BRIC+ News & comments

Here is not up to date graph of how China is getting out of US Treasury paper, as I predicted they would 6 or so years ago, as part of the plan to eventually destroy the dollar, if it has not already collapsed, by backing RMB bonds with gold. I.e. they want to reduce the size of their ONE TIME loss on Treasury paper for the EVERY YEAR saving on growing import costs with US & EU in depression and not buying competitors keeping import cost high. Of course the greater benefit is China gets to pay for its imports with printed paper, as US has done for more than two decades.

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The other main thing China must do, and is rapidly doing, is to reduce the fraction of its exports going to US & EU as it grows exports to others by ~ 20 + or - 10% each year.
From memory: only 15% of China's exports now go to the US. - China only needs a year or two more before it can tell the US:

Go to Hell. We don't need to sell to you anymore. So we will no longer finance your debts.

 

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But many of the Ms are not really miserable. They just live outside the cash economy or are not with disclosed salaries. Typically the Ms are rural folk who only need cash for flour, cooking oil, second hand clothes, electricity, beer, etc. They grow their own food, coffee, tobacco, etc.

 

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that is quite true, but not good for the economy. I have lived in Brazil for last 20 years. For first 10, I had a small (~100 acres) cattle farm which I visited for one or two week-ends each month. My very intelligent and honest but poorly educated employee took care of it. He was one like you describe. My local currency salary equal to ~$100/ month allowed him to save money, but got me into trouble with other absentee - land owners as their employees were starting to ask for a high salary like that too. All this is changing thanks to "Bolsa Familia"

BTW he killed a pig when needing more cooking oil and rendered the fat into lard. In the tight knit community of the rural valley, food was shared so little of the meat was sun/salt dried.- Most was eaten in a day or two as no one had a refrigerator. Likewise flour was little used. Manjorka root and potatoes ground into a flour made very good tasting bread or coating for fried fish, etc. The grinding was done with a short vertical log of hard wood that had a cavity* in the top in which item to be ground was placed and pounded with a blunt end post of smaller diameter. Corn meal flour was often used for corn bread. I got a baby lamb but it was confused about its (or my?) identity and butted me hard when nearly full grown. It made a nice feast for me, him and his working neighbors. Me, the "Rich American," even provided the beer.

He smoked, a little too much as that cost nothing. The inner most layers of a corn husk provided the "paper." Once I took him into town to watch a big football game on TV and offered to buy him a pack of "real cigarettes." He had had a few before, so thanked me and said: "They don't taste good." Living outside the "cash economy" is not a bad way to live, especially when, like in Brazil medical services are free to the user, but does hurt the economy.

* Made by many tiny fires, I think, but no evidence of that remained.

 

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There are now 201 million Brazilians! and like many others, Brazil has a population distribution problem rapidly growing worse as this year only 1.77 kids are born per woman. (That too will grow worse as in 2030 it is projected to be only 1.5 kids per woman.) Here are more projections and data (all in millions of people):

...............14 or less old.........65 or more old...... others
In 2000: ...52.1.....................9.7.......................111.6...... total = 173,448,346 (registered)
In 2013: ...48.5...................14.6.......................137.6...... total = 201,032,714 (registered)
In 2042*...34.7...................42.2.......................151.4...... total = 228,350,924 (PROJECTED)
In 2060: ...28.3...................58.4......................131.4...... total = 218,173,888 (PROJECTED)

* Year of Brazil's peak population. Unfortunately, currently 11.8 million officially live in Sao Paulo, but true number is higher as homeless, etc. are not fully counted and quite a few rural-born migrants to the city were not registered at birth. I think, but have not checked recently, that Sao Paulo is the world's fifth largest city.* It has kilometers of essentially parked cars on the roads during rush hour. I can, on level ground, walk faster for many blocks, before for unknown reasons the road ahead of the cars is nearly open, so they speed up for a few blocks only to creep ahead again for the next five minutes. Subway and common buses are free to those 60 years or more old, but that must soon change. Main trigger for the recent millions demonstrating in dozens of cities was a modest increase in bus fares (now cancelled). I expect the 60 limit will soon changed to 65, or 70, but I will not be effected even if it goes to 75.

Buses have their own lanes, which they share with taxis that have a passenger. They are much faster than private car when there is congested traffic, and widely used. Some on their sides have slogan (translated): "Transport: the citizen's right - the government's duty." It is not rare to see 20 buses, one right after another, with a few cabs in between. Some busses are articulated with three sections. Some use natural gas, others "bio-diesel" but more than half are common diesel still. There are also many electric trollies. Most bus stops are short side lanes to left of the main bus lane so they don't delay each other much. Each bus stop has designated busses using it (Other buses will not stop there, even if a non-blind passenger asks them too.) Thus you may need to walk four or less blocks to get to a bus stop of the bus you want to use. At major stops, an electronic sign tells you the expected wait for busses that stop there. Rarely during business hours is it even five minutes. I have not been "a world traveler" for 25 years, but Sao Paulo's public transport is second to none, of those I have seen but always crowded. (There are special seats on both buses and metro for the old, or disabled and amazingly most leave them vacant or even offer a "white hair" like me one of the regular seats if the special seats are full.)

