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  1. #1
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    Oct 2010

    Californian missile mystery elevates to Conspiracy

    California Missile Mystery Elevates To Conspiracy Theory Status.

    Original Link: http://beforeitsnews.com/story/263/0...ry_Status.html

    The California Mystery Missile has now gained conspiracy theory status in the country. Many people are even stating that this object, that was seen in the Californian skies was actually a missile fired from an enemy country, and some even state that it was US cruise missile which has been accidentally fired.

    Explanations are getting bizarre by the day and people are coming up all sorts of theories to describe this object. Earlier this week the citizens from California we astonished to find an object that looked like a missile soaring in the sky and this panicked them. But as a matter of fact this some thing that even NORAD or the ministry of defense cant explain.

    According experts this is nothing more than just a fighter plane, with it contrail left behind, and people are just hyping the whole incident to be a missile fired. In fact the video itself was shot in such a way that the fighter jet looked like a missile. For now there is nothing be feared about but people are still seeking a positive explanation from the government.

    Click for CBS video


    Alleged Cover-Up Of Mystery Missile Trail Over SoCal Skies?

    laweekly - As far as conspiracy theories go, this one is huge, because it requires the cooperation of not only the U.S. Armed Forces, the Federal Aviation Administration and major airlines, but it also requires little old us to be in on the deal.

    After all, we like nothing better than to uncover conspiracies, wrongdoing and other secrets so we can get more readers and win awards.

    But it looks like we had to get with the program on the missile-trail mystery of 2010. Sure, we admit it, it was a secret missile launch, an alien spaceship being shot back to space, or whatever else you think it was.

    Because logic just doesn't cut it in this online world.

    Our commenter of the day, Michael, writes:

    It was not a plane and if you buy that story well then you are flat out an idiot and deserve to believe your brain gained knowledge. That is one of the worse stories covering up the fact you really don't know I have heard.

    He goes on to insult the intelligence of the people of California.

    To which we point out that we elected Arnold and Jerry Brown (three times) didn't we?


    For posterity, the Pentagon’s response was as follows:

    The Department of Defense said Wednesday that it was satisfied the event was likely caused by an airplane.

    “With all the information that we have gathered over the last day and a half about this condensation trail off the coast of southern California on Monday night, both within the DoD and other U.S. government agencies, we have no information to suggest this was anything other than a contrail caused by an aircraft,” said Col. David Lapan, a Pentagon spokesman.

    “As stated yesterday, NORAD and USNORTHCOM determined that there was no threat to the U.S. homeland.”

    Response from all other government agencies saying they did not launch anything convinced the DoD this was likely an aircraft:

    “The Department of Defense, after gathering info over the last 36 hours from within the Department of Defense and other U.S. government agencies, is satisfied the contrail was likely caused by an aircraft.”


    Theodore Postol, a professor of science, technology and international security at the Massachusetts Institute of Technology, is not yet convinced. The Pentagon, he wrote in an e-mail, has provided no detailed information to support the aircraft claim. “One of their jobs is to provide air surveillance for the country, and they should be able to provide a convincing analysis supported by data for their conclusion,” said Postol, who furnished photographs of the mystery contrail along with remarkably similar pictures of solid-propellant missile launches. “I do not know what to think at this point,” he said, “but one thing is for sure, the Pentagon has not provided a plausible explanation of the observed event.”


    Observations from an anonymous source at DBKP which contradict the jet aircraft contrail claim:

    The video footage of the missile in California is authentic. The contrail, said to be coming from the horizon and moving toward the shore of CA, is bogus. Visibility (for one) to the horizon is roughly 50 miles at best before the curvature of the earth makes it impossible to see beyond that while at ground level.

    The contrail is said to be from an aircraft. Bogus info again.

    A contrail can only exist when an aircraft is at, or above, 22,000 feet. This is due to condensation from the cool air moving around the hot areas of the aircraft. (engines). When the hot air hits the cool air it creates a vapor trail (contrail). A contrail below 22,000 feet isn’t possible unless the surrounding air is at, or below, -20F (Does not include wind chill factor). The aircraft must be moving at the speed of sound (768 mph). Also due to the lower pressure in altitude.

