China And Japan Banks Have Seceret Meeting Yesterday!

Elaine Meinel Supkis

Today, we must discuss Risky and Safety, the devil and angel within all of us. The Bank of England is accused of NOT hiding bankruptcy at Northern Rock. Seems the politicians want the public kept in the dark. The drop in US interest rates roil world banks and suddenly, Japan and China called a truce and had a very SECRET meeting to discuss the US banking system and the world FOREX markets and Saudi Arabia threatens to drop the dollar as reserve currency but I bet the Dragon will visit the king there and have further discussions. Gads, the US and UK empire is collapsing and the wars we are losing are causing world oil prices to rise and are we ever in a bad fix here! And the Chinese will fix this, for certain.

From Bloomberg:

Bank of England Governor Mervyn King said British and European Union laws complicated his efforts to rescue Northern Rock Plc and prevented the central bank from acting covertly to prevent a panic.

``We're hemmed in by four pieces of legislation,'' King told a parliamentary committee in London today. ``The interaction between different pieces of unconnected legislation made it almost impossible for us to act as a lender of last resort in the way that I would prefer.''

A lot of chaos is going on as the world's balance slowly shifts from the US/UK empire which has dominated this planet since the Napoleonic Wars. I sift through the news looking for tiny clues, little bits and pieces of this great big puzzle. I loved doing jigsaw puzzles as a child. And to this day, I use the same approach: I quickly sort the pieces according to shape, size and over-all color. Once everything is sorted out, I make sub-groups of pieces looking for fine details. For example, if there are figures with eyes, I put all the eyes in a line on one side. So it is with the news: in order to rapidly build my case, I look for key words buried inside of various topics.

Many things are happening but the things we should care about are things that are occult. I have a long interest in hidden, occult things. I grew up surrounded by this and lived by my wits. When I was very young, I wanted to be a ghost who could walk through walls and spy on things without detection. Frankly, I spied on my parents. And pestered them about things they wanted to keep hidden.

So when I see hidden stuff in the news, I grab it. Note the above story: King is being critisized because he couldn't SECRETLY save a stupid bank that made insane, stupid, irresponsible loans. People trusting this semi-criminal organization felt understandable panic and fear when they learned the truth about its darker doings! The head of the Bank of England is upset that he can't conspire in the total dark with the officers of this stupid bank to save it while papering over the messes they made.

The fantasy that banking would be more stable and safe if it is SECRET is the key to the business of making wealth out of thin air: the magicians can't operate in the open, they have to have darkness surround their actions! This is true about all wealth-making systems. For example, people who do the actual digging up of wealth in the form of minerals in the earth must go into dark caves and deep pits and do very dangerous work. Some of the most poorly paid people on earth are the army of semi/full slaves who are at the very roots of the wealth system. They die terrible deaths, digging up the gold, silver, coal, iron, diamonds of this earth. Aside from them, there are the farmers who labor in foul or fair weather, doing hard labor who produce the other half of wealth. And then the artisians, vacillating between slavery and guild powers, taking all the raw materials and crafting them into tradeable goods: the basis of civilization.

Doing business concerning all this has created the banking system. The religious/magic elements within banking began at the very beginning when the temples were responsible in ancient Ur or Egypt, for tracking goods and extracting their 10% profits. The invention of writing and numbers are very much connected to temples doing business and what was this business?

Appealing to gods to protect everyone and bring prosperity! The religious impulses of our culture are tangled up in all this and is full of interesting contridictions which is why people pray to Jesus to make themselves rich whereas Jesus was anti-wealth and anti-money and demanded communist sharing of goods and labor! If Jesus were alive today, he would be Karl Marx.

Back to the Bank of England: the need for operating in the dark is so they can keep the masses ignorant and placid while the guys within this system who can see everything quite well can milk it of at least 10% in peace. The cartoon picture at the top is from an amusing Japanese anime called 'Risky and Safety'. This girl must choose which directions to follow as these two yin/yang spirits urge her onwards. This is exactly how our bankers operate: they want safety and security but this makes a lot less money for them compared to risky activities and since they operate mostly in the dark, the temptation to play it Risky's way is overwhelming. They do this, the risks accumulate until the dangers are very great and then Safety has to come to the rescue. The bankers do not want anyone knowing about this, they want to project a facade of sober care while running around, naked and drunk, at night. Thus, the need for secrecy.

