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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
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.
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
Maybe a switch to the Amero?
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!'
Wait a few more days...
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.
oh, happy B-day D O G, your one day old. you must be jesus†
after reading this article in the CBC I would say "beggar thy neighbor, beggar my neighbor: Canada"
The plot is deeper. New countries have not been fleeced. The fortunes are too great for one to turn a blind eye.
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.
Russian central bank raises deposit rates by 25 bps, leaves REFI rate on hold
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.
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.
cetral bankers say the opposite of what they mean.
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.
RRR = Reserve Requirement Ratio '
Write for your readers, not for author-ego.
.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.
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.
Only hyperinflation can solve the problem.
Only hyperinflation can solve the problem.
What? Hyperinflation leads to social unrest, chaos and failed governments. Please give me examples of hyperinflation solving anything.
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%
The dollar will tank like the Thai baht? If there are any global distruptions, expect the dollar to gain strength. Do you follow history?
.25 % is a joke indeed, they are going to notice when they have another 25% increase in the price of milk YoY next month.
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
"plz be rational not polemic"
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.
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.
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.
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
As many know, the Fed has no gold clean and clear of obligations. As such, there is America-owned gold in 'Ft Knox'.
No gold at Ft Knox then, is really Faux Knox.
HUGE typo and my apologies.
There is NO gold in Ft Knox.
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...
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
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.
China's Christmas present
USA, you do QE and we do QT (Quantitative Tightening) and Fraud Street will do the QV (Quantitative Vaporing).
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.
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.
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.
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.
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.
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.
Specially when they can deliver dollars or SLV shares
"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!"
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
"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.
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.
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.
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