    Next observation is that the contrail is from a 2 stage rocket.

    If you look closely at the contrail at mid point the ‘contrail’ breaks off from a ‘fat’ trail to a more ‘skinny’ trail. This is due to multiple booster rockets breaking off and moving to the main booster engine which is a single rocket. (For verification look up NASA shuttle launches.) The contrail is moving upward and not at a slant or straight line. Careful observation will show that should the contrail have been further out to sea with the curvature of the earth and the setting sun, the lower part of the contrail would have been a much richer orange/red color. The video shown does not contain this.

    *Numerous people witnessed the rocket moving upward into the skyline.

    *The rocket boosters’ fire was seen at the base of the rocket.

    Other so called experts claimed the ‘shiny’ or bright area was due to the sun bouncing off the reflective part of the aircraft. This is crazy talk, a plane moving at that speed and that far into the atmosphere would have had too much vapor around it to have a reflection from the sun. The ‘reflection’ could only be seen by people in a specific area since the outer part of the plane would act as a CONVEX reflective area (Research CONVEX LENS for more info on the reflection material).

    The front of the aircraft (the nose) is in cool air with the cooler air moving along the outer frame. As the nose is pushing through the air and creating drag the aircraft would be less reflective due to the force of the wind-particles including dust which still exist that far into the atmosphere. Even though the aircraft is moving faster than the speed of sound (768 mph) it still hits dust regardless of the broken barrier. The visible reflective area of the plane would have to be hit just right in order to shine sunlight down at the right angle to show that bright (said) reflective light.

    I'm going with a possible Julang 1 missile from a china sub type 094.


    Anyone else?.

    You might consider our threats over their Iran oil imports and the G20 summit we snubbed China on.

  2. #2
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    Empire - The China Arms Race - American military threat.

    Over the last decade, Washington has doubled its military budget, fuelling massive military build-ups around the world, from the emerging powers in the South China Seas to the multi-billion-dollar arms deals in the Middle East, begging the question where and when this vicious cycle of rising military expenditures will end. Empire asks: what justifies this global military addiction, or, has the world been duped by the multi-national, military industrial complex?.

  3. #3
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    China advancing laser weapons program
    Technology equals or surpasses U.S. capability.

    Original Link: http://www.wnd.com/?pageId=1862

    Posted: November 22, 1999
    1:00 am Eastern

    By Jon E. Dougherty
    © 2010 WorldNetDaily.com

    Not only is the Chinese military advancing rapidly in the field of anti-satellite, anti-missile laser weapon technology, but its technology equals or surpasses U.S. laser weapons capabilities currently under development, informed sources have told WorldNetDaily.

    According to Mark Stokes, a military author specializing in Chinese weapons development, Beijing's efforts to harness laser weapons technology began in the 1960s, under a program called Project 640-3, sanctioned by Chairman Mao Zedong. The Chinese, he said, renamed the project the "863 Program" in 1979, after a Chinese researcher named Sun Wanlin convinced the Central Military Commission "to maintain the pace and even raise the priority of laser development" in 1979.

    Today, Beijing's effort to develop laser technology encompasses over "10,000 personnel -- including 3,000 engineers in 300 scientific research organizations -- with nearly 40 percent of China's laser research and development (R & D) devoted to military applications," Stokes wrote in an analytical paper provided to WorldNetDaily.

    China's "DEW (Directed ****** Weapons) research (is) part of a larger class of weapons known to the Chinese as 'new concept weapons' (xin gainian wuqi), which include high power lasers, high power microwaves, railguns, coil guns, (and) particle beam weapons," Stokes said. "The two most important organizations involved in R&D of DEW are the China Academy of Sciences and the Commission of Science, Technology and Industry for National Defense (COSTIND)."

    To underscore Beijing's fixation with laser weaponry, the Hong Kong Standard reported Nov. 15 that the Chinese have developed a laser-based anti-missile, anti-satellite system.

    "China's system shoots a laser beam that destroys the [guidance systems] and causes the projectile to fall harmlessly to the ground," the paper said.