From Finance Week:

Yesterday the Bank announced it had pumped £10bn into the money markets, proportionally more than the injection a month ago by the European Central Bank, which has not had to deal with a Northern Rock-style collapse. Banks will be allowed to collateralise their mortgages against this – a safeguard against moral hazard, but a move that might have averted the past week’s panic if taken earlier.

The MPs who quiz King today will therefore want to know whether less complacency by the Bank a month ago might have avoided putting public money at risk. If – as they claim – Northern Rock is fundamentally solvent and no other mortgage bank is in similar trouble, then the Bank and government could profit from their emergency package. Their rescue finds will be repaid at a penalty interest rate, in effect imposing a windfall tax on banks as punishment for getting their sums wrong. But if there really is a hole in the balance sheets of one of the UK-supervised banks, the taxpayer will now end up filling it.

King’s evidence will mix a strong defence of the past month’s conduct with strong assurances of safety going forward. His statement submitted in advance assures the committee that “losses from defaults so far remain small relative to the capital of the banking system” and that “the source of the problems lies not in the state of the world economy, but in a mis-pricing or risk in the financial system.” His interrogators will want to know whether, in the process of correcting that mis-pricing – and suffering its effects – the financial sector could now undermine the real economy.

Northern Rock isn't fundamentally solvent. The crisis happened because it was risky and careless. And far from no other banks in trouble, they are all in trouble as we can plainly see, ALL the banks in the world are in trouble in one way or another! I looked into Northern Rock and discovered it operates partially out of a pirate cove in the small islands of the Channel held by Her Satanic Majesty, the Queen of England. If Northern Rock was up and up, why are they hiding at a tax-haven pirate cove? Obviously. And do note this article mentions 'moral hazard'. This concept that people who play Risky all the time should bite the bullet and die is part of the basis of all business. Whenever governments, religions or capitalist systems try to protect all the Risky gamesters, the whole system collapses. This is because people will take ever-greater risks if they can!

But there is no 'moral hazard', there is just Pure Power. When a system is working, the rulers don't mind a few drop outs failing. But when the whole system is collapsing due to fundamental problems, the rulers must keep it going no matter what. This is when everyone flails about, trying to bail out the Titanic even as water pours into the hold. In this case, the English have all their eggs in one basket: they decided to make money being bankers and making magic money appear! The collapse of even one bank is a huge problem for them. So they will hold this at bay as much as possible. But the English banking system is nearly identical to our banking system and the messes that are unwinding here are unwinding there and the British rulers dare not question this!

And to think that part of the roots of this problem lie in the fact that Her Majesty makes pin money setting up and protecting pirates who are the ones destroying the banking system is a funny thing, indeed, HAHAHA. No one in English politics dares talk about this. Barristers in England tried to shut me up in the past and failed. This is a very serious problem that must be addressed. The kingdoms in the Gulf States region are taking over the banking systems of the US and England at a really fast rate and they operate the same way as Her Majesty. I recall my ancestors having this revolution concerning these financial matters.

From the Financial Times:

CIT Group, a leading US commercial finance company, said on Wednesday it would sell its subprime loan portfolio to Freddie Mac in a move to quit the home-lending business, triggering a sharp rally in its shares.

CIT, the largest independent finance company in the US, has been badly hit by the turmoil in the credit markets and by the shake-out in the subprime sector.

The company said it planned to sell between $3.5bn and $4.2bn of triple-A rated securities backed by $6bn of residential mortgages. The announcement came on the same day that Fannie Mae and Freddie Mac, the US government-sponsored mortgage lenders, welcomed a regulatory decision to allow them to buy more home loans.

CIT will change the accounting designations of the underlying loans from “assets held for sale’’ to “assets held for investment”, according to a statement. The New York-based company also received a $2bn credit line from Morgan Stanley to finance its operations until the sale closes.

A $4.2 billion gift to the idiots who made lousy loans that were pure Risky! This is just a small part of the multi-trillion dollar bailing of the Titanic's hold. The US can make money out of thin air and in the West, the central banks have been doing this with increasing desperation. I like the change from 'sale' to 'investment' business. How on earth are these dying morgages an 'investment'? Since when are losses 'investments'? Everyone who is an 'investor' is running away from these loans because the people paying them are not paying them! This means, these loans are worthless pieces of paper.

Just like the taxpayers bailed out the Titanic during Bush Sr's and Reagan's rule, so they are captives in this latest bail-out. We have no say about war, wild spending or anything. Increasingly, our government is insulated from public opinion. Bush's ratings are 20% and Congress, 11% as the public is filled with disgust and despair. Just like in Japan where the ruling class plays musical chairs while the masses get cut out of the wealth generating schemes more and more.

