This one pisses me off

[southsider2k5]

So the Chinese government wants to buy an American Oil firm, and because Congress doesn't like it and passed a resolution urging the US government not to allow this to happen, the Chinese government had this to say...

 

We demand that the U.S. Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of the two countries

 

Excuse me? Are you f***ing kidding me? This is coming from one of the most predatory trading partners in the world. Their textile and steel industries are amongst the most heavily subsidized in the world, their currency, the Yuan, isn't allowed to free float like it should, instead it is pegged to the Dollar, at the expense of the US consumer. The Chinese still have archane laws regarding foreign ownership of companies in China that say Chinese have to have a controlling interest in any venture, and they have the NERVE to say some crap like that about us trying to protect a national interest such as energy supply? Maybe if the Chinese for once allowed for "normal" commercial exchanges between the US and China it wouldn't be a problem. Hell the US didn't bat an eye when equal level trading partner Britian's British Petroleum bought US firm Amacco.

 

What a joke.

 

[/rant]

 

http://www.washingtonpost.com/wp-dyn/conte...0400551_pf.html

[NUKE_CLEVELAND]

15 years ago everyone was worried about Japan doing the same thing that China is doing now and they're in what their 10 straight year of recession or flat growth? China is having their moment in the sun now but they're gonna have their issues in the coming years.

[kapkomet]

15 years ago everyone was worried about Japan doing the same thing that China is doing now and they're in what their 10 straight year of recession or flat growth?  China is having their moment in the sun now but they're gonna have their issues in the coming years.

I think you're wrong, Nuke. China is no Japan, nor will they commit the same foolish mistakes. They are a patient people, and I GUARANTEE you they are the next superpower, and ready to pounce on our ass. I have a lot more thoughts behind this, but China will make Japan look like amateurs when they come and screw our economy.

[NUKE_CLEVELAND]

I think you're  wrong, Nuke.  China is no Japan, nor will they commit the same foolish mistakes.  They are a patient people, and I GUARANTEE you they are the next superpower, and ready to pounce on our ass.  I have a lot more thoughts behind this, but China will make Japan look like amateurs when they come and screw our economy.

 

 

True that they can screw our economy over but we can screw theirs over twice as hard. Thee depend on us to buy their exported goods and without that they're really in the hurt locker. That's why they haven't been a lot more aggressive economically and over issues like Taiwan.

[kapkomet]

Answer me this. Why are they buying oil like it's going out of style when they have oil that they can tap?

 

Answer: because they are trying to push our market over the edge because they know our dependency on it. I'm telling you, these people know what they are doing, and they are about to kick our ass because of our shortsighted arrogance.

[KipWellsFan]

Aren't there a ton of US factories in China?

[NUKE_CLEVELAND]

Answer me this.  Why are they buying oil like it's going out of style when they have oil that they can tap? 

 

Answer:  because they are trying to push our market over the edge because they know our dependency on it.  I'm telling you, these people know what they are doing, and they are about to kick our ass because of our shortsighted arrogance.

 

 

Do the Chinese have the infrastructure to extract that oil? I dont know, I'm just asking. If not then it would be logical for them to be an importer of oil to satisfy their growing demand until they can produce what they need. High oil hurts them as much as it hurts us.

 

So far higher oil hasn't hurt out economic growth very much and I've heard it said on CNBC many times that at least 10 dollars of the price of a barrel of oil is the so called "terror premium". I really do want to see us get serious about developing a viable alternative to oil though because eventually it's really going to hurt us just later instead of sooner IMO.

[NUKE_CLEVELAND]

Aren't there a ton of US factories in China?

 

 

Yes.

[Balta1701]

Answer me this.  Why are they buying oil like it's going out of style when they have oil that they can tap? 

 

Answer:  because they are trying to push our market over the edge because they know our dependency on it.  I'm telling you, these people know what they are doing, and they are about to kick our ass because of our shortsighted arrogance.

