Common Cents

China lends us a lot of money.  China is going through growing pains at the same time the FED raised interest rates, ever so gently.  But even a gentle raise ripples through strong economies, and can damage weaker ones.

Stocks over a medium term and bonds over a short but precipitous term react badly to interest rate hikes, especially on the heels of the Feds quadrupling of the money supply via Quantitative Easing.  Yup that’s quantitative alright.  The prayer here is that all these extra dollars in float STAY in M2 meaning stay invested in stocks and bonds and real estate.  If not, and some folks sell stocks to buy other things (rental properties, land, gold, silver, platinum, fancy cars, more houses), then it leaks back into the M1 supply and real live inflation is guaranteed, with the hope it doesn’t go to 700% a year a la South American countries at times.

Top this off with wars that cost at LEAST $250 million per DAY plus over a million non combatants dead, plus the expansion to 8 countries in the Middle East from Bush’s 3 (will give Pakistan to Bush, but Obama has done the largest damage there, and for what?  Did it stop Isis?  No! It did cause 4.5 million refugees so far). and the gnarly $18,000,000,000,000+ national debt, and you have a case for eminent “collapse” or “recession” if the world’s central bankers are not adept at squeezing more life out of this house of cards called “Build An Economy Via Debt.”

So, with downward pressure on the US stock market coming from three prongs: no more massive cash flow into wall street from Washington (quantitative easing) plus higher interest rates, plus global economies showing signs of deterioration, and it appears 2016 could be a LULU.

Duck and take cover in non traditional investments that can provide income or at least capital retention.

 

Enjoy!

Doug

 

PS, ISIS would be the wet dream of a tyrant like Henry “Nobel Peace Prize” Kissinger.  You see, by pulling out, Obama, AND EVERYONE at the Pentagon, General Dynamics, Raytheon, and all other defense contractors KNEW that the Sunni Shia divide we had created by switching sides from Sunni (who we favored form the 70s until Saddam Hussein killed the Curds (on behalf of Turkey who requested it, and the US Government that brokered the chemical weapons from Germany that were used to exterminate) to Shia, by ousting the Baathists, and putting in a weak Shia government in Iraq.

These same shenanigans (strategies is too kind a word) worked in Vietnam, when China and Russia had more than three boarder skirmishes of THEIR OWN countries, after we pulled out of Vietnam.  Hence the Kissinger reference.  Pull out of the middle east, and follow along on the newsreels (carefully orchestrated by Armed Forces Television) as we see Shia and Sunni battle it out for “King of the Oilfields.”  Maybe someone can develop a game that will be based on exactly this, with the USA only firing form a distance, or bombing or droning which ever side gets a little lead.  Obama had SOME NERVE saying “we can’t afford a continual ground war in the middle east.”  Jesus, he’s right, but he’s the captain of the 7 out of our 14+ years there, with ONE MORE YEAR TO GO, for God’s sake.  he may be impotent in front of the US Congress, but watch his missiles soar without their approval asked for or needed.  Oh Patriot Act must die.

So now it’s Saudi Arabia versus Iran — guess they felt left of of this conflagration, so  they may enter it more directly now.  I pray we are ALL THE WAY out when this one cranks up, but isn’t USA foreign policy the devil on a hover board?  Wait, no, Silver Surfer’s board with full doo daddery.Our foreign policy is far more dangerous than just “Obama doesn’t know what he’s doing,” indeed, the Freemason Barack knows exactly what he’s doing and will leave behind the most dangerous situation the world has ever known, and who better than an Eastern Star lady to pick up where he left off: Hillary Rodham Clinton, and her money-grubbing, chief fundraising, labor-crushing, NAFTA, GATT 2 and World Trade Organization founding, environment trashing, world wage-slave creating husband Bill Clinton, sitting in as “adviser?” (And these folks are characterized as LEFT WINGERS!?!?!?)

 

Introducing WangLili

This letter is from Wang Lili a promising writer and chronicler of Contemporary Chinese life.  Join me in championing her cause.  Check out her photos on her site.

 

Currently I need find collectors to buy my photos to support me with my photography. 

