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Chinese Exchanges Hike Margins On Virtually All Commodities In (Temporary) Attempt To Cool Surging Prices
Just because the CME's hikes in all sorts of commodity margins were perfectly innocent and only had to do with "risk management" functions, we read with little surprise that China's Dalian Commodity and Shanghai Futures Exchanges are now also in the indirect price suppression, pardon, risk management business. Earlier reports confirm that both exchanges will hike margins on virtually every single commodity traded in China. This is likely the last stop gap measure before the central bank is forced to implement a rate hike and cool already near record inflation. As the CME's failed attempts to kill silver and gold price appreciation using margin pressure have so far done very little, we expect that the short-term impact of this move will wear off within a weak, at which point prices will resume their upward climb with a vengeance.
From Dow Jones
BEIJING (Dow Jones)--The Dalian Commodities Exchange will raise the required margins for soybean, soymeal, soyoil, palm oil, corn, linear low-density polyethylene and polyvinyl chloride contracts to 10%, effective Monday, the bourse said in a statement on its website Friday.
The daily limit for price movements will be increased to 6%, it said.
The changes follow government calls to crack down on speculative activity that has been driving price increases, especially in agricultural commodities.
"The move can efficiently curb speculation," said Liu Qing, an analyst at Xinhu Futures Co.
She said the measures were unusually strong, as margin requirements are usually raised only before holidays.
"The exchange will take more risk-control measures to stabilize the market, if risks increase," the DCE said.
On Tuesday, it had raised the required margins for soymeal and soyoil to 7%.
The Zhengzhou Commodities Exchange--on which cotton, sugar, wheat, rice and rapeseed oil are traded--raised required margins and daily trading limits for some of its key agricultural products effective Friday.
Trading limits for cotton, early-season rice and sugar were lifted to 7%, with margins set at 12%, it said. Hard wheat trading limits were raised to 6%, with margins set at 10%.
Normally, minimum trading margins for products on the Dalian and Zhengzhou exchanges are set at 5% and daily trading limits range between 4% and 6%.
The government has become increasingly concerned about inflationary pressures, however, so various ministries and departments have begun to take action.
The Ministry of Agriculture has urged farmers to expand area cultivated with vegetables to ensure supplies, the China Banking Regulatory Commission has ordered banks to extend more loans to agricultural producers and traders, and the People's Bank of China has said it will reduce excess liquidity in the banking system.
The increase in the country's consumer price index hit a 25-month high last month. The index rose 4.4% from a year earlier in October, driven by a 10.1% rise in food prices, which account for one third of the CPI basket.
And just to make sure the message is heard loud and clear, the Shanghai Futures Exchange did an identical move just hours earlier.
From Bloomberg:
The Shanghai Futures Exchange, where the world’s top three metals contracts are traded, will increase margins and daily price limits in the latest move by China to curb speculation and cool inflation.
Margins on copper, aluminum, steel wire, gold and fuel oil will rise to 10 percent, the bourse said in a statement. They gain to 12 percent for steel-reinforcing bars and zinc, and to 13 percent for rubber, after the market closes on Nov. 29, it said. Daily price limits for all products will widen to 6 percent from Nov. 30, it said.
China, the world’s biggest consumer of commodities, has pledged to control prices, and may raise interest rates a second time this year to slow the fastest inflation in two years and curb food costs that jumped 10.1 percent in October. The nation has also made trading commodity futures more expensive.
“This is another move aimed at controlling risk and curbing speculation,” Yu Ye, an analyst at Minmetals Futures Co., said by phone from Shenzhen.
Bottom line: these moves will achieve a price drop in the near term as marginal speculators are kicked out. We anticipate that the effect will last about a week, at which point price increases will resume with an even more pronounced pace and the PBoC will have no choice but to hike rates. For now, however, crisis has been averted, and yet another can kicking stop-gap has been implemented that does nothing to fix the underlying problem and everything to soothe the symptom in hopes that someone somewhere will actually do the right thing.
