Ufo propu engine, closed loop

[ltseung888]

Provinces proposed 45 trillion RMB (7 trillion USD) for Infrastructure projects. Can China print more thin-air money to achieve the goal?

Some Economists argue that printing thin-air money is piling up debt that needs to be repaid.

My view is - who is the lender and who is the borrower? Both are the Chinese Government. The Chinese Government is essentially using its own trustworthiness to say that the thin-air money will be well used. The printing of money will not create runaway inflation. The increased thin-air money will create more useful infrastructures and Meaningful Economic Activities. Some economists may take the case of the inner Mongolia Province. Few people live there. Why spend trillion of dollars?

The goal is to support the one-belt-one-road initiative and to provide an outlet for the excess production capability of China. Inner Mongolia will no longer be for nomads. Heating will no longer be polluting coal or wood. There will be running water - so the Mongolian Brothers do not need to bath only 3 times in their life-time. They will all be able to enjoy modern comfort. When a Nation produces more steel and cement than it uses, one way is to cut down production. Another way is to use the excess production for long term needs. China learned a big lesson in the 2008 World Financial Crisis. It printed 4 trillion RMB to embark on massive infrastructure projects. It built roads, bridges, high speed trains, inner city undergrounds, hospitals and real estate at an incredible pace. It found no great negative consequences. Most of the infrastructures were directed from the Central Government.

This time, the Central Government asked the Provincial Governments to submit their plans. These Provincial Governments saw it as an opportunity that should not be missed. It is like some rich uncle asking a youngster what he desires. The youngster will come up with his dream list. I do not think that all the 45 trillion projects will be approved. But getting the Provincial Governments involved is a good idea. China does not need to slow down.

[ltseung888]

In the art of war, there is the concept of complete and lasting victory. To achieve that, the victor must not generate more hatred from the defeated. USA did the right thing after the Second World War. It helped Germany and Japan to rebuild. There is no need to expand a Nation's territory or enslave other Nations to become prosperous. Just produce better and more goods.


China printed 4 trillion RMB in 2008 for Infrastructure projects. That was successful or a victory was achieved. That was viewed as winning a battle only. Winning a battle is very different from winning the war. China lost one trillion USD Foreign Currency Reserve from Aug 2015 to Dec 2016. That particular battle was a terrible defeat.


Now China can Forex Trade through its own Forex Exchanges and not a dollar of Foreign Currency Reserve needs to be used. Can it win many more battles with more Infrastructures inside China and outside China via the one-belt-one-road initiative? The goal is to get other Nations wealthy via win-win. The final Victory is a prosperous World where every Nation feels secure. Globalization is achieved via win-win.


The cruise missile attack on Syria is definitely not win-win. The talk of unilateral action by USA on North Korea is definitely not win-win. USA may be winning a battle by destroying the Syria Military but it is losing the War. It is generating more hatred.

[ltseung888]

Why Wall Street lost its prestige in the eyes of the Chinese Economists?

1.       Previously, the Investment Banks such as Goldman Sachs, Solomon Brothers, Lehman Brothers etc. were thought to be sure-win enterprises. They could package almost any Company and got it Public. It would generate much fee in the process.

2.       These Investment Banks also help many Companies to issue Bonds. Many of these Companies could not repay the Bonds unless the customers bought their new Bonds.

3.       The Investment Banks went heavily into derivative or number trading. Numbers can be infinite and the Investment Banks could show huge profits. Many other International Banks use the Bonds from these Investment Banks and their supported Bonds as collateral and issue their own Bonds.

4.       It created the domino effect – collapse of one entity would cause the collapse of many others.

5.       Lehman Brother and other Investment Banks thought that they were too big to fail. USA Government would help. USA Government could print thin-air money.

6.       The Investment Banks packaged the Mortgages of US homes as collateral and issued huge amount of Bonds. This was just one example of financial mismanagement. The earlier Junk Bond Market was another.

7.       The Hedge Funds succeeded in causing the Russian Ruble and the Asian Miracle to collapse. It also succeeded in draining one trillion USD Foreign Currency Reserve from China.

8.       The mood from some circles in Wall Street was – let the Chinese and others to be willing slaves. We printed thin-air money and they enslaved their workers; polluted their environment and gave us the good. We could enjoy the good life and they were grateful to get our orders.

9.       So long as USA have the superior War Weapons – both physical and economic, USA can dominate the World. USA could help to make any Nation rich or make them poor. If USA placed orders, those Nations would prosper. If USA sabotaged or bombed, those Nations would be poor.

10.   Wall Street did not realize that technology could be mastered quickly. They did not foresee that China could copy and improve that quickly. They never thought that North Korea could produce the nuclear bombs nor the missiles.

The Chinese Economists copied and improved on the financial concepts. They realized that there were many real projects to be done. They realized that they could redefine "what are Meaningful Economic Activities". They realized capital was never a scarce commodity. Thin-air money could be printed but need to be controlled. Allowing private enterprises to follow their greed would turn something Meaningful to Ridicule. 

[ltseung888]

How to deal with North Korea?

The thinking from USA is – no new Nations are allowed to have nuclear weapons. If any new Nation (apart from the existing nuclear club) develops nuclear weapons, USA will "take action". The action includes sanctions, bombing, sabotage and invasion. But as technical knowledge is getting wide spread, building nuclear bombs and missiles are within the capability of more and more Nations.

Why would any Nation want to possess Nuclear Weapons and delivery systems? The main reason is National Security. North Korea pointed to the missile attack on Syria by USA. It said that North Korea would suffer the same fate if it does not have nuclear weapon capabilities. But it is inviting USA to take "surgical strikes" now. The gamble is that the North Korean Scientists will develop so fast that any attempt to "surgical strike" will meet with unthinkable nuclear mutual destruction.

Is USA justified in taking such "surgical strikes"? Such surgical strikes are definitely not win-win. The strikes will generate more hatred and human suffering. Other Nations with hate in their hearts will seek revenge. They may keep the development secret...

The better path is to help North Korea to become rich similar to South Korea, Germany and Japan. When citizens are wealthy, they will try to preserve their wealth. They will not try to destroy others with the risk of getting themselves destroyed. The Chinese version of Globalization is win-win with prosperity to every human being on earth. Get back to the negotiation table. Forget sanctions. Work out a plan to rapidly develop the North Korean economy. Accept the fact that North Korea is a Nuclear Power. (Will have to accept many other Nations in the future. Technology is here.)

If the two camps (USA vs Russia+China) compete to help other poorer Nations develop, the World will be much better. Both camps have the "mutual destruction" capability and the focus can be on economic development of all Nations.

[ltseung888]

Tseung, If China is trading in its own forex market X to keep the RMB rate low and Hedge Funds are trading in forex market Y to send the RMB rate high, can I buy RMB in X and sell in Y?


No. The Forex Exchanges are like casi*os. Their chips are not interchangeable.