* It is certainly very diverse and interesting. For example, Sao Paulo has more Japanese than any other city except Tokyo; many living in large district where all signs are in Japanese and many street lights look like paper lanterns! There is racial harmony in Brazil**, but not full economic equality. Public schools are poor, so the middle class sends their kids to private schools and that sends the economic inequality into the next generation. For example nearly 100% of the upper middle class have at least one maid.

** You will be fined for a racial slur / remark and go to jail if a repeat offender.

 

Above just announced the start 10th ASEAN congress. Here is some data, by edit two days later:

 

G-20 Weighs Stimulus Exit Risk as BRICS Plan $100 Billion Shield:

 

Note that from the above and the 2nd quote of post 745, the sentence reproduced below, China's exports to ASEAN will be as large as they are to the US in 2013 and significantly greater to ASEAN than to the US in 2014.

"... China's trade with ASEAN " is expected to reach $1 trillion in 2020, compared with $400 billion last year. ..."

In 2012 US China trade, both all time record were 110.6+425.6 = 536.2 billion dollars up from 2011's 103.9+399.3 = 503.2 or 6.5% increase. For the current total bilateral trade to double to 1.072 Trillion at this 6.5% annual rate of increase will take 72/6.5 =11.1 years; But in only 7 the China-ASEAN trade ALONE will be a trillion dollars and ASEAN trade is still only a minor part of China's trade / exports.
I. e. China is making rapid progress toward not needing US as a buyer and the time when it can and will tell US:

Go to Hell. We don´t need to sell to you and will no longer finance your deficits. (Print money as you need it until it is worthless.)

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China is buying more than 1000 metric tonnes of gold in 2013 and producing 40% more than world's second largest producer - to back the RMB bonds with gold and wealthy China can pay higher interest than the US can too, so they will be the preferred component of international reserves. China then can pay for its imports with printed paper. Another strong reason why it is to China's economic advantage to take a ONE TIME loss on the dollar reserves it has not been able to spend down completely by paying up front for long term (up to 30 years) delivery contracts for energy, material and food stocks it needs to import is that EVERY YEAR the prices of those imports will be much lower with US and EU in dollar collapsed depression unable to bid prices up.

by edit on 6 Sept13: More news from ASEAN with one day before conference closes (also from China Daily today):
"The third China-Eurasia Expo in Urumqi, capital of the Xinjiang Uygur autonomous region, has helped to seal domestic deals worth 738.7 billion yuan ($121 billion), said Li Jingyuan, Expo secretary-general." Earlier news in post 745. PS here it is called the 3d, not the 10th as three years ago the name changed slightly.

 

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.Brazilian President Dilma Rousseff (left) talks to Indian Prime Minister Manmohan Singh, Russian President Vladimir Putin, Chinese President Xi Jinping and South African President Jacob Zuma as they pose for a picture after a BRICS leaders' meeting at the G20 Summit in St. Petersburg on Thursday. Also important was the BRICS made 100 billion currency stabilization agreement. China supplies 41B others 18B except SA supplies only 5B.

I bet most of that 2.23 billion was dollars taken from China's reserves - helping China get ready to kill the dollar with less pain. - See prior post 747 for why and how.

* Here is part of that "great NG potential" (China is already #1 in NG cars and fast expanding their use, in part to slow growing pollution probems):

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According to a Citi report, the number of NGVs in China grew by 48% in 2012 to reach 1.48 million vehicles. China could be on a path to become the world's largest NGV market according to Lux Research, a company specializing in research on advanced technologies. Lux predicts China could see annual sales of 540,000 NGVs by 2015; India would sit at second place with about 250,000. {China plans decades ahead and pays up front in full for decades of future imports, in part to lower its holdings of dollars.} Too bad US will not be selling any NG to China for reason explained here: http://www.sciforums.com/showthread...a-pipe-dream&p=3105359&viewfull=1#post3105359 But with no liquefaction cost (pipeline delivery) Russia will hold its market share. Not lose it as even Quatar, world's largest NG producer, soon will to closer LFNGs.

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This LFNG, a NG liquefaction plant, is world's largest ever floating objects (0.5Km long) and soon to be moored over NW Australia's large off-shore NG field, but dozens more LFNGs on order or soon to be.

