According to AFP journalist and legendary Bilderberg sleuth Jim Tucker’s inside sources, the agenda now under review includes a number of critical issues at the top of the elite’s to-do list. These breakdown as follows:

The elite are concerned that the American Congress may soon turn against the illegal and immoral invasion under humanitarian cover by NATO and the U.S. against the north African dictator Moammar Gaddafi.

As columnist Patrick Buchanan noted yesterday, Congress is rising in opposition to bogus wars launched the by the executive branch in violation of the Constitution.

“Last week, House Speaker John Boehner had to scramble to cobble up a substitute resolution to prevent half his GOP caucus from joining with Democrats to denounce President Obama’s war in Libya as unconstitutional and to demand a total U.S. pullout in 15 days,” Buchanan wrote.

More than a third of House Republicans voted to pull out of the NATO coalition attacking Gaddafi’s forces, in essence forcing a NATO withdrawal from the color revolution engineered civil war in that country.

In January, former oil industry pastor revealed that his inside sources said oil prices will skyrocket – a fait accompli with gas prices at the pump now at historically high levels – as the global elite work behind the scenes to take take down national economies. Williams appeared on the Alex Jones Show to talk about new revelations that deal with the death of the dollar, exploding energy prices, and the engineered onset of order out of chaos revolution worldwide.

The elite now meeting behind closed door in the Switzerland are pushing for a wider war and incalculable suffering in the Middle East.

The money masters have long profited from war and mass murder. Nathan Rothschild made a financial bet on Napoleon at the Battle of Waterloo and while also funding the Duke of Wellington’s peninsular campaign against Napoleon. The House of Rothschild financed the Prussian War, the Crimean War and the British attempt to seize the Suez Canal from the French and also financed the Mexican War and the Civil War in the U.S.

In addition to worrying about Congress waking up to the Libyan scam, the global elite is also concerned about a diverse liberty movement that has grown exponentially with the help of an open and free internet.

In response, the pocketed pawns in Congress have introduced a raft of bills over the last few months designed to take down the internet and blunt its impact as a medium for alternative news and information.

Read the rest here.

Comments »

Incidentally, both the CBO and this group are probably way off. 1/3 is much to high, they aren’t counting on the fact that most employers enjoy offering health insurance and use it to compete for the most competent and desirable employees. However, the CBO was super rosy, so the budget will likely get busted wide open anyway.

Thirty percent of employers will definitely or probably stop offering health benefits to their employees once the main provisions of President Obama’s federal health care law go into effect in 2014, a new survey finds.

The research published in the McKinsey Quarterly found that the number rises to 50 percent among employers who are highly aware of the health care law.

McKinsey and Company, which identifies itself as a management consultant that aims to help businesses run more productively and competitively, conducted the survey of more than 1,300 employers earlier this year. It said the survey spanned industries, geographies and employer sizes.

But the White House pushed back against the report.

“This report is at odds with the experts from the Congressional Budget Office, the Rand Corporation, the Urban Institute and history,” a senior administration official told Fox News. “History has shown that reform motivates more businesses to offer insurance.”

“Health reform in Massachusetts uses a similar structure, with an exchange, a personal responsibility requirement and an employer responsibility requirement,” the official said. “And the number of individuals with employer-sponsored insurance in Massachusetts has increased.”

According to the survey, at least 30 percent of employers would reap financial gain from dropping coverage even if they compensated employees for the change through other benefit offerings or higher salaries.

The research notes among the new provisions that could spur employers to drop coverage is a requirement of all employers with more than 50 employees to offer health benefits to every full-timer or pay a penalty of $2,000 per worker. Those benefits must also be equal between highly compensated executives and hourly employees – requirements that will increase medical costs for many companies.

The findings are distinct from a Congressional Budget Office estimate that only about 7 percent of employees who currently get health coverage through their jobs would have to switch to subsidized-exchange polices in 2014.

The group said its variance is so wide because shifting away from employer-sponsored insurance “will be economically rational” given the “law’s incentives.” The law requires employers to make insurance available to low-income or part-time employees that may not otherwise be covered.