15years ago I am migrant. 

10  years ago I am a published novelist 

5 years ago I start photography 

 

Regarding my story, people can go to my site at wanglilinovels.com to see. 

Here are some two links 

One is from the biggest media in china — global times.  

http://www.globaltimes.cn/content/934449.shtml?from=singlemessage&isappinstalled=0

 

Another is from popular English media in shanghai 

http://www.smartshanghai.com/articles/community/characters-wang-lili-the-fashion-week-lady?from=singlemessage&isappinstalled=0

 . And here are some of Wang Lilli’s photos.  See the site for more.

The Little HeNan Country Girl

 

The Little HeNan Country Girl

The Little HeNan Country Girl

Street Style from 2016S/S Shanghai Fashion Week

Street Style from 2016S/S Shanghai Fashion Week

Street Style from 2016S/S Shanghai Fashion Week

Street style from 2015 S/S Shanghai Fashion Week

Street style from 2015 S/S Shanghai Fashion Week

Street style from 2015 S/S Shanghai Fashion Week

 Street style from 2015 S/S Shanghai Fashion Week

Street style from 2015 S/S Shanghai Fashion Week

 

 

ZXX

Nice Color!

            Nice Color!

ZXX

Torn between tying

in to the system or to

make a life

of your own in some

far off land, you even have

what it takes

to lead a charge for

the workers, or to

save planet

earth, or to make a

farm and save friends when

the money system collapse

occurs.  What

will it be then?  The

“safety” of party cocoon

in China,

seeking know-how and

romance abroad, or

working to

save what is left of

arable

land for s GMO-free

grocery chain,

new generation

of healthy babies

rather than

sterilized men, Viagra

needed at

age twenty?  Make a

full play. Accomplish.

Copyright, Doug Stuber, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.

Big Bear

20140812-121759.jpg

Big Bear

We ignored you after 22 – 30 million died
in World War II. Favored China, reliably
corrupt, into having a Feudal class, but you lacked
the prowess to extract your own oil, we could still
do oil business with you, Big Bear, but the rest
went to China: the shipping, manufacturing, even
new mergers wherein Chinese firms now own Volvo
and the PC division of IBM! So Sochi was to be
Putin’s horse, so someone burned Kiev right then!
(CIA?) Distressed, due to the viciousness of events
Around the globe, neighborhood, we divert attention
from our own digression at home to a potential
(yet again) war in a third party’s country, Ukraine,
which NATO is willing to exterminate in order to lure
today’s tanks into a larger skirmish in case the ISIS
crisis flames out. Gotta have back up wars and back
them up in case the main wars sputter. It’s a new
Pentagon directive, as witnessed by the annual troop
and ship movements every March on the North/South
Korean border. Tom “Obama-Hawk” drones fly again.

 

 

Copyright, Doug Stuber, 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.

again.

10 am Final Exam

Seoul Walker 1

10 am Final Exam

Ha Neul asks
a predictable
question as
writing cramps exude
to fill frantic Four-Oh-Two.

Essays pour:
hand, in to paper
as students learn one
last lesson
in how to think in English.

Their web site
evaluates me
ruthlessly
but work equals grades
and they learn more than language.

Mi Young, my
favorite this time,
slings purple Kipling,
makes perfect
face to attract the right one.

Contingent
from China adds perspective
so that the
parochial shoes
don’t dominate here.

Enough men
kept the ladies from over
extending
the gossip patrol.
One cries, but shouldn’t.

Copyright, Doug Stuber, 2010. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.

