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China's Christmas Present To The World: Another Interest Rate Hike

Tyler Durden's picture




 

Following Friday's failed 3 Month Bill auction, things in China are once again getting interesting, just as the rest of the world has decided to sleep right into 2011. The PBoC, in a surprise move, hiked its lending and deposits rates by 0.25%, the second time the bank has done so since October 19, when its then-raise was the first in 3 years. And by all accounts the PBoC is not done: consensus is for three 25 bps moves by the end of 2011: that the PBoC is starting early may be an indication that the country is starting to seriously worry about its soft landing prospects. Yet one thing that is certain is this move cements the CNYUSD peg: despite all the rhetoric, China will keep the currency peg come hell or high water, as it eliminates any monetary trump card Bernanke may have (just as Germany loves being part of the EUR which has such insolvent countries as all PIIGS members backing up the rear). What is unclear is whether the PBoC has now decided to avoid the RRR hike path as the preferred approach to combating inflation. It is assumed that his action will have a soothing impact on the Chinese 7 and 30 Day Repo rates come Monday, as else more failed bond auctions are certain to be in store for Shanghai in 2011.

From the just released PBoC statement:

The People's Bank of China, starting December 26, 2010 has raised the financial institutions' benchmark deposit and lending rates. The one-year deposit and lending rates by 0.25 percentage points, respectively, other deposit and lending interest rate adjusted accordingly (see table). - Full release link.

And the biggest irony is that as China turns off the liquidity spigot, and the hot money follows the path of least resistance in a world of connected liquidity vessels, we expect that commodity prices in the US will jump that much higher, as the speculators slowly abandon the SHCOMP and related exchanges and bring their full sound and fury on fertile for manipulation US soil.

 

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Sat, 12/25/2010 - 08:51 | 829517 David99
David99's picture

China's central bank raises interest rates again

China's central bank will raise the one-year lending and deposit interests rate by 25 basis points from December 26, the second time in 2010.

 

Plunge and big one this time

 

Sat, 12/25/2010 - 12:10 | 829701 theXman
theXman's picture

0.25% is too small to be of any significance other than symbolic. It actually signals to the world that the Chinese government has no resolve to fight inflation.

I think Chinese stock market will rally big time on Monday.

Sat, 12/25/2010 - 14:13 | 829823 Spitzer
Spitzer's picture

right

they think they will not have to revalue but they will soon find out that combating 5 or 6% inflation requires 8% interest rates.

revaluation is coming

Sat, 12/25/2010 - 14:34 | 829845 SilverBaron
SilverBaron's picture

Maybe a switch to the Amero?

http://www.americas-union.org/default.asp

Sat, 12/25/2010 - 14:38 | 829849 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I would like to see the globalists try to implement a new currencie system.  'The old monetary system didn't work, but this one will, trust us!'

Sat, 12/25/2010 - 15:43 | 829889 Green Leader
Green Leader's picture

Wait a few more days...

Sat, 12/25/2010 - 15:52 | 829899 dognamedabu
dognamedabu's picture

Coming from Canada I can say with 100% certainty, we do not want to have an Amero. In fact some of us do not even want our own paper dollars. Real money, gold & silver, or go home.

 

 

Sat, 12/25/2010 - 16:28 | 829940 velobabe
velobabe's picture

oh, happy B-day D O G, your one day old. you must be jesus†

Sun, 12/26/2010 - 09:18 | 830379 deez nutz
deez nutz's picture

after reading this article in the CBC I would say "beggar thy neighbor, beggar my neighbor: Canada"

http://www.cbc.ca/fp/story/2010/12/17/3993060.html 

Sat, 12/25/2010 - 16:36 | 829943 Atomizer
Atomizer's picture

SilverBaron. No.

The plot is deeper. New countries have not been fleeced. The fortunes are too great for one to turn a blind eye.

http://www.un.org/en/sc/ctc/docs/gis-2009-09_en.pdf

Sun, 12/26/2010 - 08:00 | 830362 pcrs
pcrs's picture

I don't understand how the Chinese gvt can both stick to the currency peg, but also avoid inflation. If you currency is tied to the USD, you will have Ben style inflation, there is nothing you can do about it, it seems to me.

 

Sat, 12/25/2010 - 12:18 | 829695 66Sexy
66Sexy's picture

Capital will rush to the melt up; where fast equity appreciation will occur: and with interest rate hikes, that aint china. There is no 'long position'... its just speculating on what will appreciate in the next 10 minutes.

Thats why these idiots on CNBC are saying to continue to buy emerging markets... because they are selling emerging markets.

Besides, no data out of china can be trusted because they have non productive over employment, ruinous excess capacity, a vacumed real estate market, empty buildings and empty cities with market rents reflective of a "normal market"... and a lot of chinese with their 100 Yuan notes with Mao on 'em trying to buy gold for the equivalent of $1,500+ USD per ounce... a .25 rate hike is meaningless.

It will be the opposite of what everyone thinks:

PM's rally on china interest rate hikes and the DOW approches 14,000 by march 2011.

 

China Interest rate hike? Bullish for US assets.

Sat, 12/25/2010 - 13:28 | 829794 Non Passaran
Non Passaran's picture

I also think gold will go up next week. The continuation of the policy of negative real interest rates isn't great news for those long RMB - while the yuan in 2011 may slightly appreciate vs. the dollar, it'll go down vs. PMs and commodities.

Sat, 12/25/2010 - 14:16 | 829828 Spitzer
Spitzer's picture

cetral bankers say the opposite of what they mean.

revaluation is coming

Sat, 12/25/2010 - 21:18 | 830081 eatandtravel
eatandtravel's picture

We are going to find out if the Chinese government can handle a crisis such as a liquidity issue.  I have my doubts.  In my view, there is going to be unstability and as a result, there will distruptions in the manufacturing sector.  Foreign companies aren't going to be too happy.  Expect Vietnam and Mexico to be the winners when China hits the skids. 