The research found that contrary to what many employers feared, most employees — more than 85 percent — would stay at jobs that no longer offered health benefits. But 60 percent of employees would expect higher compensation.

Comments »

[youtube:http://www.youtube.com/watch?v=S28S5_NKmqI 450 300]

Comments »

Just watched this documentary courtesy of Netflix.  A great perspectives on the criminality of our recent financial crisis.

[youtube:http://www.youtube.com/watch?v=iFfTcAcGjcU&feature=related 450 300]

Comments »

From: Global Economic Trend Analysis

I received an email today from TrimTabs regarding their Consumer Spendables Index and a new measure called Dependency Ratio II

The Consumer Spendables Index consists of three components.

1. Cash Extracted from Real Estate
2. After Tax Income from Other Sources
3. After Tax Income from Wages and Salaries

click on chart for sharper image
If you see a “+” sign click a second time for higher resolution without further increasing the size.

TrimTabs reports …

The Federal Reserve discontinued its data on cash-outs in Q3 2008, but we use another source of refinancing data from Freddie Mac to estimate cash-outs and thus consumer spendables.

According to the Fed, cash-outs peaked at $804 billion in the four quarters ended in Q2 2006 (we refer to four-quarter periods to smooth quarterly volatility). At that time, cash-outs were equal to 13.6% of the $5.9 trillion in after-tax income. We estimate that cash-outs amounted to only $62 billion in the four quarters ended in April, down $742 billion, or 92.2%, from the peak.

Consumer spendables peaked at $7.06 trillion in the four quarters ended in Q4 2007, more than a year after cash-outs began to decline. Then consumer spendables began to decrease, bottoming at $6.06 trillion in Q2 2010. In the past year, consumer spendables rose an estimated $245 billion, or 4.0%, to $6.31 trillion. This increase is not impressive given that it was accompanied by the payroll tax cut and $1.5 trillion in federal deficit spending.

Note that the recession ended in the second quarter of 2009. The Consumer Spendables Index is below that point now. Moreover, it has taken three full years (12 quarters) for the Wages and Salaries component to match the pre-recession high.

This is in spite of record amounts of fiscal stimulus by Congress, and record amounts of liquidity maneuvers including two rounds of Quantitative Easing by the Fed.

TrimTabs Dependency Ratio II

TrimTabs is alarmed by the rapid rise in government benefits and has a new calculation to measure consumer dependency on government.

From TrimTabs ….

We have been alarmed at the rapid growth in government social programs. Several months ago, we introduced the TrimTabs Dependency Ratio, which compares income from government social benefits to income from wages and salaries. The ratio increased from 9% in 1960 to 36% in March.

We are introducing the TrimTabs Dependency Ratio II, which adds income from government wages and salaries to income from government social benefits and compares it to income from wages and salaries. This modified ratio rose to 66% in March, from 33% in 1960 and 45% in 2000.

The principal driver of the increase in TrimTabs Dependency Ratio is the rapid rise in government wages and salaries and social benefits over the past decade. From 2000 to 2010 private sector wages and salaries grew 29%, whereas government wages and salaries plus social benefits grew 89%, nearly three times the growth rate of private sector wages and salaries.

The government is playing an increasingly dominant role in the economy by borrowing massive sums to fund social welfare programs. This borrowing is financially unsound if not morally wrong. Instead of creating new wealth, it is simply piling more debt on an economy with the same capacity. At some point, the carrying capacity of the economy will be exhausted. We believe the economy is at or near that point.

Read the rest here.

Comments »

Another brilliant article by Mr. Jim Jubak, an absolute must read.

Here’s a quote from it:

At the end of April, gasoline sold for $3.03 a gallon in Moscow. When there was any to sell. Beginning in February, gas stations across Russia started to experience shortages. That’s a direct result of investigations launched by Prime Minister Vladimir Putin into steep price increases in gasoline. With the government cracking down on rising prices, effectively capping gasoline at a time when world oil prices had soared, Russian oil producers and refiners had started to ship more gasoline overseas. Prices for gasoline and diesel in Russia in March were $70 to $150 lower per metric ton than on world export markets, according to the Jonathan Muir, the CFO of the TNK-BP joint venture. The company, Muir said, would have earned $54 million more in the first quarter if it had exported the gasoline it instead sold in Russia.

