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Free trade. Maybe we'll get it someday. China was 1/3 of our
trade deficit last year. Energy was another third. VAT-tariffs helped produce the other third. All these
problems need to be solved. The idiocy of denial is breathtaking.
The Chinese government is a major investor in our country, using
its American dollars generated from currency-manipulation-fueled trade
surpluses. The government. Not private companies. No free trade there.
The Middle Eastern governments are major
investors in our country and the world. Using nearly $4 trillion
in oil derived profits. $100 per barrel oil this year.
Those profits are exploding. Governments. Not private
companies. No free trade there.
Patrick Mulloy told the Senate Banking Committee, on November 14:
The
rise of “sovereign wealth funds” and the increased foreign ownership of
our economy are directly related to our mismanaged trade policies which
have failed to take into account the government-directed mercantilist
trade policies of many of our trading partners.
The New York Times reported today:
Experts
estimate that oil-rich nations have a $4 trillion cache of petrodollar
investments around the world. And with oil prices likely to remain in
the stratosphere, that number could increase rapidly.
The
Bush Administration has said that foreign-government-controlled
investments here are the free market working. Up is down.
Black is white. This view is extremely dangerous.
Mulloy described the Asian actions that fuel their government investments abroad:
China’s
central bank had $1.1 trillion in reserves at the end of 2006 and the
Bank of Japan had $875 billion. The central banks of Hong Kong,
India, Malaysia, Singapore, South Korea, and Taiwan together have
another $1 trillion.
Now how are these Asian central banks able to
accumulate these vast and fast-growing amounts of “foreign exchange
reserves”? The McKinsey study tells us on page 77 that:
“…exchange rate management has been key.
And the oil producing country actions:
McKinsey
and Company in an October 2007 report entitled The New Power Brokers,
which examines sovereign wealth funds, has estimated that investors
from oil-exporting nations collectively owned between $3.4 trillion and
$3.8 trillion in foreign financial assets at the end of 2006.
That report also said many oil exporting nations have now set up
state-owned investment funds, often called sovereign wealth funds, to
invest some of the assets they have acquired through their oil exports.
Mulloy's recommendations:
1. The development of an energy policy that promptly begins to reduce our reliance on imported oil and gas. ...
2. The development of policies to
aggressively address the mercantilist trade practices (being used by
China and many of our other Asian trading partners) such as currency
manipulation, barriers to imports, illegal export subsidies, forced
technology transfers, subsidies to attract investment ,and the massive
theft of intellectual property. ...
3. A third element of such a
strategy is to have in place a CFIUS process for reviewing foreign
acquisitions of U.S. companies that ensures our Government does not
permit the selling off of assets that are critical to our national
security.
Solving the oil, currency manipulation and VAT-tariff
problems are key to our future. What will America look like in 10
years on this track?
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