From the NYT:

The consortium that had agreed to buy Sallie Mae for $25 billion plans to return to the negotiating table and seek a lower price, people close to the group said yesterday. If the group fails, it may move to scuttle the deal.

The buyers — the private equity firms J. C. Flowers & Company and Friedman Fleischer & Lowe, as well as two banks, JPMorgan Chase and Bank of America — met Tuesday to discuss the best way to pressure Sallie Mae into accepting a lower price, these people said.

While the group is hoping to renegotiate the price of Sallie Mae, these people said, it may also be willing to walk away and pay the $900 million breakup fee.

Oh, how does the Bank of America pressure Sallie Mae to do business their way? Bribe, bribe, bribe your politician, gently to the sea, merrily, merrily, merrily, merrily, life is but a magic cave of wealth. The ONLY reason Bernanke was pressured into suddenly dropping rates was so these big deals can be renegotiated at a lower rate and then the profits can be eked out from this. This gross transfer of wealth is on par with the tax cuts that raised our national debt by $7+ trillion dollars in the last two decades. Instead of worrying about the debts of students and protecting them, the government passes laws and punishes them and forces them to go futher into debt in order to gain some living----and here we are, instead of the government simply saying, they will cancel ALL these loans and turn it into a Social Security benefit, the other half of our social system with students becoming higher-wage earners who then support retirees, instead, the pirates running our finances want to MILK THEM FOR PROFIT. And since this is falling apart, it is time to have a real society and this means protecting our children from debt and protecting us from old age while at the same time, putting public money into the system so we have a highly trained, well employed nation of workers who can pay taxes and make this country grow!

To me, this is very simple. My children had to start life with debts. This means, they can't capitalize on their labor but must work for someone else in order to pay their monthly education bills. This is stupid. If this system worked, I wouldn't mind. But it is obviously broken. Since none of the pirates want Sallie Mae, it should go to the People and become Ours and we can then use TAXES to run it, not hit new graduates with huge loan bills.

From the Telegraph:

Spanish officials have furiously denied reports that the country’s property market is heading for a crash or that a clutch of banks may be in the same boat as Northern Rock.
*snip*
“The current turbulence has highlighted the downside risks to growth but Spanish institutions face this episode from strength. Exposure to [sub-prime debt] is insignificant: the problem is we don’t know where the losses are, or who owns what,” he said. “The biggest favour the banks can do is to come clean on losses.”

The central bank also denied reports that its financial institutions had required “emergency liquidity” along the lines of Northern Rock, but the statement failed to end doubts since Spanish banks have been able to borrow unlimited sums cheaply from the European Central Bank’s window.

Spain recently sold off a lot of its gold reserves to keep itself within the rules of the European Union's currency markets. But the mess there is intimately connected with England's banking mess since a lot of the housing built there for retirees were built for Brits. As well as Germans. The building boom in the West was fuelled by Asian banks. Now that the West has bid up the value of properties to levels we can no longer afford, the bubble is popping. And secret games or bail outs by the Safety freaks in the governments of Europe and America can't change the facts: we can't afford infinite debts any more than we can afford infinite trade deficits.

From MSNBC:

Consumer prices in August fell for the first time in 10 months, as another big drop in energy costs offset higher food prices.

The Labor Department reported Wednesday that its closely watched Consumer Price Index dipped 0.1 percent last month, slightly better than the flat reading that had been expected. It was the first decline in consumer prices since a 0.4 percent fall in October 2006.

And here is an example of how our magicians work! They are adamant that energy and food have nothing to do with anything with inflation and yet, if either goes down even slightly, they crow that inflation is gone and they can do the thing they want to do the most: be Risky and lower interest rates! Because of this predilection of theirs, they are always running interest rates below the real rate of inflation. In the last 15 years, they kept tinkering with the statistics for figuring inflation until it has virtally no connection at all. This is how they deal with everyone who has COLAs: make it all meaningless and behind reality so incomes DROP. The manufacturing community is madly trying to eliminate COLAs. I know many people who work now and can't get pay raises at all...unless they leave their work and seek it elsewhere. And people on SS are really being reamed out by all this.

From the Economist:

OIL prices have been hitting new peaks this week. The latest came on Tuesday September 18th after markets reacted to the Federal Reserve's decision to cut interest rates. The price of benchmark West Texas Intermediate for delivery one month ahead soared to an intraday record of $82.38 per barrel, closing at just over $82. More highs are likely. Prices have risen by a third so far this year, driven partly by worries that supplies cannot meet robust global demand. Last week prices rose despite a decision by the Organisation of the Petroleum Exporting Countries, a cartel of producers, to boost production by 2%.