    The report also noted that Beijing had "conducted tests of its new technology since August 1999," and said the system was "similar to the laser defense system technology being developed by the U.S. Air Force."

    Rick Fischer, a congressional Chinese military hardware expert, told WorldNetDaily that recent photographs of Chinese main battle tanks taken during military parades held in celebration of China's 50th anniversary of Communism in October showed "what was described as a photoelectric device that may have been a ground-based laser equivalent" of the same ASAT system.

    Fischer said the U.S. is currently developing a similar weapon, whereby "a ground-based laser would be capable of producing a 'dazzle'" strong enough to knock an incoming missile off course."

    However, he cautioned, "the Chinese may have beat us to the punch," though he said attempts to classify the new battle tank equipment as "definitely laser technology" were inconclusive.

    As early as 1997, the Army reported successfully test-firing a ground-based laser called MIRCL at an orbiting Air Force MSTI-3 research satellite as it passed over the Army's White Sands, New Mexico, test facility. According to one published report, "Two bursts from the chemical laser struck a sensor array on the MSTI-3 craft." The U.S. firms Boeing and TRW are also developing an airborne laser defense system, fitted to a cargo model of the 747 airliner, that would be capable of targeting incoming ICBMs and other medium-range missiles, either destroying them or rendering them incapacitated.

    U.S. officials downplayed the results of the Army's laser tests, saying only that they were "a research experiment, not a step towards a space weapon."

    But since the Hong Kong newspaper account, officials and experts in the United States have begun to re-examine the issue of Chinese military laser technology, which now may be even more advanced than developments first revealed by the Cox Committee.

    According to the Cox report, Beijing had already managed to obtain sensitive laser technology enabling them to test miniature nuclear weapons and to assist the Chinese navy in locating hard-to-find U.S. nuclear submarines.

    Unclassified documents provided to WorldNetDaily also provide detailed technical information on new Chinese beam director designs for high-powered laser weapons -- specifically those designed for eventual "anti-satellite missions," anti-missile applications and for blinding combatants in the field. Stokes said the Chinese were especially interested in the development of "free electron laser" weapons, "because they have a number of advantages, including their adjustable wavelength and bandwidth and their potential range of 5,000 kilometers."

    According to documents, Li Hui, Director of the Beijing Institute of Remote Sensing Equipment, a developer of optical precision and photoelectronic guidance systems for surface-to-air missiles, "has cited laser technology as the only effective means to counter cruise missiles."

    Hui has "encouraged the acceleration of laser weapons development," the documents said, while stressing that an "anti-cruise missile laser weapon" already developed by China "utilizes...the most mature high-****** laser technology, the deuterium-fluoride (DF) chemical laser."

    "Li Hui's statement advocating ground-based laser weapons for use against missiles is not the first by a Chinese weapons developer," the documents said. "The 1028th Research Institute (RI) of the Ministry of Information Industry, a major Chinese developer of integrated air defense systems, has analyzed the use of lasers in future warfare. Such uses include active jamming of electro-optics, blinding combatants and damaging sensors, causing laser-guided weapons to deviate from their true targets, and target destruction."

    The 1028th's analysis, the papers said, "concluded with the statement, 'The appearance of laser weapons will have a significant impact on modern warfare. On today's electronic battlefield, it is natural for defensive systems to use low-****** laser weapons to damage enemy electronic equipment. When high-****** lasers that can directly destroy tanks, planes and ships develop and mature, they will be formidable offensive weapons.'"

    Stokes' research supports the Cox Committee's conclusions about Chinese intentions to build a variety of high-tech laser weapons. Though he said "there is no proof or strong indication that development" of such weapons "is in a more advanced stage in China than in the U.S.," he notes that China's People's Liberation Army "is placing greater emphasis on lasers and their potential military applications."

    "The Academy of Military Science, the PLA's leading think-tank on future warfare," Stokes said, "believes lasers will be an integral aspect of 21st century war."

    /news/archives.asp?ARCHIVE_ID=16Charles Smith, a WorldNetDaily staff writer and founder of Softwar, wrote Jan. 26 that new Chinese laser systems not only are rapidly advancing, but they incorporate microchip technology obtained through export from the U.S.