So guess what? Russian refiners started to do just that — and fuel shortages emerged first in the country’s more remote areas, such as Siberia and the southern Altai region, and then in urban areas such as St. Petersburg. In the Altai, more than 700 gas stations have closed. In the Siberian city of Tomsk, gas stations limited customers, even city buses, to 25 liters a day. Because city buses need 80 to 100 liters a day to operate, you won’t be surprised if I tell you that 20% of buses didn’t run on April 28.

Comments »

Seriously, the CDC is preparing you for a Zombie Apocalypse.

Read the rest here.

Currently, the CDC does not appear to be prepared for all the incoming traffic as they prepare us for the Zombie Apocalypse. This link to the CDC blog works a little better. Hopefully in the case of a real Zombie Apocalypse, they will have updated their ability to handle the increased bandwidth, you know, since like in the case of a real epidemic, I bet a great many folks will be visiting the CDC site.

Comments »

“Our benchmark point estimates suggest that the ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to off-set state revenue shortfalls and Medicaid increases rather than boost private sector employment. The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.”

Read the rest here.

Comments »

We could definitely use another Abraham Lincoln to emancipate us all from being slaves to words.

In the midst of a historic financial crisis of unprecedented government spending, and a national debt that outstrips even the debt accumulated by the reckless government spending of the previous administration, we are still enthralled by words and ignoring realities.

President Barack Obama’s constant talk about “millionaires and billionaires” needing to pay higher taxes would be a bad joke if the consequences were not so serious. Even if the income tax rate were raised to 100% on millionaires and billionaires, it would still not cover the trillions of dollars the government is spending.

More fundamentally, tax rates — whatever they are — are just words on paper. Only the hard cash that comes in can cover government spending. History has shown repeatedly, under administrations of both political parties, that there is no automatic correlation between tax rates and tax revenues.

Tax Rates Vs. Hard Cash

When the tax rate on the highest incomes was 73% in 1921, that brought in less tax revenue than after the tax rate was cut to 24% in 1925. Why? Because high tax rates that people don’t actually pay do not bring in as much hard cash as lower tax rates that they do pay. That’s not rocket science.

Then and now, people with the highest incomes have had the greatest flexibility as to where they will put their money. Buying tax-exempt bonds is just one of the many ways that “millionaires and billionaires” avoid paying hard cash to the government, no matter how high the tax rates go.

Most working people don’t have the same options. Their taxes have been taken out of their paychecks before they get them.

Even more so today than in the 1920s, billions of dollars can be sent overseas electronically, almost instantaneously, to be invested in other countries — creating jobs there, while millions of Americans are unemployed. That is a very high price to pay for class warfare rhetoric about taxing “millionaires and billionaires.”

Nothing New

Make no mistake about it, that kind of rhetoric wins votes for political demagogues — and votes are their bottom line. But that is totally different from saying that it will bring in more tax revenue to the government.

Time and again, at both state and federal levels, in the country and in other countries, tax rates and tax revenue have moved in opposite directions many times. After Maryland raised its tax rates on people making a million dollars a year, there were fewer such people living in Maryland — and less tax revenue was collected from them.

Read the rest here.

Comments »

“The news media in this country are in a stupor. Either out of ignorance, or complete leftist bias and fraud to protect their socialist hero Barack Obama, the mainstream media has turned a blind eye toward the enormous disaster facing our economy. The greatest Ponzi scheme in world history is coming to an end, leaving America on the precipice of economic Armageddon. Here are the facts the mainstream media does not want you to see- hiding in plain site just like Osama bin Laden was.”

Read the rest here.

Comments »

And even there, it looks ripe to fail.

WASHINGTON (AP) — The Senate is taking up a bill Tuesday that would repeal about $2 billion a year in tax breaks for the five biggest oil companies, a Democratic response to $4-a-gallon gasoline that might fare better when Congress and the White House negotiate a deal later this year to increase the government’s ability to borrow.