When oil prices dropped a tad back in 2006, the government and the media crowed that inflation was now banished forever and the economy would boom even though the housing bubble had already popped. Then the relentless climb in energy prices continued. This is due entirely to the US itself: the state that runs us, Israel, has been talking war nonstop and the US echoes this so of course, if we are egging the whole world into allowing us to attack Iran, this will cause world oil prices to go through the roof. And up they go! The more we talk of war, the more likely they will rise. The bombing of Syria illegally by invading Israeli jets set world oil prices through the roof.

The US economy is taking a big hit from all this. One would think the average American would figure out the connection of war to oil prices and do something. But alas, even as wars sour on the public, their ability to move their representatives in a saner direction is nearly totally muffled. Virtually no candidates in either party are talking about stopping wars in the Middle East. And the ones that do, are never mentioned by the media. For obvious reasons.

From the Telegraph:

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

"This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.

"Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.

The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

Saudi Arabia won't drop the dollar, they just won't buy more dollars. They are already working on the euro and the pound which is why both have risen against the dollar for the last 2 years. What Saudi Arabia is doing is herding us in the appropriate direction. They want, like Japan, control of our foreign policy in the region and they want to control our navy which will protect them, not us. Our navy is very, very expensive. We pay for this via IOUs held by various governments. Japan and Saudi Arabia hold a tremendous amount of US government debts and they use this to control us. Saudi Arabia needs higher interest rates so they can let their money 'grow' passively. The more pro-active they must be, the more they have to make choices. And it would be smart for us to not force them to choose.

The sudden, big drop in rates by the Fed when obviously, oil inflation is raging, hits the oil producers directly. They remember how we inflated our way out of our obligations during the 1970's. Iran and Iraq went to war and oil prices outstripped inflation and since then, they are very wary. They know we plan to inflate our way out of paying our debts. So they issue warnings. Maybe they will drop us! That would be revolutionary. And what bin Laden wants. Again and again, the choices are increasingly Risky and all outcomes, increasingly revolutionary or violent.

Saudi Arabia fears Iran greatly and now knows their gambit of letting the US/UK invade Iraq didn't strengthen them but rather, unleashed the third act of the Shia revolution! Now they are in greater danger. The Chinese, focused on Taiwan and Korea, aren't interested in militarily occupying the Middle East but even this is changing. Note how the US demanded China send troops to Africa! Talk about a foolish move.

The Chinese are not ready for full-scale military patrols. They plan to be able to do this in about another 25 years. As per usual, when our empire falls apart, we will cling to the lucrative parts but this will force us to cling to all the parts and this will bankrupt us. Saudi Arabia bankrolled our first war with Saddam. They then hired us as mercenaries to occupy parts of Saudi Arabia to protect the ruler there. This janissary job was a clone of the same thing in the earlier Muslim empires: they use outsiders to protect the throne. This also fired up bin Laden and Al Qeada. The mix of money and religious revolutions and conflicts in the Middle East is at the heart of much of the evolving problems leading us to a major war that will end our world rule.

From Breitbart:

Bank of Japan Governor Toshihiko Fukui met with his Chinese counterpart Zhou Xiaochuan on Thursday to discuss a wide range of international economic and monetary issues, BOJ officials said.

Although the BOJ officials did not disclose the details of their talks, the U.S. subprime mortgage crisis and its repercussions across the world are believed to have been high on their agenda.

Fukui briefed Zhou, governor of the People's Bank of China, on why the BOJ decided not to raise interest rates at its Policy Board meeting Wednesday as well as his take on the outlook for the Japanese economy, according to the officials.

Oh, this is when I really wish I was a ghost who could walk through walls! To enter the Top Secret Vault run by the Dragon to hear what that creature said to Miz Japan! What did they talk about? The world banking system?

HAHAHA! I have an ugly feeling, I know what was said. 'We want Taiwan. You want Safety. America's navy is doomed if they go bankrupt. We can bankrupt them any time we wish now. You know this and you know what your fate is,' snarled the Dragon.

'So sorry! We, the LDP, want to keep ruling Japan but we might lose power! We want peace with you, dear Dragon. How can we do this?' says Miz Japan, flirting behind her open fan and holding her sleeve very cocquettishly.