Um, I could have swore they were buying oil like it was going out of style because a.) there is a limited production rate at oil fields (i.e. you can't just increase production rate to infinity because you want to), and b.) their demand for oil has swelled massively over the past decade as their economy has grown by 10%+ per year, to the point that they've gone from being a net exporter of oil in the early 90's to a major importer now.

 

This isn't some wierd scheme by China to keep the price of oil high - that hurts their development as well, because it becomes more expensive to run those factories in China and then ship product over to the U.S.

[jackie hayes]

I'm no expert on energy, but I'm pretty sure Unocal is not enough to establish a stranglehold over the US oil supply. China's not going to be able to dictate a price to us. They think the company's worth more than anyone in the US does. What's the big deal?

 

The thing is, they are going to buy tons of resources in the US no matter what, because of their huge trade surplus. If it's not Unocal, it'll be something else. That's not because they have some ploy, it's just accounting -- we're buying lots of stuff from China, they have to spend the dollars somehow (and they've got plenty of government debt already). The ONLY way this'll change is if Americans start saving more. It's all our fault that we own less wealth. No investment, no wealth. Pretty simple.

[kapkomet]

There's a lot more complexity in this then meets the eye. I have a lot of work to do - I'll post more later on this.

 

But China knows exactly what they are doing to the marketplace.

[southsider2k5]

Both Japan and China have huge major faults in their economic system.

 

Japan would still be a huge world economic power, if their banking system weren't utter trash. They refuse to write off bad debts that have no hope of being collected, so those numbers sit on their books perpetually and that money can't used as new loans to stimulate spending. They also have an incredibly low spending rate, which means almost all of their growth comes from investment, which can't happen because the banking system is handicapped.

 

China's big downfall is going to be their own rules. They refuse foreign ownership, which severely limits their capital pool for investment growth. They also still are subject to the whims of the communtist party, and all of the ineffeciencies that go with that. Their sheer numbers are something to be afraid of though, IF they can raise thier standard of living nationwide. Right now such a chunk of China is poor peasants that their growth is limited to the part of the population that is upwardly moble and has access to money.

[kapkomet]

Both Japan and China have huge major faults in their economic system. 

 

Japan would still be a huge world economic power, if their banking system weren't utter trash.  They refuse to write off bad debts that have no hope of being collected, so those numbers sit on their books perpetually and that money can't used as new loans to stimulate spending.  They also have an incredibly low spending rate, which means almost all of their growth comes from investment, which can't happen because the banking system is handicapped.

 

China's big downfall is going to be their own rules.  They refuse foreign ownership, which severely limits their capital pool for investment growth.  They also still are subject to the whims of the communtist party, and all of the ineffeciencies that go with that.  Their sheer numbers are something to be afraid of though, IF they can raise thier standard of living nationwide.  Right now such a chunk of China is poor peasants that their growth is limited to the part of the population that is upwardly moble and has access to money.

 

Which, by pure #'s alone is a lot more then the US population. That's sort of scary that there are that many poor people, yet, only a fraction (representing the money holders) of their population is more then our entire population.

[southsider2k5]

One more thought on oil prices, independant of China and everyone else...

 

What do the last two major price spikes in the price of oil have in common? (early 90's and now)

[NUKE_CLEVELAND]

One more thought on oil prices, independant of China and everyone else... 

 

What do the last two major price spikes in the price of oil have in common? (early 90's and now)

 

 

 

War in the middle east.

 

It makes sense that this spike is worse than the last one because of the "terror premium" I mentioned before.

[southsider2k5]

War in the middle east.

 

It makes sense that this spike is worse than the last one because of the "terror premium" I mentioned before.

 

You are right on the first part.

 

On the second part, think differently. I am taking you guys down a road that neither party has had the guts to talk about. Its not terror premium I am talking about here.

[NUKE_CLEVELAND]

You are right on the first part.

 

On the second part, think differently.  I am taking you guys down a road that neither party has had the guts to talk about.  Its not terror premium I am talking about here.