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china <> russia != $$$$
in about a weak eh?
A week (sic) mind focuses on typo's rather than the message.
back to the message - dropping only 10$ as a result, i have feeling gold/silver will storm out of the gates early next week...
not with the dollar increasing.....
although it will be interesting to see where european capital goes as a "flight to safety"....last time when europe was falling apart both USD and PM's were increasing right?
"Slash",
Get back to your status report, your annual review is coming up...and you need to get that 3.5% this year.
The West politicians don't understand China and its political/economic system.
China is a communist country with a central-system economy. China economic model is very close to the Soviet pre-WWII economy model. Specifically, using very cheap forced-labor and export, China builds its industrial might.
It is not a big deal for China to overbuild its commercial and residential real estate. In the next 3-5 years, 100-300 millions Chinese peasants will move to cities resolving their real estate over-construction problems. So, it is not a mid- to long-term problem.
The Chinese central-planning system is the problem. So far, export-oriented economy was able to solve planning and marketing aspects of the economy. But none-export domestic segments of economy show weaknesses and failures of the economic model. So far, their export was capable of saving their domestic economy and smooth the bumps. However, as the world economic crisis worsens and protectionism growth, the Chinese economic miracle will start to unravel.
+1
China's economy has been disproportionately tie to exports and when those falter significantly, big crash. That is when the housing boom and the Chinese banking debacle will come into full resolution.
can
can
can
protectionism will only lead to more speculation! government intervention has and will always fail.
This is not about protectionism. It's about inflation, and inflation causes social unrest.
China, the US, EU... they all try to "HIDE" the real inflation numbers to not cause a panick. and this trick is about the only one they can adopt, but there is a invisible tipping point that is soon to be reached in all the big economies.
“There’s a hard rain a ’comin’, and now its just beginning to sprinkle.”
Consider the following Bogus Official versus Real Numbers
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported November 17, 2010
1.17% 8.51% (annualized October, 2010 Rate)
U.S. Unemployment reported November 5, 2010
9.6% 22.5%
U.S. GDP Annual Growth/Decline reported November 23, 2010
3.24% -1.44%
U.S. M3 reported November 16, 2010 (Month of October, Y.O.Y.)
No Official Report - 3.29%
Just to compare apples to apples, the BLS comparison to the shadowstats 22.5% unemployment rate should be the underemployment rate which is BLS 17% and shadowstats 22.5%.
One final chance to load up on them PMs. Pretty soon, margin hikes will have diminishing to no effect.
Margin hikes hit the shorts as well. Since shorts = longs in commodities, this is likely to have no impact.
Yes, and unlike the Comex they are making an early announcement so as to warn everyone in advance, which is more fair.
i would be so bold as to suggest less paper means higher prices.... the markets will now have to increasingly reflect a direct physical market now, instead of an unlimited, endless paper market.
the initial, gut reaction will of course be lower.... but over time it decreases the chances of a bubble amid less credit and margin based speculation. and the fundamentals remain the same for PM's...
not to mention, with the necessity for the "authorities" to take policy action against a resource means look out baby... we really ARE goin to the moon...
I agree with everything you said. In addition they may be trying to "paint" a head-&-shoulders on the gold chart to shake out those who trade by charts and ignore fundamentals.
Well, then 'they' have a way to go yet to even accomplish that, try as 'they' might.
+1 Excellent points 66sexy.
China's Economic Planning/control systems seem to be in-place and effective...sucessful government/business fascist partnership..along the line of Italy 1920-1930, more so than NAZI Germany...curious Ideological compromise, a long long way distant from MAO, or the KymerRouge Marxist communist theme...
Synergism, convergence...the 'Overseas Chinese' throughout the Far East, including San Francisco certainly really never took Lenin/Marxist Worker/Soviets seriously, anyway...Concrescent mutuality between Japan, China, the two Koreas, Taiwan....THAT will happen...NO WAR
"Planning" is why long term FOREX trending in the Yen/Yuan can be depended upon, speculated on...a retail FOREX market winner for next 20 years...Find out what is Politically Planned and the Banking will follow...