'Between us, we hold over $12 trillion in US wealth, money, bonds, stocks and other things,' says the Dragon, hauling out its acabus and clicking the wooden markers up and down as it adds up everything. 'I don't like losing this investment. I doubt you want to lose, either. As you know,' continued the Dragon, giving Miz Japan a very dark look, 'I have an interest in buying yen suddenly. But if you want to cooperate with me, we can keep the foreign demon bank accounts running for a while longer but you must do as I say and not run off and double deal me when the G8 meet, understand? No more calls for me to change the value of the yuan and we will let the yen drop in value against the dollar again.'

Well? We shall see if I am right about this. So far, when it comes to figuring out these people, I am right so the chances of the present status quo STRENGTHENING is VERY HIGH! The collapse of the West will be put off, the battle between the Dragon and Miz Japan will evaporate and all will be well until we are disposed of. For loading us up with debts is the whole point here! And if this is what WE want, it will happen! And we will find some means of doing this, somehow. Beggars at Beijing's Gates, we will continue to pretend to be an emperor while being in reality, the beggar. Until the Wheel of Fortune grinds us under its iron bound rims.

Here is a photo shot of Bloomberg's TV offerings:

Note how the magicians are all over the place, reassuring everyone but note the headline below: our ability to pay our debts is continuing to collapse. If the bankers in China and Japan don't save us, we die. I am betting very heavily, they will now save us. Despite the drop in interest rates, the deal Miz Japan just made with China is super-secrecy will show up in the news as this crisis suddenly fades and the MONEY FLOW RETURNS! Interrupted suddenly on 7/17/7, it will now be 'back to normal.' Which is what the Chinese want anyway. This means the US government must stop hassling China about trade. And the yuan. I expect this to happen. Note how the US never chats with Japan about trade and the low value of the yen!

So it will be for China! And if we don't do this, the accord between China and Japan will end or...JAPAN will begin to dump dollars and flee the US! Anything is possible. Japan is very exposed to Chinese domination and their game with the US is faltering as the US gets sucked into wars in the Middle East. The Middle Kingdom can see this very clearly and will force Japan to face reality: the Dragon will be the new ally, the new power!

Here is a screenshot from Mark It.com, a site that tracks ABX-He numbers:

Just a tidbit look at how hedge funds are faring. They are dying and this junk is being shifted onto government agencies as fast as possible. Then these investors are moving their money to growing markets: CHINA.

From Market Watch:

The governments of Dubai and Qatar battled Thursday to gain key footholds in some of the world's top stock exchanges, including the Nasdaq Stock Market and the London Stock Exchange, using cash gained from record oil prices to spark development of their own financial-services industries.

Which takes me back to the Middle East: this story is see-sawing between Risky and Safety as well as Asia and the Middle East for both are the twin poles we are trapped between. All this, due to our blatant refusal to curb our use of energy and thus, bring our trade into balance and protect earth's resources. The real reason everything is very unstable and we are in debt is very simple: we consume a quarter of the earth's resources and we are less than 3% of the earth's population. And we are doing this nearly entirely on credit. So the people holding our money are holding the whip hand here. Our choices will be fewer and fewer as time passes.

We are being allowed this latest tax cut only because all these people are rapidly meeting each other in SECRET to make deals that we won't like. China does worry that Japan might betray these secret deals to the US. But then, China can suddenly dump dollars so Japan has to worry about this. If China dumps dollars suddenly, the entire FOREX hoard in Japan vanishes and with that, Japan crashes and burns since it has the highest debt/income ratio of all the major industrial powers.

And from Market Watch:

The Securities and Exchange Commission and the U.S. Attorney's office in Brooklyn are investigating whether current or former employees at several brokerage firms committed fraud while setting up stock-lending agreements, The Wall Street Journal reported Thursday, citing people familiar with the matter.

And Risky rears her pretty little web-winged self and laughs at people who not only are very careless and who take big chances but also need to commit crimes in order to get lots and lots of money so they can go out whoring and drinking. The Devil is always in the details. And the SEC is one of the few functioning systems in our government.

Culture of Life News Main Page

Comments

[Carlos]

China and Japan have been playing this game separately long before this current spate of events. For them to meet in "secret" (in full view of the US) is a calibrated move to get the desired response and open to the end game. The enemy of my enemy is my friend. Starting from different points on the board they have now completely surrounded their rivals.

Their elite have made their people sacrifice dearly to reach this point; tightening their belts almost to the point of starving them to death (in the case of Japan).

They have a completely different mindset, playing the long game, they shun short term pirate schemes, though they dance and play to the pirates tunes just long enough to control the board. Pirates are easily blinded by gold being low EQ creatures. It's simple enough, you tighten your belt and use your savings to buy your opponent until you own them.

