A Skeptical Survivalist

China is one of the world’s largest producers and purchasers of precious metals, especially gold and silver. Beijing has now unveiled its first gold ATM machine in a shopping district. More than 2,000 will be installed in the next two years. Since the beginning of the global economic meltdown, China has been purchasing and producing commodities at a rapid pace. Digital Journal has reported in the past that its central bank has bought gold bullion and state-television outlets have even urged citizens to acquire silver bullion. Digital Journal has also reported of gold ATM machines being installed in Germany and the United States. Now, China has unveiled its first gold ATM machine in Beijing’s shopping district of Wangfujing Street.

Read more: http://www.digitaljournal.com/article/312073#ixzz1aLf3IjlM

(Reuters) - Thousands of people demonstrated in northeastern China on Sunday, demanding the relocation of a petrochemical plant at the center of a toxic spill scare, state media said.

Demonstrators in the port city of Dalian, in Liaoning province, faced down a wall of police in riot gear in front of the municipal government office and minor scuffles broke out, although there was no report of injuries, state news agency Xinhua said.

State media said last Monday that residents in Dalian were forced to flee when a storm battering the northeast Chinese coast whipped up waves that burst through a dyke protecting the plant, which makes paraxylene (PX), a toxic petrochemical used in polyester.

Although authorities repaired the dyke and insisted that no spills were detected, the incident sparked panic that PX could have been released, fuelling resentment against the project. Calls on popular microblogging site Weibo and QQ, an instant messaging system, urged residents to protest on Sunday.

The outpouring of public anger is emblematic of the rising discontent facing Chinese leaders, which are obsessed with maintaining stability and are struggling to balance growth with growing public anger over pollution and environmental threats.

Read the rest of the story

EMP is also falls under this category.

Could China wipe out an American military advantage with a simple black box? Joshua Cooper Ramo’s thought-provoking book The Age of the Unthinkable challenges all kinds of conventional thinking about everything from venture capital to military strategy. One section caught my eye in particular, about how the Chinese might neutralize American air superiority, using a type of weapon known an “Assassin’s Mace.” The specific device in question is an unassuming little case; how worried should we be?

U.S. airpower depends on the ability to overcome surface-to-air missile (SAM) defenses, and one of the key weapons for this role is the AGM-88 High Speed Anti-radiation Missile (HARM), which homes in on radar emissions. (You can see them, under the F/A-18’s wings in the picture, above.) The defenders can either turn off their radar, thus blinding themselves, or have it destroyed. This is where the black box that Ramo found at a military trade show in Zhuhai in 2002 comes in:

“…packed inside were several thousand microtransmitters and when you plugged the device in and turned it on, it broadcast signals – 10,000 of them – on the frequency of a SAM site. From the perspective of an American pilot – or , more precisely, the perspective of his HARM missile looking for a ‘lock’ on a SAM radar signal – this meant an air-to-ground picture that looked like 10,001 SAM signals, only one of which was real…”

Ramo suggests that if defenders have these black boxes then the U.S. aircraft would be helpless against enemy SAMs, and air superiority would be lost at stroke.

This is just one example of Beijing’s “Assassin’s Mace” family of weaponry that’s been much discussed in both Chinese and American military circles. The Pentagon defines the Maces as technologies that might afford an inferior military an advantage in a conflict with a superior power. In this view, an Assassin’s Mace is anything which provides a cheap means of countering an expensive weapon. Other examples might include Chinese anti-satellite weapons, which might instantly knock out U.S. space assets, or aconventional ballistic missile, designed to take out a supercarrier and all its aircraft in one hit. It’s an interesting contrast to the perspective of the American arms industry, which can end up spending vast amounts countering low-tech, low-cost threats like mines and IEDs.

You know I am skeptical of EMP and consider it a “high impact, low probability” threat.  However, reports like this show an increased probability since it’s actively being pursued by our biggest potential enemy. Will keep watching.  Read the whole story though. 

China’s military is developing electromagnetic pulse weapons that Beijing plans to use against U.S. aircraft carriers in any future conflict overTaiwan, according to an intelligence report made public on Thursday.

Portions of a National Ground Intelligence Centerstudy on the lethal effects of electromagnetic pulse (EMP) and high-powered microwave (HPM) weapons revealed that the arms are part of China’s so-called “assassin’s mace” arsenal - weapons that allow a technologically inferiorChina to defeat U.S. military forces.

EMP weapons mimic the gamma-ray pulse caused by a nuclear blast that knocks out all electronics, including computers and automobiles, over wide areas. The phenomenon was discovered in 1962 after an aboveground nuclear test in the Pacific disabled electronics in Hawaii.

The declassified intelligence report, obtained by the private National Security Archive, provides details on China’s EMP weapons and plans for their use. Annual Pentagon reports on China’s military in the past made only passing references to the arms.

“For use against Taiwan, China could detonate at a much lower altitude (30 to 40 kilometers) … to confine the EMP effects to Taiwan and its immediate vicinity and minimize damage to electronics on the mainland,” the report said.

The report, produced in 2005 and once labeled “secret,” stated that Chinese military writings have discussed building low-yield EMP warheads, but “it is not known whether [the Chinese] have actually done so.”

The report said that in addition to EMP weapons, “any low-yield strategic nuclear warhead (or tactical nuclear warheads) could be used with similar effects.”

“The DF-21 medium-range ballistic missile has been mentioned as a platform for the EMP attack against Taiwan,” the report said.

According to the report, China’s electronic weapons are part of what are called “trump card” or “assassin’s mace” weapons that “are based on new technology that has been developed in high secrecy.”