    "The Clinton administration allowed the export of advanced radiation-hardened microchip technology, vital electronic components for military satellites and nuclear weapons, to Russia and China," Smith wrote. The technology allowed China to build air-defense laser systems powerful enough to deliver an "estimated...10,000 watts of output power on a target up to 500 miles away." Smith said the Chinese are preparing to deploy "an even more powerful ground-based laser by the year 2000."

    The Pentagon declined to comment on current Chinese laser weapons development, but most experts who spoke with WorldNetDaily believe the Chinese have obtained advanced laser technology from multiple sources. They also believe Beijing is involved in an ongoing plan to "acquire" new laser weapons technologies either by producing them domestically, buying them or through espionage.

    William Triplett II, co-author of the Chinese espionage bestseller, "Year of the Rat," and a new book detailing Chinese military prowess called "Red Dragon Rising," said he believed Beijing may have stolen some U.S. ASAT and laser technology, but indicated that in the end that may prove to be a small part of their developmental process.

    "Right now the Chinese are in the cat-bird seat," he said. "They have holes in their capabilities, but they have access to cutting-edge military technology from both Russia and the U.S. What they couldn't get from us they have bought from Moscow."

    Triplett said that while China's use of laser technology was "advanced," Beijing's ASAT and anti-missile laser weaponry was "not yet equal" to U.S. capabilities.

    "The degree to which espionage" was involved with Chinese acquisition of laser technology "is really not clear," said Fischer. "We can assume with a high degree of certainty that Beijing is seeking Russian laser technology, but they themselves have devoted enormous resources" to the research and development of laser weaponry, he said.

    Stokes added, "Chinese analysts see directed ****** weapons as important for China's air defense and counterspace efforts. DEW efforts also reflect a diversification of China's nuclear weapons industry."

  4. #4
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    I smell a rat with the sudden emergence of these "China has suddenly become technologically more advanced than America" stories to be honest. Somebody, somewhere is releasing this stuff, I doubt it just came out of nowhere.

    Key question: Who benefits?

  5. #5
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    Empire - Military build-ups around the world - USA Leading us In To WW3.

    Over the last decade, Washington has doubled its military budget, fuelling massive military build-ups around the world, from the emerging powers in the South China Seas to the multi-billion-dollar arms deals in the Middle East, begging the question where and when this vicious cycle of rising military expenditures will end. Empire asks: what justifies this global military addiction, or, has the world been duped by the multi-national, military industrial complex?.

  6. #6
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    China’s military prowess on full display at air show.

    Original Link:http://www.taipeitimes.com/News/taiw...2/2003489151/1

    Showoff: While China’s military planning has usually been kept under wraps, this show contained details on how it could counter an aircraft carrier.

    By J. Michael Cole / Staff Reporter.

    Efforts by the Chinese military to modernize its aerospace capabilities were on full display at the eighth China International Aviation and Aerospace Exhibition that concluded in Zhuhai, Guangdong Province, China, yesterday, with no less than 25 unmanned aerial vehicles (UAV) on display.

    According to a report in Defense News, three Chinese companies — ASN Technology Group, China Aerospace Science and Industry Corp (CASIC) and China Aerospace Science Technology Corp (CASC) — produced the majority of the UAVs unveiled at the show.

    The different models served various roles, from combat to battlefield reconnaissance, reports said.

    The most sophisticated models, Defense News wrote, were -produced by CASIC and CASC — the main provider for China’s space program — which had systems designed not only to locate targets, but to destroy them as well.

    One model, the CH-3, was a multipurpose medium-range UAV platform suitable for battlefield reconnaissance that could be modified as a precision-attack platform using air-to-ground missiles similar to the US’ Hellfire.

    In one promotional video, a WJ-600 drone produced by CASIC was seen locating an aircraft carrier and relaying the information to a coastal defense center for possible attack by anti-ship missiles, Defense News reported.

    Also noteworthy were signs of growing assertiveness by the Chinese, who had traditionally kept “a low profile, especially when it comes to military planning,” -Russell Hsiao, editor of the Jamestown Foundation’s China Brief, wrote in an article published on Friday.