Twenty Lines to Freedom

Twenty Lines to Freedom

 

One listens for hours, patiently waiting her turn, before heading
to Sucheon to play outside with her Dad. Another busses home
to make or eat fried or boiled kimchee-fish soup; then there’s Su,
hopping, joyous, life-changed, spiritual, philosophical, knowing
one day the support needed will return; already this or that angel
has stopped at her doorstep, sometimes talking, sometimes smiling,
she knows the best will come. Silver bicycle, oversized pink trunk
and the smell of fresh-baked-goods mingle here. Brick walkways
lead lookers, lovers, lost souls past each other, and Ding Yun, the
one who, twenty three messages later, sticks with it, though with
lowered expectations, not ever giving in to today, always focused
on a better tomorrow. One will fiddle for Hyuntay, another only
wants life abroad, her boyfriend could not meet family expectations,
yet her mother nods in a room her father isn’t in. Now the two faces:
one wants a comfy job at the Korean Exchange Bank, the very best,
Wood’s wish, will stop by for modeling time tomorrow, a wonderful
tomorrow, with long-hairs walking by, work-out sweaters bobbing,
museum visitors moving in a slow rhythm reserved for interested
eyes, old legs, young minds, tuned to a complex life available within
a ten minute walk or bus ride from the Chonnam faculty apartments.

 

 

Copyright, Doug Stuber, 2008. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.

Earthquake Blues

Earthquake Blues

She didn’t get certified, so must study more, more
language, more life, more gripping handbags, thin-calved
walking, slender-footed parades, waves good-bye, the one
who didn’t dare has come and gone, leaving her with eyewear,
a slim-banded watch, see-through lace skirt, tenacious
desire, and new friend called Yaya who sits, red-eyed,
pen-stroking, jean-skirt surrounding young legs, separate
life, light blue heart-shaped hair clasp, blue sweater
on a warm, rainy day in case she has to hide her top from
conditions both frigid and hot that have crushed her party
here in Gwangju. This man she told me about won’t leave
her alone, and he proposes great things, but is not her type,
so she wears three thick layers even if this is late May.
No matter the joy, this year the earth shook, broke, quaked,
leaving no time for chit-chat. So how to connect to those
who go home before they fade out, but wait, the switch
got flipped a long time ago, so she stumbles around in his
darkness, losing certain functions, until, via friendship,
she steps out smiling, her life is her own, but she still
has red eyes, not fully aware of how it all happened.

Copyright, Doug Stuber, 2008. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.

 

 

 

The Day the Dollar Died, singin bye bye Miss American Pie….

(For some just note the PS)

Couple this article with the last one on GOLD and you may get an additional idea about
why I am heading to China this summer.

Ever try to buy even Canadian Maple Leaf coins recently (the last five years) in the USA?
It almost can’t be done. Most coin shops have none and they say it will take weeks to deliver
and they come with a HEFTY delivery charge, in the neighborhood of 10-12%.

Compare to China, where gold, which the government there ENCOURAGES people to buy,
is available in AL post offices, banks, department stores, etc. My wife and I are taking the limit of
cash over, and having more wired, if you know what I mean. China now also mines more gold than
any other country, including Australia!

Granted, if half the gold has disappeared (I’d look in China and India if I were a detective) then
the price of gold is entirely open to manipulation, and, as the Hunt brothers proved with Silver,
locking up a commodity can have downside consequences. Hence, gold is like an option, you
have to watch it like a hawk, EVEN if you’re in it long term.

It’s simple: if oil starts to be traded in RMB or Euros, or both, the US as a reserve currency is
nailed to a wall and buried. But Doug, you say, 67% of the world’s reserve currencies held by
governments and central banks is in US Dollars. Correct, but don’t you think they will get out of dollars
if HR 2847 (the resolution that went into effect July 1st) uses any part of its provision that allows the US
government to DEFAULT on up to 30 % of its debt actually comes true, that foreign banks will be dumping
dollars quickly EVEN IF THIS HAMMERS THEIR OWN TRADING ABILITY!?!?!?

Note this for research about this stupid and dastardly House Bill:

https://dougstuber.wordpress.com/2014/05/24/hr-2847-a-tax-law-also-paves-a-path-for-the-usa-to-start-defaulting-on-its-debt-obligations/

Thanks, and “good investing”

Doug

PS, the PBOC (People’s Bank of China) now has a branch in New York City
(since they hold over 20% of the US house mortgages, this makes sense.)
You can walk in with up to $50,000 a day to trade Dollars for RMB.

I’m just guessing, but I figure some smart pants folks are doing exactly that.