I suspect Pax Asiana will be an infinitely kinder more peaceful era to live in, that is, if we can reach it without triggering WWIII.

[Blunt Force Trauma]

Ooooo. The cartoon; when the link from the main page is opened, is not too friendly; "Use your own server to host images". Waaa.

[shargash]

Oil & gold are up sharply today. The Saudis are threatening to uncouple from the dollar. The Chinese are making threats about using the "nuclear option" (dumping dollars). The dollar has broken through a key support level and is in free fall.

Things are starting to happen. I wonder if we'll look back on the Fed rate cut as we look back on the October 1929 crash -- i.e. the day that marked the beginning of the end?

[krn]

I need a little help here, if possible. Could you spell out the following further?
-"The kingdoms in the Gulf States region are taking over the banking systems of the US and England at a really fast rate and they operate the same way as Her Majesty."
Exactly who is taking over what banking and exactly how are they doing it?
-[hedge funds] are dying and this junk is being shifted onto government agencies as fast as possible." How? Like the way Fannie and Freddie will now be allowed to buy up larger loans?
-"our ability to pay our debts is continuing to collapse." meaning the solvency of the US?
"the deal Miz Japan just made with China is super-secrecy will show up in the news as this crisis suddenly fades and the MONEY FLOW RETURNS!" By this, you mean China and/or Japan will return to buying up Treasuries?
I'm confused. How can anything be "back to normal" if "Things are starting to happen." And, "the dollar is in free fall".

[shargash]

How can anything be "back to normal" if "Things are starting to happen." And, "the dollar is in free fall".

I think Elaine is saying that the Chinese & Japanese will return to buying dollars to prop up the status quo. I'm not so sure.

Since the Fed lowered interest rates, the dollar is a very bad investment. The dollar is setting record lows. Anyone with a lot of FOREX reserves can prop it up for a while, but only by increasing their exposure when the bottom finally drops out (and it will drop out eventually; the status quo -- the US current account deficit, national debt, consumer debt, etc -- is unsustainable).

It would make more sense if the Chinese & Japanese would demand that the US raise interest rates before they agreed to buy dollars. If they don't, they're just throwing good money after bad.

Actually, I'm not sure the status quo can be propped up, given the drop in interest rates. Lower interest rates here will not only depress the dollar, it will cause the carry trade to unwind. As that happens, all that borrowed Japanese money will flow from the US to Japan, strengthening the Yen and further depressing the dollar.

[Elaine Meinel Supkis]

As I have said since May, Japan cannot support the status quo ALONE. I also said, in July, China was ending the status quo. This caused the banking crisis. Now, it is going again, I am assuming.

Until Japan screws up. The Chinese don't trust the Japanese as far as they can kick them. So the next crisis will be when Japan joins the West to attack the yuan yet again.

[krn]

Arrggghh. Sorry to be so dense. China caused the banking crisis. OK, check. "Now, it is going again." It - meaning China? - is creating another crisis? China is rgoing to return to buying Treasuries?

I have witnessed deep hatred between China and Japan. It would take something mighty compelling for them to work together. With China clearly on everybody's potential threat list, it's hard to imagine Japan would do anything that would undermine its own security.

[Elaine Meinel Supkis]

Japan needs the US for security. The US is going bankrupt. So Japan has to TRIANGULATE. Few Americans understand this art. Triangulation is also called 'hedging your bets.'

All nations do this except for empires. Empires are exposed to singular positions. They can't trianguate by definition. Older readers of this news service understand this. Go read earlier stories and you can see quickly that the business of diplomacy is part and parcel of economics.

And the diplomacy between Japan and China goes back about 4,000 years. They have played this queer game of imitation/destruction. They are still playing this game. And it is a very dangerous game for us since Japan is using us as a tool for defying China right now.

We can't afford this. We are going bankrupt. And China holds as many financial cards as Japan now so Japan has been TRUMPED. Hence, the secret negotiations.

[DH]

Your comment on bankers projecting "a facade of sober care" prompted me to re-read "Young Goodman Brown" (1835).
Thank you.
This year China remembers things that happened seventy years ago. In July 1937, the conflict with Japan escalated dramatically, and the Nanjing Massacre occurred in December.

[Callihan]

As Oil Hits High,
Mideast Buyers
Go on a Spree
Dubai, Qatar Battle
For Stakes in Bourses;
Political Savvy Grows
By HENNY SENDER in New York, CHIP CUMMINS in Dubai, GREG HITT in Washington and JASON SINGER in London

Wall Street Journal, September 21, 2007

As oil prices soar, Middle Eastern governments are demonstrating their clout in global financial markets -- but doing so with a new political savvy.