Sat, 12/25/2010 - 16:23 | 829936 anonnn
anonnn's picture

RRR = Reserve Requirement Ratio '

Write for your readers, not for author-ego.

Sun, 12/26/2010 - 06:12 | 830325 strannick
strannick's picture

Merci Buttecup

Sat, 12/25/2010 - 09:11 | 829541 steve from virginia
steve from virginia's picture

.25%? You gotta be kidding me!

China is likely long past the Paul Volcker- esque 18% rate needed to curb Chinese hyperinflation. The .25% is theater, more fraud from the international finance cartel of which China is a dues- paid member.

China has no desire to fight inflation which would require capital controls rather than rate hikes. Imposing capital controls would crash China's real estate bubble economy, bankrupting both the govenrment as well as highly leveraged Chinese elites.

I can guarantee that this will never happen: that China will never bankrupt its elites. Warren Buffett will give his fortune to the Salvation Army, first.

It is China, not America that is experiencing hyperinflation, that is 'printing money' that is inflating away its debts as fast as possible. China is the Weimar Republic; it's industrial base is excessive to any world- or domestic demand, its workers restive. Why not bankrupt the lot with inflation and steal their savings?

China has a big army which can control citizen fury, with tanks and artillery if necessary.

If China does not impose capital controls, rate increases simply attract more 'hot money' capital increasing China's money supply.

China's real problem is its fixation with F/X reserves. The cost of maintaining the putative 'value' of these reserves is bankrupting China.

Sat, 12/25/2010 - 09:57 | 829583 eigenvalue
eigenvalue's picture

Exactly. China is the 21st Evil Empire. The Chinese government doesn't have the guts to apply drastic tightening to quell inflation. All the banks in China are owned by the government and it is the Chinese government that is most highly levered entity in China. Only hyperinflation can solve the problem.

Sat, 12/25/2010 - 12:50 | 829753 Cursive
Cursive's picture

@eigenvalue

 Only hyperinflation can solve the problem.

What?  Hyperinflation leads to social unrest, chaos and failed governments.  Please give me examples of hyperinflation solving anything.

Sat, 12/25/2010 - 14:20 | 829832 Spitzer
Spitzer's picture

China is the creditor you fools.

China will be stuck doing what the creditors did in Thailand in 1997, cut their losses. The US dollar will go the same way the Baht did. Down by 20 to 40%

Sat, 12/25/2010 - 21:28 | 830089 eatandtravel
eatandtravel's picture

The dollar will tank like the Thai baht?  If there are any global distruptions, expect the dollar to gain strength.  Do you follow history?

Sat, 12/25/2010 - 11:39 | 829665 Rider
Rider's picture

.25 % is a joke indeed, they are going to notice when they have another 25% increase in the price of milk YoY next month.

Sat, 12/25/2010 - 11:56 | 829682 h3m1ngw4y
h3m1ngw4y's picture

do you guys really think volker hiked rates overnight to 21%?? lol

i think its a fallacious argument to compare a 2 month rate hike of .5% with an annualized rise of 25% in milk per annum, ok? thats the kind of thinking that looks dramatic only for polemic reasons.

please do the math and compare apples to apples not apples to milk *g* furthermore the compare interest rates and cpi not interest rates to volatility.

so how much rate hike is this 0.5 since october annualized. and is this a big jump or not? is there more to come or not? are they aware of the problem or are the states aware of the problem?

plz be rational not polemic

 

 

 

Sat, 12/25/2010 - 15:28 | 829880 Seer
Seer's picture

"plz be rational not polemic"

Amen!

Sat, 12/25/2010 - 21:03 | 830067 Rider
Rider's picture

What about near 2 percent in a couple of months? Like it happened in some "first world" countries. When problems are this deep, central planning here in US or in China do extreme things.

What about "emergency" Interest rates of almost 0% for TWO YEARS so far (pretty lenghty "emergency" we thought we were, as Geithner said, in a "recovery")?

This still being desperate times, and we will see extreme adjustments to the extreme measures taken in the ongoing crisis, is not polemic is just reality, that if you want to smell the coffee.

 

So again, .25% to stop that kind of inflation and unbalances is too few, too late.

Sat, 12/25/2010 - 21:22 | 830086 eatandtravel
eatandtravel's picture

Nice read.  That's why I sold my Yum Brands for a handsome profit.  China is going to experience a hard, hard, hard landing.  Hopefully, this will scare our people and government to doing the right thing.

Sun, 12/26/2010 - 00:57 | 830202 lamont cranston
lamont cranston's picture

Steve-

Glad their tanks are domestic and not headed fro Siberia, which, is my worry.

Well before 18% rates back then (I had a 5 YR rollover/15 yr amortization secured floating rate note that originated in 1978 commercial note that started at 8.75% and went to 19.25% in 3+  years, about bankrupted me at age 29), but survived by hocking my house in an inflating RE market. That ain't the case 2day.

China and the US and the whole world are ded if that happens.

Sat, 12/25/2010 - 09:27 | 829549 Azannoth
Azannoth's picture

I think China should make an offer to the USA "We will trade 2000$ worth of your Treasuries for 1 oz. of gold from Fort Knox" put the shit in the FED own mouth

 

at 147 million oz. it would be x2000 = 300 Billion 1/8 of Chinas foreign reserves I guess it would be a bargain

Sat, 12/25/2010 - 09:43 | 829573 MarketTruth
MarketTruth's picture

As many know, the Fed has no gold clean and clear of obligations. As such, there is America-owned gold in 'Ft Knox'.

Sat, 12/25/2010 - 12:27 | 829719 threefingerscam
threefingerscam's picture

No gold at Ft Knox then, is really Faux Knox.

Sat, 12/25/2010 - 12:40 | 829738 MarketTruth
MarketTruth's picture

HUGE typo and my apologies.

