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China's Dagong Sees No Threat Of Fed Monetization Ending, Believes "World Credit War" Is About To Escalate
Starting to get doubts about QE3? Don't tell that to the official Chinese rating agency Dagong, who in traditional uber-pragmatic fashion, has the following summary observation on US monetary policy, and any imaginary changes thereto: "The second round quantitative easing policy ongoing in the United States can not change its weak domestic demand in the short term. In fact, it can only lower the interest rate of US Treasuries so as to maintain stable interest rate in the capital market in the long term, playing the indirect role of clearing some obstacles for a stable recovery. However, the plan of purchasing 600 billion US dollar Treasury bonds can not realize its predicted goal; and therefore, the United States will hardly change its predetermined monetary policy in 2011." What does this mean for China and the rest of the world: "The continuous implementation of such unconventional monetary policy in the United States will lead to the escalation of world credit war and inflict greater losses for related parties in the world credit system." Any questions?
Full selection from Dagong's report on the question of US monetary policy:
The United States, as the biggest country involved in sovereign debt crisis around the world, will continue its quantitative easing policy when the country is in danger, and the world credit war will be escalated due to the overflow of US dollars
The second round quantitative easing policy ongoing in the United States can not change its weak domestic demand in the short term. In fact, it can only lower the interest rate of US Treasuries so as to maintain stable interest rate in the capital market in the long term, playing the indirect role of clearing some obstacles for a stable recovery. However, the plan of purchasing 600 billion US dollar Treasury bonds can not realize its predicted goal; and therefore, the United States will hardly change its predetermined monetary policy in 2011. The continuous implementation of such unconventional monetary policy in the United States will lead to the escalation of world credit war and inflict greater losses for related parties in the world credit system.
First, the trend of long-term depreciation of US dollar will result in haircut of international creditors’ debts dominated in US dollar. As the interest rate of US government debt is lowered due to the quantitative easing policy adopted by the United States, creditors can not obtain the investment return commensurate with the risk status of US Treasuries. At the same time, the depreciation will also cause continuous exchange losses for the international creditors. Since June 2010, the US dollar has significantly depreciated compared with the currencies in emerging market countries and some developed countries, and the depreciation is 3.0% against RMB, 12% against Brazilian Real, 14% against South African Rand, 19.5% against Australian dollar and 11.4% against Korean won. The trend will continue in 2011, and international creditors will lose all their profits of the US dollars in exchange for the export income under the gradual depreciation of the currency. The behavior that the United States ignores international creditors’ legitimate interests indicates a dramatic decline of the country’s willingness to repay the debt.
Second, rapid inflow of capital will cause risks regarding inflation and asset bubbles in the emerging market countries, which is unfavorable for those countries to maintain their debt repayment credit. As a result, emerging market countries, including some developed countries and regions with good economic recovery, will have to withstand the economic and financial impact arisen from the inflow of capital in 2011. If the capital inflow exceeded the capacity that the domestic economic and financial development can absorb, some of the capital will flow over in the real estate market, capital market such as stocks and bonds and some commodity market to raise the asset price in the domestic market and eventually accelerate the inflation. Most of the countries have transferred to neutral monetary policies and will speed up the contraction of their monetary policies; however, due to the viscosity of the currency and imbalance of capital inflow in different industry, and yet the policies and measures will exert general restrictive effect on capital in the overall domestic market, the healthy development of the domestic economy will inevitably be damaged. Some Asian countries, for the purpose of eliminating the damage to the export in case of rapid currency appreciation, take some intervention measures, which bring increase of foreign reserves at a faster speed, and the consequent hedge cost is not favorable for the inflation control. While the capital retrieves quickly, the fall of asset prices will impose adverse impact on the robustness of the banks, domestic consumption and stability of the exchange rate.
