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Another Chinese Rate Hike As Early As This Week Expected

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Sun, 06/05/2011 - 23:49 | 1342459 lolmao500
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They could fix their inflation problem real fast. Get your currency to world currency status.

Mon, 06/06/2011 - 01:06 | 1342553 Ahmeexnal
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Recent developments in the Peruvian election: Ollanta Humala leads the vote count.

TPTB will not let Humala win.

Violence is about to erupt in Peru.



Sun, 06/05/2011 - 23:58 | 1342469 DoChenRollingBearing
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Just get out.

Buy gold, the real physical stuff in your own possession.  Before it's too late.


Mon, 06/06/2011 - 08:16 | 1342799 Dolemite
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Precious metals to present good buying oppurtunity after a near term correction?

Gold and silver showing signs of weakness, and oil is confirming.


Mon, 06/06/2011 - 08:57 | 1342912 savagegoose
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wait till china do some tighening, that seems to knock gold on the head a bit.

then buy for a few dollars less.

Mon, 06/06/2011 - 00:03 | 1342474 Dr Zaius
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Please forgive the silly question, I'm just trying to get a handle on all this stuff. How would mandates to banks in China to pay higher interest rates and increase reserves be a problem for Treasuries? Is it that yields are to low on Treasuries and the banks must find alternate holdings that will allow them to pay the increased rates mandated by the People's Bank of China?

Mon, 06/06/2011 - 00:34 | 1342525 What_Me_Worry
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I think since they peg to us that it doesn't matter what rate they set.  Except for the collateral damage that is causes from increased cost of goods in China that must be passed on to consumers here, due to their razor margins their exports work on.

The amount of USTs that China buys is pretty much as simple as the total trade deficit.  It must keep buying to peg its currency.

Mon, 06/06/2011 - 00:06 | 1342476 theXman
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Drought is over. China south is now swamped in water.

Mon, 06/06/2011 - 01:07 | 1342560 Ahmeexnal
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They should have kept the drought.

That water now flooding south China is Fukushima water.

Mon, 06/06/2011 - 00:23 | 1342505 Missiondweller
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When was that Walmart exec was saying "serious" inflation was going to really hit the US? June?

Mon, 06/06/2011 - 07:28 | 1342747 pacosan
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An ice cream cone from McDonald's went from $0.75 to $0.86 last week(tax included). That's around a 14% increase. 

Mon, 06/06/2011 - 00:29 | 1342518 What_Me_Worry
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When are those barbaric Chinese going to figure out that food and energy shouldn't be included in the CPI?

Let them eat USTs.

Mon, 06/06/2011 - 00:35 | 1342522 HungrySeagull
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We owe money to China who works in factories for us to buy things we desire to have using credit to repay someday on money we will never have.

It's a wonder this Nation works so hard to postpone the inevitable.

The best thing Walmart needs to do now is shut down all China production and procurement. And start up all over again in some dirt village in Liberia or something. Shipping should be a bit easier and more trains run east to west instead of west to east on the land bridge.

Mon, 06/06/2011 - 01:04 | 1342555 Michael
Michael's picture

You said it HS. We better find another suppler before the Chinese get a clue and dump our asses. You'd think Wall-Mart would have a clue. They should be setting up peasant sweet shops in Ethiopia even as we speak. How else are ugly Americans going to get their cheep consumer goods fix if the Chinese jack up prices.

Mon, 06/06/2011 - 01:29 | 1342584 HungrySeagull
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Not only that, I am beginning to hate Walmart.

They have killed off downtowns all across the land reducing the fine old 5-10 store to little more than a flea market or a Christian mission store. And turned the rest of the blocks into deteroating buildings unfit for further retail service.

YThose too poor to own a car are trapped at the local grocery paying prices that are 20% or more over walmart.

There was a time walmart did not exist 20+ years ago. I think it will not be too difficult to re-adapt to those kind of times all over again. If anyone is left alive long enough to organize it.

Mon, 06/06/2011 - 00:47 | 1342541 bankonzhongguo
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I'm just a round eyed small potato, but a real reserve currency is built on gold and machines.

China has the machines, now it just needs to sell UST for physical gold and then a slow parade of ships from US/Europe vaults to China.  PBOC should ask for a public audit of Fort Knox before it buys the next round of UST10Y.

Frankly, all China needs is a swap of defaulting UST for African gold direct from the mines and skip CME entirely. Pay the mines twice the price (its only paper), bank the gold and crash the dollar.

Zhijue shi xianshi.

Mon, 06/06/2011 - 01:09 | 1342562 Ahmeexnal
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And you think gold miners are *that* stupid as to be left holding the bag?

Mon, 06/06/2011 - 01:55 | 1342616 What_Me_Worry
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They already are doing just that.  One example that is public is buying gold concentrate from Couer's(CDE) Alaska mine and then shipping it to China to be refined.  This allows them to purchase gold without it appearing they are buying gold.  It also doesn't cause them to bid against current supplies and therefore raise the price.

They grabbed this deal before the mine started even started full production.  They also would only take 50% of the total yield.  This seems like they didn't want to grab too much attention to make it look like they were buying a US mine, outright.

Who knows how many deals they have going that we don't know about.

The longer this goes on, the closer they become to being the largest holder of physical gold reserves.  That is what I think they are shooting for and why they are willing to play pretend with USTs.  They wouldn't want the truth to be known.  At least, not yet.

Disclaimer- I still think China will fall harder than the US when this whole bukkake theatre is said and done.