 

There is NO gold in Ft Knox.

Sat, 12/25/2010 - 12:27 | 829721 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Gold? in ft knox?  LOL, Im not sure if this is sarcastic, or you actually think AMericans still have an ounce of gold in some bunker that was audited before the biggest fiat print man has known...

Sat, 12/25/2010 - 16:06 | 829918 Azannoth
Azannoth's picture

I know the Chinesse have a shotgun to the USA head and can pull the trigger att will, the blowback would knock their teeth out but the Western system would fall

Sun, 12/26/2010 - 06:17 | 830326 strannick
strannick's picture

Compelling analogy

Sat, 12/25/2010 - 21:31 | 830091 eatandtravel
eatandtravel's picture

Why would the Chinese trade their prized possession which is the dollar?  The world is experiencing deflation people.  I know about commodities.  Expect commodities to drop like a rock when China hits that liquidity cliff.

By the way, phyiscal gold and silver will go through the rooof.

 

Sat, 12/25/2010 - 09:39 | 829567 David99
David99's picture

China's Christmas present

USA, you do QE and we do QT (Quantitative Tightening) and Fraud Street will do the QV (Quantitative Vaporing).

Sat, 12/25/2010 - 09:41 | 829571 eigenvalue
eigenvalue's picture

Gold and silver will be nuked on Monday. Blythe Masters will never miss this chance. What a tragedy!
By and by, the rates hike was simply theatre. Even the underestimated CPI now stands above 5%. 0.25% is just a farce.

Sat, 12/25/2010 - 09:56 | 829579 Oh regional Indian
Oh regional Indian's picture

Why eigen? Care to explain the correlation? You mean hot money will flow into China as a result and away from PM's?

Somehow, I cannot see this tiny hike compensating for all the other excesses and riskes in the Chinese system?

Like someone said upthread, Vlokeresque tightening is the only thing that can work, but the intended and unintended consequences of the same will be mind-boggling.

I think we'll see slow creeps and no pull-backs on interest rates world over.

ORI

http://aadivaahan.wordpress.com

Sat, 12/25/2010 - 10:06 | 829587 eigenvalue
eigenvalue's picture

I'm not talking about the fundamentals. In terms of the fundos, of course go long PMs. A 0.25% hike is not enough to curb the inflation in China. On Monday, most traders are away on holiday and the volume will be thin. It will be a perfect time for Blythe Masters to hammer PMs.

Sat, 12/25/2010 - 10:12 | 829591 duo
duo's picture

can't wait.  Buy some Jan ITM calls on SLV after the $1 "crash" in silver (bottom usually hit around noon EST).  Sell the next morning.

Finding the true bottom on a PM beat-down day is the hardest part.

Sat, 12/25/2010 - 10:25 | 829602 eigenvalue
eigenvalue's picture

The open interest of silver is steadily increasing these days despite all the hammering. If Blythe hammers further, the open interest may keep increasing. That could create a delivery problem for Blythe in March.

Sat, 12/25/2010 - 14:18 | 829831 Al Huxley
Al Huxley's picture

I've been bullish on PMs for years now, but this talk of delivery problems has been going on for years as well, and never materializes. 

Sun, 12/26/2010 - 06:19 | 830328 strannick
strannick's picture

Specially when they can deliver dollars or SLV shares

Sat, 12/25/2010 - 15:35 | 829883 Seer
Seer's picture

"A 0.25% hike is not enough to curb the inflation in China."

It was clearly noted above that this is ONE increase, of which there has been two over the past two months.  One could say that this is a clear trend, and, if extrapolated out to a full year, isn't exactly peanuts.  Again, don't look at only ONE day: if they did this EVERY day would you be saying the same thing- "it's a paltry amount!"

Sat, 12/25/2010 - 10:12 | 829592 Azannoth
Azannoth's picture

There was a small selloff in PM equites end of week, I guess there was a leak, cuz the PM themselves did not move at all

Sat, 12/25/2010 - 19:47 | 830032 El Hosel
El Hosel's picture

  "cuz the PM themselves did not move at all"

  Many of the PM equities  sold off on chunky volume late Thursday, they bounced back on anemic volume Friday...  Just saying. 

Sat, 12/25/2010 - 13:34 | 829797 Non Passaran
Non Passaran's picture

Why would that be a tragedy? That doesn't make any sense.
Everyone who wants to be long can buy some more at a lower price.

Sat, 12/25/2010 - 09:45 | 829576 Cognitive Dissonance
Cognitive Dissonance's picture

After all the dominoes have triggered and the party is over no one ever remembers the first domino to topple. I can't help but wonder if the Chinese are finally enacting their revenge for the Western powers arrogant use of Gunboat Diplomacy begining in the 19th Century and progressing all the way to 2010.

Payback is a bitch.

http://en.wikipedia.org/wiki/Gunboat_diplomacy

Sat, 12/25/2010 - 10:15 | 829595 duo
duo's picture

A modern Boxer rebellion:  Seize assets of US corporations in China, put the RMB on some sort of gold convertability, and 300 years of anglo/American banking dominance come to an end.

Sat, 12/25/2010 - 12:01 | 829686 66Sexy
66Sexy's picture

"Sieze assets of american corporations" sorry i lol'd.

Sat, 12/25/2010 - 11:58 | 829675 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The first Opium War, led by Samuel Huntington Russel and other bluebloods that could afford the Cutters, sure messed China up good.  So much in fact that the Chinese Emperor legalized opium just to get the Forbses to get out of their business.  Of course the monied blue bloods then sent over US Naval Fleets and insisted it would be in China's best interest to make the plant illegal.  China capitulated and the Roosevelts were able to alleviate themselves from their bankruptcy (the family went bankrupt after China kicked out the drug runners) and restart their drug running business.