Third, the issuance of US dollar encourages numerous speculative capitals into the global commodity market, leading to an increasing pressure on global inflation. The quantitative easing policy conducted by the Fed in a continuous way failed to promote the expansion of domestic credit scale; rather, the liquidity accumulated inside the financial system, in addition to flowing to foreign markets, has been used for financial speculative investment, causing surge of prices of global commodities including energy, raw materials, and foods; and almost all countries, as a result, have suffered losses arisen from the imported inflation to different extent. In EU and the eurozone countries where see the slowest recovery, the annual inflation rate has increased to 2.6% and 2.2% respectively by December 2010, the figure for countries with serious inflation, such as Romania, Greece and Hungary, has reached 7.9%, 5.2% and 4.6% espectively.
The anti-inflation measures make the weak economic recovery even worse. In general, the capital inflow and inflation pressure that emerging market countries are experiencing will, on one side, directly affect the governments’ capacity for repaying local currency debt from the perspective of its influence on the value of local currency, and on the other side, indirectly and more seriously threaten the governments’ credit based on its adverse influence on healthy development of macro economy and financial security.
Currency system is the carrier of credit system, and therefore, the value of the currency determines the quality of credit system. International currency is the carrier of international credit system, and the instability of the currency value and the depreciation trend arisen from the over issuance make the function of the US dollar as the value scale distorted, which make other countries in the world pay an undeserved cost for their subsistence and development. The strike of shortterm capital dominated in US dollar to the emerging economics has made the excess US dollar capital become the destructive factor to the healthy economic development in different countries. The international credit system established on the basis of US dollar as the intermediary has been twisted in a way that the impartiality and reasonable aspect of the current international credit relations gradually vanish. Different countries, in order to avoid unpredictable losses on their own interests, will have to seek for adjustment of international credit relations, and the global credit war, no doubt, will become the turning point of reforming international credit relations in 2011.
Full report link
h/t Cate Long
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http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/27_Jim_Rickards.html
Rickards,already in the mix(QE3) is ongoing as we speak.
As observed many times already, here is the maturity schedule of all Fed securities maturing within one year:
Rolling this will add maybe 1 point in Netflix.
You should add the forecasted deficits with that and the chart gets pretty interesting.
A trillion here, trillion there and you get a real picasso :)
Just an amazing statistic.
1 in 3 defaulters in homes have not made a payment in 2 years or more. 1 in 2 have not made a payment in 18 months or more! Talk about stimulus. Ponzi baby.
http://www.fundmymutualfund.com/2011/03/nearly-13rd-of-home-owners-in-us...
That's amazing? It has been highlighted for over 6 months here. Just today: "the average U.S. loan in foreclosure now having been delinquent for a record 537 days" delinquent means nobody pays the loan. It also means the liar banks probably have the loan market at par.
magnesium deficiency.
Enhancement of learning and memory by elevating brain magnesium.
Slutsky I, Abumaria N, Wu LJ, Huang C, Zhang L, Li B, Zhao X, Govindarajan A, Zhao MG, Zhuo M, Tonegawa S, Liu G.
Department of Brain and Cognitive Sciences, Massachusetts Institute of Technology, Cambridge, MA 02139, USA.
Comment in:
AbstractLearning and memory are fundamental brain functions affected by dietary and environmental factors. Here, we show that increasing brain magnesium using a newly developed magnesium compound (magnesium-L-threonate, MgT) leads to the enhancement of learning abilities, working memory, and short- and long-term memory in rats. The pattern completion ability was also improved in aged rats. MgT-treated rats had higher density of synaptophysin-/synaptobrevin-positive puncta in DG and CA1 subregions of hippocampus that were correlated with memory improvement. Functionally, magnesium increased the number of functional presynaptic release sites, while it reduced their release probability. The resultant synaptic reconfiguration enabled selective enhancement of synaptic transmission for burst inputs. Coupled with concurrent upregulation of NR2B-containing NMDA receptors and its downstream signaling, synaptic plasticity induced by correlated inputs was enhanced. Our findings suggest that an increase in brain magnesium enhances both short-term synaptic facilitation and long-term potentiation and improves learning and memory functions.
it was always a war on our brain anyways. thanks for your work, td.If you like this website wait 'till you check out
http://www.webmd.com/
Wow...are there any American born students in our PhD programs anymore? Either the American education system drove off a cliff (which is likely) or the liberal agenda to reshape America using the tool of the University system has gone into overdrive.