Central planning always has a 5 year plan. The Chinese have turned off the Autopilot. They are no longer reacting to the wishes of the West. Charting a new course of action?
"the China Banking Regulatory Commission has ordered banks to extend more loans to agricultural producers and traders, and the People's Bank of China has said it will reduce excess liquidity in the banking system."
This seems contradictory.
Actually, if you look at the combined effect of these 2 policies and you see the PTB's true intentions in China.
In a normal, healthy market, the cure for high prices is high prices - farmers take their profits and invest in ways that allow them to increase supply. But high prices mean empowerment of farmers through greater profit (money --> power). And the PTB don't want that. But they do want to increase the supply of commodities.
So they coordinate increased margin requirements to suppress prices while increasing loans to farmers. This way they can both increase the supply of commodities and undermine the empowerment of farmers (debt --> slavery).
It's a brilliant bit of policy from an evil, sociopathic perspective.
So that explains the sudden price drop in PMs. If this is it then I'm pretty sure prices won't take a week to recover.
Yup, exactly. Gold took a 5 minute dive there, and is back at the same Yuan level it was at before.
What we are seeing is moving of the goal posts. The financial rules are being rewritten constantly right now, and that should tell you only one thing, the Oligarchy is getting desperate. Next there is a good chance we will see infighting among the 'elites'.
But don't expect them to come out and tell the truth, it is more like Mob Warfare, where you don't go to the Press and tell the other guys secrets, because you will be implicated: i.e. "And how do you know all this?" "Ummmmmmm...."
It will be done with much more conniving and backstabbing. A spate of heart attacks and plane crashes, if I had to guess the most obvious methods.
http://psychonews.site90.net
PsychoNews: Exposing the Oligarchy, one Psycho at a time.
Yes, let's go back to price controls. Cause history has clearly demonstrated that works. Do the criminals that run governments ever learn? No answer necessary.
When do ag ETF's like DBA, DAG get outlawed, or are they core holdings of TPTB?
But of course.
The US, strong of its FED gun and its army of 300 million people who generate a daily demand of 2 billions meals, is at starving the part of the world that is sitting on commodities.
Given the current levels of demand, that part of the world has no other option than going long contracts on their commodities. They wont make it through short term demand.
China and Japan want their share of the loot but cannot emit USD (US monopoly) and their capacity to buy USD is diminished. They need to suppress commodities prices in order to get the best out of their commodities long contracting bargains. Nothing more normal.
The US ganglord is showing us the way in the age of darkness and fear.
"PBOC Researcher Calls on U.S. to Sell Gold, People’s Daily Says"
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aD0_TS95f.ok
Compliments of Bloomberg via Jesse's Cafe Americain. Hat tips to both.
"The U.S. has to resolve its “twin deficits” in the government budget and the current account, Xia was quoted as saying. Three ways that may help the U.S. achieve that target include reducing military expenses, selling part of its gold reserves and relaxing some export limits on technology, he said."
“The U.S. has more than 8,000 tons of gold reserves; why can’t it sell some of it since the country wants to raise funds for economic recovery but doesn’t want to add more burden to the fiscal deficit,” Xia told the newspaper. He didn’t mention whether China would be willing to purchase any gold from the U.S."
"Trav7777 Calls on China to STFU and stop stealing IP"
what a sleazy nation...sheesh
Trav7777 gets my vote for the most enjoyable reply's! LMAO again.
foundation x says they have more than 5 bn ozs. of Au. If that number is legit and the hoard is ever brought above board the Au/Ag ratio will get smoked. work that contingency into your expressed scenario.
"foundation x says they have more than 5 bn ozs. of Au."
I have not heard of 'foundations x'....nor do I know who 'they' is. Please provide links and let me in on who 'they' is. Thank you.
Foundation X is a mysterious foundation (aka the US [my interpretation]) that is generously offering £75bn to clear UK's debt. No string attached.