    The Global Times reported last week that a detailed diagram in the main hall of the air show depicted an integrated “Coastal Defense System” of Chinese ground, naval, air and space assets coordinating an attack on an unflagged aircraft carrier group approaching a small island off the coast of China.

    This was the first time CASIC has publicly showed how the Chinese military could counter an aircraft carrier group ostensibly heading for the Taiwan Strait, which dovetailed with increasing signs that the People’s Liberation Army is developing a variety of “area denial” platforms to complicate US intervention in a Taiwan contingency.

    “The prominent role of UAVs at the air show also suggests that its battlefield applications are becoming more defined in Chinese defense planning,” Hsiao wrote.

  7. #7
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    China Fired Missile Seen In Southern California.

    Original Link http://www.waynemadsenreport.com/

    Pentagon and its embedded media covering up Chinese show of force off LA

    China flexed its military muscle Monday evening in the skies west of Los Angeles when a Chinese Navy Jin class ballistic missile nuclear submarine, deployed secretly from its underground home base on the south coast of Hainan island, launched an intercontinental ballistic missile from international waters off the southern California coast. WMR’s intelligence sources in Asia, including Japan, say the belief by the military commands in Asia and the intelligence services is that the Chinese decided to demonstrate to the United States its capabilities on the eve of the G-20 Summit in Seoul and the Asia-Pacific Economic Cooperation summit in Tokyo, where President Obama is scheduled to attend during his ten-day trip to Asia.

    The reported Chinese missile test off Los Angeles came as a double blow to Obama. The day after the missile firing, China’s leading credit rating agency, Dagong Global Credit Rating, downgraded sovereign debt rating of the United States to A-plus from AA. The missile demonstration coupled with the downgrading of the United States financial grade represents a military and financial show of force by Beijing to Washington.

    The Pentagon spin machine, backed by the media reporters who regularly cover the Defense Department, as well as officials of the Federal Aviation Administration (FAA), North American Aerospace Defense Command (NORAD), and the U.S. Northern Command, is now spinning various conspiracy theories, including describing the missile plume videotaped by KCBS news helicopter cameraman Gil Leyvas at around 5:00 pm Pacific Standard Time, during the height of evening rush hour, as the condensation trail from a jet aircraft. Other Pentagon-inspired cover stories are that the missile was actually an amateur rocket or an optical illusion.

    Experts agree that this was a ballistic missile being fired off of Los Angeles. Pentagon insists it was a jet aircraft or model rocket.

    There are no records of a plane in the area having taken off from Los Angeles International Airport or from other airports in the region. The Navy and Air Force have said that they were not conducting any missile tests from submarines, ships, or Vandenberg Air Force Base. The Navy has also ruled out an accidental firing from one of its own submarines.

    Missile experts, including those from Jane’s in London, say the plume was definitely from a missile, possibly launched from a submarine. WMR has learned that the missile was likely a JL-2 ICBM, which has a range of 7,000 miles, and was fired in a northwesterly direction over the Pacific and away from U.S. territory from a Jin class submarine. The Jin class can carry up to twelve such missiles.

    Navy sources have revealed that the missile may have impacted on Chinese territory and that the National Security Agency (NSA) likely posseses intercepts of Chinese telemtry signals during the missile firing and subsequent testing operations.


    Japanese and other Asian intelligence agencies believe that a Chinese Jin-class SSBN submarine conducted missile “show of force” in skies west of Los Angeles.

    Asian intelligence sources believe the submarine transited from its base on Hainan through South Pacific waters, where U.S. anti-submarine warfare detection capabilities are not as effective as they are in the northern and mid-Pacific, and then transited north to waters off of Los Angeles. The Pentagon, which has spent billions on ballistic missile defense systems, a pet project of former Defense Secretary Donald Rumsfeld, is clearly embarrassed over the Chinese show of strength.


    Likely route of Jin-class submarine from Hainan base.