Slutskey of 'Slutskey et al.' sounds American -- Probably one of Robo's pin-ups too
The university thought police prefers to have its population thoroughly indoctrinated before opening the floor to free speach. Otherwise who knows what those kids might say??
Afterall, you cant have people watching Obama's Pravda broadcast and wondering why his hypocritical doublespeek is met with millions of progressive drones nodding their heads in unicent, mumbling in monotone 'yes we can'
Well that makes sense when you look at the fact that purified sugar and short chain carbohydrates sap the magnesium out of your system. Nothing worse than an over sugared person. Either they can't slow down enough to listen, or they are falling asleep after the sugar wear's off.
"Limitless" NZT48 baby! Ok, maybe NZT03 or so...
I think he doesn't have 4 hours time a day to keep up with all the posts you put on here T. :)
perhaps he has a social life? just guessing here...
dlt
In any war, there's propaganda. Is it about "consumer expectations"?
They all know their backyard is BBB-, and they know the other side knows it.
http://www.bloomberg.com/news/2010-08-04/chinese-regulator-said-to-tell-...
To: Tyler Durden
The incredible thing is even while the bank is not collecting from the mortgage they still are allowed to show it as income on their books.
It's not until the forclosure takes place that the bank writes down the asset.
This is just another reason for the banks not to expedite forclosure.
Nice accounting scam, huh!
You need to post more often.
Wish I could, but I have to feed the kids and milk the cows!
Is that what you call them?
Doubleplusgood!
Doesn't this just show the plan is progressing nicely in that the fed's mother ship's directive to increase title to real estate holdings as assets increase substantially?
Owning soveriegn governments is not enough unless you can get the serfs to be obligated to grind the meal. It may just be that the serfs in the US may end up telling the fed's foriegn authority to pound sand, that the deed / mortgage paper they hold has the same intrinsic value as the currency they're flooding the earth with.
The US foundation is still intact. The sticks and straw that have been used since 1913 are deteriorating rapidly due to a severe lack of trust. I'm willing to rebuild, but not with these inferior materials.
Establish weights and measures. Coin intrinsically valuable currency. Provide for the common defense. Assure domestic tranquility. Establish uniform laws of bankruptcy. C'mon folks, this isn't nuclear science ya know.
Good post. Sure makes a "sucker" of those who pay. Banks have no incentive to foreclose since they are getting "free money" from the Fed on the backs of the Middle Class Savers.
Shame.
BINGO!! Milestones
maybe this has been already asked.... but "Who is paying the property taxes?" the bank? some insurance co? some TARP clerk?
just seems really, really odd that counties are not seizing property yet, with all the state & municipalities sucking wind.
Yes the tipping point is behind us, however, something doesn’t add up, with all the noise from FED sock puppets, of ending QE2 sooner and no need for QE3 and now this from China, of all places
“The continuous implementation of such unconventional monetary policy in the United States will lead to the escalation of world credit war and inflict greater losses for related parties in the world credit system."
I have fro sometime thought Dr.B has lost control, and now I think there is another piece to this puzzle, something is brewing and it makes me uneasy not able to figure it out.
I feel there will be cease fire from Dr. B’s monetary cannons for a some time, but make no mistake he is under siege and will have to start firing incessantly and in the process take the system down with him … but I’m not able to figure is who is going to be taking the slack when there is no flak, from Dr.B.. and why this statement from China.. now?
No loss of control, rather the onset of diminishing returns (early/mid stages of loss of control). The entire lot right now is directed at spooking the herd towards austerity... they need a pullback to blow off steam from commodities and give themselves more room to operate... think numerous cycles, all stair stepping downware... an attempt at a controlled demolition... well, in order to maintain control, you need to keep ambiguity alive... how long the world tolerates it is anyone's guess...
"they need a pullback to blow off steam from commodities and give themselves more room to operate"
agree,
but with looming short term maturities.. how long can they give themselves room to operate? with statements from Bull and Co. aren't they painting themselves in a corner.. you maybe this may be a slow downward stairway hell.. IB
Conceptually, if you create the stampede from equities (rise in the dollar), you can get at least some bonds sold...