The cutters would load up their boats West of China, around Af/Pak, and then sell the opium in the south China Sea.  Americans only got involved, and late in the game, once the East Coast Cutters were invented.  Cutter ships were made to hug the shore; they could get to the drop points first, and thus they got the best price.

Sat, 12/25/2010 - 15:52 | 829897 Oh regional Indian
Oh regional Indian's picture

Lenon H, you are spot on. And of course, India was a huge part of the Opium story.

It was grown extensively in India's own little golden triangle in North-eastern India and transported along the silk route, both ways.

Now here is the kicker: ALmost every major Industrial family in India, and we'll just name the most famous, Tata's, were in the business with the Queen.

Every single major family now, was either a grower, transporter or financier of the Opium trade to China.

And we are still living the echoes of it today!

Totally nuts.

ORI

http://aadivaahan.wordpress.com/2010/12/24/where-do-we-fit/

Sat, 12/25/2010 - 17:09 | 829968 anarkst
anarkst's picture

Get more than two adult human beings together and all hell breaks loose...every time.

Sun, 12/26/2010 - 00:04 | 830172 Oh regional Indian
Oh regional Indian's picture

Thus spake an anarchist?

Funny! But true. Such are these days and such are these times.

ORI

Sun, 12/26/2010 - 01:21 | 830220 DaveyJones
DaveyJones's picture

works with angels too :

Sat, 12/25/2010 - 09:57 | 829580 David99
David99's picture

Last time when China raised interest rates by 0.25 basis points on Oct 20, Dow went in red by -165 points

Sat, 12/25/2010 - 10:37 | 829617 eigenvalue
eigenvalue's picture

The Dow will be fine. Remember, on Monday, the Shanghai market is the first to digest the news and I'm pretty sure that SHCOMP will open lower but close in green. Last time when PBoC raised the interest rate, it was the European market to digest the news first. Since European investors had no clue to how the Chinese would react to the news, people panicked. This time it will be fine.

Sun, 12/26/2010 - 06:23 | 830330 strannick
strannick's picture

Isnt that .25% raise just a gilted invite to get folks back to the failed bond auction?

Sat, 12/25/2010 - 13:00 | 829764 Prof Gulliver
Prof Gulliver's picture

And that loss was made up over the next two trading days, and the Dow is up 5% since then. Buy the fucking dip.

Sat, 12/25/2010 - 10:19 | 829599 Rudeger
Rudeger's picture

Me thinks PM's prices will remain stable...No big suprise here, rate hike has already been priced in!

Sat, 12/25/2010 - 10:32 | 829608 eigenvalue
eigenvalue's picture

The PM market is manipulated so nothing can be priced in...

Sat, 12/25/2010 - 12:39 | 829737 Arius
Arius's picture

if it was PM negative would not have been done over the weekend...i go w/ tyler's reading of it...

Sat, 12/25/2010 - 10:32 | 829609 johny2
johny2's picture

China and USA are now tied together, and they will either sink or float together.

Bernanke does not understand this, and neither do the most of the USA population.

Many times I thought Chinese must be fools to hoard treasuries and dollars, but it is like holding a hostage something USA can not afford to become collateral damage.

Like QE2, China's interest rise isn't going to get the desired effect. The commodity and food prices are going to rally further.

 

 

Sat, 12/25/2010 - 12:04 | 829691 johny2
johny2's picture

Explain what is junk from above, then. My guess is that you are one of the brainwashed assholes who thinks that USA can print trillions of the paper IOU-s and latter get away with it, without any harm done to next generations. 

i think also that unless the earnings start to be distributed more evenly, both USA and China are going to sink in next 5 years at most.

Sat, 12/25/2010 - 21:39 | 830094 eatandtravel
eatandtravel's picture

China is holding dollars because it's a prized item.  Guys, get off this China is stupid for holding dollars.

China needs America.  America doesn't need China.

 

Sun, 12/26/2010 - 08:02 | 830361 johny2
johny2's picture

Right now every move by China affects the mortgage rate of American households. 20 years ago that was pretty hard to imagine, but here we are.

My opinion is that Chinese played their cards very smart, and got themselves in position where they are much stronger than couple of decades ago. And USA was so blinded by its cold war triumph that it even now most can not see the reality.

But both these countries and the rest of the world are either going to improve the system, or its going to break down.  

And I am sure it would be foolish to hold most of savings in paper money, and because of that i was struggling to understand China. But now I feel that maybe understand Chinas reasoning, and i tried to describe it above. Maybe the description is not the best or correct, but its pretty reasonable and far away from being junk. Which make me sure that the person who junked it is a complete idiot.

Sat, 12/25/2010 - 10:48 | 829614 virgilcaine
virgilcaine's picture

Bernank is reduced to a non event now if China is raising rates.. means there is no QE.

Rates are backing up and Oil won't see 100.

Were at the highs for 2011, stocks crb, fx. 

expect more beard stroking and quivering in the new Yr.

vc 

Sat, 12/25/2010 - 10:52 | 829623 spekulatn
spekulatn's picture

On a strictly practical level, China's potential aid is a clever move. No doubt there are all sorts of behind-the-scenes advantages that will accrue; plus the obvious ones of increased international clout. We have noted many times that sooner or later the Chinese central banking system is going to create a terrible crash in that great country. The Chinese leaders doubtless know it too. (They struggle with price inflation every day.) Right now the economy is still vibrant and the Chinese are doubtless doing what they can – before they cannot.

 

 

http://www.thedailybell.com/1626/China-Shows-Elite-Hand.html

Sat, 12/25/2010 - 11:02 | 829629 WTF2
WTF2's picture

Bernank's QE2 is doomed and I bet he did not see it coming.  Higher trending Chinese rates will put the holiday thin market's on edge.  Buy the dip.

