Using the Rio Tinto situation as an example of how a Communist regime operates you don’t need to be a rocket scientist to conclude why in the hell have we for so long we put China on a pedestal? Exclude the fact they are our number one enemy, China wins the title as the most loathsome nation on earth. The country is devoid of any human rights, poverty for all but a few million matches anything that exists in the poorest nations in Africa and the country’s leaders are all cheaters, liars and stealers. So much has been attached to how wonderfully well their stimulus package is working and how this most disgusting nation on earth will lead the world out of recession. This is nothing but a cock and bull story.

Exports account for over 40% of its economy and one thing for sure, if and when the rest of the world emerges from the recession and business gets back to normal, China’s dominance will be a thing of the past. Why? Two things, firstly we really don’t need most of the junk they used to dump on us and secondly, their Ponzi scheme is about to collapse and their bullshit and bravado has about another six months life. This current run up is about China celebrating its 60th anniversary in October. On that anniversary date they plan to have a huge party celebrating their success at becoming in their eyes the “world’s number one” super power. I call it their swansong!

Right now China is constructing buildings that will never be occupied, railway lines that will never feel the weight of a trainload of goods, and roads that will never be used. They are also investing in their stock market (the Shanghai Index is up over 80% this year) in the hope they will be able sell off to their investments to foreign “suckers” before it all collapses. Under capitalism, Ponzi schemes in the main affect individuals. Under communism, everything starts off being owned and generally retained by the government. Bernie Madoff’s only involvement with the government was that his activities were illegal. Uncle Sam lost not a dime, but tens of thousands of investors, mainly individuals lost close to $60 billion. Yes, there are some wealthy Chinese capitalists investing in the stock market, but the bulk of the investment is through Chinese government-owned enterprises. There are very credible experts in Europe who claim Chinese equities are currently overvalued by 50-100%. It is a great time to buy puts!

We are talking about a bubble economy which when it falls (within two years) it will make Japan’s experience look like it was just a hiccup. All Chinese banks have up to 70% of their lending tied up in property, not the real economy and values have gone through the roof. When the real estate market collapses so too will most of the banks. Chinese people are not consumers, they are hoarders. History dictates their spending behavior. Although China claims their stimulus package has increased retail sales by 15%, Chinese habits die hard. I wouldn’t give credence to that statement. It is all about measuring. The western world gauges its GDP on sales and China gauges it on output. In other words factories can keep pumping out junk where there are no buyers and China will continue to tell the world the country is booming when in fact most of that junk will fill up and stay in warehouses never to end up in people’s houses. Fifteen years ago, Chainsaw Al Dunlap who was Chairman of Sunbeam tried the same caper, manufactured enough barbeques for literally every American, invoiced bogus customers, registered the sales, to give a credit down the line but in between telling Wall Street the company was booming thus the stock price soared through the roof. Dunlap sold his stock options at the peak and once he banked the profit, walked away from the company, which immediately fell into Chapter 7 bankruptcy. The story is exactly the same with China.

Remember you first read of China’s imminent demise on this blog!

Earlier this month China declared a catastrophe; year over year November exports plummeted a massive 2.2%. Japan, the world’s number two economy, on the other hand announced their exports plunged 26.7%. Here we have the Ports of Los Angeles and Long Beach, the gateway for Asian imports are literally ghost towns for the past four months. The shipping industry is in total turmoil with nose-diving freight rates and fleets of container ships laid up. Meanwhile China is trying to tell us they are all but unaffected by the global meltdown in trade. This is in spite of leaks coming out of China that business activities such as the toy industry is now 50% of what it was at peak, with tens of thousands of factories shuttered and tens of millions of migrant (Chinese slave labor) Chinese from the agricultural hinterland returning home to their family rice paddy plots.

In a nutshell, the Chinese from their President Hu Jintao down to the lowest level Communist officials are totally arrogant, corrupt liars and cheats. In reality, Wall Street is not too far behind China since they actually share a great deal in common. Whereas a Chinese official might make up to tens of $millions practicing their craft, those Wall Street “gurus” led by fallen kings such as Bernie Madoff, Richard Fuld (Lehmann Bros) and Alan Schwartz (Bear Sterns) ran off with $billions in their pockets. At least in America, whether it was too late or not, Wall Street and greedy corporation CEO’s have been exposed for what they truly were/are. By contrast, in China until they return to being the agrarian economy they once were; which is what I predict happening with the wealth of the country based by barter, as was the case for centuries, China will continue to be run by filthy lowlife Communist Party officials.

In the geo-political arena, America’s ineffectual administration under George “Dubya” has lost all respect on the world stage. Much of it was brought about by sheer stupidity of an inept leader. Thanks also goes to China and Russia who have undermined this great country. Our global influence has never been so low in more than one hundred years. China, with its neighbor, Russia are our true enemies in every way. Why? The leadership of both countries are not only liars of the first order, but they also run corrupt governments. While Cheney/Bush did very well at covering up the collapse of our financial system, until it had to spend $trillions salvaging it a couple of months back, at least in a Judeo/Christian society there are checks and balances, that in the end, protect us as the greater good for mankind is the over-riding factor. What many of us do not realize is that Communism’s “official religion” is atheism. At the end of the day we have a higher order to answer to; China and Russia don’t. That is why Chinese have no conscience tainting their food exports with poison, making dangerous toys with leaded paint, tires that fall apart, supplying toxic pharmaceutical ingredients, producing a high failure rate in computer components, poor assembly of scooters and cars etc, etc. Add this China’s flagrant abuse of copyright or intellectual property and we have our enemy number one.

I say to Obama give China the flick and make it quick. We don’t need their ilk feeding off us. They are the antipathy in every way of what America stands for.