The evening vote is expected to fail. But Democrats hope to build their case to include the measure in a deficit-reduction package being negotiated by key lawmakers and the Obama administration. Lawmakers from both parties are demanding deficit reduction as part of deal to increase the government’s ability to borrow and avoid an unprecedented default on U.S. Treasury bonds.

Comments »

WASHINGTON (AP) — Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.

The debt limit is the amount of money the government can borrow to help finance its operations. The nation has reached its debt limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate is that it borrows 40 cents for every dollar it spends.

Comments »

An excerpt from the speech has been included below. The rest may be found here.

Chairman Ben S. Bernanke
At the Conference on “New Building Blocks for Jobs and Economic Growth,” Washington, D.C.
May 16, 2011
Promoting Research and Development: The Government’s Role

I am pleased to speak at this conference on new building blocks for jobs and economic growth. The conference organizers have gathered an outstanding group of participants and have set an ambitious agenda. The topics you will address today and tomorrow, bearing on innovation and intangible capital, are central to understanding how we can best promote robust economic growth in the long run.

I won’t have to spend much time convincing this audience of the importance of long-run economic growth. The Nobel Prize-winning economist Robert E. Lucas, Jr., wrote that once one starts thinking about long-run growth and economic development, “it is hard to think about anything else.”1 Although I don’t think I would go quite that far, it is certainly true that relatively small differences in rates of economic growth, maintained over a sustained period, can have enormous implications for material living standards. A growth rate of output per person of 2-1/2 percent per year doubles average living standards in 28 years–about one generation–whereas output per person growing at what seems a modestly slower rate of 1-1/2 percent a year leads to a doubling in average living standards in about 47 years–roughly two generations. Compound interest is powerful! Of course, factors other than aggregate economic growth contribute to changes in living standards for different segments of the population, including shifts in relative wages and in rates of labor market participation. Nonetheless, if output per person increases more rapidly, the prospects for greater and more broad-based prosperity are significantly enhanced.

Over long spans of time, economic growth and the associated improvements in living standards reflect a number of determinants, including increases in workers’ skills, rates of saving and capital accumulation, and institutional factors ranging from the flexibility of markets to the quality of the legal and regulatory frameworks. However, innovation and technological change are undoubtedly central to the growth process; over the past 200 years or so, innovation, technical advances, and investment in capital goods embodying new technologies have transformed economies around the world. In recent decades, as this audience well knows, advances in semiconductor technology have radically changed many aspects of our lives, from communication to health care. Technological developments further in the past, such as electrification or the internal combustion engine, were equally revolutionary, if not more so. In addition, recent research has highlighted the important role played by intangible capital, such as the knowledge embodied in the workforce, business plans and practices, and brand names. This research suggests that technological progress and the accumulation of intangible capital have together accounted for well over half of the increase in output per hour in the United States during the past several decades.2

Innovation has not only led to new products and more-efficient production methods, but it has also induced dramatic changes in how businesses are organized and managed, highlighting the connections between new ideas and methods and the organizational structure needed to implement them. For example, in the 19th century, the development of the railroad and telegraph, along with a host of other technologies, were associated with the rise of large businesses with national reach. And, as transportation and communication technologies developed further in the 20th century, multinational corporations became more feasible and prevalent.

Economic policy affects innovation and long-run economic growth in many ways. A stable macroeconomic environment; sound public finances; and well-functioning financial, labor, and product markets all support innovation, entrepreneurship, and growth, as do effective tax, trade, and regulatory policies. Policies directed at objectives such as the protection of intellectual property rights and the promotion of research and development, or R&D, promote innovation and technological change more directly.

In the remainder of my remarks, I will focus on one important component of innovation policy–namely, government support for R&D. As I have already suggested, the effective commercial application of new ideas involves much more than just pure research. Many other factors are relevant, including the extent of market competition, the intellectual property regime, and the availability of financing for innovative enterprises. That said, the tendency of the market to supply too little of certain types of R&D provides a rationale for government intervention; and no matter how good the policy environment, ultimately, big new ideas are often rooted in well-executed R&D.

