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China's Christmas Present To The World: Another Interest Rate Hike
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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Yep. Unlike the Chinese hotel put up in 6 days, there is no blueprint
China is testing the waters to see if they can soak up some of the excess CNY sloshing around and brake the ponzi lending rackets.
Well, THEY are the ones who injected all that CNY into the economy and they do so daily by defending their absurd peg. Trying to sequester the money in bonds is foolish. If they want to stop the sloshing, they will have to dramatically force a lot of defaults and repayments to vaporize a bunch of yuan or else they are going to have to stop sterilizing all the dollar inflows and let the CNY rise to wherever it should. Expecting tickytack rate rises to mop up liquidity - it won't.
So much for the long-term strategic genius of the Chinese...they have maneuvered themselves straight into a liquidity trap
There is NO way that anything based on perpetual growth couldn't but hit the liquidty wall (not enough physical backing up the promisaries).
I do not think this person is well versed in the relevant particulars.
Specifically, a 30% move closes the market, regardless of time of day. Futures could do this. The market could open down 30% and that would be closure criterion.
No one is going to make a judgement that it's time to sell. No one is going to be able to buy. The level of the market will open the next day down 30% -- before any trade you might make goes in.
You are not guaranteed the opportunity to maneuver.
A what people are going to find out in January when they return from their Bernanke induced drunken stupor of a party....land mines everywhere, especially in the internals and technicals of the markets....
With sentiment being what it currently is and the time of year (santa claus rally & January affect mostly priced in) we are certainly ripe for a pullback to a more dominant trend line....of course, this provides players with another excuse to buy the dip....
Market technicals have never been better.
Everything is pointing up.
Advance/decline line is actually going up faster than the NY Composite. When the market tops, the A/D line actually goes down about a week before the final price high.
whats ds then::
http://goldscents.blogspot.com/2010/12/bad-breadth.html
Robo the AD is at a new high BUT the NH's ..New Highs on the NYSE , NAS and Amex all peaked in April. Were even below Nov 9th on New Highs.. this shows a mkt topping out. The Nas and Amex AD is below April.
Financials below April Highs major Non Confirm..if anyone got in the Mkt in April they under water. (for Nas and Amex esp)
Look at Sears.. where America shops..SHLD oogly.
Stockcharts symbol...$NYHL
where in the FUCK, is m a r l a?
m a m a r l m a l a d e
oh fuck you two
SOUTH AFRICA: Chinese Vice President Xi Jinping arrives in Cape Town for talks about minerals and investment
http://www.itnsource.com/shotlist//RTV/2010/11/17/RTV2933610/
Refer to my prior post (above) regarding UN. Connect the dots.
Think about US policy vs Afghanistan troop withdrawal. Controlling the minerals is a number one priority. Our landlord is in a bull mode.
Enjoy
http://www.silkroadstudies.org/new/docs/silkroadpapers/1005Afghan.pdf
Everybody wants Africa, even Bono!
Robot, I do not disagree as to the strength...I still think we are due for a short term pullback-- at most a couple of % but nothing major and the dominant uptrend remains intact. Overall like most I am bullish on equities & I think it is best at this particular point to protect oneself a bit before going "longer."....
Apparently the popular grumbling about prices (title: "Beijing's housing price fury goes viral") is already well underway in Beijing.
The Financials non confirming will lead us down, they always do.. Thank You Banks!
If the banks are hurting the Economy is hurting.. quite simple.
I dare Robo to Post a BAC Chart.. ! haha
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=bac&time=&freq=
There are several new stark truths in our world markets now. Those blinded by bias have to recognize these new truths to do well going forward:
Currencies - and Gold, of course, should be included among the currencies - are the tail that wags the animal (dragon now, not dog) of world markets. Currency movements determine stock movements and not the other way around.
The old battle between Gold and the Dollar is now the WRONG battle. Forever.
Gold should be moving in near lockstep with the Yuan as we go forward. Yuan strengthening equals gradual but inexorable erosion of Emperor Dollar's position among the world's central bank reserves.
Gold is the mediator among all currencies as this inexorable transition takes place, because it is the Stateless Currency.
Any move that strengthens the Yuan and makes it move up faster may or may not be good for the commodity complex as a whole, but it should ALWAYS be recognized as good for Gold. The propaganda from the DOGs saying the opposite is truly silly and should be refuted by everyone intelligent who cares about the world economy and its recovery.
Again, Stronger Yuan, Stronger Gold, money flows away from the three big Debtor Currencies into the Surplus Currencies, as is fair and honest.
But the situation of the commodity complex as a whole - ex-Gold - is very different. That's because commodity prices are distorted and will remain distorted, as long as commodities are priced against Emperor Dollar.
