan

What went wrong with China? According to Keith Bradsher of the Global Edition of the New York Times (August25, 2012), after three decades of ardent growth, China is now reportedly encountering an unfamiliar problem with its economy. There's now a huge build up of unsold goods that is allegedly cluttering shop floors, clogging car dealerships and filling factory warehouses. There is now an oversupply from steel, household appliances to cars and apartments which impede China's efforts to emerge from a drastic economic slowdown. It led to a series of price wars and manufacturers redoubling their efforts to export what they cannot sell in China. The Chinese government, according to report, has been trying to cover it up by blocking or adjusting its economic data in an effort to prop up confidence in the economy among business manager's and investors.

China's economic nightmare is interconnected with the global recession where the Eurozone's currency is collapsing and the United States economy and its political gridlock paralyzes America and the world. The pattern is glaring. Real estate prices and stock markets have fallen, imports and exports have also stalled, sales fell dramatically.

Here comes the prophets of doom namely- Jacob Rothschild, john Paulson and George Soros all betting that financial disaster is coming.( Jacob Rothschild, one of the wealthiest men in the world made a bet of almost 200 million dollars that the Euro will go down. While billionaire hedge fund manager JohnPaulson made around 20 billion dollars betting against the US housing market during the last financial crisis is again betting that the Euro will go down and that the price of precious metals especially gold will go up. The other week, George Soros unloaded all his stocks and convert it into physical gold investments. Definitely, the gold price will soar creating massive financial disaster in the process. Their behavior is alarming for all of us.

Are these elites are the only one to be blamed? What about the policies of governments' and the world's regulators like the United Nations, World Trade Organization, APEC, ARF,etc.? As if undermining the World Trade Organization's Doha Round of global free trade talks was not bad enough where the last ministerial meeting in Geneva produced barely a squeak, the United States has reportedly compounded it's folly by actively promoting the Trans-Pacific Partnership (CRS-Congressional Research Service Report Dec.12,2011). This was actually announced by US President Barack Obama during his sorties in the Asian region. At the onset, this is being propagated using the western media to the unsuspecting public as evidence of American leadership on trade. But the fact is the opposite. It is important that those who care about global trading system know what's really happening. According to pundits, this could allegedly trigger a 'Dracula' effect: expose what remain hidden to sunlight and it will shrivel up and die.

The TPP partnership is criticized as a testament to the ability of American industrial lobbies, Congress and leaders to obfuscate public policy. It is widely understood today that free trade agreements, whether bilateral or multilateral are perceived built on discrimination. Reason most economists call them PTA-preferential trade agreements. In principle, countries are free to join the TPP but a closer look reveals that not all can just like China. The TPP is believed to be US political response to China's new aggressiveness designed to contain and possibly confront China in the process. TPP's template includes numerous agenda unrelated to trade like labor standard and restraints on the use of capital account control, many of which preclude China's accession. These extraneous conditions will reportedly make the TPP a 'high quality trade agreement for the twenty-first century.

The result of the TPP is now being felt in South America and by China. Many Asian countries joined the TPP to 'keep the US in the region' in the face of the Mainland China's heavy handedness. They embraced the US in the same way that East Europeans rushed to join Nato and the European Union in the face threat-real or imagined posed by post-Soviet Russia. These big nations are pushing each other to the wall and blaming each other overtly and covertly.

Governments and big banks all over the world are discreetly preparing for an eventual financial disaster. What about us? Our ‘trapos’ (traditional politicians) are preparing for the 2013 and 2016 elections.

Wake up!

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