    The White House also wants to donwplay the missile story before Presidnet Obama meets with his Chinese counterpart in Seoul and Tokyo. According to Japanese intelligence sources, Beijing has been angry over United States and allied naval exercises in the South China and Yellow Seas, in what China considers its sphere of influence, and the missile firing within the view of people in Southern California was a demonstration that China’s navy can also play in waters off the American coast.

    For the U.S. Navy, the Chinese show of force is a huge embarassment, especially for the Navy’s Pacific Command in Pearl Harbor, where Japan’s December 7, 1941 attack on the fleet at Pearl Harbor remains a sore subject.

    In 2002, national security adviser Condoleezza Rice reportedly scolded visiting Chinese General Xiong Guankai, the deputy chief of staff for intelligence of the People’s Liberation Army, for remarks he allegedly made in 1995 that China would use nuclear weapons on Los Angeles. Xiong denied he made any such comments but the “spin” on the story helped convince Congress to sink billions of additional dollars into ballistic missile defense, sometimes referred to at “Star Wars II.”

  8. #8
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    China Retaliates Again, Accuses US Of "Out Of Control" Dollar Printing.

    Original Link: http://www.zerohedge.com/article/chi...ollar-printing

    After taking heat from the White House for nearly a year for its currency peg, a fact that in itself will never get China to loosen its regime as it would be perceived as yielding to pressure from D.C., China has once again gone on the offensive, this time via its commerce minister who earlier today said that dollar issuance in the U.S. is "out of control" which in turn is leading to an inflation assault on China. Of course, one simple way to deal with said assault would be to revalue the currency, but why do so if the world's biggest export economy benefits from the stupidity of the Federal Reserve. After all, the Fed's China monetary policy allows the US to continue to export inflation and to provide cheap Chinese goods to America's great unwashed masses of Wal Mart shoppers who enjoy cheap (but increasingly more expensive) products. Plus it is not as if China is not printing trillion in money of its own, however in the form of what the US used to do in the past, and do so in the form of cheap, NINJA credit. All in all, this is just another instance of a pot calling a kettle black, even as nothing ever changes.Well, one thing may change: imminent bubbles in ever more rare earth minerals, and soon, rice and rubber, will soon add to pressure in all other already inflating commodities. How companies will be able to pass through these costs to consumers, nobody seems to have either any idea, or care. Certainly not the Fed, which is very myopically welcoming this price change.

    Via Reuters:

    Chen Deming, speaking at a trade fair in southern China, said that exporters had done a good job of preparing themselves for exchange rate changes as well as rising labour costs, but were suddenly confronted with new challenges.

    "Because the United States' issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems," Chen was quoted as saying by the official Xinhua news agency.

    Chinese officials have criticised U.S. monetary policy as being too loose before, but rarely in such explicit language.

    At the G20 meeting in South Korea which ended on Saturday, Chinese Finance Minister Xie Xuren said that issuers of major reserve currencies -- code for the United States -- must follow responsible economic policies.

    Along with posing an inflationary risk, a weak dollar also places appreciation pressure on China's yuan since its value is so closely tied to the U.S. currency.

    And here is all one needs to know:

    Despite his concern about the impact of U.S. monetary policy, Chen gave a positive outlook for Chinese trade next year. He said export growth would be stable, while imports would increase strongly.

    In other words, status quo preserved.
    Last edited by $ick3nin.vend3tta; 11-24-2010 at 05:47 AM.

  9. #9
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    The currency war will lead to military war, mark my words.

  10. #10
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    U.S. China Currency War Drifting towards Military Conflict.

    Politics / GeoPolitics Oct 22, 2010 - 09:43 AM.

    By: Mike_Whitney

    Original Link: http://www.marketoracle.co.uk/Article23687.html

    Best Financial Markets Analysis ArticleThe United States conducts monetary policy the same way it conducts foreign policy; unilaterally. When Fed chairman Ben Bernanke signaled last week that he was planning to restart his bond purchasing program (Quantitative Easing) he didn't consult with allies at the IMF, the G-20 or the WTO. He simply issued his edict, and that was that. The fact that the Fed's policy will flood emerging markets with cheap capital, pushing up the value of their currencies and igniting inflation, is of no concern to Bernanke. He operates on the same theory as former Treasury Secretary John Connally who breezily quipped to a group of euro finance ministers, “The dollar is our currency, but your problem.”