Sat, 12/25/2010 - 22:20 | 830111 Non Passaran
Non Passaran's picture

Not necessarily so.
If this slows down China's economy, it's going to hurt (or, motivate them to revaluate). I'm not saying QE2 was a smart move - overall it wasn't but it could accomplish some of its presumed goals.

Sat, 12/25/2010 - 11:12 | 829637 Trimmed Hedge
Trimmed Hedge's picture

Melly Chlistmas, lound-eye!

Sat, 12/25/2010 - 13:58 | 829814 Clayton Bigsby
Clayton Bigsby's picture

Now that's funny...

Sat, 12/25/2010 - 11:14 | 829639 RobotTrader
RobotTrader's picture

This will be another non-event.

China might sell off a couple of days, but just like in the late 1990's as Fleckenstein used to document during the mania, any and all rate hikes are shucked off and forgotten.

Wake me up when the 10-year hits 7%.

Sat, 12/25/2010 - 11:56 | 829681 Deep
Deep's picture

Robo go back to your trend chasing. When you discuss anything other than chasing trends, you sound like a buffoon. “Wake me up when the 10yr gets to 7%” How dumb is that statement.

It amazes me the complacency I see. We got the FED manipulating the market, printing money to buy our own debt to fund the deficit, media propaganda everywhere telling people everything is so rosy. This country is broke and so are most people. Then you got idiot government putting another trillion in debt for these tax cuts. ARE WE INSANE? We need some tough medicine, or things are going to get real bad here. We cannot continue on this path of print, print, print, consume, consume, consume.

I don’t know the answer, i am sure no one does, but i am pretty confident we cannot continue on our current path. We need jobs, not a “stock market wealth effect”. Most people in this country don’t even have a lot of money in the market.

For spending 4 trillion dollars and this is all we have gotten so far, what is going to happen when the FED withdraws, if they ever do. The Bernak and the Feds have painted themselves in the corner. Commodities are going thru the roof, and yields are slowing rising across the world. There is too much debt in this world, i don’t have a PhD in economics,  but it just doesn’t make any sense to me to fight a debt bubble with more debt. We are heading down the wrong path and i fear there is no turning back now. The FEDS have taken the road and i doubt there is no turning back.

“Wake me up when the 10yr gets to 7%”

How about waking the fuck up right now

 

Sat, 12/25/2010 - 12:12 | 829702 taraxias
taraxias's picture

You are wasting your time. Anything beyond staring at a 5-minute chart is beyond RoboTroll's comprehension.

Sat, 12/25/2010 - 23:14 | 830135 RoRoTrader
RoRoTrader's picture

at the risk of stating the obvious, the 5 minute charts seem to have worked all the way from Sept 1 9950 Dow to the 11,585.

what part of printing dollars and higher prices for everything crossed against the USD didn't you understand?

to put it bluntly you junkers have nothing constructive to bring to the conversation.

just curious, but what will the comments look like when Robot reverses to shorts?

the sky is falling! the sky is falling!.......soon.

Sat, 12/25/2010 - 12:13 | 829704 Salinger
Salinger's picture

With all due respect Robo is an important contributor as are Krasting and Leo.

Sat, 12/25/2010 - 22:32 | 830115 Non Passaran
Non Passaran's picture

Christmas humor! One could say Charles Manson was an important personality from the 20th century. That's technically true, but... Well, at least today he didn't link to a freaking stock chart!

Sun, 12/26/2010 - 13:47 | 830516 weinerdog43
weinerdog43's picture

Robo and Leo, yes.  Krasting is a bankster douchnozzle.

Sat, 12/25/2010 - 12:48 | 829747 John Law Lives
John Law Lives's picture

Some of us have been lobbying ZH for an ignore button for some time.  Robo and Harry would likely disappear from the majority of our screens if we get an ignore button.

Sat, 12/25/2010 - 13:02 | 829763 deepsouthdoug
deepsouthdoug's picture

Robot delivers those all important bra size reports concerning the girls of CNBS. 

We need more stories on the travails of b-cup Bernett.

Sun, 12/26/2010 - 04:36 | 830301 andia
andia's picture

Robo is more effective trader than most of you guys. She has fantastic sense and stays always on the winning side.

Sun, 12/26/2010 - 06:35 | 830332 strannick
strannick's picture

Robo's a she?

Sat, 12/25/2010 - 22:33 | 830118 Non Passaran
Non Passaran's picture

+1

Sat, 12/25/2010 - 23:22 | 830140 RoRoTrader
RoRoTrader's picture

garbage comment from another dogmatic bullshitter with nothing constructive to bring to a trading conversation.

just don't read it then. if you're so fucking smart why bother?

Sun, 12/26/2010 - 12:02 | 830449 Max Hunter
Max Hunter's picture

Some of us have been lobbying ZH for an ignore button for some time.

That would totally ruin this website.. I've been on currency forums with that and the people act like little JR High girls threatening to ignore each other.. Quite childish and quite unnecessary.. If you don't like someone, don't read their comment.. It's really not that hard.

If you think some people are childish now, add an ignore button... This place would be worse than a schoolyard popularity contest..

Sat, 12/25/2010 - 13:10 | 829772 Cursive
Cursive's picture

@Deep

Well said.  It didn't have to be this way and maybe, just maybe we could still change course, but every day further down this road makes the eventual austerity that much harsher.  I worry about the coming violence and riots when the lotus eaters wake up and realize the party is over.  I sense it will be a lot like what Fernando describes about Argentina:

http://ferfal.blogspot.com/

Well, just keep taking care of business and preparing for the worst.

Sat, 12/25/2010 - 14:04 | 829817 Azannoth
Azannoth's picture

Why does no1 have respect for people of different opinion anymore ??? especially if they where correct thus far

Sat, 12/25/2010 - 22:45 | 830125 Non Passaran
Non Passaran's picture

If you hang around a bit longer you will realize not everyone's opinion deserves respect. (And note that no one has asked for Robo or any other member to be kicked or banned!)