 

Thanks to the US Government's spying IN mainland China (they apparently had a single server running in Beijing) American tech companies are to lose out on hundreds of billions of dollars worth of business in China. The government has already stated they want American hardware out and replaced with Chinese hardware they can be confident the NSA is not using to spy on their Citizens.

 

Another Chinese conversion of US's paper promises into real assets:

Not a very big deal, more a "foot in the door." About 5 years ago China gave PetroBrass twice as much (10 billion dollars) for delivery of 200,000 barrels of oil (daily average) delivered per day for 20 years. Of course, if this field pans out as many believe, China may get twice the oil for half the price even thought China now owns only 8&1/3 percent of the field.

 

Central banks are not only buying more gold than ever but selling dollar bonds too. That will make it easier for China to kill the dollar when its to China's economic advantage to do that - See more details in post 747.

 

Brazil exports commodities mainly agricultural ones plus world's purest iron ore (>95% Fe2O3) that compensates for the greater shipping distance to the main Asian growth markets.

The days of always a trade surplus for Brazil, may be numbered. Brazil's middle class it growing both in size and in purchasing power. - Just the opposite of the US's middle class - which is shrinking in size and purchasing power; however, the government is changing taxation policy to get the newly rich members of the middle class to "Buy Brazilian." Read the following:

 

If you go to: http://www.chinadaily.com.cn/china/2013-06/26/content_16659894.htm you will see many photos of the landing of their space craft with lady below as one of the three who spent two weeks in space. It seems clear from these photo graphs the site was very well known in advance and achieved, as the astronauts do not exit un-aided as US astronauts do. A waiting ground crew opens the hatch from outside and helps the astronauts into chairs, letting them adjust to 1G. See two of many at end of next post.

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June16 til 29 of 2012: The fourth manned spacecraft carries Jing Haipeng, Liu Wang and Liu Yang into orbit. Liu Yang is the first Chinese woman in space. The mission conducts an automated docking, and the country's first manual docking with the unmanned Tiangong-1 space module.

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JIUQUAN - Thirty-three-year-old spacewoman Wang Yaping will make history -- she will be China's first teacher in space. Wang will teach Chinese primary and middle school students on Earth physics phenomena in a zero-gravity environment. She is preparing for the lecture and expressed full confidence about the upcoming lesson. Meeting the media Monday, she said, "We are all students in facing the vast universe. We are looking forward to joining our young friends to learn and explore the mystical and beautiful universe."

China has world's best primary & middle school education, in Shanghai and is now copying it in all of China.* See:http://www.sciforums.com/showthread...l-Superpower&p=3149408&viewfull=1#post3149408
Teachers are well qualified, well paid, and very respected. I wish her well and pray she escapes the fate of US's first teacher in space.

*See: http://www.chinadaily.com.cn/china/2013-12/31/content_17208205.htm Even some from the US are helping in central China's rural schools:

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A 25-year-old foreigner from Chicago teaches an English class at Xincheng primary school,in Zhecheng county, Central China's Henan province on Dec 26, 2013. Kenton，Chinese name Ye Fengguang, has been a volunteer English teacher at two rural schools since October 2013. Need a job? Learn mandarin and China has one waiting for you.

 

From recent survey on the views of China's Gen Y:

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180,000 cubic meters of ice in 750,000 sq meter park put up by 10,000 workers in 15 days! First was in 1963. This 50th anniversary version is, like others for last two decades, a "must see" to believe. Even better see Bloomberg's video of it: http://www.bloomberg.com/video/magi...ights-up-in-china-4oDSmcQVQRGWrtkthc4TJA.html
First below is an overview of ice sculptures at the Harbin Ice and Snow Sculpture Festival in the northern city of Harbin, Heilongjiang province China January 5, 2014.

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A few years ago, it was illegal for Chinese to hoard gold, but now that is encouraged by new gold bank accounts. I.e. give Y yuan to bank and get account credited with G grams of gold. (You can't later ask for the gold but can get its then current value in Yuan and have gotten no interest. They help with inflation - remove circulating Yuan)

A large volume of gold is smuggled into China too - The Chinese know that if government knows of their gold, it is at risk of confiscation still, (as US did in 1932 @ $35/oz) so they mainly bury it instead of use the newly legal gold bank accounts. True total imports of gold into China probably total more than twice that coming via Hong Kong.

 

A gathering storm to sink all western ships in 2014?

 

See the fantastic result, in three photos in post 755. Here is part of how it was done:

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Its cold in NE China - that is lake ice cut by >100, now beat up chain saws.

 

China also sells more cars than any other nation (4 for every 3 sold in US in 2013) and was first nation to sell more than 20 million in one year. Most drinkers + most inexperienced drivers = a solution to their pollution problem?

 

Union under "One China, Two systems" again?