Comments »

ALBANY – Escape from New York is not just a movie – it’s also a state of mind.

A new Marist College poll shows that 36% of New Yorkers under the age of 30 are planning to leave New York within the next five years – and more than a quarter of all adults are planning to bolt the Empire State.

The New York City suburbs, with their high property values and taxes, are leading the Exodus, the poll found.

Of those preparing to leave, 62% cite economic reasons like cost of living, taxes – and a lack of jobs.

Comments »

“A default would inflict catastrophic far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment,” said Geithner in the letter to Bennet which was dated May 13. “Even a short-term default could cause irrevocable damage to the economy.”

Read the rest here.

Comments »

(Reuters) – President Barack Obama, under pressure from Republicans and the public to bring down gasoline prices, announced new measures on Saturday to expand domestic oil production in Alaska and the Gulf of Mexico.

High fuel prices have dented Obama’s ratings in opinion polls and threaten to dampen the economic recovery that is critical to his re-election in 2012.

Full story click here

Comments »

The rail system built with the $200M will purpotedly extend between Chicago and Detroit, and Michigan will receive a share of another $336M for the trains that will ride along this route.

This is part of the $2 billion that Florida turned down for their own federally funded high speed rail system earlier this year. That money has been divided amongst 15 states, including Michigan.

The Department of Transportation claims that these rails will provide access to 80% of Americans in 25 years. How exactly the creation of new railways (which will presumably built alongside or over existing track) is going to provide access to more Americans than current rail cars currently manage to provide, is never explained.

“These projects will put thousands of Americans to work, save hundreds of thousands of hours for American travelers every year, and boost U.S. manufacturing by investing hundreds of millions of dollars in next-generation, American-made locomotives and railcars,” said Vice President Joe Biden.

Comments »

WASHINGTON (AP) — Congress and President Barack Obama are proposing ways to automatically trigger budget savings if they can’t rein in deficits the old-fashioned way, by enacting laws to cut spending or raise taxes. Similar efforts in the past have a spotty record.

The last quarter-century has seen plenty of missed deficit and spending targets and inventive evasions of budget curbs. This is because the same legislators who put in place those budget constraints can pass laws to ignore them.

That history has convinced analysts that automatic triggers work best when lawmakers already have approved spending cuts, taxes increases or both. They’re least effective when used as an incentive to force legislators into such agreements in the first place.

“Process alone is never going to bring about fiscal responsibility,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that wants to erase federal deficits. “If the political actors are not willing or ready to make hard choices, they won’t.”

This year’s expected record deficit of $1.5 trillion and a cumulative national debt topping $14 trillion have snowballed into a major political issue that probably will color presidential and congressional elections in 2012.

As a result, Washington is awash with proposals from Obama, lawmakers and anti-deficit groups such as the Bipartisan Policy Center to automatically trigger budget savings if ceilings on spending, the national debt or other benchmarks are pierced.

A quarter-century ago, lawmakers were looking for similar mechanisms.

When Reagan-era deficits reached the unprecedented $200 billion-a-year range, Congress in 1985 enacted the Gramm-Rudman law, sponsored by Sens. Phil Gramm, R-Texas, Warren Rudman, R-N.H., and Ernest Hollings, D-S.C.

Comments »

In their latest press release on May 4, Moody’s rating service confirms what many had the common sense to understand on their own. It is impossible to legislate oneself out of a crisis, and credibility and accompanying credit comes as a product of fullfilling obligations and successes, not international finance laws.

New York, May 04, 2011 — Moody’s Investors Service says in a new report that although Basel 3 is credit positive for banks, the standalone financial strength of banks weakened by the global financial crisis is unlikely to return to pre-crisis levels in the short term. The report discusses the likely impact of Basel 3 on bank credit profiles and how different groups of banks may be affected in the new Basel 3, post-crisis environment.

The framework agreed by the Basel Committee on Banking Supervision in the aftermath of the financial crisis sets new standards for global bank regulation. “Basel 3 will be positive for bank creditors overall, as it will improve the resilience of the global banking system by adding sizeable capital and liquidity buffers,” says Vice President and co-author of the report Tobias Moerschen. The recovery of banks’ credit profiles, however, is constrained by the pressures many institutions still face given the fragile economic recovery in developed markets, skittish financial markets, and new global risks.