I don't mind Robo's presence here - in 80% of cases I simply scroll through (if there's a chart in the post, then without reading) - but I'd gladly automate this process for all posts of certain other individuals!

Sat, 12/25/2010 - 11:18 | 829642 IrishSamurai
IrishSamurai's picture

Hike, Grinchez!

Sat, 12/25/2010 - 13:26 | 829792 MsCreant
MsCreant's picture

This is profoundly cute and should have been the headline for this story.

Sat, 12/25/2010 - 15:44 | 829890 Seer
Seer's picture

Very good, thanks!

Sat, 12/25/2010 - 11:35 | 829658 Carl LaFong
Carl LaFong's picture

China's BS .25% increase is all window dressing since they are increasing the amount of money the banks will be able to lend in 2011 and the rates are still very low. IMHO the PMs will barely blink this time, even if they dip for a day or two. Great buying oppty for dip buyers and the price is guaranteed to rise. They will be experiencing and exporting inflation to the US and this will insure higher oil/gold/silver/food prices for the foreseeable future. Bernanke will have no choice but to continue with QE "to infinity" as Sinclair has been professing for a couple of years now. Sadly, it looks as if he's correct and the US sheeple will be paying the price at the pump, the market and in a lower standard of living for main street. All the BS about rising rates having to do with an improving economy is pablum for the masses. Just read showstats for the real numbers and the writing is on the wall....How do you tell a communist? Well, it's someone who reads Marx and Lenin. And how do you tell an anti-Communist? It's someone who understands Marx and Lenin.    Ronald Reagan 

Sat, 12/25/2010 - 12:03 | 829685 Salinger
Salinger's picture

 US sheeple will be paying the price at the pump,

 

but the green shoots crowd are telling us that  the American public are used to $3 and even $4 gas such that their craving for flat panel TVs will not abate - I guess that's why BestBuy and Walmart are selling them at gigantic discounts - almost every report from the mainstream are cheering the recovery and the return of the American consumer (except for housing) but as one greenshooter said on Bloomberg ((Larry Kantor, head of research at Barclays Capital)) "housing is only 5% of the economy"

 

more from Kantor in an earlier interview

 

http://www.bloomberg.com/video/65183706/

Sat, 12/25/2010 - 12:30 | 829731 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

QE to infinity is a certainty.  "Sell" bonds high (to itself, the FED), pay rates low.  It is the only way to keep the US gov 'solvent'.

Sat, 12/25/2010 - 11:40 | 829666 NFW
NFW's picture

I am not sure I follow the impact of this on US...sorry but could someone explain a bit more...thanks

Sat, 12/25/2010 - 11:55 | 829680 Eric The Red
Eric The Red's picture

We (USA) used to be the dog. Now we are the tail.  Welcome to the New World Order.

Sun, 12/26/2010 - 01:26 | 830225 DaveyJones
DaveyJones's picture

and we made that move by being the thing under the tail

Sat, 12/25/2010 - 12:36 | 829732 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Finance just became minutely more expensive, so they would have you believe.

Sat, 12/25/2010 - 16:03 | 829886 TheJudge2012
TheJudge2012's picture

Peter Schiff talked about this on 11/19 about 11 minutes (not including commercial time) into the show on

http://www.schiffradio.com

Because of the peg it's different from what most people think will happen. He thinks China rate increases cause hot money to flow out of the US and into China and will cause more inflation in China. Since the words 'rate increase' makes everyone think of money tightening, gold to fall.

Bear in mind the amount of hot money inflow to China depends on the size of their rate increase.

There are a lot of in-the-money calls in January GLD I bet the US market manipulators and their Chinese partners in crime would like to take out during the light volume holidays by hitting the stops.

Sat, 12/25/2010 - 17:54 | 829989 Carl LaFong
Carl LaFong's picture

Last time China raised a symbolic .25%, the PMs fell for a couple of days until investors realized this would do nothing to stop inflation, hot money flows to China, etc.  This .25% raise (i.e. window dressing) will probably do even less, especially since the Chinks have already told the market they will be INCREASING liquidity in Feb 2011 and will absolutely NOT be turning off the spigot. Let's remember, they want to accumulate as much gold/silver as they can to raise their reserve ratio to 5% or so. They have a long way to go and don't want the metal prices to run away from them. The problem they have now is the potential shortage in phys silver might end up costing them more than they bargained for. Note the stubborn price support during this last consolidation period. "Normally," real tightening would cause gold to fall. This is not real tightening and these are not normal times. People's faith in fiat is damaged and this paltry excuse for a rate increase will do nothing to slow down the rise in commodity prices, including gold.  

A government big enough to give you everything you want is a government big enough to take from you everything you have.  - Thomas Jefferson

Sat, 12/25/2010 - 18:19 | 829996 TheJudge2012
TheJudge2012's picture

Yes, they just want to fool the market long enough to take out some stops.

Sun, 12/26/2010 - 06:40 | 830335 strannick
strannick's picture

Chinks is  a bad word

Tue, 12/28/2010 - 08:12 | 832706 TheJudge2012
TheJudge2012's picture

You're right it was brief.

If the RMB is allowed to rise if China depegged, that would make gold cheaper in China and the dollar weaker. Is China afraid US gold demand would threaten supplies if it depegged and/or Chinese people would buy more at lower price?

Sat, 12/25/2010 - 20:02 | 830035 El Hosel
El Hosel's picture

  " I am not sure I follow the impact of this on US...sorry but could someone explain a bit more"

 

US Markets are grossly overvalued and overbought due too easy policy and outright asset purchases by the Fed. When the markets correct it won't matter what the reason is, what you "don't follow" is not there. A token .25 rate change anywhere won't change anything, it remains to be seen if it can act a catylist.

