This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Should China Be Allowed to Buy Texas Oil?

Third, in and of itself, this deal may seem fairly innocuous. However, it also represents a "camel's nose under the tent" probe by the Chinese government for bigger and bolder acquisitions that may not be in the strategic interests of the United States -- remember the controversy five years ago when China tried to buy Unocal.

Finally, deals like this play an important part in China's currency manipulation as China seeks to diversify out of U.S. government bonds and acquire hard assets like oil reserves which represent a better inflation hedge. To be clear here, to maintain the grossly undervalued Chinese yuan's fixed peg to the dollar, the Chinese government must circulate U.S. dollars back into the U.S. One way to do this is to buy U.S. government bonds, which is how China has acquired almost $2 trillion of U.S. treasuries. But buying hard U.S. assets like oil reserves is now seen in Beijing as a better way for China to manipulate its currency because hard assets are better inflation hedges.

In the final analysis, the best way to look at this deal is as just another monthly payment by America on its mortgage to China. Until China freely values its currency, lowers its Great Walls of Protectionism around its various markets and resources, and plays by the rules of free trade, Chinese companies, whether state-owned enterprises or not, should not be allowed to acquire American companies.

Peter Navarro is a contributor to The Street and author of "Seeds of Destruction."
www.PeterNavarro.com.

Peter Navarro is a business professor at the University of California-Irvine. He is the author of the path-breaking management book, "The Well-Timed Strategy," and the bestselling investment book, "If It's Raining in Brazil, Buy Starbucks" and "Seeds of Destruction." His unique and internationally recognized expertise lies in his "big picture" application of a highly sophisticated but easily accessible macroeconomic analysis of the business environment and financial markets for investors and corporate executives. Navarro's articles have appeared in a wide range of publications, from Business Week, the Los Angeles Times, The New York Times and The Wall Street Journal to the Harvard Business Review, the Sloan Management Review and the Journal of Business. Professor Navarro is a widely sought after public speaker. He has appeared frequently on Bloomberg TV and radio, CNN, CNBC, and NPR, as well as on all three major network news shows. His free weekly investment newsletter is published at www.peternavarro.com.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CEO $163.16 -0.90%
CHK $14.77 -1.90%
PTR $124.20 -0.46%
XOM $85.85 -0.77%
AAPL $131.02 -1.10%

Markets

DOW 18,072.90 -159.12 -0.87%
S&P 500 2,110.51 -15.55 -0.73%
NASDAQ 5,039.9080 -49.4540 -0.97%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs