Puppet Master: China Vs USA: Who Is The Spider

Puppet Master China Vs USA: Who Is The Spider

Puppet Master

Updated March 2023

Sure of their qualities and demanding praise, more go to ruined fortunes than are raised.

Alexander Pope 1688-1744, British Poet, and critic

Two hundred fifty billion dollars of China’s reserves are in U.S. Treasuries. Now you know who the true power is; the one that holds the strings to the purse is usually the puppet master. If they even hinted that they would dump these treasuries watch interest rates skyrocket and the market crash. If they dumped them, the scenario would be devastating and crippling for the majority. This means that the U.S. is only in a position to bark to try to fool the world that they have some say in China’s policy-making decisions. They lost the ability to bite China a long time ago.

On a different note, if China listened to the U.S. and unpegged the Yuan from the dollar, the true effects of inflation would be felt everywhere. All those dollars and 99 cents stores would have to change their names to maybe a dollar plus more or 2 or 3 dollar stores. A un pegged Yuan would appreciate approximately 30%, which means all these prices would have to rise, and the sad part is that we would have to pay these prices as we have lost almost our entire manufacturing base. So the U.S. should be careful what it wishes for.

A small portion of China’s Elite Controls most of the Wealth

The wealthiest 10% of China’s population controls 45% of China’s wealth, and the poorest 10% controls or holds only 1%. Most Americans would be aghast by such numbers; however, the sad part is that the situation is much worse here in the U.S. The top 1% control 1/3 of the country’s wealth, and the wealthiest 5% control over 50%. If we go to the other end of the curve, the extremely poor in this country have little or no wealth.

So if deflation ever hits the U.S. (which it will after a hyperinflationary phase) debt holders will be shredded to pieces. Since the U.S. has a negative savings rate, we can safely assume that the majority (if we were to guess, we would say at least 75% of the population falls into these categories) will go through a phase one could safely call “the hell on Earth phase”. When this will happen is something no one can predict but happen it will, and as the inflationary forces keep rising, the day of reckoning draws ever closer.

Puppet Master China: It Has Achieved Spectacular growth rates

China has achieved spectacular growth for the last several years in a row, but a lot of that is based on malinvestment. Right now, steel mills and aluminium foundries are producing and storing far more than they can ever hope to sell, and they continue to build even bigger and larger mills. If this excess aluminium, steel, iron, copper etc, were ever dumped on the open market, the entire base metals market would take an extremely severe beating.

There is one more possibility. We have always stated that the Chinese are advanced chess players because they have an uncanny ability to plan for events in the future that most individuals or nations will miss.

What if China was actually building all these mills and buying up all these raw materials as a form of wealth diversification? They have billions of dollars in reserve; if they started to buy just Gold, platinum, or palladium, they would drive these markets to insane levels. They also cannot just dump the dollar for the Euro; they would hurt themselves in the process. Hence one way to do this subtly would be to buy every single commodity possible.

Engaging Read: Technical Analysis Of Stocks And Commodities

Is China diversifying and putting some of its money into hard assets? 

Coke (Raw Iron) producers produced so much last year that supply exceeded demand by over 100 million tons. Steel supplies exceeded demand by over 120 million tons last year, and the list continues. In 2005 investments in this sector grew by 25%, and even though supplies far exceed demand, it appears this sector will increase by another 20% plus this year. This will result in even larger surpluses this year. Normally, such an event would cause prices to tumble but note that raw material prices continue to rise. In between, yes, there are corrections, but the main up-trend line for most basic raw materials is still intact. This means that the only logical conclusion one can draw is this excess supply is not making its way to the markets but is being tucked away for maybe a rainy day.

The fly that does not want to be swatted is safest if it sits on the fly swat.

Georg C. Lichtenberg 1742-1799


Originally written on Sept 12, 2006, this piece has been regularly updated over the years, with the most recent update occurring in March 2023.

Other Articles Of Interest

Amazon fake reviews

Faking It: Navigating the Realm of Fake Amazon Reviews

 Deceptive Echoes: Unmasking the World of Fake Amazon Reviews Jan 9, 2024 In the digital era, online shopping has become ...
Iran Nuclear Deal News: can diplomacy win

Iran Nuclear Deal News: Navigating Global Diplomacy and Uncertainties

Navigating Iran Nuclear Deal News: Past, Present, and Future Uncertainties Jan 4, 2024 Intro: The Prospects of the Iran Nuclear ...
Health Horizons: Harnessing the Potential of Alpha-Ketoglutarate

Current Fed Interest Rate Stance Equates To Rubbish

Beware of all enterprises that require a new set of clothes. Henry David Thoreau Current Fed Interest Rate Stance Akin ...
dow 30

Dow 30 Stocks: What Do They Reveal

Dow 30 Stocks Updated Dec 31,  2023 So, what is the Dow 30? Well, according to Wikipedia The Dow Jones ...
Iran Nuclear Deal 2022: Tracing Past, Present, and Future Perspectives

Iran Nuclear Deal 2022: Past, Present, and Future Perspectives in 2023

Updated Dec, 2023 Iran Nuclear Deal 2022: Charting the Chilling Journey The Iran nuclear deal has become a contentious pawn ...

The rent is too damn high: Are you a cost-burdened renter?

 The Rent is Still Too High: An Updated Look at the Housing Crisis Updated Dec 2023 Despite the economic recovery ...
Americans waste 33 percent of their Food

Americas Wasted Food: Americans waste 33 percent of their Food

Editor: Vladimir Bajic | Tactical Investor  Americas Wasted Food - A Call for Action Updated Dec 2023  In the United ...
9 Ways to Build Wealth: Unlocking Financial Abundance

9 ways to build wealth in the stock market

Great things are done when men and mountains meet. This is not done by jostling in the street. William Blake ...
Demystifying Online Addiction: Navigating the Digital World

Online addict: Unveiling the Underlying Patterns

The Enigma of an Online Addiction: Navigating the Abyss Updated on Dec 24, 2023 Our lives are increasingly intertwined with ...
Earth's Energy Balance and Its Impact on Climate Change: 30% Reflected to Space

Decoding Earth’s Energy Ballet: Dance with Climate Change Dynamics

Harmony Unraveled: Navigating Earth's Energy Balance Amidst Climate Change Updated Dec 15, 2023 Introduction  The Earth's energy balance, an intricate ...
Efficient Allocation of Resources: Fight the crowd and win

Efficient Allocation of Resources: Unlocking Stock Market Success

Optimize gains with Efficient Allocation of Resources in the stock market Updated Dec 12, 2023 In the republic of mediocrity, ...
Human Sex Trafficking - U.S. Envoy Urges Sudan to Assume Its Responsibilities

Human Sex Trafficking Shows No Signs Of Abating

Editor: Draco Copper | Tactical Investor Latest Insights on Human Trafficking: A Call for Global Action Updated Dec 12, 2023 ...
 Best Cheap VPNs: Pros and Cons of Using a VPN

Best Cheap VPNs: Pros and Cons of Using a VPN

 Best Cheap VPNs Dec 05, 2023 In today's interconnected world, where online privacy and data security are paramount, Virtual Private ...
Student debt news: Outlook from bad to worse

Student Debt News: Soaring at $2,800 Every Second

Student Debt News: Levels Soar Uncontrollably Updated Dec 03, 2023 The student debt crisis in the United States is a ...
Americans Looking Forward To Paying With Facial Recognition technologies

Embracing Facial Recognition Technologies: The Future of Payments!

Editor: Vladimir Bajic | Tactical Investor The Face of Future Payments: America's Embrace of Facial Recognition Technologies Dec 2,  2023 Introduction: ...

Nickel Has Put In A long Term Bottom; What’s Next?  (July 31)

AMD vs Intel: Who Will Dominate the Landscape going forward (June 28)

Fiat Currency: Instruments of Mass Destruction     (June 18)

The Retirement Lie The Masses Have Been Conned Into Accepting (June 15)

Stock Market Bull 2019 & Forever QE  (June 13)

Forever QE; the Program that never stops giving    (May 31)

Trending Now News Equates To Garbage; It’s All Talk & No Action  (April 24)

Americans Are Scared Of Investing, And The Answer Might Surprise You  (March 9)