Also, not really sure how the FED would just now be painting itself in a corner... I'm pretty sure this happened decades ago... the end of the dollar is a certainty, the only question is when and the intermediate monetary method(s) chosen...
Yeah,
I don't get today - actually totally baffled.
How in the face of supposed cesation of massive QE liquidity, corporate margin compression, housing slow down, blah fucking blah and the market runs up?
I don't know what I'm looking at - looks like somebody is simply buying stocks with money from nowhere, from nothing, and simply removing them from existence.
My econ 101 book didn't have a chapter covering this!
Well, how about the bond is down=stocks are up?
Insanity never looks the same as before. I just shake my head and keep buying gold and silver.
are coupon payments from long-term bonds included in these flows?
Those are remitted back to the Treasury. Hence - ponzi
I don't think this is a Ponzi - a Ponzi requires ever greater new investors to bring a limited supply of money for maintaining the scheme.
Fed is not looking for investors any longer. Fed nor banks need your "money" (capital) any longer. "Money" (digital credits) is created from nothing and digitally circulated to PD's (who else?) buy things of "value" be they T's, MBS, stocks, etc. These are effectively retired from circulation thus lessening the supply of goods to buy and increasing the "money" with which to buy those remaining. This process is very effective pushing prices up and would likely also have the effect of reducing volumes as these retired goods never return. Fed doesn't care cause they can always create more "money" to reduce outstanding assets further. In fact will actually require significant new corporate / T's issuance to maintain a semblance of a market. Roundy roundy.
Not a Ponzi - needs a new name altogether...or just call it "fiat gone wild" or plain vanilla hyperinflation.
I see it more as a protection racket. I am looking at you, oil exporters.
The Treasury Ponzi doesnt need new investors when its one investor, the FED, can print money without end.
perpetual motion machine paired with a check kiting operation
Rickards seems to be under the impression that the Fed can do stealth QE by reinvesting that which matures + (and this is where he is wrong) the P & I income from MBS and Treasury et.al. coupons.
If you listen to the interview that is what I take away from it. But the revenue the Fed receives clearly goes to the Treasury and cannot be reinvested as Rickards seems to think. I don't know where he is getting this idea that keeping the balance sheet at 3 trillion will allow stealth QE of any significance.
He is getting that idea from the Fed itself. Did you listen to the interview where he dissected the Stock vs Flow presentation regarding the Fed balance sheet?
http://www.federalreserve.gov/pubs/feds/2010/201052/201052pap.pdf
Thanks for the post. I have not listened to the dissection but I will find it. Read 5 pages of the Fed Babble.. Here is my main question:
Does the Fed only pay Treasury once a year? If the Fed can reinvest monthly income (from all coupons and MBS principal) and payout at the end of the year (as they did a few weeks ago) then I can see that there would be additional liquidity injected.
I don't know the intricacies of the Fed's swap lines so lets just deal with a hypothetical of $2 trillion in ABS, Agencies, MBS, Treasury's, etc. With the back end loaded with MBS (which for some idiotic reason they claim are 10 years or longer assets when everyone knows they average a 7 year duration) we'll give them 4.5% on $1 trillion. That's $45 billion in yield. Let's be generous and give them $20 billion on the rest.
That would imply that there could be roughly $65billion that could be put back into the system in addition to runoff reinvested. So next year runs off $110 billion plus this possible $65 billion and we have a rough stealth QE of $175 billion. A pittance compared to what QE2 is.
How does keeping the balance sheet at 3 trillion allow stealth QE of any significance more than the above stated amount? Additionally, do they pay the Treasury monthly? The only link I found for payments to Treasury was this from last week:
http://www.nytimes.com/2011/03/23/business/economy/23fed.html?_r=1&ref=business
Can anyone clear that up?
