Trader Dan’s Commentary

If you want to read a downright fascinating and yet alarming story on a new breed of computer viruses created to be used as weapons of war, check out the following link. This article is absolutely stunning and reads like something out of a fantastic sci-fi movie..

Stuxnet malware is ‘weapon’ out to destroy … Iran’s Bushehr nuclear plant?
By Mark Clayton Mark Clayton – Tue Sep 21, 3:08 pm ET

Cyber security experts say they have identified the world’s first known cyber super weapon designed specifically to destroy a real-world target – a factory, a refinery, or just maybe a nuclear power plant.

The cyber worm, called Stuxnet, has been the object of intense study since its detection in June. As more has become known about it, alarm about its capabilities and purpose have grown. Some top cyber security experts now say Stuxnet’s arrival heralds something blindingly new: a cyber weapon created to cross from the digital realm to the physical world – to destroy something.

At least one expert who has extensively studied the malicious software, or malware, suggests Stuxnet may have already attacked its target – and that it may have been Iran’s Bushehr nuclear power plant, which much of the world condemns as a nuclear weapons threat.

The appearance of Stuxnet created a ripple of amazement among computer security experts. Too large, too encrypted, too complex to be immediately understood, it employed amazing new tricks, like taking control of a computer system without the user taking any action or clicking any button other than inserting an infected memory stick. Experts say it took a massive expenditure of time, money, and software engineering talent to identify and exploit such vulnerabilities in industrial control software systems.

Unlike most malware, Stuxnet is not intended to help someone make money or steal proprietary data. Industrial control systems experts now have concluded, after nearly four months spent reverse engineering Stuxnet, that the world faces a new breed of malware that could become a template for attackers wishing to launch digital strikes at physical targets worldwide. Internet link not required.

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Jim Sinclair’s Commentary

Contrary to general financial TV news and breaking news alert statements from Treasury, the Western World financiers do not have China shaking in any boot.

Wen Rebuffs U.S. Over Yuan Dispute

(RTTNews) – Chinese Premier Wen Jiabao on Wednesday said there is no basis for a rapid appreciation of the yuan (renminbi), rebuffing calls from U.S. officials to let the currency move more freely.

"There is no basis for a drastic appreciation of the renminbi," Wen was quoted as saying in a speech to the U.S.-China Business Committee in New York. He said a 20-40% rise in the yuan, as demanded by U.S. lawmakers, would render numerous export-reliant Chinese companies insolvent.

Wen, who is due to meet U.S. President Barack Obama on Thursday at the U.N. Summit, said the yuan’s valuation is an economic issue and should not be politicized, adding that a rapid rise in the currency will not solve the trade imbalance between the U.S. and China.

Unlike other major currencies, China does not allow its yuan to trade freely according to market demand. Instead, Chinese policymakers set a central parity rate – an official reference for daily trading – every morning and allows the currency to fluctuate upto 0.5% from that level.

Critics of China’s exchange rate policy say the artificially weak yuan unfairly gives an edge to the country’s exporters, while disadvantaging exporters elsewhere by rendering them uncompetitive.

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Jim Sinclair’s Commentary

According Sun Tzu and the Art of War, when condemning the enemy send a conciliatory message to help take the edge off it. In India the theory is presented as "If you cannot oblige, speak obligingly."

As published, it is titled "When yes means no."

China seeks to play down differences with US
By FOSTER KLUG
Associated Press Writer

(AP:NEW YORK) Chinese Premier Wen Jiabao expressed optimism Wednesday that the United States and China would resolve major trade frictions, even as he rejected U.S. claims that Beijing’s currency policies cost American jobs.

Despite sometimes tough words, Wen used much of a speech on the sidelines of a United Nations global summit to try to ease U.S. anger against China ahead of a Thursday meeting with President Barack Obama.

Relations between the powers have suffered recently, but Wen sought to play down economic, military and diplomatic tensions. The United States and China, Wen told business leaders gathered at the Waldorf-Astoria hotel, are "not rivals in competition but partners in cooperation."

Wen, however, pushed back against U.S. claims that Beijing’s tightly regulated, undervalued currency _ the yuan _ gives China’s exporters an artificial advantage over U.S. manufacturers. Ahead of U.S. congressional elections in November and at a time of high American unemployment, China’s economic and trade policies are a major friction in ties with Washington.

Wen warned that China’s currency must not be turned into a political issue between the countries. He saw no link between the yuan’s value and China’s trade advantage over the United States. The politically sensitive U.S. trade deficit with China jumped to $26.2 billion in June, the largest one-month gap since October 2008.

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Jim Sinclair’s Commentary

There is no more serious dilemma in the world than China’s ability to shut down high tech by cornering the market and production of strategic materials and metals, yet the West simply paddles on with no plan whatsoever. In this case the only meaningful alternative is Tanzania, a country where China is extremely active.

I wrote a book in 1983 titled The Strategic Metals War ^[4]. it was spot on then and is spot on now.

China Blocks Export of Crucial Minerals to Japan as Dispute Escalates
By KEITH BRADSHER
Published: September 22, 2010

HONG KONG — Sharply raising the stakes in a dispute over Japan’s detention of a Chinese fishing trawler captain, the Chinese government has blocked exports to Japan of a crucial category of minerals used in products like hybrid cars, wind turbines and guided missiles.

Chinese customs officials are halting shipments to Japan of so-called rare earth elements, preventing them from being loading aboard ships at Chinese ports, industry officials said on Thursday.

On Tuesday, Prime Minister Wen Jiabao personally called for Japan’s release of the captain, who was detained after his vessel collided with two Japanese coast guard vessels about 40 minutes apart as he tried to fish in waters controlled by Japan but long claimed by China. Mr. Wen threatened unspecified further actions if Japan did not comply.

A Chinese Commerce Ministry spokesman declined on Thursday morning to discuss the country’s trade policy on rare earths, saying only that Mr. Wen’s comments remained the Chinese government’s position. News agencies later reported that Chen Rongkai, another ministry spokesman, had denied that any embargo had been imposed.

Any publication of government regulations or other official pronouncements barring exports would allow Japan to file an immediate complaint with the World Trade Organization, alleging a violation of free trade rules. But an administrative halt to exports, by preventing the loading of rare earths on ships bound for Japan, is much harder to challenge at the W.T.O.

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