Yesterday saw a burst of deal activity involving Mideast governments, including a battle among two Persian Gulf emirates over the London Stock Exchange and a bid by one of them for a stake in Nasdaq Stock Market Inc. A third emirate announced an investment in Carlyle Group, a Washington-based private-equity firm known for ties to political heavy hitters such as former President Bush.

The governments of the Persian Gulf -- along with regional powerhouse Saudi Arabia -- have seen their coffers swell to unprecedented size with rising energy prices and a regional economic boom. Yesterday crude oil topped $83 a barrel.

Four of the eight largest government-controlled investment authorities are from the Gulf, and the Abu Dhabi Investment Authority tops the list with assets estimated at $875 billion, according to Morgan Stanley. That's more than triple the size of Calpers, the California pension fund.

Middle Eastern firms and funds shopping around the globe have spent $64 billion so far this year, compared with $30.8 billion in all of last year and $4.5 billion in 2004, according to Dealogic. Acquisitions in the U.S. and Britain account for slightly more than half of the total this year.

"The deep pools of capital in the Middle East are increasingly affecting all aspects of global financial markets, both private and public," says Monte Brem, chief executive officer of StepStone Group LLC, La Jolla, Calif., which advises Middle Eastern institutions on their international investments.

That frenetic pace could continue as oil revenues climb along with oil prices. Crude-oil futures ended at their fourth record high in a row Thursday, in nominal terms, as fears renewed of an approaching storm in the Gulf of Mexico. The front-month contract has surged 20% over the past 20 days.

Some of the Middle Eastern investment funds have long histories, such as those of Abu Dhabi, Kuwait and Saudi Arabia. But newer investment authorities set up by Qatar and Dubai have made most of the waves in global markets recently by making aggressive bids for stakes in well-known targets such as Nasdaq.

Despite the attention-grabbing deals, Middle Eastern countries are becoming more sophisticated at heading off political backlashes, especially in the U.S. They have learned from the firestorm last year that forced a Dubai-controlled company to sell the U.S. port operations of a British company it had acquired. China, which also combines deep pockets of foreign reserves with a shaky standing in Washington, left another lesson when one of its government firms tried unsuccessfully to purchase the U.S. oil company Unocal.

Dubai, which is seeking a minority stake in Nasdaq, asked the Bush administration to vet the deal upfront for potential national-security issues. It hired a team of Washington lobbyists and strategists to reach out to officials in the administration and Capitol Hill a day before the proposed deal became public, according to people familiar with the situation.

While President Bush promised a careful review of the deal, a key legislator, Democrat Barney Frank, said it "doesn't raise any alarm bells to me." Rep. Frank, who is chairman of the House Financial Services Committee, noted Nasdaq is a highly regulated entity and "there's no physical transfer of property" in the proposed deal.

The fight over Nasdaq is part of a larger battle for control over parts of world stock exchanges between Dubai and Qatar. Dubai, part of the United Arab Emirates, is the flashier of the two. Nearby Qatar is a tiny country that controls the world's third-largest gas reserves.

Apart from Nasdaq, the other two stock exchanges involved in the maneuvering are London Stock Exchange Group PLC and a company called OMX AB that operates stock exchanges in Sweden, Denmark, Finland and Iceland.

Dubai's stock exchange agreed to a deal yesterday under which it will take a 19.9% stake in Nasdaq and buy a 28% stake in the London exchange from Nasdaq. The deal would also result in Nasdaq owning OMX.

But just as it seemed Dubai had locked up an alliance with leading exchanges in the world's top two financial capitals, Qatar moved in with an apparent bid to upset it. Qatar spent $1.36 billion in a matter of hours before the market opened to buy 20% of the London exchange. It also spent $470 million during trading hours to buy 10% of OMX.

Officials representing Qatar said the country is looking for long-term investments in a variety of industries that can produce high rates of return. Three Delta, a fund backed by the Qatar Investment Authority, says it is principally focused on acquiring companies in the United Kingdom, and it aims to support existing management at the companies it buys.

The Qatari investment fund has also offered to pay $21 billion for British supermarket chain J. Sainsbury PLC. The fund has hired Tony Campbell, the former deputy chief executive of Wal-Mart Stores Inc.'s British division, to become nonexecutive chairman of Sainsbury if its takeover is successful.