It's Rickards contention that the Fed isn't going to QE(x) to monetize the debt per se, they still expect to gin up conventional debt sales in the future the old fashioned way (coercion and fear). The purpose of the QE flow is to present a credible threat to cut the bond vigilantes off at the knees should they get uppity. The size of QE2 was necessary to get the balance sheet stock up to where flow could operate.
"The purpose of the QE flow is to present a credible threat to cut the bond vigilantes off at the knees should they get uppity." My vote for the quote of the day or week or month or year. Thank you, Bendromeda Strain, this is the best explanation I have heard for the Fed's QE behaviour.
Your explanation makes sense but I don't think anything will hold off the vigilantes if higher rates are truly warranted.
When I traded MBS on the street in the late 80's and 90's, the old fashioned Treasury way was called the quarterly refunding (7's, 10's, 30's) and open market operations every day at 11am eastern.
Now it's the daily or weekly funding. Times have changed so much it's just unreal. However, if the Fed really thinks they can control the yield curve when all hell breaks loose then I would be thrilled to see that academic turd of a chairsatan get a teach from the market.
don't know how often they pay the Treasury, but the FED's new accounting policy announced on jan. 6, 2011 adjusted accounting treatment to allow the FED to offset losses on it's balance sheet against $ owed the FED on a daily basis. Formerly this adjustment was done annually. Perhaps, both the offset and paymt to the Treasury is now daily.
Howard, I checked it out.
Per the below FED policy change announcement of Jan 6th, the remittance to the Treasury occurs weekly.
http://www.federalreserve.gov/releases/h41/20110106/
Thanks so much Dave! That tells us a bit more about the "flow" and that Tyler is most likely the one who is right as far as the Rickards debate goes. If the Fed has to transfer their coupon and principal payments every week to the Treasury, then that leaves the Fed with only the ability to reinvest runoff. For Rickards to say that the Fed can swap maturities and make deals with the Morgue or the Squid is possible (of course at our expense) but if they were to outright sell what they have that would be soaking up liquidity. So, unless they continue QE to infinity they have pretty much shot their wad.
Nothing like satisfying a short term need with a long term liability. Isn't that the definition of an addiction?
Crack? Heroin? Meth? QE..............
None of those ever have a happy ending do they?
Good point CrazyJ - perhaps we should recommend that Ben & Timmah be candidates for the Cable TV show INTERVENTION - that would be interesting 12 Steps & the Federal Reserve - Hi, I am Ben & I am an Addict -
There are all kinds of good drug analogies here. Like keeping the Crack/Debt cheap just long enough to get everyone addicted. Once that is done, and it is done, it is all over but the crying.
The way I heard Rickards explain it, the longer maturities are in play at any time. The Fed just has to shuffle the deck and make some offers that can't be refused. Capice? Since he referred to ZH by name, (Rickards is reading? Congrats) I have to assume you did take the time to listen.
Wow - look at that chart - now there's a Bridge hand!
The FED keeping the worst cards at 10 years or beyond well breasted, and the easiest to fudge on the table, with the in-betweens in play in the middle.
Let's hope the FED doesn't try to beat the Chinese at Mahjong.
+13 (spades)
Wow look at the chart?... The Fed said they were going to buy MBS and that's what they did!
They are not any easier to fudge. That crap at Maiden Lane 1 and 2 is far more toxic than this stuff. MBS are on average a 7 year duration instrument due to moving, divorce, death, etc. The other kicker is how interest rate moves affect prepayments. Now in this case, if we were living in a normal world (we're not) it doesn't seem feasible that MBS will get much lower in terms of yield. So in another era of average mortgage rates in the zone of 6%-8%, a 4.5% MBS would trade at a big discount to par since they were unlikely to prepay as fast as the current coupon. So while it seems crazy that the Fed would buy something yielding so little with a 10 year and longer maturity is simple not the case. MBS don't live that long and that in and of itself is bullshit on the chart.
The real kicker is still foreclosure: Much of what the Fed has purchased are new MBS issued in 2009/10. Data on new mortgages in any of the hot 4 (CA, FLA, NV, AZ) show that defaults on these are as high as kites as property values continue to go down. Many could have been reworked and rebundled through FNMA and Freddie Mac. And yes, some were perfectly good MBS that as long as purchased at par or below would most likely yield close to their coupon over time.
