As worldwide car sales drop like a rock, interesting things are now showing up in the statistics. It is not what you are but where you stand, relative to others. This month, China just passed a new road sign: more cars were sold in China than in the US. This is very important: we no longer control world consumer markets. It is moving East. Japan refused to be a world market and looked only to enrich the top 10% so Japanese car sales have been declining for a decade or more. But with the massive Chinese population indulging in this, it means the fall of world oil prices will cease and the US will begin seriously competing with the Chinese for gasoline.
GM’s 53% U.S. Sales Decline Leads Industry’s February Plunge
General Motors Corp., surviving with federal loans, said its February U.S. sales plummeted 53 percent as the recession pushed industrywide purchases toward the lowest in almost three decades.
Sales tumbled 48 percent for Ford Motor Co., 40 percent for Toyota Motor Corp., 38 percent for Honda Motor Co. and 37 percent for Nissan Motor Co. GM said it plans to build 34 percent fewer vehicles in North America next quarter, and Ford announced a 38 percent reduction from a year earlier.
All auto industries are contracting but the US is contracting the most. We didn’t fully appreciate the Chinese market where we actually have a lot of ‘good will’ potential. For example, unlike Europe or Japan, we never invaded and raped and killed. We actually tried to be friends, repeatedly, with China. We didn’t barge in with addictive drugs. We supported the Chinese in their fights with neighbors.
Instead, we stood aside and let the aggressive Japanese dominate this emerging market. The Chinese do not like the Japanese and would be happy to be our friends, we shouldn’t use China as cheap labor for US imports but rather, build cars in China for Chinese customers, for example. This sort of ‘globalization’ is fine with me. Just like, building cars in Brazil for Brazilians is excellent.
The Japanese car makers colonized the US in this fashion, for example.
New figures have shown that in December, for the first time ever, there have been more cars sold in China than the United States.
A total of 735,000 automobiles were sold in China last month, compared to 656,976 vehicles were sold in the US.
The reason, analysts say, is that the slump in sales in China has been less severe than the slump in the US – not exactly a cause for celebration for carmakers here.Bloomberg.com: Japan
All world stock markets are in decline. All sales are going down. Prices are dropping. Countries that have sovereign wealth, large FOREX holdings and solid banks will dominate in the future. The fact that the Chinese are now #1 in car purchases is the warning bell for the US. Eventually, all of the sales that flow to the US will flow, instead, to China. All the goodies we take for granted will vanish in a puff of smoke. Overnight.
China’s car use means one very important thing: all these new cars mean more oil consumed. This is the ‘floor’ for global oil prices. Since both China and the US are competing for the same oil from the same dealers, it means our own costs will begin to rise if the Chinese buy more and more cars.
There is a dynamic at work which are ignored at our own peril: expensive oil periods ALWAYS creates economic retrenchments. And cheap oil causes booms. Oil is cheap again and people are expecting a boom to appear on the horizon but I fear, this will not happen.
Rarely have we seen such a dramatic collapse in
the price of anything as is depicted in the above chart of
crude oil. From the summer, as you can see, it has moved
virtually straight down, losing some 75% of its value from
its high! This is a clear indication of powerful demand
destruction brought on by the recession in the United
States, and then having spread throughout the world. This
is exactly what we were expecting, but the rate at which
this decline has occurred has even surprised me. It
means, I believe, that the aforementioned deflationary
forces are more powerful than any we have ever seen,
possibly even including the Great Depression era. This is
very ominous indeed.
I altered the graph greatly to show the dynamics at work. The hedge fund pirate community, flushed out of the CDO markets, all stampeded into the commodity markets and using Japanese carry trade loans, bet up the cost of crude tremendously. Of course, it crashed when they all had to unwind their Japanese carry trade positions when the yen grew stronger and all the major oil consuming nations rushed towards ZIRP banking systems.
OPEC has cut back and is reading the tea leaves carefully and now is very aware that China is the Big Future, not the US. These sorts of tidal shifts take time. But it is definitely going to happen.
South Korea’s biggest port is running out of room to store shipping containers, said Park Jung Ho, an official at one of Busan’s nine operators. The bigger concern is that the boxes are almost all empty.
Container trade at Busan, the world’s fifth-largest port, has fallen about 40 percent in recent months, said Park, at Busan International Terminal Co. Even by stacking boxes five deep and leasing a nearby lot, he barely has room for the 31,700 containers that have piled up on his wharves.
