My morning at the bank and bicycle shop...
Thursday, May 26, 2022 9:30 PM
I soon grew as poor as a rat.—E.A. Poe
Dear Friends + Interlocutors,
I went to the bank this morning to withdraw a hundred dollars in small bills. Walking around money. The Dollar is not what it used to be. The clerk apologized that she did not have an envelope in which to give me the cash. This is a major, international bank. I did not need the envelope, but the clerk volunteered, “Supply chain problems.”
Later, while waiting to get an oil change for my car, I reconnoitered the neighborhood and stopped at a bike shop. I have not ridden a bike in years, but I think about it. I had a Schwinn bike as a kid, and it was a happy time.
There were all sorts of bikes in the shop, including folding bikes. I quizzed the owner about the folding bikes. Where were they made? “All bikes are made out of the country” was the reply. “The companies are American, but the bikes are made elsewhere.”
From Wikipedia: "The Schwinn Bicycle Company was founded by German-born mechanical engineer Ignaz Schwinn(1860–1948) in Chicago in 1895. It became the dominant manufacturer of American bicycles through most of the 20th century.
“Once America's preeminent bicycle manufacturer, the Schwinn brand, as with many other bicycle manufacturers, affixed itself to fabrication in China and Taiwan, fueling most of its corporate parent's growth.”
Whatever happened to Schwinn, it ended up in China. Is that China’s fault? Is China trying to take over the world? No, China is manufacturing stuff off-loaded to it by American companies and others all around the globe. This is not a plot by the Chicoms, the Chinese Communist Party.
Below is an email I sent last year, in December 2021, highlighting an Anthony Rowley article in the South China Morning Post. It concerns inflation in America and China’s relation to it. We can thank China for keeping inflation low, under the radar, for so many decades. The rise of China has been a deflationary event for the U.S.
Personally, I do not regard China as a threat to America. On balance, I would say the rise of China has been a plus for America and for the world at large, just like the rise of Japan was an asset to the U.S. when Japan reemerged from the ashes of the Second World War.
Now, under Trump and the current bozo in the White House, the U.S. is confronting China. In fact, official U.S.G. policy is that China is the number one threat to the America, not Russia. Just the other day, The Bozo POTUS remarked that the U.S. military will engage China if it invaded Taiwan, a province of China.
Supposedly, this remark was designed to ward off China from invading, something China has no intention of doing. Is Bozo Biden egging on China to try it, the way he and his inner circle egged on Putin to take military action against Ukraine? It is difficult to understand what Biden is doing or thinking. The man is a walking disaster.
However, in view of America’s supply chain problems, surging inflation, and the economic dependence of the U.S. on China, it would be madness for Washington to get into a military conflict with China. Such was not the White House calculation with respect to the Washington-initiated proxy-war against Russia now taking place in Ukraine.
You see, the U.S. is not economically dependent upon Russia. But Europe, and especially Germany, are. Do you think Washington cares? Not on your life, at least not Victoria “fuck the EU” Nuland the battle-ax in charge of U.S. policy in Europe.
Ms Nuland, Blind Man Blinken, Bozo Biden and his national security advisor, Jake Sullivan, are the four individuals most responsible for the outbreak of the Russo-Ukraine war.
Am I the only innocent bystander who regards the war as clear evidence of yet another gross failure of U.S. foreign policy? Everybody is fixated upon Putin. But it was the White House which could have stopped this war from ever happening.
Similarly, the ill-regulated minds in Whitehall, trustees of the British Empire, could have prevented the continental European war in 1914 that soon became World War I. It seems to me that both wars were allowed to happen as a calculated move to preserve the Anglo-American status quo, now called the international rules-based order.
That’s hogwash—“the international rules based order”—a cover story.
Patrick
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Always remember, it can be worse tomorrow.—Soda Jerk, Witness to Murder
Tuesday morning, December 21st, 2021
Dear Friends + Interlocutors,
Another straw in the wind…
Anthony Rowley of the South China Morning Post wrote an item yesterday entitled Why the inflation threat is more serious than most economists and policymakers realise or are willing to admit. The link is provided herewith, but unless you are a subscriber to SCMP, you may not be able to access. I have copied and pasted below the portions which preoccupied me the most.
Rowley’s central point is that the rise of China caused inflation to go under the radar in the U.S. In my simple-minded, non-economist way, that notion, that feeling, occurred to me and I’ve mentioned it previously. Amazon, Apple, Walmart, etc., etc.
China is making everything, or almost everything. Certainly in the realm of consumer products, and doing it inexpensively and well. The most valuable U.S. company in the world, Apple, was made in China. Literally, China made Apple.
Washington’s proactive policy under The Trumpster and now under Papa Joe is to engage in a Cold War against China, to harass China. Washington does not want to get involved in a hot war.
Just a sort of knee-capping of China through sanctions, tariffs, etc. It’s unwise, unnecessary and counter-productive.
China is being targeted because of its unparalleled success and growing influence. At the same time, American business wants to ride, continue to ride, with China’s success.
Wall Street investments continue to pour in. Washington does not interfere. America is of two-minds.
What I don’t understand is how interest rate hikes by the U.S. Federal Reserve will mitigate the type of inflation which Rowley describes.
Rowley’s excerpts are below and speak for themselves. My emphasis in red… Try to access the whole article.
Patrick
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“As former JP Morgan and Merrill Lynch (Japan) securities analyst Jesper Koll pointed out, the structural aspects of the inflation being seen now may take a long time to subside and may require aggressive action by central banks that could ramify deeply into major economies.
“As Koll recalled, it took a number of years for then head of the Fed, Paul Volcker, to get inflation under control in the 1970s by means of repeated interest rate hikes and back to what is regarded nowadays as a “normal” target level of 2 per cent.
“As Koll recalled, it took a number of years for then head of the Fed, Paul Volcker, to get inflation under control in the 1970s by means of repeated interest rate hikes and back to what is regarded nowadays as a “normal” target level of 2 per cent.
“What kept inflation under control thereafter was, as Japan’s former “Mr Yen” (vice-finance minister Eisuke Sakakibara) has often pointed out, not central bank governors but Chinese political leaders who succeeded in making China the “factory” and cheap goods supplier of the world.
“China ‘exported’ deflation and at the same time created global supply chains that helped speed the flow of goods around the world and to open up global trade, thereby putting downward pressure on costs. The advent of the internet, too, accelerated deregulatory and deflationary trends.
“China ‘exported’ deflation and at the same time created global supply chains that helped speed the flow of goods around the world and to open up global trade, thereby putting downward pressure on costs. The advent of the internet, too, accelerated deregulatory and deflationary trends.
“All this is going into reverse now. China is focusing more on domestic markets while US President Joe Biden’s administration and its alliance partners are creating rival supply chains to China’s – and a wider trend towards deglobalisation is putting upward pressure on costs and prices.
“Deregulation is giving way to re-regulation in everything from trade policy to government controls over the internet and protectionism in technology. These are certainly not the “transitory” types of change that justify complacency about the future course of inflation.”
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