    Bernanke's 15 report could have been reduced to nine words: Inflation is too low and unemployment is too high. That said, Bernanke is not going to sit back hemming and hawing until congress figures out that the economy needs more support. He's going to put downward pressure on the dollar until inflation rises to the target 2%, increasing the prospects for lower unemployment, a narrowing of the current account deficit, and a faster rebound. Economist Edward Hugh sums it up like this:

    “Unemployment in the United States (which is currently at 9.6%, and may reach 10% by the end of the year) is causing enormous problems for the Obama administration. The US labor market and welfare system are simply not designed to run with these levels of unemployment for any length of time. In Japan the unemployment rate is 5.1%, and in Germany it is under 8%. So people in Washington, not unreasonably ask themselves why the US should shoulder so much extra unemployment and run a current account deficit just to maintain the Bretton Woods system and the reserve currency status of the US Dollar.

    My feeling is that the US administration has decided to reduce the unemployment rate, and close the current account deficit, and that the only way to achieve this is to force the value of the dollar down. That way it will be US factories rather than German or Japanese ones that are humming to the sound of the new orders which come in from all that flourishing emerging market demand.”

    Bernanke has drawn the same conclusions as Hugh, but that doesn't mean his strategy won't inflict considerable damage on US allies. It will. His beggar-thy-neighbor QE program will force trading partners to implement capital controls and other protectionist measures to maintain price stability. QE will also lead to more competitive devaluation as the world's largest economies fight for a bigger share of the export market. The impending clash could bring about the dissolution of the present trade regime and a sharp reversal of 30-years of globalization.

    Bernanke's biggest problem is China. China was America's darling when it was loading up on Treasuries and fueling a historic consumption binge that filled Wall Street's coffers. But now that the purchase of US debt is preventing the Fed from implementing its monetary policy, Bernanke wants a change. Unfortunately, China is not cooperating. It's piling up foreign exchange reserves at record pace to maintain the dollar peg which is widening the current account deficit to precrisis levels. The yawning trade imbalance is pushing the world towards another crisis, which is why Bernanke and Co. are determined to persuade China to let its currency to appreciate to narrow the gap. (China's foreign exchange reserves surged to $2.65tr in the 3rd quarter)

    Bottom line: The Fed cannot jump-start the domestic economy if the trade deficit continues to grow. It's impossible. The stimulus just gets flushed down the plughole. China is soaking up the lion's share of global demand by underbidding the US on everything under the sun. That's the real effect of the dollar peg, it gives China an unfair advantage over its competitors. A free-floating currency helps to level the playing field (even if US labor is competing with some of the world's worst paid workers) Bernanke's announcement last Friday, is just the first shot fired over Beijing's bow. There will be more to come. This weekend's meeting of the G-20 provides Treasury Secretary Timothy Geithner with the perfect opportunity to put the spotlight on China and to rail against currency manipulation. Many expect him to make a strong statement demanding changes to the policy.

    An update by Reuters on Wednesday confirms the US position. Here's a blurp:

    “The United States wants Group of 20 finance chiefs to commit to allowing market forces to set currency values and will discuss using targets for trade to measure progress, a senior U.S. Treasury Department official said on Wednesday.

    Ahead of weekend G20 meetings in Gyeongju, South Korea, the U.S. official made clear Washington wants currency levels to be a focal point of the meetings and sees current account surpluses and deficits a vital part of the discussion....

    From our perspective we believe these issues are fundamentally, inherently linked and that it is important for the G20 to be able to undertake cooperative action facilitating orderly adjustment of imbalances and also ensuring more effective adjustment of exchange rates in line with economic fundamentals," the official said.” (“U.S. wants G20 commitment to allow currency rises”, Reuters)

    Neither the Obama administration nor the Fed want a full-blown trade war with China. They'd rather see China “assume its position in the global system”. (as US diplomats aver) But that means that China will have to compromise on, what it considers to be, a matter of national sovereignty. And, there's the rub. China is a proud nation and doesn't want to be told what to do. But that's not how the system works. Behind the facade of free markets and international institutions, lies an imperial system ruled from Washington. That leaves Beijing with two options; they can either bow to US pressure and fall in line or shrug off Washington's demands and continue on the same path. If they choose to resist, relations with the US will grow more acrimonious and the probability of conflict will rise.