Alas, for the US economy! A tremendous amount of trade goods we allowed to gush into America, was pure junk. We wrecked our trade balance, our finances, our banking system, mostly so a flood of cheap junk could litter our garbage dumps. True, people enjoyed buying tons of things to pile into the home. Children were buried under a tsunami of toys. We now have electronics of all sorts all over the place, in huge numbers. We have lots and lots of stuff.
When we walk into the average house today, we can barely wend our way through piles of stuff. This flood was fatal for our economy. No one took the slightest measures to stem this tsunami of goods. Now, we get to live in junkyards, at home, while world trade ceases and then, slowly, shifts.
China Mulls Oil Purchases With Foreign Reserves
BEIJING (Nikkei)–The Chinese government is considering plans to tap its foreign reserves to buy crude oil as part of a push to diversify holdings from U.S. Treasuries, The Nikkei learned Tuesday.
All the profit from all that junk brought over in Korean and Chinese container ships is now being used to control future oil markets! As China rapidly draws down on its $2 trillion in sovereign wealth, they will use it to corner world oil markets, no ifs, ands or buts! And what are we offering?
Insults! Demands that the Muslims back our looney ghetto program for the hapless and helpless Palestinian people! They don’t like us. They use us and are cynical about using us but our financial collapse is ruining them so they will drop us like a hot potato and run off to China to smooch in the future.
Already, China is smooching it up with Euador and Venezuela as well as Mexico. They have the loot, we have the snoot. Now, back off to Japan!
Toyota, Facing First Loss in 59 Years, Seeks Loans From Japan
Toyota Motor Corp., forecasting its first loss in 59 years, is seeking loans from the Japanese government as private investors demand up to 50 percent more in interest for the company’s debt.
The company’s financial unit may ask for 200 billion yen ($2 billion) in loans, public broadcaster NHK reported today, without citing anyone. Toyota Financial Services Corp. spokesman Toshiaki Kawai said the unit is in talks with state-owned Japan Bank for International Cooperation, without confirming the amount.
Japan is using its own immense FOREX holdings to buck up it own auto industries. The US is seeing lots of suicidal Americans screaming for letting our own auto industries die. Then we can work for the Chinese and Japanese automakers! Or perhaps, the Germans. Whatever: another mile stone on the road down for us and up for them. All Japan has to do is wait us out and compete with China. We committed seppuku.
Nissan Eyeing 27% Global Output Cut For 1st Half Of FY09
TOKYO (Nikkei)–Nissan Motor Co. (7201) has set its global auto production target for the April-September half at roughly 1.29 million units, down 27% from a year earlier and the lowest level in eight years, The Nikkei learned Tuesday.
Japan is shrinking but our own industry is VANISHING. Bankrupt is dead. We could revive the industry but with new owners, all foreigners or using foreign funds. They will pretend to be American like Walmart pretends to be American.
The Japanese government is to use part of its nearly $1,000bn in foreign exchange reserves to provide loans to Japanese companies operating in overseas markets in a further step to prevent tight credit conditions from stifling business activity.
The Ministry of Finance is to lend Y500bn of Japan’s forex reserves this month to the Japan Bank for International Cooperation, which would use the additional funds to provide foreign currency denominated loans to help Japanese companies meet their overseas funding needs.
The news just came in, the opposition party of Japan that virtually never gets in power, is in trouble. The police were able to find something to arrest the secretary to Ozawa. Oh my, the odious, evil gangsters running the LDP which has a popularity rating of 9%, will now rejoice. Of course, they are utterly corrupt, themselves, after all, they are the Export Power Corporate Party and are literally destroying the future of Japan!
But the best way to stop opposition is to get some scandal going. Sex or money, it doesn’t matter. Then, the rulers can ease back and laugh as they live as they wish, rich people don’t need bribes! Connected people like Aso, whose family is one of these rich industrialists, a family that enslaved workers in WWII and worked them to death, yes, he is pure and clean! Gads.
I read in the news in Japan that Ozawa was pushing for the laws to change concerning using temporary workers. Over 40% of Japan’s workforce, from office work, engineers, line work, etc, is all ‘temporary’. This is absurd! And should be made illegal. But now, the hope of the LDP is, they can continue to enslave the surviving Japanese people and squeeze them literally to death.
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