Paying the Piper, China/U.S. #1, China/U.S. #2

Paying the Piper

An article today titled '' says that over half the U.S. money supply has been created in the past 4 years. While I see the article headline as somewhat misleading, since that while Ben Bernanke may direct U.S. Economic Traffic to some degree he presumably by himself did not make the decisions that have resulted in the U.S. bailout and subsidization programs. Moreover, the U.S. current economic condition may well have been worse without these programs - although as those of you who read these e-mails likely have figured out, I have always seen these programs as 'postponing the inevitable' on the theory that the 'piper must always be paid in the end'.

China/U.S. #1

I recommend you read an article today titled ' I commented on this article this morning as follows:

In my view this is a very good article for useful content. Reading it focuses one on what I have thought since at least mid-2005 is at the root of U.S. ongoing economic deterioration. Moreover, I think Mr. Snyder makes exactly the right point when he says that at some future point in time investment by U.S. corporations in China is at risk if 'China/U.S. relationships go south'.

That said, short of massive U.S. protectionism policies (and I question whether at this stage even that would work) globalization is not going to reverse. As I see it Americans (and other developed country residents) continued to enjoy their standard of living through mid-2008 because many of their consumables became ever less expensive (through Walmart and other retailers) resulting from the low labor rates underlying their production combined with comparatively low shipping costs. At the same time, this U.S. 'import phenomenon' contributed (along with the concurrent increased oil price) to an almost quadrupling of the U.S. net cumulative trade deficit in the 10 year period ended 2009 (from U.S.$2 trillion to U.S.$7.5 trillion). This in turn put large amounts of U.S.$ in the hands of the Chinese and other foreign governments. Simplistically, and viewed collectively, the U.S. manufacturing job losses along with these other things has (again in my view) greatly eroded the U.S.'s economic flexibility and each month ever more negatively impairs the U.S.'s world economic power.

Water does not 'flow uphill'. While I would like to agree with Mr. Snyder that "If the American people would just wake up this trend towards increasing globalism could be reversed", I don't. I believe that globalization, like the proverbial 'snowball', has serious momentum and will continue to 'pick up speed' - crushing in its path anything that attempts to hold it back.

It will not surprise me if my comment gets a large number of 'negative thumbs-down' from what I suspect is Seeking Alpha's (where the article appeared) predominantly U.S. based readership. My comment contains a number of points I feel quite strongly about. I will greatly appreciate it if readers of this e-mail will write to me at info@stockresearchportal.com and let me know if they agree or disagree with my views. Thanks in advance.

China/U.S. #2

Here is a second article today on U.S./China issues I think you ought to read - reading time again about 4 minutes - 'U.S.-China Economic War: Already the Case'. I commented on this article this morning as follows:

This is a good 'food for thought' article for those that read it carefully. That said, to suggest President Obama may not have the "political will to push the Chinese into a corner and, as far as Congress is concerned, we need to wait until November" by-passes what I think is the real question: Could the U.S. Federal Government do such a thing even if it wanted to? While I can't claim to understand all the implications of the answer to that question, intuitively I doubt the U.S. currently is able to push the Chinese Government very far in any direction, let alone a 'corner'.

I think it is very important to continuously watch the type and quantum of 'strategic investments' China makes over the next months and years. From my perspective, the more of China's U.S.$ holdings it deploys making investments it considers strategic to it, the greater becomes China's power on the world economic stage.

I believe strongly that it is important to observe and follow the strategic (particularly resource) investments China makes for two reasons:

· first, for the reason I outlined in my comment related to 'China's power on the world economic stage'; and,

· second, given my belief of the importance to equity investors of 'resource based stocks' going forward (and hence the reason for the time I spend developing and improving StockResearchPortal.com for its Subscribers) observing where (in what countries) and in what resources China is investing strikes me as a possible way for 'think for yourself' investors to better develop and improve their respective investment strategies.