Sat, 12/25/2010 - 11:48 | 829672 TexDenim
TexDenim's picture

A nice Fuck You Very Much from the Chinese.

Sat, 12/25/2010 - 12:30 | 829728 SilverBaron
SilverBaron's picture

It would seem that an unwinnable game of chess is being played here.  The endgame for the Chinese is being the new sole world superpower.  The engame for the west is complete crash and ushering in of one world government.  The crash part will probably happen, but one world government--never.  How do I know?  The bible says they will not cleave on to another.  Nebuchanezzer's dream said the last kingdom would be a divided kingdom (EU).  Iron and mirey clay.  One world government is a pipe dream.  They failed in the first two world wars and they will fail in the third. 

Sat, 12/25/2010 - 13:27 | 829793 Chappaquiddick
Chappaquiddick's picture

There will be no winners in this game.  As the energy abates then we're all down the plug hole and although the  Chinese have all the loot they will starve like the rest of us.  They have too many mouths to feed and that is what will be their undoing.  Besides which the timescale for decent is too rapid for anyone to get out of the way in time - its too late.

Sat, 12/25/2010 - 14:22 | 829834 Eric The Red
Eric The Red's picture

And the bible has what to do with...anything?  

Sun, 12/26/2010 - 06:42 | 830337 strannick
strannick's picture

Christmas

Sat, 12/25/2010 - 15:49 | 829895 Seer
Seer's picture

"The endgame for the Chinese is being the new sole world superpower."

Yeah, clearly over the course of their thousands of years of existence they've been globtrotting toward this endeavor: the US is, what?, less than 250 years old and it's got over 800 military bases throughout the world, tons of incursions into other ocuntries.

Sounds like another bible-thumper draped in a US flag looking to hurl more bodies at "godless communists [and other non-white folks]."  Ho hum...

Sun, 12/26/2010 - 06:43 | 830339 strannick
strannick's picture

Maoer to the Shepple

Sun, 12/26/2010 - 17:30 | 830771 SilverBaron
SilverBaron's picture

Maybe you are right and they are not power hungry.  Maybe they are just trying to hold on to their sovereignty.  But I would then wonder why they are building aircraft carriers which are used to extend power beyond your borders.  Maybe just to show the rest of Asia and the world that they are no longer third world.  Maybe.

I am against the undeclared wars!  The defense budget is a big part of what is killing us. I am pro Ron Paul and I say support our troops, bring them home!

Racist? Certainly not.

Sat, 12/25/2010 - 23:01 | 830127 Non Passaran
Non Passaran's picture

That is hilarious!

Sat, 12/25/2010 - 12:29 | 829730 Quinvarius
Quinvarius's picture

Now that the news is out, we will find out if this is a sell the rumor buy the news, or a sell the rumor raid the news event.

Sat, 12/25/2010 - 12:34 | 829733 Xibalba
Xibalba's picture

Despite Congress ordering the CFTC by law to have them implemented by Jan 2011, Bart Chilton said that position limits won't be introduced until 2012 at the earliest.    If the comex is gonna settle delivery with cash instead of bullion, what's to stop JPM from shorting all the worlds supply by then?

Sat, 12/25/2010 - 12:43 | 829743 liberal sodomy
liberal sodomy's picture

Long physical/short paper gold might be the trade of a lifetime.

I have both sides.

Sat, 12/25/2010 - 12:46 | 829746 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That's ballz.

Sat, 12/25/2010 - 13:16 | 829782 unununium
unununium's picture

Stick the paper in a bankruptcy-remote vehicle and you're playing at pigman level.

Sat, 12/25/2010 - 13:15 | 829752 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If the industrial price rises it could start a bullion panic.  Remember, there is currently a massive movement to invest in physical.  It would be ironic if the big monie COMEX contracts were never payed in full (in bullion) and the small players were the ones left holding the goods.

Sat, 12/25/2010 - 13:50 | 829799 Chappaquiddick
Chappaquiddick's picture

@x - where was Chiltons comments on position limits reported?

 

This indicates 2500 contracts as the new limit: 12.5mmoz 

http://www.cftc.gov/PressRoom/SpeechesTestimony/CommissionerBartChilton/chiltonstatement121610.html

 

Sat, 12/25/2010 - 12:40 | 829741 liberal sodomy
liberal sodomy's picture

Merry Christmas.  Merry Christmas, Mr. Lawrence.

Sat, 12/25/2010 - 12:47 | 829748 RobotTrader
RobotTrader's picture

Trust me, when the market turns south and we are in a confirmed downtrend, I'll be shorting huge.  But for now, I'm not going to waste my time trying to pick tops or fight the tape.  Maybe some of you "Armchair Anarchists" who only trade the market one way will finally make some coin.  But I plan on following the bouncing ball, which ever way it goes.  It is futile to fight the PigMen and Uncle Gorilla when they are pushing the tape higher.  Either follow the big money or get steamrolled.

Sat, 12/25/2010 - 13:17 | 829760 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Fuck that.  Paper chasing fools is what you are doing!  You know what 'cash' means?  'is there anything left?'  'no, it is cashed.'  You know what that word means, don't you?  And besides, if you are looking for return, you would buy silver.

Sat, 12/25/2010 - 13:24 | 829789 Salinger
Salinger's picture

actually Sulphur delivered better than twice the return of Silver followed closely by Coal

Top Five Performing
Commodities
In 2010
(% price increase
Dec 14 ’10 / Dec ’09)

1. Sulphur 153.3%
2. Silver 69.1%
3. Coking Coal 63.3%
4. Nickel 44.7%
5. Molybdenum 41.3%

Sat, 12/25/2010 - 21:56 | 830101 gwar5
gwar5's picture

devilish

Sat, 12/25/2010 - 14:34 | 829843 Al Huxley
Al Huxley's picture

I think Robo's right on this - the market's always telegraph a trend reversal long before it actually happens - you can check the charts back to the 30's and see it.  As long as you're in early enough, don't chase and get out when the signals show up its not particularly dangerous to play the long side, even when the fundamentals are all fake.  That said, I'm sticking to the junior PM miners at the moment, because all the great technicals actually have a sound fundamental backing (in my opinion).

