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Posted November 22, 2021

Sean Ring

By Sean Ring

The China Privilege

Good morning!

Im getting through all the excellent suggestions from the mailbag. This one, in particular, jumped out at me today.

Rude reader Geoff, from Gig Harbor, WA, asked me to share my views on China.

Geoff was wondering where all the outrage was concerning Chinas actions.

Im reminded of William Bennetts book, The Death of Outrage, which attempted to awaken the countrys conscience concerning the Clinton Administration.

I devoured that book when it came out. Having voted for Bob Dole in 96, that should be no surprise.

Well, there are many reasons we give China a pass. Ill list my big ones.

Feel free to write asksean@paradigm.press with others!

The Unknown Virus of Unspecified Origin

In many of his videos, the Critical Drinker has called Covid this pejorative term, and I never cease to laugh.

The Covid origin story is still, painfully, being covered up.

Just ask Jon Stewart.

But before you do, watch this hilarious video.

If youre wondering how Stephen Colbert has a job, its easy: hes a company man. And its an embarrassment.

But the interview itself isnt whats so cringeworthy. Nor is Colbert trying to cover up for his masters.

Its the blowback Stewart got for that interview that cracks me up.

This thread on Twitter sums it all up. Scientism is real.

Now lets do a thought experiment.

Lets say we have irrefutable proof the Wuhan lab was responsible for the newly concocted virus, its gain-of-function, and the outbreak.

What are we going to do with our second-largest trading partner?

Declare war?

Doubtful. Theres nothing militarily we can do without setting half the planet on fire.

Thats the real reason for the cover-up.

So China gets a pass.

Uighurs or Tibetans Have No Impact on Our Daily Lives

When was the first time you learned how to pronounce Uighur correctly?

I was in my late-30s, I think. (Its WEE-grr, in case you were wondering.)

This may be incredibly unpopular, but I just dont care.

Well, I care in the normal I wish them well sense.

You may never have seen someone write that in print. So I apologize if that shocks you.

But when youre born in a country that went to war with the greatest empire ever known over a 2% tax, its tough to feel bad for those who wont fight back on their own.

As for Tibet, I respect those famous people who bring attention to the plight of the Tibetan people. Thats all they can do.

But what they cant do is explain that China wants Tibet to control Asias water flow. Or that theyre only occupying Xinjiang (or East Turkmenistan, as the Uighurs call it) to protect their Western flank.

And that takes the issue from one of opportunistic conquering to one of mandatory security.

But what about Taiwan, you ask?

Hell yeah, we care about them!

No Taiwan no iPhones.

Source: https://www.trendforce.com/presscenter/news/20210305-10693.html

So, China gets another pass.

The South China Sea is Too Far Away

Robert Kaplan, in his excellent book, Monsoon: The Indian Ocean and the Future of American Power, wrote:

Americans, in particular, are barely aware of the Indian Ocean, concentrated as they are, on their own geography, on the Atlantic and the Pacific.

Of course, the South China Sea is next to the Indian Ocean via Singapore, so the same logic applies.

Americans rightly care about Canadians and Mexicans first. Theyre our closest neighbors and deserve our utmost attention.

When American Presidents meet with other leaders before those two, it always raises hackles.

Not because of offended vanity, but because theres an order to things and should be respected.

Most other international observers are angered when US Presidents dont deign to understand their countries first.

The fact is if youre not a Canadian or Mexican, you simply dont matter as much to Americans.

Sorry, not sorry. Thats realpolitik.

And yet, this is another reason why China gets a pass.

Though 22% of total world trade and 60% of global maritime trade passes through this critical body of water, its not front-of-mind until it has to be.

Keep Dancing!

When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, youve got to get up and dance.

Alas, this attitude has not changed in the 13 years since Wall Street blew up.

And it wont, for all the reasons Ive outlined in this very newsletter over and over again.

But the real reason is that if the worlds fund managers call time on this rally, it really will be over. And if its over, the just desserts wont be sweet.

And so we must keep up the pretense that alls well. With this, China gets to keep providing cheap exports to Americans eager to supply customers through their e-commerce stores.

China, too, prints money. Not as much as the Fed, ECB, or Bank of Japan. But it does.

Source: https://www.yardeni.com/pub/peacockfedecbassets.pdf

Were All Fiat Now

The simple fact is that its now acceptable for central banks to print money and buy other countries equities with them.

Lets take the Swiss National Bank, for example. I wrote the other day that it was a hedge fund dressed up a central bank.

Some of my banker friends had a good laugh over that.

Why did I write it?

Nearly a quarter of Swiss foreign reserves are held in equities.

That means the SNB prints francs out of thin air and then purchases stock.

How is this right? I think its downright immoral.

These are the SNBs top holdings:

Source: https://whalewisdom.com/filer/swiss-national-bank#tabholdings_tab_link

These are all the holdings over $2 billion.

I love Switzerland. The Swiss have no ill intentions.

Theyve done nothing illegal. Far from it, you can allege theyve admitted that US stock is better than their own currency!

And the franc is a currency that used to be backed by gold.

Yet, theres nothing right about this situation.

Now just think of how many Chinese state-owned enterprises (SOEs) own US stock and dont have the best of intentions.

And what about their sovereign wealth funds?

We simply dont know.

From a report titled, Chinas Sovereign Wealth Fund, from the Congressional Research Office:

On May 20, 2007, China Jianyin Investment Company, a wholly-owned subsidiary of the Central Huijin Investment Company (CHIC), signed an agreement to purchase a less than 10% stake in Blackstone Group in non-voting shares worth $3 billion. The decision to purchase less than 10% of Blackstones shares, and to purchase non-voting shares, was apparently not an arbitrary one. According to Blackstones CEO and Chairman Stephen A. Schwarzman, The deal is purely commercial and do sic not need the U.S. government approval as the stake is less than 10 percent.

Its a situation that never should have been allowed to arise.

Wonder why Elon Musk has no respect for the SEC?

This should be reason number 1!

Imagine if China dumped all its holdings? Yikes!

So were prisoners in a jail whose gate we left open for others to invade.

Wrap Up

Im sure there are other reasons, such as China having far too many friends and far too few critics in Washington and the media.

But the reasons above are big enough.

I hope that answered your question well enough.

Until tomorrow.

All the best,

Sean

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