Mon, 06/06/2011 - 01:52 | 1342617 laomei
laomei's picture

Something to remember with any and all stories on Chinese inflation.  The CPI in China is calculated hysterically different from that in the US.  Food and energy prices actually make up a very large part of it.  As such, the number is far more realistic.  Something to remember in all this however is that these markets are highly regulated (because China kinda sorta recognizes speculator market manipulation as a bad thing).


Now anyone care to venture a guess as to what the real CPI is in the US using an equal basket of goods?  Do keep in mind that the US response is "nothing to see here, all is well" instead of actual corrective action.


And people think that China is imploding... lol.

Mon, 06/06/2011 - 02:11 | 1342630 HungrySeagull
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I don't care about CPI because no one raised the COLA last year. This year? I don't know if we will still be a United States of America after August 2 which is Default day.

Mon, 06/06/2011 - 11:37 | 1343379 topshelfstuff
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""""I don't care about CPI because no one raised the COLA last year""""


actually it is now 3 years that there has been Zero Increase in COLA, and a great example of how non-reactive, docile, Americans are. There wasn't a peep, no outrage, demonstrations, demands to not do this. And all this while the top 1%, and top 10%, kept getting a larger slice of the pie. Even in Europe such a move wouldn't get passed w/o enough of a Pubic outcry to force a "reconsideration". It was in 2008 when the US announced no increase in COLA for the next 2 years, and since the Pubil didn't complain, we got it again this year [ now 3 in a row ]

BTW, while its not put in our News, if you were to look at the Increases in China, Asia, all Latin American countries, you'll be amazed. Once again Min Wage, Average Wage, has been increasing by 10% to 25% yearly, along with Purchasing Power increases on their currency. They also have assurances from the Gov to increase intra-year, should it become necessary, if CPI happens to move above the forecast, and the increase would be higher than the CPI increase.

Mon, 06/06/2011 - 02:38 | 1342645 covsire
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Don't blame Walmart for that.  Walmart is the effect, Washington is the cause.  The dirty little secret here is that without cheap chinese crap, our quality of life would be much lower because leftists have made it impossible to manufacture anything here.

Mon, 06/06/2011 - 03:21 | 1342660 dolly madison
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That's ridiculous.  If cheap stuff couldn't be bought, we would buy more expensive stuff, just less of it. With the quality level of Walmart stuff, we wouldn't be missing much.  Does having a whole bunch of cheap crap really make our standard of living better?

In my grandparents generation (adults in the 50s), they lived like that.  Not tons of stuff, but the stuff they had was quality.  Of course they did it on one salary back then instead of two.

Mon, 06/06/2011 - 03:38 | 1342664 covsire
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Cheap chinese electronics more or less work fine.  Produced here, those same electronics would cost at least twice as much and how much better do you think they'll be?

A manufacturer here has to deal with minimum wage laws, compliance and regulation costs, lawsuit risks, union threats and government muscle backing up those threats, environmental groups and eco laws and regulations.  The list goes on.  We simply have no governmental infrastructure to produce these same goods at anywhere near the cost China does. 

Walmart has simply been the most efficient company to make a profit bringing those products to our market.  I hate going to Walmart, but i'm also smart enough to see through the lies that they are the ones responsible for this mess...

Mon, 06/06/2011 - 06:00 | 1342695 brodix
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Why can the system afford excess speculation pulling all possible value out of the system, than it can afford excess freeloaders dragging it down? The problem exists at both ends and these ends are destroying the middle. The Chinese are building up their middle.

Mon, 06/06/2011 - 09:24 | 1342996 Troll Magnet
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well, maybe our government should think about applying the same set of standards and regulations of wall street to all other sectors.  which would be NO standards or regulations.

Mon, 06/06/2011 - 09:02 | 1342921 savagegoose
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i long for the days of $100 for a pc mouse, or a $200 Cd drive. bring manufacture back to the usa and we can have them again

Mon, 06/06/2011 - 09:25 | 1343006 Troll Magnet
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you know what?  if our minimum wages were $20 and if our CEO/worker salary ratio wasn't so goddamned out of control, maybe people can actually afford a $100 pc mouse and a $200 CD drive.  although, why would anyone buy a CD drive these days? 

Mon, 06/06/2011 - 11:31 | 1343358 savagegoose
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just thinking back to the days i had made in usa and made in jpan on a pc product

Mon, 06/06/2011 - 06:38 | 1342708 Captain_Howdy
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With food at 32% of Chinese CPI...these dudes seem to be boxed into a corner.  Of course, because China is an efficient police state, the security services could allow inflationary pressures to increase, arrest the subsequent protestors, kill them, grind them up into meat and then sell the meat to reduce inflationary pressures. Who says we need to rely on monetary policy?

Mon, 06/06/2011 - 09:38 | 1343047 PulauHantu29
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With millions of vacant apartments and houses there (as investment property?) just wait until everyone realizes RE does NOT always go up.

The stampede to the exits to SELL, SELL SELL! will be fast and furious more so then the disillusioned in the USA who also were brainwashed into believing something that is an economic impossibility, i.e., that ANYTHING "must always go higher."

Mon, 06/06/2011 - 11:29 | 1343367 savagegoose
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debt ceiling?

Mon, 06/06/2011 - 12:28 | 1343551 laomei
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Housing is regulated and investment properties here are 1) rarely flipped and 2) held for the long term.


These "vacant cities" are full of people who were compensated for their land with a mix of apartments and cash.  The vacant apartments were primarily built to absorb investor wealth and take the speculation away from the cities where people actually live.  The vast vast vast majority of these apartments were paid for in cash up front.  If the value drops, they will just turn into rentals or continue to be held.

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