But trying to pick a top in this environment is bad news - cash is ok, but then you're effectively holding a depreciating asset.  Of course, physical PMs are a good way to hold cash in this environment especially.

Sun, 12/26/2010 - 06:48 | 830340 strannick
strannick's picture

Nice. SLX. FR.

Sat, 12/25/2010 - 13:18 | 829784 unununium
unununium's picture

It took 18 months of rolling FNM puts before the payoff.  When it fell, the only difference the intervening height made was that I got to buy even more puts cheaper.

 

Sat, 12/25/2010 - 15:54 | 829903 Seer
Seer's picture

And how sure are you that you will be able to pull out before they open up the trap door?

Anyone thinking they can escape the perils of greed fail to heed history's warnings...

Sat, 12/25/2010 - 21:55 | 830100 gwar5
gwar5's picture

Party on. Agree with you're strategy. Hope you make a killing. I rode the last top and downturn and just play defense now from a peaceful shire.  Make sure you get to keep everything you make.

Sat, 12/25/2010 - 12:51 | 829754 deepsouthdoug
deepsouthdoug's picture

Ignore the Tyler snark - commodities will take a hit.  Gold and Silver will tick lower. 

Sat, 12/25/2010 - 23:08 | 830131 Non Passaran
Non Passaran's picture

Thanks a bunch for this deep analysis! I especially agree with your argument #3.
I'll sell all my PM's first thing in the morning!

Sun, 12/26/2010 - 06:48 | 830342 strannick
strannick's picture

What have gold and silver to do with commodities, more of a contra-equity?

Sat, 12/25/2010 - 12:56 | 829759 markar
markar's picture

.25% rate hike=yawn. This will fuel even more inflation in China.Wake me when they unpeg the RMB.

Sat, 12/25/2010 - 16:23 | 829938 TheJudge2012
TheJudge2012's picture

Perhaps the only reason they leave the peg on for so long is so China can absorb US inflation. Maybe that was part of the plan all along and the real reason why China started telling the citizens to buy gold. Bernanke will be free to QE so long as inflation is tame, but when the rug is pulled from under the US when China depegs, all hell breaks loose.

Sun, 12/26/2010 - 06:50 | 830343 strannick
strannick's picture

hmm....

Sat, 12/25/2010 - 13:00 | 829762 RobotTrader
RobotTrader's picture

Quote from Fleck's "Chronicles of a Mania":

"Earlier in the month the Fed changed its bias from neutral to an inclination to tighten interest rates.  A couple of weeks later, Chairman Greenspan issued some hawkish remarks the evening before the release of a higher PPI number.  An already jittery market faltered a bit on this unwelcome data and its attendant implications. But with the benefit of hindsight and a completed chart (Nasdaq's run from 2800 to 4700 in 4 months), its clear that all of the aforementioned was quickly discounted and forgotten."

Just sayin'...

Sat, 12/25/2010 - 13:22 | 829785 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

How many tens of billions does the Fed lose every week in the market now?  Propping this mess up is costing the President's Working Group its ass!

Sat, 12/25/2010 - 13:06 | 829768 bankonzhongguo
bankonzhongguo's picture

The PBOC is playing big time central banker. They can only mimic what they have been taught by the vaulted western bankers.  All central banks know that a giant overnight increase in rates will cause panic. China's inflation is the only panic.  The west is desperate for China to suffer and inflation is the only way to break the country into pieces.  The only way a centralized power can keep the appearance of confidence is to raise rates slowly like a gentleman.  Its going to be funny to see China trade out their junk dollar reserve positions to bail out Europe - all for the benefit of Russia.

Sat, 12/25/2010 - 17:25 | 829975 Black Forest
Black Forest's picture

Its going to be funny to see China trade out their junk dollar reserve positions to bail out Europe - all for the benefit of Russia.

Good point. Thanks for highlighting this.

Sat, 12/25/2010 - 13:06 | 829769 RobotTrader
RobotTrader's picture

Another clip.  And remember, The Bernank hasn't even started raising rates yet.  Here's what happened after the 3rd or 4th rate hike during the late 1990's cycle.

Sat, 12/25/2010 - 13:24 | 829791 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are saying that monetary and fiscal policy have little effect on the markets.  So think about that then.

Sat, 12/25/2010 - 14:08 | 829820 Azannoth
Azannoth's picture

I agree this will only end after an Exuberance phase, after Joe Investor sinks all his remaining saving in the market

Sat, 12/25/2010 - 14:41 | 829851 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What savings?

Sat, 12/25/2010 - 14:36 | 829846 buzzsaw99
buzzsaw99's picture

I agree with those who say that this rate hike is just for show. China has no intention of strengthening their currency or crashing their stock market. They will raise a token amount while accumulating and hiding usa dollars and chinese stocks. As for bernanke he doesn't anticipate anything, he merely follows orders from the squid and jpm.

Sat, 12/25/2010 - 16:23 | 829922 Seer
Seer's picture

You can label it whatever you wish, "currency strengthening," "crashing the stock market," etc, but the REAL issue is that they can NOT continue at their current insane levels of growth.

Bernanke knows exactly what he's doing.  He's been trained as well as anyone for this.  The PROBLEM is that there aren't any solutions available, period!  The system is based on Ponzi, as long as we continue to try and play this game it will turn out poorly.  A world-wide crash is going to come, and NO one (none of THEM, and none of US) has any idea what will come afterwards.

Sun, 12/26/2010 - 09:26 | 830019 buzzsaw99
buzzsaw99's picture

edit: i have no clue what they are trying to do or why. pardon the previous drivel.

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