“Trump card would be applicable if the Chinese have developed new low-yield, possibly enhanced, EMP warheads, while assassin’s mace would apply if older warheads are employed,” the report said.

According to the report, China conducted EMP tests on mice, rats, rabbits, dogs and monkeys that produced eye, brain, bone marrow and other organ injuries. It stated that “it is clear the real purpose of the Chinese medical experiments is to learn the potential human effects of exposure to powerful EMP and [high-powered microwave] radiation.”

How are we going to feed two more Chinas by 2050? According to the United Nations Department of Economic and Social Affairs Population Division, the “world population is projected to grow from 6.1 billion in 2000 to 8.9 billion in 2050” – an increase of about 50% . This means that on average, every year for the next 50 years, the world population will grow by about the number of people that live now in Italy, and total population growth over the next 50 years will be more than twice the size of the current population in China.

The demand for food globally is going nowhere but up, and investing in companies positioned to satisfy this demand is a wise move for the long-term investor.

Food scarcity is inconceivable in a country that has had an abundance for so long. However, it was only a few years ago when Joesette Sheeran, the head of the United Nations World Food Programme called the rising food prices in 2008 a “silent tsunami” which could push more than 100 million people worldwide into hunger according to the UN News Centre website. According to Jim Rogers on CNBC on January 15, 2010, “Sometime in the next few years we’re going to have very serious shortages of food everywhere in the world and prices are going to go through the roof.”

While there is no way to know for sure, it is entirely possible that food prices will soon be aboard their own runaway train. Let’s take a look at the following demand and supply drivers: rising populations, income growth in the China, India & Brazil (leading to improved diets), contraction of arable land in developed countries, expanding biofuels production, and water shortages.

All of these factors and more could lead to price inflation and cause a global food crisis. According to the Food and Agriculture Organization of the United Nations in their report titled “How to Feed the World in 2050” projections show that “feeding a world population of 9.1 billion people in 2050 would require raising overall food production by some 70% between 2005/07 and 2050. Production in the developing countries would need to almost double.” While this may ultimately be accomplished, it would seem that anything short of that target could produce a supply shortage at different points along the way, which has some intriguing implications for secular-thinking investors.

Mac Slavo over at SHTFPlan comments on the Chinese warship off the coast of Libya:

Though China abstained from a UN Security Council vote authorizing a no-fly-zone in Libya, and are not among the 16 nation coalition involved in Operation Odyssey Dawn, for the first time in modern day naval history, a Chinese warship sailed in the Mediterranean Sea. The 4000 ton Xuzhou missile frigate sailed to Libya after having been deployed of the coast of Yemen, on the other side of the Red Sea, a few days ago.

The missile frigate’s role is not exactly clear, but based on China’s position thus far it is not likely that the ship is part of the US, UK and French led attack. The People’s Daily, the Communist Party’s newspaper, earlier pointed to Iraq and Afghanistan, and criticized the US for launching a third attack “on a sovereign nation,” so the chances that China is providing assistance are slim. While China may be flexing some of its military might, they are more than likely in the area strictly to observe operations – for the time being.

A good article evaluating the Chinese investments in US currency and why they can’t just “pull out”. Worth the full reading…

There is far more Chinese money in the U.S. than widely understood. Yet no disaster has occurred. This is because of the depth of American financial markets but also because the PRC cannot disinvest under conditions it clings tightly to – huge external surpluses and rigid balance of payments rules. The actual lesson of $1.6 trillion in June 2010, and counting, is no Chinese financial influence over America.

Mistaken impressions are caused in part by the incomplete picture. Further, when conditions finally change, Chinese funds will need to be monitored better than is done now. Most important, the PRC is not just pegged to the dollar, it is dependent. Addressing that dependence will yield a more open China.

This story definitely contradicts the Bloomberg premise that wheat is going back down.

Global food prices hardly need another reason to rise. But talk that China may have to increase wheat imports again this year due to poor harvests has added to market jitters, with wheat prices this month around 2½-year highs. Like so many other commodity markets, those for grains may have to get used to a hungry dragon. Some perspective is needed. China’s wheat imports rose to 1.4 million tons in the year ending June 2010, according to the International Grain Council, up 260% from a year earlier. Corn imports could jump fourfold this year, it forecasts. Dramatic that may seem, but China still only accounts for 1% to 2% of total world imports of both commodities. By contrast, its imports account for 60% of global trade in soy beans.

China’s wheat imports are volatile; as recently as 2004-2005, they were as high as 6.8 million tons a year. The true effects of recent poor weather won’t be known fully until later this spring. Changing diets could reduce pressures: the United Nations Food and Agriculture Organization says Chinese wheat consumption per capita has fallen in the last decade.

Here’s one guy wishing for the default on the national debt to just go ahead and happen. Let the Shit Hit the Fan he says.  :) Not likely to happen this way, but if it ever did it would be ugly.

Reuters is out with a big story on some new WikiLeaks cables that purport to show how China flexed its muscle to influence US policy during the crisis.

The subtext is this: If you thought the Chinese had us over a barrel, you’re right, they do!

We’re not so sure.

Since the global financial crisis, major economies including China and Russia have called for less dependence on the US dollar in international trade and investment, and accelerated steps to promote their own currencies on a global basis.

French President Nicolas Sarkozy came up with an ambitious agenda to reform the de facto US dollar-dominated global monetary regime and wanted to put the Chinese yuan into the basket of global reserve currencies.

However, there was no progress at the two-day conference on the yuan internationalization roadmap though the international community are encouraging the world’s second-largest economy to take quicker steps.