But people are still defaulting and not paying their mortgages. So that big lump in 10 years and beyond (which really doesn't belong there due to stated duration above) are newly issued MBS that who knows how well they are performing other than the Fed itself. But with a Bloomberg terminal I could tell you much more just from the magnitude of the Fed's purchases vs. the universe of MBS issued in the last 2 years in terms of normal prepayment and default data.
If there are more defaults, the Fed and the taxpayer lose, period. And in the long run, the Fed has screwed the pooch so it's all semantics at this point.
Who is Jim Rickards? I mean you can find the bio and he has been an insiders insider. There for example in the LTCM bailout.
Who is Eric King of King World News?
I mean who are they in relation to and within the competition among our elites. Are the related to Christian Reconstructionists on the right?
Who is Jim Rickards? I mean you can find the bio and he has been an insiders insider. There for example in the LTCM bailout.
Who is Eric King of King World News?
I mean who are they in relation to and within the competition among our elites. Are the related to Christian Reconstructionists on the right?
Rickards said that he didn't expect more QE as we have come to know and love it... But that we would have "stealth" QE to infinity... What he said was:
Bang Dae-Gong?
Baseball Hot Dogs Apple pie and Brilliance Jinbei!
no, silly.
Bang Dae Ho!!
I did not junk you. Whoever did is an[sic] ass-newb outlander.
"Bang Dae-Gong?"
Don't know about him, but dog-gone if Dagong isn't right!
I really don't get why the Chinese continue to wag their disapproving finger at the Fed, when they could, at any time, call the Fed's bluff and float the RMB -- of course, that would send the FRN into the sewer.
Get It On!
http://www.youtube.com/watch?v=TVEhDrJzM8E
How do I know this is T-Rex without checking the link....LOL.
Maybe they should stick to land development, and try to sell some of those 66 million vacant apartments...
They are changing the marketing material into Japanese
WWIII.....let's get this over with already.
WWIII. History will show it has already started.
+8 years ago.
No, not 8+ years ago.
The opening shot was 9/11.
Shot by whom?
20 brown guys who hate us for our freedoms...........AND they have boxcutters!!!!!!!!! /sarc/
Trade wars lead to real wars.
-Gerald Celente
At least we have had 20 years of modern war games using live ammo. Our pilots and troops having been sharpening that axe at the expense of a few Muslim countries. We should be all polished up for the big one. What was the last engagement the Chinese have been involved in? Hmmmm, it's been awhile for them it appears.
That rust might come to our advantage.
Will this mean I have to rename my favorite dish Kung Pao chicken to Freedom Chicken?
It already happened. Your in heaven right now. I hope it's everything you ever imagined it would be.
Looking at the market right now, apparently QE3 is already underway.
On NYSE volume of half a billion. What a farce this has become.
Indeed. It is the one statistic that cannot be made to lie...and it reveals just how desperate the situation has become.
$5 trillion in stimulus...$8 billion per day in POMO, and this is where we are...where we have arrived.
But they will say...."wow, what a surprise...who knew the market was in trouble...things were so bullish...no one could tell that it was coming...no one was selling"...surprise...sure.
Thats exactly right Cdad, the implosion will certainly not be announced, it will likely happen on a big uptick, when everyone just turned off their monitors for the day after seeing their big gain for the day.
Terrible new home sales data in February.
Terrible durable goods orders data.
Terrible consumer sentiment data.
Anemic volume melt-up.
100% FUBAR Ponzi BS market. Someone please smash HAL 9000 to bits.
HAL 9000 will be destroying itself very soon...all by itself.
Daisy, daisy, give me -an---answer-----do. ____I'm-----half-------crazy---- Milestones
I'm afraid I can't allow that Dave.
HAL'S demise will not be allowed. Bens machinations seem bizarre now but they will become downright byzantine.. I don't know how it will end but it will take much longer than we think and approach comedy just before it does. The American people are so dense and so blinded to reality, Goebbels could only dream of such a blank canvas to work with as the American people.