Other big sovereign funds from the Middle East and Asia have said they are looking for undervalued brand-name businesses. A Dubai investment firm bought a big stake in DaimlerChrysler AG when the big German auto maker was suffering from quality problems at its Mercedes-Benz division. It sold the stake after a year, doubling its money. The same firm, Dubai International Capital, bought Tussauds Group, the U.K. museum and entertainment company, but later sold most of it to private-equity firm Blackstone Group.

Gulf governments have also been active in the U.S., buying Manhattan real estate and other assets. Yesterday, an investment arm of the Abu Dhabi government known as Mubadala Development Co. announced it reached an agreement to pay $1.35 billion for a 7.5% stake in Carlyle Group.

The parties in that deal also showed awareness of political sensitivities. Before the deal was announced yesterday, Carlyle notified key players in Congress and the U.S. Treasury "as a courtesy," said Carlyle co-founder David Rubenstein.

The battle between Qatar and Dubai for a piece of Western stock exchanges is part of their jockeying to become the premier financial center in the Middle East. Ten years ago, when Dubai wasn't much more than a port with a single business thoroughfare in the desert, such ambitions would have been dismissed as laughable.

President Bush said yesterday that Dubai's proposed transaction for a Nasdaq stake will come under formal scrutiny by his administration. "We're going to take a good look at it, as to whether or not it has any national security implications," Mr. Bush told reporters. "I'm comfortable with the process to go forward."

Lawmakers on Capitol Hill said they would closely monitor the deal. Such reviews are carried out by the Committee on Foreign Investment in the U.S., or CFIUS, a government panel led by the Treasury Department.

Even before the president's statement, Nasdaq and Borse Dubai had signaled to policy makers that they wanted a U.S. review.

New York Democratic Sen. Charles Schumer, a leader of opposition to the Dubai ports deal, was among the first to receive a briefing when representatives of Dubai and Nasdaq went to Capitol Hill this week.

The senator voiced skepticism, warning in a letter to the Treasury Department that the deal "would result in a foreign government having a large influence on the decisions made by a critical part of the U.S. economic infrastructure."

[Elaine Meinel Supkis]

They hire lobbyists? They have been doing this for YEARS!!!!

Carlyle: guess where papa Bush was on 9/11? Meeting with the bin Ladens, talking about money in Carlyle! 'It's a small world, after all!'

Since 1945, the Saudis have been mixing it with us Westerners. My mom and dad took me all over the earth and let me meet all sorts of people EXCEPT the Saudi royals. I was not allowed to go there or meet them here until after I was married.

Heh. Nonetheless: they are now buying up the US power base in ernest. This is a dangerous game for it exposes them to revolutionaries. Maybe they will flee after selling off all the oil. This is what I expect. This is what bin Laden's revolution is all about. The surge of wealth is a two edged sword in the Middle East. Mix in millions of refugees from Iraq and the demolition of the Palestinian ghettoes and a tremendous amount of pent up anger and lots and lots of boys (due to them being 'valuable') we get an explosive package.

[Neuro Artist]

It appears to be a chicken-race, between these countries (Saudi Arabia, Japan and China). They all will see demand destruction for their products (oil, cars and consumer goods/toys), when the real plunge of the dollar occurs. At the same time the one who pulls the trigger last will see the destruction of their holdings.

I guess what they'll try to do is change their dollar holdings into physical assets. The meeting between China and Japan banks was to give them time to do that instead of buying each others currencies with USD. Wall Street will explode with this buying, until one of them squeezes the trigger (probably China), and the house of cards falls. Mid October maybe?

[DeVaul]

Check out Yahoo.news today.

A western businessman was forced to sit like a hostage next to a Chinese official and apologize to China and the Chinese people on national television about recalling too many toys and damaging the reputation of the Chinese people.

This is our future. If he were Chinese, he would be underground or in a little jar by now.

In a way, it is kind of ironic. These hot-shot businessmen thought they could exploit Chinese labor and then blame them for all their problems just like they do here in America.

Nooooooooooo.....

The Chinese officials politely and quietly explained the concept of a "gun to the back of your head" to Debrowski and that may be why he was sitting "stoney-faced" during this televised event.

[Elaine Meinel Supkis]

Thanks for the news! Doesn't surprise me at all! Yes, the Chinese are very proud and very intent and duelling with them, dangerous. They will strong arm any opponent.

The leadership is very sensitive, they are still very pissed off at me. They hate this news service, too. I know too much.

They will force anyone doing things with them to kow tow. They also know how to flatter and roll out red carpets, this is how they reeled in Putin.