ARE WE LOSING CONTROL??

The article below appears to be one of those political “I told you so” scare tactics when, if fact, it contains true statements (in general) and was sent to me by an ol' workplace Bud,  Altho we differ on some political issues, this one is pretty much dead on.  My thoughts on this information follows the article.

This article, though aimed at a US audience (thank-you Republicans), gives a scary insight into China's growing economic power.
A Little Known Reality.
June 8, 2013. Source: Michael Snyder, Guest Post
In future China will employ millions of American workers and dominate thousands of small communities all
Over the United States. Chinese acquisition of U.S. Businesses set a new all-time record last year, and it is
On pace to shatter that record this year.
The Smithfield Foods acquisition is an example. Smithfield Foods is the largest pork producer and processor
In the world. It has facilities in 26 U.S. States and it employs tens of thousands of Americans. It directly owns
460 farms and has contracts with approximately 2,100 others. But now a Chinese company has bought it for
$4.7 billion, and that means that the Chinese will now be the most important employer in dozens of rural
Communities all over America.

Thanks in part to our massively bloated trade deficit with China, the Chinese have trillions of dollars to spend.
They are only just starting to exercise their economic muscle.
It is important to keep in mind that there is often not much of a difference between “the Chinese government”
And “Chinese corporations”. In 2011, 43 percent of all profits in China were produced by companies where the
Chinese government had a controlling interest in.

Last year a Chinese company spent $2.6 billion to purchase AMC entertainment – one of the largest movie theatre
Chains in the United States. Now that Chinese company controls more movie ticket sales than anyone else in the world.

But China is not just relying on acquisitions to expand its economic power. “Economic beachheads” are being
Established all over America. For example, Golden Dragon Precise Copper Tube Group, Inc. Recently broke ground
On a $100 million plant in Thomasville, Alabama. Many of the residents of Thomasville, Alabama will be glad to have
Jobs, but it will also become yet another community that will now be heavily dependent on communist China.
And guess where else Chinese companies are putting down roots? Detroit. Chinese-owned companies are investing in
American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores,
And hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers
And their suppliers. If you recently purchased an “American-made” vehicle, there is a really good chance that it has a
Number of Chinese parts in it. Industry analysts are hard-pressed to put a number on the Chinese suppliers operating in
The United States.
China seems particularly interested in acquiring energy resources in the United States. For example, China is actually
Mining for coal in the mountains of Tennessee. Guizhou Gouchuang Energy Holdings Group spent 616 million dollars
To acquire Triple H. Coal Co.... In Jacksboro, Tennessee. At the time, that acquisition really didn't make much news, but now
A group of conservatives in Tennessee is trying to stop the Chinese from blowing up their mountains and taking their coal.

And pretty soon China may want to build entire cities in the United States just like they have been doing in other countries.
Right now China is actually building a city larger than Manhattan just outside Minsk , the capital of Belarus .
Are you starting to get the picture? China is on the rise. If you doubt this, just read the following:
# When you total up all imports and exports, China is now the number one trading nation on the entire planet.
# Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.
# China has more foreign currency reserves than anyone else on the planet.
# China now has the largest new car market in the entire world.
# China now produces more than twice as many automobiles as the United States does. After being bailed out by
U.S. taxpayers, GM is involved in 11 joint ventures with Chinese companies.
# China is the number one gold producer in the world.
# The uniforms for the U.S. Olympic team were made in China.
# 85% of all artificial Christmas trees the world over are made in China.
# The new World Trade Center tower in New York is going to include glass imported from China.
# China now consumes more energy than the United States does.
# China is now in aggregate the leading manufacturer of goods in the entire world.
# China uses more cement than the rest of the world combined.
# China is now the number one producer of wind and solar power on the entire globe.
# China produces 3 times as much coal and 11 times as much steel as the United States does.
# China produces more than 90 percent of the global supply of rare earth elements.
# China is now the number one supplier of components that are critical to the operation of any national defense system.
# In published scientific research articles China is expected to become number one in the world very shortly.

MY THOUGHTS:

China is, indeed buying U.S.  real estate, both commercial and residential holdings, at a record clip.  Their target is not just the U.S. market however.  They are scarfing up distressed properties world wide.  Their initiative was spurred by the burst of the housing bubble brought on by deregulation (and lack of oversight on what little reg was left) and the great Recession of 2008/2009.  They also own 1.3 trillion (with a T) of U.S. debt, much of which can be attributed to tax cuts and continued Pork Barrel spending as well as defense spending on systems no longer applicable to what the experts say is today’s modern warfare methodology/tactics. 

The China problem actually began simplistically when President Clinton signed the free trade agreement with them which allowed them entry into the WTO.  The problem was exacerbated by President G.W. Bush when he said “My experiences in business school, China, and the oil business were converging into a set of convictions: The free market provided the fairest way to allocate resources. Lower taxes rewarded hard work and encouraged risk taking. Eliminating barriers to trade created new export markets for American producers & more choice for our consumers. Government should respect its constitutional limits.”  Little did he know the consequences?  On the surface, it appeared to be a brilliant move by both Clinton and Bush in that it allowed U.S. corporations to export autos, durable goods, etc to them until Corporate greed took advantage of Third World wages and began moving operations there.  That led to improving conditions and an increase in wealth for the state which, in turn, seems to have led to present day conditions.

This presents a conundrum of what to do about it.  First, the reality of it is that there seems to be very little we CAN do about it short of an enormous tax increase (a no-no in a fragile economy) and cutting spending of EVERYTHING, including defense and entitlements (yes entitlements, I PAID into SS and Medicare and am therefore entitled to the benefits of such).  So, what to do?

I guess accept it as "it is what it is", today’s reality.  A required reading in Macroeconomics was called “The Global Economy” written, I believe in the late 70's, by a Japanese author (can’t remember  the name) that actually foretold and explained the coming of the global economy in which we now live.  A simplistic, short term approach is to invest in the Chinese real estate conglomerate E-house, China holdings LTM.  Last price this date was $13.72.  Has a 52 week high of 15.14 and low of 3.58.  Pays a dividend of 0.15 per share.  Now, how’s that for crass??