10/14/09 Baltimore, Maryland
You know we love “signs of the times.” This might be the granddaddy of them all:
China National Offshore Oil Corp and Exxon Mobil are about to enter a bidding war over oil-rich water near Ghana. At stake is “Jubilee,” a recently discovered offshore site that probably holds a couple billion barrels of oil. This isn’t China’s state-owned offshore oil company’s first foray into the global energy grab, but it’s one of its biggest. Exxon currently has the winning bid — $4 billion.
Technically, it’s going to be a “bidding war,” but really, it’s just a matter of how much China is willing to pay. The Red Nation announced this morning that its foreign exchange reserves rose $141 billion in the third quarter, to $2.27 trillion — the biggest national war chest in the history of fiat money… a feat they’ve accomplished in a remarkably short time:
No company, even the mighty XOM, can hang with that.
“More than $40 billion in loans to Brazil, Russia and Venezuela in exchange for future supplies,” the FT notes, “direct state purchases of other producers and pledges of infrastructure to countries such as Angola give China a claim to billions of barrels of future production. Add to that huge sums spent or pledged in pariah states such as Iran and Sudan, where U.S. companies cannot compete, and China’s political edge in securing supplies is clear.”
Heh, and can you even imagine the U.S. — the world’s largest oil consumer — trying to elbow our way into this Jubilee deal? With what… T-bills? Citigroup prefered shares? Chevy Malibus?
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exxon should have thought about that when it decided to support free trade with slave wage communist countries….
Check my math for me. 2.3 trillion dollars from a nation of 1.3 billion people is 1,770 dollars per person. Not everyone works, but in China I bet most do, child labor laws being a little, uh, lax. So say maybe $2,000 dollars per worker.
2.3 Trillion is a lot of money, but if I were a communist and I had a work force of a billion people and I could get them to work for peanuts, I think I could put up some big numbers too.
We talk a lot about the declining dollar, but the yuan is falling along with it. The commies have to provide so little to their workers they can’t be beat.
Cheers!
actually unemployment in china is quite high especially in the western provinces….
it is also not certain that chinese reserves are as high as claimed….i have no idea where the numbers come from and there is evidence that chinese trade surplusses have been overstated considerably….
yes the yuan has lots of problems and as much if not more per capita spendomania as the usa…
as i have opined elsewhere it is too early to know if the chinese are the japan of the 1980s or if they really do represent a paradigm shift from west to east….
as long as capital flight from the usa persists, it would seem that the center of gravity is shifting to asia.
the shift away from the us$ to the russian/chinese!! as the worlds reserve currency has already taken place. only most inflexable western minds. do not see this change