 

 

The terror premium is part of it for certain but another issue that I keep hearing is that the supply capacity and demand are roughly balanced right now and any disruption.......or potential disruption......( oil is up almost 1.70 a barrel today because of some weak tropical storm which is making its way through the Gulf of Mexico ) causes the price of oil to get bid up. This is from Rick Santelli who does coverage of the commodities and bond markets from Chicago for CNBC.

 

 

Back to your point though, are you referring to the fact that the government isin't serious about alternative energy at all?

Edited July 6, 2005 by NUKE_CLEVELAND

[southsider2k5]

The terror premium is part of it for certain but another issue that I keep hearing is that the supply capacity and demand are roughly balanced right now and any disruption.......or potential disruption......( oil is up almost 1.70 a barrel today because of some weak tropical storm which is making its way through the Gulf of Mexico ) causes the price of oil to get bid up.  This is from Rick Santelli who does coverage of the commodities and bond markets from Chicago for CNBC. 

Back to your point though, are you referring to the fact that the government isin't serious about alternative energy at all?

 

Alternative energy is only as good as the people who are willing to use it. There is not much appreciable demand for it, so it flouders in this current enviornment.

 

Supply disruption fears are a product of extreme demand. It is mostly causation of the fact that we are at capacity. Anything causes supply disruptions now, whereas historical when you have spare production capacity, you just switch to the spare capacity. Right now you don't have that luxury, so something that 5 years ago wouldn't have mattered, now gives speculators a chance to run up the price of crude.

 

The question that no one is asking is why are we at capacity? I think I know why, and I wish I had a way to test my theory.

[NUKE_CLEVELAND]

Alternative energy is only as good as the people who are willing to use it.  There is not much appreciable demand for it, so it flouders in this current enviornment. 

 

Supply disruption fears are a product of extreme demand.  It is mostly causation of the fact that we are at capacity.  Anything causes supply disruptions now, whereas historical when you have spare production capacity, you just switch to the spare capacity.  Right now you don't have that luxury, so something that 5 years ago wouldn't have mattered, now gives speculators a chance to run up the price of crude.

 

The question that no one is asking is why are we at capacity?  I think I know why, and I wish I had a way to test my theory.

 

 

Well what is your theory? I keep hearing that explosive growth in China's economy is driving up demand.

Edited July 6, 2005 by NUKE_CLEVELAND

[kapkomet]

I know, I know!

 

It COULDN'T be that we are hoarding supplies for, *ahem*, a rainy day?

 

Maybe for something like my avatar...

[Balta1701]

The question that no one is asking is why are we at capacity?  I think I know why, and I wish I had a way to test my theory.

Actually a lot of people are asking that question. Here is the best answer I can give you; we're at capacity because there's a limit to how much oil is in the ground and how fast it can be pumped out.

[JUGGERNAUT]

They are still working on pipelines spanning 1000's of miles from the Caspian Sea. They are setting themselves up to be the main buyers of oil from Iraq & Iran.

 

Japan was a democracy that had to answer to elections & legislative debate.

China is not. China will pounce on our arse like a 600 pd Gorilla. They are buying up land & factories left & right in S America to take away our last remaining option of building a strong W Hemisphere trade block. It's game over & we're going down ...

 

... unless we act now & pass laws demanding retailers provide shelf space for US manufacturers. We need to subsidize these manufacturers with tax breaks for buyers. We can't just sit on our arse & cling to the capitalism of the past while China does whatever they want with little to no consequence for their actions.

[Balta1701]

Juggernaut...for the most part, the oil fields in the Caspian sea area have turned out to be disappointing in their volume and production yields. They'll produce some, but even adding in pipelines won't be enough to keep up with the global growth in oil demand.

[YASNY]

Look at the thread title ... then look at this:

 

China's big downfall is going to be their own rules. They refuse foreign ownership

 

What's wrong with this picture?

[kapkomet]

Look at the thread title ... then look at this:

What's wrong with this picture?

Nothing - well, that's even more why I think we're gonna get our ass kicked on this.

 

Juggs is on the right track.

 

And the Caspian Sea has been disappointing because they can't move the oil out of there. It's there, and a lot of it, the problem is getting it out of there.