5 Yardsticks for the economy
This YouTube video has a good summary on the yardsticks of the economy to summary the current economy in August, 2020.
https://www.youtube.com/watch?v=icUArG-7tXY&list=WL&index=109&t=0s
The following summarizes them in one page and most are self-explanatory. You can find more details from Wikipedia and/or Investopedia.
Baltic Dry Index. It indicates international trading.
ISM Manufacturing. It is especially useful in U.S. factory activities.
Initial Jobless Claims.
Unemployment. It is similar to above. We started with 4% and then climbed to about 15% after the breakout of the pandemic.
Housing Starts. In 2020, the low interest rate is a plus to the housing starts, but the unemployment is a big minus.
Consumer Confidence. It is similar to the above.
Federal fund rate. It is the low rate charged between member banks. It affects the general interest rate. Today’s low interest rate affects consumers, investors and corporations.
GDP.
Most are related to the following: Trade war with China, the pandemic of 2020 and the unlimited supply of money. Dow Transport used to be a good indicator, but the internet takes out some of its predictable power.
The
following have a slight chance to occur. The conflict with China could lead to
a military war with China and the collapse of the USD as a reserve currency. I
recommend to have 5% to 15% investing in gold (GLD and other gold ETFs) and
gold miners (such as the ETF RING). Some suggest to buy gold coins to reduce
the effect of the government interference and the risk of paying back the
investors in gold. Talk to your financial advisor before you take any actions.
6 TPP and RCEP
Obama wanted TPP, a trade agreement (with less or eliminating tariffs and less regulations) with Asian countries excluding China. Besides eliminating tariffs, TPP includes human rights, protecting intelligent properties, environment and other ideas. The countries in South East Asia have a hard time to exclude trading with China. On the average, they have 20% of the trade with China. Most if not all of these countries do not want to upset U.S.
China is #1 trade partner with Australia. Australia’s prime minister is the stupidest (not a typo) politician. What do you gain by upsetting your #1 trader (China)? You lose important trade by being a running dog of U.S.
Trump did not want TPP, as it is better to deal with individual country to maximize our profits. We did this with Mexico and Canada. These two countries depend on us, and hence the deals are better to us. It is time- consuming to do a deal one by one with about 22 countries in Asia. China should thank Trump for withdrawing from TPP.
RCEP includes the ten S.E. countries plus China, Australia, New Zealand, Japan and Korea excluding U.S.A., which may join later on. India withdrew, as they would lose a lot. India’s protectionism makes most of their products not competitive in the world market.
RCEP is as important as EU in trade area. TPP is dead now and the new TPP if there is one will not be effective due to the RCEP and it may be forced to include China.
In any case, China gains a lot in the free trade with these countries. The trade blockage on China is not working especially with RCEP. Most likely, China will lead RCEP. So far, the U.S. is the loser. We have lost our concentration and effort with the new TPP due to spending too much time in reelection and fighting the pandemic. As usual, the media do not report RCEP and its importance.
RCEP is a new major free-trade zones after EU and NAFTA (U.S., Canada and Mexico). RCEP lacks of energy supplies.
Links
Google “RCEP” for more articles.
11 Necessity is the mother of invention
Our actions cause China to react, and I can say the same on opposite way. Here is a brief summary. For further reading, read the included links to articles and Wikipedia if available, which also provides updates. You can also search the updated YouTube videos on these topics.
Quantum computing / transmission
We present computer information with 1 bit either on or off. Quantum theory suggests there is a third state. For simple illustration, a coin can be either head or tail, and the third state (superposition) is when it is standing.
China can transmit information between Beijing and Shanghai via a 1,300 mile fiber link and one Chinese city to Vienna via a satellite using quantum technology. The transmitted data is virtually impossible to hack.
IBM, Google and China are working on quantum computers that are supposed to be many times faster than today’s top computers. As of 2020, it may still take a few years for practical uses.
Actions and reactions. China found out that NSA were spying on them from the transmission network via Edward Snowden. They knew they had to find a better way. Most Chinese scientists learned this technology from the west. Trump wanted to ban the scholars from China on technology even they have contributed a lot to the research and finance in U.S. universities. China’s huge investment forces us to fund more on our research in science (about time!).
Article: 1 (recommended)
YouTube: 1
https://en.wikipedia.org/wiki/Quantum_computing
https://www.youtube.com/watch?v=pD48lIcJQf4
China’s GPS (BeiDou)
China has a decent system similar to our GPS. EU and Russia have their own, but most cannot be compared to GPS and BeiDou. BeiDou is better than the U.S.’s, but I bet they will leapfrog each other.