“While directionally positive, Basel 3 does not cure the structural challenges banks continue to face from a credit perspective, such as illiquidity and high leverage, nor does it alleviate the tension between profit-maximizing equity holders and bank managers in contrast to risk-averse bondholders,” notes Senior Vice President and co-author of the report Alain Laurin. While important, the new regulatory framework is therefore only one part of the broader effort to improve banks’ resilience to economic downturns.

Stricter regulatory standards and investors’ elevated focus on risks in the post-crisis environment will not affect banks in a uniform manner. The report discusses three different groups of banks: 1) institutions that are able to raise additional capital and bolster liquidity to meet Basel 3 requirements, which may see their credit strength improve; 2) weaker banks that will be challenged to comply with the new rules, and may see their credit profiles deteriorate; and 3) banks that are already largely compliant with Basel 3, whose credit strength likely will remain stable. With the new rules acting as a catalyst for change, weaker banks may seek acquirers, seek government support, or wind down part or all of their operations, with potentially adverse consequences for creditors.

The report notes that considerable uncertainty remains about the effects of Basel 3 due to the long transition period (banks have until 2019 to fully comply) and the likelihood that parts of the proposed framework may change. Additionally, jurisdictions may differ in how they adopt the new rules, with the potential for regulatory arbitrage. Banks are also just beginning to formulate how they will adapt to the Basel 3, post-crisis world and their strategies could have a significant impact on their intrinsic financial strength.

Sadly, for the body of politicians who participated in the Basel process, increasing buffers and reserve requirements when the economy is on the fringe and no financial institution has the funds available to contribute to said buffers (which was sort of the problem to begin with), can hardly be helpful to the immediate release of the system.

And even worse for them, enacting a banking reform after a banking crisis is hardly great enough of an endevour to immediately reduce all pessimism in the system.

Perhaps Basel 3 will be helpful down the road, but for now, it isn’t.

Comments »

SHANGHAI — For three decades, wealthy nations have invested hundreds of billions of dollars in China, helping drive one of the most remarkable economic booms in history.

Now, China is poised to return the investment favor. The question is whether the United States will be willing and able to fully participate, according to a new study to be released Thursday.

Flush with capital from its enormous trade surpluses and armed with the world’s largest foreign exchange reserves, China has begun spreading its newfound riches to every corner of the world — whether copper mines in Africa, iron ore facilities in Australia or even a gas shale project in the heart of Texas.

The study, commissioned by the Asia Society in New York and the Woodrow Wilson Center for International Scholars in Washington, forecasts that over the next decade China could invest as much as $2 trillion in overseas companies, plants or property, money that could help reinvigorate growth in the United States and Europe.

But the report, to be released at a Washington news conference that Commerce Secretary Gary Locke plans to attend, also warns that the United States risks missing out on a large share of the Chinese investment boom because of politics, a growing rivalry between the two nations and deep-seated perceptions that Chinese investments are unwelcome in America.

“If political interference is not tempered,” the study warns, some of the benefits of Chinese investment — “such as job creation, consumer welfare and even contributions to U.S. infrastructure renewal — risk being diverted to our competitors.” While Wall Street banks have lobbied for more Chinese investments in the United States, hoping that will bring bigger deals for the banks, Washington has remained wary — even though the Obama administration says it welcomes Chinese money.

But anti-China rhetoric is hot in Washington and among many state and local officials. One frequently cited worry is that Chinese companies, many of them owned partly or entirely by the government, will use their purchases to gain military secrets. Another concern is that Chinese companies will buy American companies with manufacturing operations in the United States, close those factories and move production to China.

China, of course, is already a force in global markets. Over the last few years, it has made multibillion-dollar loans to developing nations and let its state-owned companies acquire minority stakes in global powerhouses like Rio Tinto, Morgan Stanley and the Blackstone Group.