My interpretation: foundation X is the US that are willing to bail out their trojan horse in the EU, the UK, in fear that this crisis allow european politicians to speed up the merge between european nations.
I did a quick google and came up with this....a bit far out, but I'm not saying it's not true.
"Behold Media Presents: NWO Bribe
Original Poster: SpudXXXX
“The people I’m dealing with from “X” have been forthcoming with a list of referees who are amongst the most powerful and the most high profile people on the whole world stage and they invited the British Government to pick up a phone to these people to validate their existence”
Lord Blackheath insists that a ‘shadow force’ wants to support Britain with its own, non sovereign (commercial/corporate) assets to the tune of £75bn. The group would loan this money, interest free in order to to prop up the U.K. if the U.K. Government is willing to take the bait.. umm, I mean accept the offer."
I am guessing that by 'speed up the merge between European Nations' you mean a stronger political union?
My personal take is that Germany is edging toward the back door out of an economic or political union with 'other European Nations' and is conducting meetings with Russia on currency and natural resources....This is strictly my hunch and only backed by some rumors and the fact that Germany knows that the PIIGS are not going to work as hard as Germans and that corruption of PIIGS govs will continue, and that PIIGS consumers are not going to be consumers of German production to the extent that they have been.
There is also the possibility that China will step into the breach and offer bail out funds for the EU....If, the EU is willing to do business in currency other than dollars or sterling. Germany needs Russian natural resources and Russia needs German ingenuity/factories in many economic endeavors. We should not forget that at one time Germany/Russia/Japan were military allies and trade agreements almost always preceed other alliances.
Lots of back room talks/manuvers ongoing, imo.
link to foundation x.... http://nauresistance.org/2010/11/who-is-foundation-x/
Can't find the link and the memory disc is a bit faulty at the moment but I read that someone was insisting Foundation X was actually the Rothschilds based on the theory that they can not afford to lose the City as base of operations and were willing to pay to maintain the staus quo.
FWIW
Here's a linky
http://www.themistsofavalon.net/news-views-f9/foundation-x-prepared-to-b...
Another mythical Org to be feared and before which to tremble. I think this latest story disappears by XMas. No such Org.
Nobody knows who they is. Not even British Parliament members approached by said unknow entity. There are lots of hits already from the US to the UK. You will see if my comment is junk soon enough.
"X Men" - LOL!
5 bn oz. is how many tons?
What a bunch of crock...
Anyone who wants to keep on thinking the chinese might just be normal by some chance... should not check out this clip.
http://www.youtube.com/watch?v=yru1C-RE7lc&
I personally dont think they want world domination as they've got too many of their own problems.... but you cant deny they are NUTS!!
'Nuts' compared to what other country or countries.
When discussing SE Asia one must keep in mind that they are very old cultures and have been through many forms of goverments and many, many forms of currencies.
Veiwed from the West they may appear to be nuts. Viewed from SE Asia the West may appear to be nuts.
I suggest that the game is economic warfare and the winner will be un-nuts....since the winner will be writing the history. Viewed in this way, keeping score is easy.
"Viewed from SE Asia the West may appear to be nuts."
everything relevant right? depend which is your reference point. well in their defense they are older cultures.
americans which appear to be leading the west are not even close...soon we shall see...
i suppose what we are going through will qualify for US as a learning experience...everything takes time...better late than never.
ALL the large cultures are insane. All of them have 'fiat' currencies, controlled by central banks based on the 'limited liability' corporate business model, the stocks of which are owned by ... dunno. All have 'fractional reserve' banking, which allows banks to loan what they do not have and charge interest for this imaginary money. All are printing more and more of this paper. All the cultures worship these little pieces of paper, and the state religion is how to accumulate more of this paper. I could go on, but I think I need a cup of tea ... or perhaps something much stronger.
Yes i get your point exactly.
i am awe-inspired at their recent rise and ability to have their brand on every piece of tittle-tattle out there.
