I don’t, but I have a good friend who can translate it.

Matt

The link will be directed to a post in Chinese, you read Chinese?

http://www.wforum.com/newspool/articles/headline/127010.html

That is broadly consistent with what I’m hearing. But the Chinese ALSO want (and this is a KEY demand) better security guarantees for their nationals working in the provinces.

And I don’t think Zardari can deliver that. If that means an end to the Sindh dominance in Pakistan, so be it; that is consistent with the Chinese aim of a strategic counterweight to the BJP in India.

The USA is of course apoplectic at this possibility.

But the absurd US support of the anti-democratic coup ousting Chaudhury as head of the Pakistani Supreme Court earlier this year (and Zardari’s ratification of the result) virtually eliminated the last vestiges of support the US had among the Pakistani people, rich AND poor.

As for the NY Times, I find it generally to be an inferior newspaper; whether it be their sacrifice of journalistic credibility with Judith Miller, their general failure to understand the depth of the rage of the Global South against the so-called Washington Consensus, their failure to understand the inner workings of the Fed, or their completely misinformed reporting on Russia, South Asia and China.

Matt Dubuque
nospammdubuque@yahoo.com

What I read on some Chinese internet forum is that China will guarantee the solvency of major Pakistani commercial banks, thus prevent a system-wide meltdown in Pakistan. Possible means includes equity injection through large state-owned banks. And no, they won’t hand cash directly to “Mr. Ten Percent” or anyone close to him. Don’t know if the information is accurate or up-to-date, but here it is.

And frankly, I find it hard to believe the article in NYT. The whole page is full of quotes from “Western officials.” Sounds fishy to me.

What the current discussions seem to be centered around is inauguration of the ACU (Asian Currency Unit), an idea that has been in various stages of development over the last several years at APEC.

Over a period of time, the hope is that this would be the foundation for a new Bretton Woods.

In terms of China “turning Pakistan down flat” for a rescue loan, that is a wholly inaccurate statement.

Recall that Pakistan has been rocked over the last 10 days (although virtually unreported in the Western media) by the kidnapping of a Chinese aid worker in the frontier provinces.

This has been a HUGE story in both China and Pakistan. Late last week, the Pakistanis launched a massive air strike in a hostage rescue operation, killing around 12 people and freeing the captive.

Negotiations have now resumed between Pakistan and China over the loan.

China wanted to have Pakistan take care of business first. This was their second citizen that has been taken hostage in the last 12 months.

The ties between China and Pakistan are far deeper and broader than those between the declining empire and Pakistan.

The Chinese are also negotiating, as part of this loan, for a commitment to reduce the mania for forced privatization at fire sale prices and a general rejection of the so called “Washington consensus”.

They may have to force (behind the scenes) a change in government to pull that off, but it is definitely in the cards.

Matt Dubuque
nospammdubuque@yahoo.com

It seems to me that the US and the EU are looking to come up with linked float of their currencies backed by mutual swaps, and then to use that ‘cartlidge’ to set terms for ‘Bretton Woods III’ based on who has access to dollars to unwind dollar-denominated debt without blowing up. Dubya and Sarko just butted heads at Camp David regarding who was going to be the boss of that operation. I’ll bet Sarko now knows what the rest of us know: Dubya is stone useless, and nothing will move forward until term limits pry the First Dweeb from office.

That leaves Russia, China, and the Oelo-gopolies out of the inner ring. They would be nuts, to me, to turn to the IMF; far better to come to mutual terms amongst themselves if they can as an emergent bloc, but that would take radical thinking. Probably take a year or two to get something like that rolling it it takes off at all. We’ll see.

I haven’t seen any video lately of Putin wrestling an alligator, must be to busy trying to save his markets and banking system.

Setser’s post is very good, I have in it in my Links draft already, but have not posted it yet (working on another post first).