China must now join Russia, the Gulf States, much of Central Asia, many other countries, and the United Nations! in calling for an end to pricing world commodities against the Dollar.
World commodities - especially energy and food commodities - must now forever be priced against Fair and Neutral Baskets of world currencies, including both the Debtor Currencies and the much faster-growing Surplus Currencies - not only the Yuan, but also the Rupee, the Ruble, the Real, and the various Resource Currencies.
Only with this important change will the world economy become something other than a tawdry, vulgar propaganda battle, which has hurt almost everyone.
The loudest propagandists - like the DOGs, with the UK DOGs even worse than the US DOGs - have pushed and pushed and pushed their "Strong Dollar" rhetoric the past thirty years, NOT because they - or anyone - cares one little whit about "the integrity of our currency."
"Strong Dollar" is simply a code phrase for artificially pushing the commodity complex lower in Dollar terms, especially energy, which is the obsession of the DOGs. (In China, the obsession is not really energy - it's base metals and food. Especially food.)
If you price commodities against Emperor Dollar, the side effect is higher and higher commodity costs measured in every currency that moves against the Dollar: Higher commodity costs hurting other developed countries, like the Europeans and Japan and Canada. But especially, higher commodity costs in the developing world, even the poorest nations among the developing group.
This is why income has become so incredibly badly skewed the past several decades.
The very few obscenely rich become richer and richer, while the poorest of the world are not only not making progress, they can barely survive. And all because of "Strong Dollar" and the horrors that have accompanied it.
Clearly, this is becoming an essay and should be continued elsewhere.
But with 2011 being both the Year of the Strengthening Yuan and - cross fingers and toes - the Year of Commodity Baskets Taking Center Stage, it is important to heed these messages.
deleted
"There is nothing more powerful than an idea whose time has come." - Victor Hugo
Godspeed.
"Ultimately, the course of history is determined by ideas, be they true or false, and by men acting upon and being inspired by true or false ideas. The current mess is also the result of ideas." - Hans Hermann Hoppe
http://www.animateit.net/data/media/201/spock.gif
You're right. Something has to give. The longer this continues the worse it will be.
Canucks love rising commodities
Why do this on Christmas day? Anyone care to speculate.
coincidence, PBOC always hikes or lowers rates on Saturdays, and usually before the end of the month
“Interest rates on medium and long-term loans are adjusted by banks at the beginning of every year so by raising rates now, this will have a much greater tightening effect than it would have in January.”
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aIm2G9rZzqhI&pos=1
Because most people use bots to trade. The object is to strengthen the dollar and get those bots to sell.
China and Russia's main interest is PMs and food.
Ben, Timmy and the bankers are trying to sell paper.
They are laughing at us.
In case you didn't notice China is not big on Christmas.
China's main interest is commodities. They will make every attempt to keep our currency strong in order to use our soon to be worthless dollars to buy all the food and metals available.
Yeah, thats the crux of it. Thats whats going on. Chinese flood USA with cheap stuff, then USA flood CHina with cheap dollars. Cheap QE-dollars buy less Noodles.
Last time when China raised interest rates by 0.25 basis points on Oct 20, Dow went in red by -165 points and in coming week Dow -565 points
You are way off here. After China raised rates on the 19th of Oct. 2010, the following market day the DOW opened at 10974 had a low of 10970 and closed at 11107.
It means no more "lowest price everyday" at walmart. A kowtow to Ben who is determined to bring inflation to america.
If the 10 year rises above 3.5% then the stock market sells off.
Another spell with the markets shut,another problem.Pretty soon there will not be enough holidays to get rid of ever increasing bad news.Time for more holidays as we know whats coming.We could have JPM day,Bond bust day,Euro default days (at least 10 in the year),QE printing days,Currency wars day,Austerity day,Stock Markets never come down days,lots of scope,lol.
by Goldenballs
on Sun, 12/26/2010 - 06:53
"Time for more holidays"
how about bank hollow days???
Is China's Property Bubble About To Burst?
(Reuters) - China's government will be able to keep inflation in check, Premier Wen Jiabao said on Sunday, a day after the central bank raised interest rates, and he pledged to speed up efforts to rein in house price surges.
http://www.reuters.com/article...
Edit:
Copper: Is this inflation?
http://99ercharts.blogspot.com...
Edit:
When China last raised interest rates in mid-October, it sent the dollar higher, dragged gold down by more than 2 percent, oil fell 4 percent, copper lost almost 2.5 percent, and losses of 2.7 percent in wheat and 2 percent in corn.
http://www.reuters.com/article...
Chinese interest rate, so far, just a beginning! See the Shibor in the coming days.