Views from China aren’t that much different from Economic Undertow’s. This is today’s New York Times:

Chinese Foreign Currency Reserves Swell by Record Amount

China’s foreign exchange reserves surged in the fourth quarter by a record amount while the money circulating within the Chinese economy also climbed more than expected in December, according to government statistics released Tuesday that underline the country’s worsening inflation dilemma.

The Chinese government has been printing renminbi at a furious pace to buy foreign currencies like the dollar and the euro, which are pouring faster and faster into the country through trade surpluses and foreign investment. The People’s Bank of China, which is the country’s central bank, has been doing so in an effort to hold down the value of the renminbi and preserve a competitive advantage in foreign markets for exporters in China and the tens of millions of workers they employ.

The extra renminbi issued to pay for rising foreign exchange reserves will make China’s inflation problem even worse, said Diana Choyleva, an economist in Hong Kong for Lombard Street Research. The extra renminbi come as the Chinese central bank has been grappling with the additional money that it pumped into the Chinese banking system in 2009 and early 2010 to keep the economy growing through the global financial crisis.

An analysis of the data by Standard Chartered said that trade and government-approved foreign investments into China accounted for less than half of the increase in foreign reserves in the fourth quarter; investors around the world have also been putting money into Chinese real estate, bank accounts and other investments despite efforts by the Chinese government to discourage these capital inflows.

The Chinese foreign reserves leaped by $199 billion in the fourth quarter, to $2.85 trillion. The increase was much larger than economists expected, and the numbers suggested that China had about doubled its intervention in currency markets to about $2 billion a day.

Which means two things: first is the ‘unofficial’ flows of F/X into China are as large as the unofficial flows and that the Chinese establishment is adding 12+ billion yuan into circulation every single day in an attempt to manage the difference between official and unofficial flows.

The article points out that the inflation rate in China is greater than the released figures would indicate. Sacre bleu! The Chinese are misstating figures? Who would have guessed?

Meanwhile, a look around the web reveals the dog that does not bark, that the class war has begun for real. That is, the shooting war has broken out between the pampered ‘haves’ versus the penniless and desperate ‘have- nots’ who are armed to the teeth.

Pop culture has made an industry of ‘sexing up’ our outlaws making them all ‘Queens for a day (or so)’, while at the same time celebrating their ill- gotten ‘loot’. The next step is lust/envy and the sale of person- hood to the ‘idiot box’ and what goes with it. Outlaw Goldman- Sachs has been a tough sell but given the efforts of estimable Matt Taibbi and Max Keiser the reprehensible Lloyd Blankfein has a spot in the gay outlaw pantheon next to Tupac Shakur and John Dillinger.

“Steal from the ‘rich’ and give to the richest, eh Lloyd?” Tres Robin Hood, the archetypal gay outlaw figgah. That’s right, gay. You just want to be butt- fucked by these people. And you are, over and over again.

Class war shrivels the gay outlaw archetype into another systemic fraud. Once the shooting starts and blood flows outlawry ceases to be an hegemonic American culture phenomenon and something far more real. Class warfare is anti- anti- heroic and is unable to pimp anything, not even gold- plated trash cans or lavatory faucets.

The ‘haves’ aren’t hard to find. Like a large (and growing) minority in Congress Gabrielle Giffords is a millionaire albeit a minor variant. She is not in the league with Darrell Issa ($300 million) who prepares to take taxpayer- funded cheap shots @ ‘Government Corruption’ (the president) as if there is nothing better to do.

Where are these people going to hide? Not just Congress but the entire constellation of pop culture moneyed hotshots: rappers, real estate executives, business tycoons, hedge fund managers, investment bankers, media starz, professional athletes, stock swindlers and their various and sundry establishment lackeys. ‘Bling America’ is a target- rich environment. Anyone with a Ferrari or Aston Martin is a potential victim.

What pop- culture created as figures to be emulated and adored now threatens to become despised, unsympathetic, arrogant creatures to be hunted down like rats. The bodyguard business is going to explode along with the market for armored luxury cars and stylish ‘personal body armor’, but these are of limited effect. Bodyguards or police escorts in Tucson would have been shot along with the rest.

The easy solutions would be to cut back on the inequality that fuels the class war. Sez Warren Buffett,

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

Nobody has yet made the connection between the lucrative tax deal cut by the billionaire class and their lackeys on Capital Hill and the Giffords’ shooting. The timing is hard to ignore. Maybe ordinary folks have gotten fed up with the looting and maybe not but maybe the uppers might ought to consider hedging themselves while they have the luxury of ‘time remaining’. The ‘other’ class has just fired back and has used live ammunition.