THE USA ranks 22nd in the holding of foreign currency. Nothing like a terrible
trade imbalance to leave the Fed and even IMF without any leeway when it
comes to rescuing the dollar. Ha can you imagine US treasury notes
denominated in RMB or (how’s this for s joke) Euros?

We are Japan 17 years ago. With interest at zero for so long, and no noticeable increase
IN JOBS, who is going to buy the things needed to keep the US economy afloat?

Should interest rates be forced up by our debt holders, won’t we have rising interest
and rising inflation at THE SAME TIME? Won’t this cripple an already decimated
middle and lower class?

Either way, deflation of inflation (I’m betting inflation), the USA is about to head into a depression
worse than the 1930s, and, for those already foreclosed up they are already in one.

The only true way to ensure the continued prosperity of your children and grandchildren is to buy
land and plant food. I will start my pecan orchard in less than a year in the USA, and have
farm land in two other countries already producing solid income. IN one the land will be paid of in
seven more years INCLUDING paying the labor that harvests crops nearly every month. In the
other, the livestock and crop choices assure a major protein supply (Goats, Ducks, Turkeys)
while also giving us a major cash crop (Ginseng).

I traded in the money from the sale of Mom’s Naples house for plantable land.For now it’s a
tiny part of the portfolio, but putting in Pecans after knocking out 3000 trees, selling what I
can of the hardwood and milling lumber for a barn, that will put me “all in” on Mom’s
slice of the pie. (But Doug you’re not a farmer) no but my cousins are and I can read, and
the nursery and Pecan Wholesaler are ALREADY full of tips.

If I’m wrong, the Pecans put out 100% crop for 150 to 180 years, and at right at $1000 per
tree per year, 50 trees is a heck of a stand. If inflation, up go nut prices, he he. If
massive economic chaos, come join us for a pecan breakfast, lunch and dinner.

———- Forwarded message ———-
From: DailyWealth

Editor’s note: Steve recently finished reading a very thought-provoking book called The Death of Money by Jim Rickards. And over the past week, he has been sharing some of the most important ideas from the book. If you missed last week’s essays, you can check them out here, here, and here. Today, he continues the series with a story about…

The Last Time the Dollar Almost Died (It Wasn’t Long Ago)
By Dr. Steve Sjuggerud
Monday, July 7, 2014
“Few Americans in our time recall that the dollar nearly ceased to function as the world’s reserve currency in 1978,” Jim Rickards writes in the introduction to his excellent book The Death of Money.

In short, nobody wanted the dollar back then…

It got so bad, American singer Bette Midler demanded to be paid in gold for her 1978 European tour (as this newspaper clipping from Billboard magazine shows):

“What began as a managed dollar devaluation in 1971, with President Nixon’s abandonment of gold convertibility, became a full-scale rout by the decade’s end,” Rickards writes.

Americans traveling in Europe found that their dollars were not welcome…

Rickards tells the story of author Janet Tavakoli traveling in Italy:

Americans traveling abroad found that restaurants, hotels, and merchants did not want [dollars]… The manager of the hotel asked departing guests: “Do you have gold? Because look what your American President has done.” He was serious about gold; he would accept it as payment.

I immediately asked to pre-pay my hotel bill in [Italian] lire… The manager clapped his hands in delight. He and the rest of the staff treated me as if I were royalty. I wasn’t like those other Americans with their stupid dollars. For the rest of my stay, no merchant or restaurant wanted my business until I demonstrated I could pay in [Italian] lire.

Rickards summed up the situation in 1978: “Foreign creditors no longer trusted the U.S. dollar as a store of value,” he wrote. In 1978, the U.S. Treasury “was forced to issue government bonds denominated in Swiss francs.”

Desperate measures were needed to save the dollar…

The rout of the dollar didn’t end until Paul Volcker took over at the Federal Reserve. “Volcker raised interest rates to 19% in 1981 to snuff out inflation and make the dollar an attractive choice for foreign capital.”

Rickards says a “similar constellation of symptoms to those of 1978 can be seen in the world economy today.” In recent years, the U.S. dollar index hit an all-time low – below the 1978 level. And gold hit an all-time high, around $1,900.