Mr. Calm,
A++++++++
give yourself a raise and take the rest of the day off.
Great stuff. Spot on!
Wow a Chinese official telling the truth. Just remember, when goods stop crossing boarders, troops do. Hedge accordingly.
You know things are screwed when the official Chinese propaganda is actually true!
Stocked up on lead painted toys and plastic rice here boss..
Dagong would not have written this unless given express consent by the Chinese Government......so you can bank on it....
The fact that the goverment had to approve these statements doesn't add any validity to CNBC.
Approved or not, the truth is the truth.
Bank on it being what, misdirection? Totaly fits, China announces QE will not stop, while Ben is painted into a corner unable to do it. This is a rope-a-dope, Chinese boxing style.
'QE will not stop, complacent americans do not worry Ben will keep printing to keep your retirement up'....why would they care the least about this? I say they know Ben cant keep printing and uppercut him.
Oh and dont forget every news article and sure thing changes by open the next morning in these times. If CHina is saying it, theres something behind it, and you can bet its not for avg americans benefit.
Is it possible that they've expanded the monetary base enough that with a few years of moderate inflation and a little austerity, the good citizens, municipalities and governments of the 'developed' world might just make good on their debt repayments?
Is it hell!
This shit is structural, demographic and fucking geological. It's a fact... and they might lay off the QE accelerator for a little while but we all know they'll panic sooner or later...
and when they do...
Gold, Silver, Wheat, Oil and fucking manure are where it's at.
There's truth in that.. manure is going to be a very valuable commodity, as it once was.
The future is shit!
Like the syntax!! Milestones
If the currency war escalates, who are the biggest losers over the longer term (other than the serfs of course)? Manufacturing countries... a good way to control China without overt action is through currency devaluation...
I think he said it's ON!!!!!!!!!!
Yep. On like Donkey Kong.
WWIII is the current monetary war...kinda phony war...It's WWIV that is the big one, when the nuclear reactors become generalized...not just in Fukushima; Every ship, every plane, every missile head. That's when you all have to hide in Fukushima with me, the only safe place on earth.
WWIII- The phony war using phony money
Thats great!
Did they say "war"? An earlier post was saying it was up to Congress to declare war... there's no war here, just police action from the Fed.
No, no, no. It's now known as "kinetic currency action."
Didn't you get the memo?
Gees Now Even Robert "the shill" Shiller is advocating for "more" QE!!! as seen on Bloomberg! So, it's ON folks! I just decided to sell a little gold for some more ammo and a brand spanking new DIGITAL SCOPE!
+7.62x54
True dat Mosin-Nagant. The gal is old, but she can still dance. Reliable as a shovel. Cheaper than bottled water and even easier to use. I love 'em.
Luidmilla Pavlochenko FTW!
This is really funny but I am easily amused..
http://www.mouseguns.com/compare.htm
I've got the M44 carbine, thing hurts!!! Just bought a butt-pad (huh-huh), gotta try it out.
Damn the Torpedoes! Full Speed Ahead!
Let the games begin, I say. America's greatest minds from Ivy League schools, schows the stupidity.
Love your spelling! Milestones
It will be a QE3...but not as one expect, just USTs. I beleive PIMCO is just 50% right. It will be MBAs AND USTs in QE3....
Air drop ben and Congress in Libya and let them fight.
And the WHOLE CONGREGATION said AMEN....
I, too, am not Chumbawumba
Surely you jest!! Milesatones
The two things I get from this:
China is pissed off, and they won't be buying Timmy's paper anymore
and
US Dollar is being pushed to be removed as the reserve currency, if this happens, say hello to a depression style Zimbabwe.
Bernanke better get the dollar up quick, or it's all she wrote.
Shits and Giggles.
'Bernanke better get the dollar up quick' He can't get himself up.
Geee. That a lollygagger. Don't choke, but he does not want the dollar up. And he does not care about China. It's the Plan.
China needs a weak dollar to keep on loading up on cheap commodities.
