China Declares Economic War
WSJ says don't trip over that whole China tire tariff thing, and I sort of agree with them. There are bigger fish to fry with this particular dish of chow mein, kids.
China on Monday called for talks over the China-U.S. trade dispute in a sign the disagreement may be containable, as evidence emerged that the economic value of the affected sectors is relatively small.
China's Ministry of Commerce is referring the U.S. move to levy punitive import duties on Chinese tires to the World Trade Organization, ministry spokesman Yao Jian said. "China's move to seek consultations with the U.S. is a legitimate act in line with a WTO member's rights and a practical step to protect one's own interests," he said in a statement on the ministry's Web site.
China's rapid action in taking the case to the WTO highlights the continued trade tensions between the two nations, but also that China is eager to keep the dispute within the framework of international law.
One reason for that, analysts said, is that the amounts involved are thus far not too great. In interviews with state media on Monday, an official from the Chinese rubber industry said the U.S. decision on Friday to impose tariffs on Chinese tire exports to the U.S., would cost it $1 billion a year in exports. While the figures could not be verified, if accurate the amount is less than one-tenth of 1% of China's total exports of $1.43 trillion.
Jim Sinclair covered the story that *actually* matters, not this little bitch ass tire tariff crap. Make sure you're watching the right bouncing ball here. I am not kidding.
Reported Chinese actions to unilaterally cancel OTC derivative loss debts held by state corporations whereby they purchased hedge contracts written by major American OTC derivative manufacturers and distributors is legally a unilateral novation. A novation declares an item to be invalid. Invalid means not valid. A contract which is not valid infers a form of a fraudulent contract.
Actions by the Chinese tend to follow and can be understood by learning the tenets of the teachings of Sun Tzu.
Had the West acted exactly this way rather than financing them to pay the winners when the hedge fund, Long-Term Capital, failed on OTC derivatives, there would have been financial problems but this event today would only be a modest recession and not a catastrophic depression.
MOPE has blacked this event out while titanic pressure is being brought on the US to fall into line and pay off the winners in New York.
What happened here will pave the road of the future.
This is the most important economic event since the fall or shove into bankruptcy of Lehman.
See also my September 5th: China Won't Unload Dollars, But it Does Say F*^k Our Worthless Paper. If this isn't a declaration of economic war, I'm not sure what is.