Too bad, Mr Buffett you can’t go outside any more.

Meanwhile, there is the ongoing crackdown by ‘capital a’ Authority on its harmless critics. The establishment and its minions gives its best impression of the buffoonish ‘Federation’ in Woody Allen’s ‘Sleeper’:

Instead of shutting down militias and ‘patriot’ groups the FBI focuses on Wikileaks and anti- war activists! It would be funny if not tragic.

Government-created climate of fear

Glenn Greenwald

One of the more eye-opening events for me of 2010 occurred in March, when I first wrote about WikiLeaks and the war the Pentagon was waging on it (as evidenced by its classified 2008 report branding the website an enemy and planning how to destroy it). At the time, few had heard of the group — it was before it had released the video of the Apache helicopter attack — but I nonetheless believed it could perform vitally important functions and thus encouraged readers to donate to it and otherwise support it. In response, there were numerous people — via email, comments, and other means — who expressed a serious fear of doing so: they were worried that donating money to a group so disliked by the government would cause them to be placed on various lists or, worse, incur criminal liability for materially supporting a Terrorist organization.

At the time, I dismissed those concerns as both ill-founded and even slightly paranoid. From a strictly legal standpoint, those concerns were and are ill-founded: WikiLeaks has never even been charged with, let alone convicted of, any crime, nor does it do anything different than what major newspapers around the world routinely do, nor has it been formally designated a Terrorist organization, nor — I believed at the time — could it ever be so designated. There is not — and cannot remotely be — anything illegal about donating to it. Any efforts to retroactively criminalize such donations would be a classic case of an “ex post facto” law unquestionably barred by the Constitution. But from a political perspective, the crux of the fear was probably more prescient than paranoid: within a matter of months, leading right-wing figures were equating WikiLeaks to Al Qaeda, while the Vice President of the U.S. went on Meet the Press and disgustingly called Julian Assange a “terrorist.”

But more significant than the legal soundness of this fear was what the fear itself signified. Most of those expressing these concerns were perfectly rational, smart, well-informed American citizens. And yet they were petrified that merely donating money to a non-violent political and journalistic group whose goals they supported would subject them to invasive government scrutiny or, worse, turn them into criminals. A government can guarantee all the political liberties in the world on paper (free speech, free assembly, freedom of association), but if it succeeds in frightening the citizenry out of exercising those rights, they become meaningless.

So much of what the U.S. Government has done over the last decade has been devoted to creating and strengthening this climate of fear. Attacking Iraq under the terrorizing banner of “shock and awe”; disappearing people to secret prisons; abducting them and shipping them to what Newsweek’s Jonathan Alter (when advocating this) euphemistically called “our less squeamish allies”; throwing them in cages for years without charges, dressed in orange jumpsuits and shackles; creating a worldwide torture regime; spying on Americans without warrants and asserting the power to arrest them on U.S. soil without charges: all of this had one overarching objective. It was designed to create a climate of repression and intimidation by signaling to the world — and its own citizens — that the U.S. was unconstrained by law, by conventions, by morality, or by anything else: the government would do whatever it wanted to anyone it wanted, and those thinking about opposing the U.S. in any way, through means legitimate or illegitimate, should (and would) thus think twice, at least.

That a large percentage of those brutalized by this system turned out to be innocent — knowingly innocent — is a feature, not a bug: that one can end up being subjected to these lawless horrors despite doing nothing wrong only intensifies the fear and makes it more effective. The power being asserted is not merely unlimited and tyrannical, but arbitrary.

And so it goes, Le Capitaine orders that the ‘usual subjects’ be rounded up. Good Grief!

Meanwhile, grab a credit card and purchase any number of full- automatic carbines, sub- machine guns and belt- fed machine guns online! It is widely considered unlawful for Americans to own full auto weapons in the US. This is true in some states but in others such as Virginia, machine gun ownership is permitted.

Only full auto weapons manufactured after 1986 are prohibited nationwide. Considering that millions of military weapons were manufactured prior to 1986 including those made during the Second World War by all combatants there is practically an unlimited lawful supply of the tools needed to turn America into Afghanistan.

Keep in mind that a lot of this firepower is flooding into Mexico to equip the drug cartels.

Welcome to the Thunderdome!