Without a cheap dollar, commodities would skyrocket.
I agree 100%. China is totally complicit in this scam. This is not a war where countries are fighting each other. It is the elites against everybody else!!
LOL was this for me
interesting terms "global credit war" (=global debt war) and
"adjustment of international credit relations" which presumably is a thinly veiled intent to dump US treasuries.
I am not Chumbawumba.
How anyone can read this and conclude its great news for US must be smoking the same shit Ben is.
definately bullish
My guess is, the chinese people and government now attained enough PMs to establish and maintain stable exchange of goods on the basis of the Yuan with those emerging economies. Otherwise they'd not use the words "credit war".
They'll not back down now.
Drop the peg then mother fuckers.
lol
I think they're about to drop everything except their pants.
(That's our job.)
Drop the reserve currency status first.
Drop the reserve currency status first.
Why? We paid for it with our blood, still are.
DROP THE PEG THEN!
<crickets>
Thats the thing.....FED playing the rage aginst the machine tune here...
"...And now you do what I told ya..."
The chineese play to the second part
"...Fuck you, I won't do what you tell me
Fuck you, I won't do what you tell me..."
Perhaps my favorite Rage tune.
We used is as a company anthem during the dot-com time.
'course the investors are still real mad.
Man, I miss that era.
Trav,
What would the price of an Ipad 2 be if the peg were dropped?
It'd be made in vietnam or some other country that would peg.
china may not realize this, but nobody is playing their "technology sharing" game any longer. Japan figured this out as has Germany and even the US. The core IP is kept closely but they use China's labor base to get construction done cheap.
China has a manufacturing base so long as it is useful for them to have one. If they won't play ball there are always 1.2B indians and hundreds of millions of other SE asians. It's useful for multinationals that China's gov't has overbuilt factories and has idle capacity and empty cities. It means that margins won't compress. If factory 1 tries to raise prices, the owner of idle factory 2 might be persuaded to give a better deal.
Nobody wants cloned Chinese cars, cloned Chinese airliners, or Chinese fighter jets featured in "top gun" ripoff clips. What they do want is Japanese, American, Korean, German designed and engineered products made by chinese worker bees.
Thank you for the thoughtful analysis.
If the peg were dropped rather than weaned, what do you feel the short term effect on US. consumer prices be? That is before the manufacuturing moves to another country
drop the peg or 40% tariffs, same diff
US consumer prices skyrocket
US citizens learn they don't really need some things currently thought to be essential and learn how to do without like their grandparents did
US manufacturing suddenly finds it profitable to manufacture in the US and returns to feed it's own citizens
China eats a bag of dicks
Sounds like the chinese slit their own wrists via excess capacity
That and the mercantilist strategy is difficult to extricate an economy from especially theirs with their population metrics. Going to be many angry young men there shortly..
Lots of third world countries willing to supply desperate workers willing to work for a pittance. You'll soon be putting the US on that list. Who will buy the iPads and salad spinners though?
That would be in their own best interests. And ours, long term.
not sure I can agree with that. I mean, long term, sure, trade flows simply have to normalize; the center cannot hold.
But China is sitting on a seemingly perpetual need for credit inflation. You know how ponzis work and their economy is one. I'm sure they imagine there is some self-sustaining plateau they will achieve "someday," but it seems clear that isn't today.
dickweed
Wouldn't this devalue the debt that China holds?
yep, drop the peg
or we put up tariffs to match it...say, 40%?
How will Apple sell the I-pad 3 coming out next week?
Operation RECALL IPAD 2?
apparently a sufficient number of goobers still have functioning credit cards; witness the last 3 rounds; no problem, until they're all maxed out
actually the name has been changed to I-Rad1. it glows in the dark even when its turned off.
I love the fact that China likes to glaze over the fact that they are printing money like hell also.
I love the fact that China likes to glaze over the fact that they are printing money like hell also.
yeah, and I see our resident commie lovers junked you for speaking the truth boilermaker
America bashing is the soup du jour that many clamor for these days
China's economy and government are just as solid and trustworthy as that shit they sell us that breaks when you look at it.