Today, U.S. government debt is at a record high, and the Fed continues to print money at a record pace. There’s no doubt this will end badly, as my colleague Porter Stansberry has predicted. The only question is when. You can’t ignore the possibilities of a potential collapse in the dollar.

In his book The Death of Money, Rickards puts the dollar under the microscope, and then explains the signs to watch for as the dollar – as we know it – heads toward what he believes is an inevitable death.

His book is deep and thought-provoking. Whether you agree with Rickards or not, I urge you to read it…

Good investing,

Steve

P.S. We still have some free copies of The Death of Money available. All you have to do is pay for the shipping (less than $5). Along with the book, you’ll get an exclusive bonus chapter written by Jim himself… and a collection of my most recent True Wealth special reports. You can learn more about the book and how to claim your copy right here.
Further Reading:

Amber Lee Mason recently showed readers how to buy gold bullion at a big discount… by buying closed-end funds. Amber says it’s the “closest thing to free money you’ll find in the investment markets.” Get all the details here.

“Gold stocks are rallying,” Brian Weepie writes. “But there’s one gold stock outperforming the rest. The secret to this company’s success is simple… it’s a gold miner that doesn’t actually mine gold.” Learn all about it right here.

NEW HIGHS OF NOTE LAST WEEK

Intel (INTC)… Big Cheap Tech
Johnson & Johnson (JNJ)… Big Pharma
Eli Lilly (LLY)… Big Pharma
Novartis (NVS)… Big Pharma
Royal Gold (RGLD)… gold royalties
Franco-Nevada (FNV)… gold royalties
Weyerhaeuser (WY)… timber
Activision Blizzard (ATVI)… video games
Yum! Brands (YUM)… Taco Bell, Pizza Hut, KFC
Coca-Cola (KO)… beverage giant
Constellation Brands (STZ)… booze
Molson Coors (TAP-A)… booze
Walt Disney Co. (DIS)… entertainment
Time Warner (TWX)… entertainment
Netflix (NFLX)… entertainment
Tiffany & Co. (TIF)… expensive jewelry
American Express (AXP)… credit cards
Legg Mason (LM)… asset management
T. Rowe Price (TROW)… asset management
FedEx (FDX)… shipping
Southwest Airlines (LUV)… airline
JetBlue (JBLU)… airline
Spirit Airlines (SAVE)… airline
Royal Dutch Shell (RDS-A)… Big Oil
British Petroleum (BP)… Big Oil
Baker Hughes (BHI)… oil services
Halliburton (HAL)… oil services
Schlumberger (SLB)… oil services
Carrizo Oil & Gas (CRZO)… oil and gas production
Continental Resources (CLR)… oil and gas production
Caterpillar (CAT)… heavy equipment
D.R. Horton (DHI)… homebuilder

NEW LOWS OF NOTE LAST WEEK

Not many… it’s a bull market!

How China Feeds it Population , by FLZ

By FLZ

How China feeds its population

China is known as the developing country with the most population. And in 50 years after the World War II, new fast growing China is facing a problem that other countries have never met in history: How to feed 1.4 billion people?
Unlike the western world’s complete free market economy, the economic system used in China is called the socialist market economy with Chinese characteristics. It’s a market economy but every key economic factors are under the government’s macro-control.

“The government has strengthened the coordination of coal, electrical power, oil and transportation to maintain the link between supply and demand of major raw materials. It has also reduced allocation quotas for consumption of electricity, oil and coal for companies that fail to meet industry entry standards.

The government has taken a series of policy measures to encourage grain production, including direct subsidies, seed subsidies, exemption of agricultural taxes and price control on agricultural production materials.” 1

Even China has grown rapidly for years there are still countless people who are living a tough life in China. Controlling every key economic factors ensures those low-income people’s quality of life. And the highly developed agriculture ensures adequate supply of food.