Actions. U.S. had several incidents to stop GPS coverage on China. China would be a big disadvantage without their own GPS during a military war between the two countries.
Article: 1
https://www.cnn.com/2020/06/24/tech/china-beidou-satellite-gps-intl-hnk/index.html
https://en.wikipedia.org/wiki/BeiDou
Carrier killer missiles, swarm drones and undetected submarines
They are supposed to be effective to down a carrier, but they have not been proven in actual wars. If the missile cannot be detected in the firing stage, it is hard to detect on its way towards the target as it changes its projectile. We may not feel the threat now, but who knows in their fast development?
In theory, it is hard to protect (and not economically feasible) from a swarm of drones with some carrying bombs. It may be a long way to be deployed in downing a carrier.
The technology of silent (harder to detect) submarine was most likely from U.S. or Russia.
Actions and reactions. We have sent fleets to South China Sea and Obama declared ‘return to the Pacific’. We are developing solutions to China’s new weapons.
Wikipedia: Missile, Swarm drones,
https://www.businessinsider.com/china-test-launched-swarm-of-suicide-drones-from-a-truck-2020-10
https://asiatimes.com/2020/04/run-silent-run-deep-shang-class-subs-set-new-standard/
https://en.wikipedia.org/wiki/DF-21
https://en.wikipedia.org/wiki/China_Electronics_Technology_Group
China’s carriers
The first one is for training and was refitted from a Ukraine’s carrier. The second one is an improvement from the first one, but it is still old technology. The third one is a big improvement and should be ready in 2020 - 2021. The fourth one is nuclear-powered and it is in the design phase as of 2020.
Actions and reactions. China needs to protect the sea route supplying oil and materials. China is decades behind us in carriers, but the gap has been reduced.
Article: 1
https://www.defenseworld.net/news/27842/China_to_Launch_Third_Aircraft_Carrier_in_2020#.X7fmllB7mM8
https://en.wikipedia.org/wiki/Chinese_aircraft_carrier_programme
Chip making
Chinese can design many products using chips, but they do not have advanced chip makers and depend many chips from us.
Actions and reactions. Trump banned Huawei and a few Chinese companies from buying U.S. chips and the chip makers if they have a specific percent of U.S. technology.
Banning ASML’s most advanced chip makers is a blow to China. China now concentrates their effort and resources on building chip makers. You cannot build a house without strong foundation.
The U.S. is losing big sales and profits from China. When China is ready to build their own advanced chip makers, the U.S. chip companies will be in permanent loss. This is why most if not all chip companies oppose Trump’s decision.
Article: 1
https://www.theedgemarkets.com/article/tech-why-uschina-chip-war-heating
https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant
Newton is right that there is a reaction to every action even in politics; also there is an action to every reaction.
#Filler: Advantages of high-speed rail for China:
· Reduce wealth gap.
· Open some inaccessible rural areas.
· Support local government in riots and natural disasters
· Reduce the railroad burden.
· Reduce the air travel burden.
· Increase the land price along the high-speed stations; most lands are owned by the government.
· Provide jobs.
· Reduce carbon emission.
· Earn foreign contracts.
10 Feeding 20% of world population with 7% farm land
It is not easy for sure. Today, China can feed her citizens without import except during natural disasters such as flooding and droughts. China’s famines such as during 1950 are past memory.
China does import food. Beef cannot be raised profitably in China due to the land resources. Some corn and soy bean are imported and they are used for animal feed. Lobsters and some seafood are imported for wealthy citizens.
Here is a brief summary.
· Hard working. It is similar to other industries.
· Making use of limited resources such as rice terraces in hills and turning deserts into farm land.
· Aqua farming. Many sea food including oysters are farmed.
· Using technologies such as farming machines. Drones are used for fertilizing / insecticides which is efficient and saving fertilizers and water. Chinese can grow modified specimens of rice in salty water.
· Improving transportation to bring food from farms to cities.
· Encourages research and experiments in farming.
· Chinese farming has benefited from many scientific advances such as GPS, weather forecasts and genetics.
· Management. China has months banning fishing to prevent over-fishing.
· “One-child policy” has limited population growth in spite of many drawbacks.
· Water redirection projects. Hopefully and eventually, the semi desert in many areas in West China would be turned into farm land from the water redirected from the south.
Links
General. 1
Farming technology: 1, 2, 3 4 5
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