    By Mike Whitney

  11. #11
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    Oct 2010

    Re: Californian missile mystery elevates to Conspi

    A step closer to WAR!.

    Original Link: http://www.chinadaily.com.cn/china/2...t_11599087.htm

    China, Russia quit dollar
    By Su Qiang and Li Xiaokun (China Daily)
    Updated: 2010-11-24 08:02.

    Premier Wen Jiabao shakes hands with his Russian counterpart Vladimir Putin on a visit to St. Petersburg on Tuesday.ALEXEY DRUZHININ / AFP

    St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

    Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

    "About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

    The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

    The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

    "That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries," he said.

    Putin made his remarks after a meeting with Wen. They also officiated at a signing ceremony for 12 documents, including ****** cooperation.

    The documents covered cooperation on aviation, railroad construction, customs, protecting intellectual property, culture and a joint communiqu. Details of the documents have yet to be released.

    Putin said one of the pacts between the two countries is about the purchase of two nuclear reactors from Russia by China's Tianwan nuclear power plant, the most advanced nuclear power complex in China.

    Putin has called for boosting sales of natural resources - Russia's main export - to China, but price has proven to be a sticking point.

    Russian Deputy Prime Minister Igor Sechin, who holds sway over Russia's ****** sector, said following a meeting with Chinese representatives that Moscow and Beijing are unlikely to agree on the price of Russian gas supplies to China before the middle of next year.

    Russia is looking for China to pay prices similar to those Russian gas giant Gazprom charges its European customers, but Beijing wants a discount. The two sides were about $100 per 1,000 cubic meters apart, according to Chinese officials last week.

    Wen's trip follows Russian President Dmitry Medvedev's three-day visit to China in September, during which he and President Hu Jintao launched a cross-border pipeline linking the world's biggest ****** producer with the largest ****** consumer.

    Wen said at the press conference that the partnership between Beijing and Moscow has "reached an unprecedented level" and pledged the two countries will "never become each other's enemy".

    Over the past year, "our strategic cooperative partnership endured strenuous tests and reached an unprecedented level," Wen said, adding the two nations are now more confident and determined to defend their mutual interests.

    "China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said.

    "The modernization of China will not affect other countries' interests, while a solid and strong Sino-Russian relationship is in line with the fundamental interests of both countries."

    Wen said Beijing is willing to boost cooperation with Moscow in Northeast Asia, Central Asia and the Asia-Pacific region, as well as in major international organizations and on mechanisms in pursuit of a "fair and reasonable new order" in international politics and the economy.

    Sun Zhuangzhi, a senior researcher in Central Asian studies at the Chinese Academy of Social Sciences, said the new mode of trade settlement between China and Russia follows a global trend after the financial crisis exposed the faults of a dollar-dominated world financial system.

    Pang Zhongying, who specializes in international politics at Renmin University of China, said the proposal is not challenging the dollar, but aimed at avoiding the risks the dollar represents.

    Wen arrived in the northern Russian city on Monday evening for a regular meeting between Chinese and Russian heads of government.

    He left St. Petersburg for Moscow late on Tuesday and is set to meet with Russian President Dmitry Medvedev on Wednesday.

    China, Russia to drop dollar in bilateral trade.

    Original Link: http://www.marketwatch.com/story/chi...ade-2010-11-23

    HONG KONG (MarketWatch) -- China and Russia will stop using the U.S. dollar to settle bilateral trade and instead use the ruble or the yuan, though the move is not meant to signal a challenge to the dollar, according to reports Wednesday.
    All trades for the major nations and most of the minor ones has been conducted in dollars.

    Now the dollar is being dumped by the two biggest users of it outside the US. This will mean hyperinflation in no time at all, exports will slow dramatically and imports will get very expensive.

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