China is also a major player in the global debt markets, holding about $1.6 trillion in United States Treasury bonds, an investment that helps keep American interest rates low and finances America’s enormous debt.

But China is still a relatively small player in overseas direct investments, which include purchases of large, voting stakes in foreign companies and plants. That also includes investments in new construction projects on previously undeveloped land — so-called greenfield facilities.

Last year, China’s overseas direct investments amounted to about $59 billion. By comparison, the United States’ figure was over $300 billion.

But with Beijing pushing its big companies to go overseas and invest in resources and technology, China’s investments could soon reach $100 billion to $200 billion a year, according to the Asia Society study.

The potential problem for Beijing is that Chinese companies are not always welcomed overseas — not only because China wields enormous economic clout but because state-owned giants are believed to be subsidized by the state and possibly working in the interest of the government.

Congressional critics of China’s investment aspirations including Senator Jack Reed, Democrat of Rhode Island. “Many of these companies are so closely intertwined with the government of China that it is hard to see where the company stops and the country begins, and vice versa,” Mr. Reed recently told Reuters.

A series of proposed Chinese deals in the United States have been blocked by regulators or attacked by local politicians, who say they are worried China could gain access to sensitive military technology or take control of valuable natural resources.

In 2005, one of China’s giant oil companies, Cnooc, dropped its bid to acquire the American oil giant Unocal after a Congressional investigation into the purchase. And in recent years, the Chinese telecommunications giant, Huawei, has repeatedly been rebuffed from making deals in the United States, over national security concerns.

More recently, the Anshan Iron and Steel Group, a Chinese company seeking to build a relatively unsophisticated steel rebar factory in Mississippi, had to fight fierce political opposition in the state, including fears the project would result in job losses and threaten national security.

Angered at what it says is protectionism masquerading as national security concern, Beijing has lodged sharp complaints with Washington.

The Treasury Department has placed the topic on the agenda for a high-level dialogue with Chinese officials scheduled for next week in Washington.

“We strongly welcome investment from around the world, including China,” says Lael Brainard, one of the highest-ranking Treasury Department officials.

Still, some experts say anti-China sentiment is so high across the country that the United States is unlikely to attract the huge investments over the next few years that the Asia Society study suggests are possible.

“There’s no chance this is going to happen,” says Derek Scissors, an expert on China at the Heritage Foundation, a conservative policy institute in Washington. “They want to invest a lot, but no one here’s going to let them. The political climate in Washington is too anti-China right now.”

Daniel H. Rosen, co-author of the study with Thilo Hanemann, and a principal at the Rhodium Group, an economic advisory firm in New York, says that if Chinese companies are turned away, it could significantly reduce investment opportunities in the United States.

And, he warns, it could prompt China to retaliate against American businesses that operate in China, while also discouraging Beijing from pushing ahead with reforms that would make its business and financial markets more open and transparent.

“America has been debating this kind of thing for hundreds of years,” Mr. Rosen said. “But time and time again, America has decided” to be open to investment from overseas, he said. “Our conclusion is China is no different.”

To ensure that America gets its share of China’s money, the study calls on Washington to send a clear, bipartisan message that Chinese investment in the United States is welcome, to protect any national security review process from political interference and to work with China to enhance its own transparency when it proposes investing in the United States.

Some analysts say China deserves some of the blame for opposition to its overseas investments, not just in the United States but elsewhere.

Chinese companies are not very transparent, and much of the investing by China is done by a handful of government-owned companies that have access to cheap state financing, giving them what some analysts say is an unfair advantage in competing for resources or assets.

But many analysts say China and the United States clearly need each other. China now has the capital American business so desperately seeks, and the United States has technology and a highly skilled work force.

Orville Schell, director of the Center on U.S.-China Relations at the Asia Society and the person who commissioned the study, says the United States must do its part to improve relations with China.

“I feel increasingly alarmed and discouraged by the willful ignorance of Americans to the competitive challenge the Chinese pose to the U.S., including in foreign investment,” Mr. Schell said in an interview. “China is looking for places to park its money, and it could be to our advantage. If we don’t find a way to be open to China, it’s undeniable the money will go elsewhere.”

Comments »