Good news: You don’t need to fret about global war, the economy or even the future value of outstanding U.S. Treasury bills, notes and bonds, at least if China has any say. It is not going to do a single thing to rock America’s boat. In fact, Beijing hopes that things stay smooth as glass, because it holds more than $1.1 trillion of U.S. Treasury debt. And with the direction America is going, the country would love nothing better than to see Barack Obama re-elected.
China’s leaders are not stupid. To them, Obama is the best thing to come along since one-minute rice.
One prominent Republican agrees. Last month, self-promoter extraordinaire Donald Trump wrote an open letter to the President. Trump took issue with Obama regarding the advantages in trade that China is being given, writing: “How little respect the Chinese government has for you.”
Last week, Trump added to his complaints against Obama’s China policy, saying: “They’re having a field day with the United States and our leadership.”
You would have to be an idiot to discount China’s global ambitions. Beijing is covering all of its bases, building a 21st Century military, piling up IOUs and putting capitalism to work. (Poor Mao Zedong. All he did was turn hundreds of millions of kids into robots and wear a stupid cap.)
The new leaders in China are not peasants like Mao, nor are they blinded by Communist doctrine. They have set their sights on global domination and one of their biggest allies is Obama.
China’s Ambition: Drink Canada Dry
Welcome to Calgary, a global epicenter for energy and home to thousands of Americans, including yours truly. Most of us transplants love it here, and why not? The politics are conservative, the economy is booming and the petroleum industry is strong.
But don’t expect to walk around downtown and see Texans ambling by in cowboy boots and Stetsons. It is more likely you will encounter Chinese nationals staking out the city’s finest restaurants and hotels.
The likes of J.R. Ewing don’t throw much of a wake. However men like Jiang Jiemin, the chairman of PetroChina, do.
Much of the blame lies with Obama because he refuses to renew America’s claim in Canada’s incredibly rich oil sands. By placating the Greens, Obama is frittering away a windfall of petroleum just waiting to be harvested for the benefit of all North American people.
Consider that Canada has the second largest oil reserves in the world. Only Saudi Arabia has more. Canada’s reserves are mostly in the form of shale oil. I have visited the oil sands projects in Northern Alberta, and they are a moonscape. Digging up ground to squeeze oil from rock is a dirty process, but also an effective one. When I first started writing about energy 30 years ago, it cost almost $30 to make a barrel of crude from oil sands. With new technologies, the price has fallen to about $10 per barrel.
While Greens in the United States cry foul over some dead ducks caused by Alberta’s oil sands reservoirs, China appreciates the bonanza that exists here and desperately wants to tap into it.
It won’t be long before China is consuming more oil than the United States.
In September, China’s Ministry of Public Security released a statement indicating that the number of automobiles in China has surged to 100 million. As of the end of August, China registered 219 million motor vehicles in four categories: motorcycles, tractors, trucks and automobiles.
As the President and his Democrats delay Alberta’s oil sands imports that can easily be harvested, China is pouring billions of dollars into Canada. Since 2009, China has invested $16 billion in cash into Canada’s energy projects.
This investment has come about as Ottawa has changed its hard-line policies toward China. Today, Ottawa is busily reassuring Beijing that its investment is safe in Canada.
In response, China has been eager to roll its U.S. dollars into Canadian petroleum projects. Why wouldn’t it? After all, the greenback has been steadily weakening for more than a decade. More recently, the turmoil in North Africa and the Mideast has demonstrated to Chinese investors something that leaders in Washington used to understand: Canada is a safe, secure democracy worth investing in.
The foremost reason for this marriage between Canada and China is that Congressional Democrats openly reject Canadian crude. After 200 years of a peaceful alliance and after fighting two world wars together, Obama and his Green coalition are denouncing Canada — even if it means embracing Muslim Sheiks who enacted two oil embargoes against the United States in the 1970s and who continue to finance Islamic extremists.
Last week, The Financial Post wrote this about the growing alliance between Canada and China:
Canada’s recent Asian market diversification drive after the U.S. State Department delayed the approval of the Keystone XL pipeline has given Chinese energy companies further incentive to invest in Canada. Although keeping a low profile in the intensifying Canadian debate on building more pipelines to the West Coast, China and other Asian countries hope to have access to Canadian oil and gas in the near future.
Communists better understand the advantages of investing in Canada and the most strategic commodity on Earth: oil.
Perhaps we should not be surprised. In the ancient treatise The Art of War, Chinese philosopher Sun Tzu wrote:
A wise general makes a point of foraging on the enemy. One cartload of the enemy’s provisions is equivalent to twenty of one’s own, and likewise a single picul [133.3 pounds] of his provender is equivalent to twenty from one’s own store.
The bottom line is that a vote for Obama is a vote for China. He will continue his policies of the past three years, making Beijing very happy. China’s leaders are well-educated in history and have undoubtedly have read what Napoleon Bonaparte said: “Never interrupt your enemy when he is making a mistake.”
Yours in good times and bad,
Myers Energy & Gold Report