“The Chinese government has been very active in shaping the nation’s food policy because it’s closely linked to the issues of inflation and social stability. In 2011, inflation increased at double digit rates. Most recently, In September, the inflation rate reached 13%.This was caused by growing demand for food, weather disasters that hindered crop production and a liquidity injection by the Chinese government to fight off the aftershocks of the 2008 financial crisis. Consequently, a series of violent protests broke out in inner Mongolia and spread to Guangdong. In response, the government constrained lending to maintain stability and low prices. The Chinese government has used its might to reign in food prices while guaranteeing food supplies.”2

The Chinese government has implemented policies to stimulate the agriculture and reduce import cost. They keep food and other necessities for life in a very low price so the poor people could have a normal life as those people who are much wealthier. Inflation could easily destroy their life by raising prices and increasing their debts. And that’s why inflation has a great negative impact on China.
We can see the changes in inflation rate in the two charts below:

Graph CPI China last year

AA Fan graph 1

Graph CPI China long-term

AA Fan Graph 2

“When we talk about the rate of inflation in China, this often refers to the rate of inflation based on the consumer price index, or CPI for short. The Chinese CPI shows the change in prices of a standard package of goods and services which Chinese households purchase for consumption. In order to measure inflation, an assessment is made of how much the CPI has risen in percentage terms over a given period compared to the CPI in a preceding period..” 3
China Inflation has two main effects:
1. Real income falls down.
If a hyper-inflation happens in China, prices will rise sharply and unlike the western developed countries, Chinese low-income people don’t have savings to sustain their normal life, and it would directly cause various kinds of serious social problems. Inflation will widen the gap between wealthy and poor, those people with lowest income will be the most affected because the price of house and other properties will keep rising so the rich people and middle class could reduce their losses or even make profit by raising prices. That’s how an over-sized middle class threats the ability of the low-income families to afford to live.
2. The reduction of social welfare.
In China, most of the enterprise development funds come from bank loans, inflation will transfer risks to state bank and slows down the economic development and the government has to tax more and reduce social welfare to maintain the daily cost.
Does a large middle class insure inflation?

“Inflation can be caused by many factors:

1. Rising wages
2. Import prices
3. Raw Material Prices
4. Profit Push Inflation
5. Declining productivity
6. Higher taxes” 4

Yes. The inflation in China has two sources: agricultural commodities and imported commodities.
1. Agriculture. The biggest urbanization happened In China in the past 50 years, living in a city means better income and more possibilities. All the young people in rural area went to cities in order to find a better job. It means there won’t be enough labor for farming. It caused the high agricultural products’ prices.
2. Imported commodities. China fast-growing economy stimulates consumption and the middle class starts to purchase imported commodities with better qualities. The demand of imported commodities keeps rising and it finally resulted in the rising prices of all imported commodities and high taxes.
Those rising prices led to inflation. The expansion of middle class had a great influence in the process of rising prices.
Difference in DEBT LEVELS between farmers and workers

“In 2013, 37.70 percent of Chinese farmer household has debts, the debt per farmer household stood at 55,113 yuan ($8,856.66), the ratio of debt to income was at 155 percent, and 10.50 percent of farmer household with debts are insolvent, according to a joint report released by the Southwestern University of Finance and Economics and Agricultural Bank of China Limited on Sunday.” 5

The average pay per hour worked of factory workers in China is about 15 YUAN per hour(which is nearly 3 dollars), and some skilled workers could get 25 YUAN per hour(which is about 4 dollars). Most of Chinese workers make more money than Chinese farmers because Chinese workers relatively have less debt than farmers, but the high housing prices and low government subsidies still make them hard to live.

LINK:
1. http://www.china.org.cn/english/features/Q&A/161626.htm
2. http://www.sinolatincapital.com/Upload/2011121143410.pdf
3. http://www.global-rates.com/economic-indicators/inflation/consumer-prices/cpi/china.aspx
4. http://www.economicshelp.org/macroeconomics/inflation/causes-inflation/
5. http://www.aastocks.com/en/stocks/analysis/china-hot-topic-content.aspx?id=200000336250&type=16&catg=1

 

Copyright,2014. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given, and with appropriate and specific direction to the original content.