I think i find their dynamism and enthusiasm exhausting rather than infectious and i cant shake it off.
When you say ' the game is economic warfare' - is that a threat to the west? is the chinese 'long' game sinister or good for themselves and their allies?
" is the chinese 'long' game sinister or good for themselves and their allies?"
I don't believe that the Chinese are interested in dumping tons of Yuan into their military and are doing only what is necessary to prevent being invaded militarily....and, maybe enough to force Formosa/Tiawan back into the fold.
I do believe that China has a long term plan to weaken the West financially and there by winning the economic game. If China can dislodge the dollar from 'world reserve status' and oil begins trading in gold or for various other soverign currencies they will have achieved some world financial success.
I believe that reading about developments in the SCO are more informative than most sources. Odd, but the SCO and it's mechanations are rarely if ever mentioned, even on internet blogs re economics.
Here is a link to the SCO... Shanghai Cooperation Organisation
http://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation
Interesting SW. Except,
"If China can dislodge the dollar from 'world reserve status' and oil begins trading in gold or for various other soverign currencies they will have achieved some world financial success."
All currencies are completely fungible (including Au and Ag for that matter). Mish says,
http://globaleconomicanalysis.blogspot.com/2009/10/ridiculous-hype-over-secret-oil.html
Unexpectedly this argument also works against the whole USD deflationists' assertion that a vast number of debts are 'denominated in USD'.
Payment depends on the creditor's preference, no?
Regards
Although a deflationist Mish has repeatedly said that gold is essentially a chaos hedge (my term), regardless of inflation/deflation. Hence, it works against the strict dollar deflationist, but not so in Mish's case. Funny, but the last time I saw a Prechter interview (2-3 months ago, can't find the link) he had ever so slightly backed off his negative view of gold in this environment.
A canteen is strewn with wreckage after more than 1,000 pupils from low-income families at a high school in Liupanshui, Guizhou, ran wild over increases in food prices brought on by fast-rising inflation. The increases affected the cost of bottled water, rice, bread and other dishes at the canteen.
www.scmp.com.hk
Haven't you noticed inflation in your own grocery bag?
10 years ago, I could go to the store and buy for 100 euro a nice full cart of food for the whole week.
Now, a full cart easely costs me 250 euro!
10 cents here, 10 cents there and every few months they start again.
I make a very good income compaired to the average working people. But I can't imagine how to get through the end of the month if suddenly my salary would drop to a average one.
These day, it's like when I only just open my door to go outdoors it costs me 50€ to start with!
Where are you shopping? If I go to Lidl I get a full shopping cart with just 50€.
Perhaps you are paying with these coins?
http://www.eucoins.info/wp-content/uploads/image/50euro-Theodor-Billroth-frt.jpg
if so, have I got news for you kid!
Historically, government attempts at price controls always ultimately bring HIGHER prices instead. Producers either hoard supplies or reduce production, thus creating shortages and higher prices still. Hugo Chavez is teaching this lesson to Venezuelans right now, with inflation at 20% and still rising. Sad that people never seem to learn the lessons. We're doomed to repeat them, creating global misery.
Check on the headlines on FT.com today. Europes debt woes are deepening, sending Dow futures, Euro plunging. And California's debt woes continue to deepen also. Interesting that these debt debacles are mirroring each other.
No comment on the China failed govt debt auction yesterday?
Best news here, none of us are standing online as gonzumer consumers
After a rate hike and multiple reserve requirements hike there are
Expectations are still rife for another Chinese rate hike.
Chinese tightening can pull the carpets from under several asset classes
that are basking in the glory of an ever increasing dependence on Chinese ascent.
Chinese ascent has been real but it hasn’t been in the right fashion.
It hasn't been a clean organic growth; it is more like a growth on
steroids which have dangerous side effects, not immediately, but
absolutely certainly.
The core of capitalism is free trade and most of the developed world
which grew from shambles to glory after the world wars grew
organically on the healthy diet of free trade. The world would have
certainly continued to do so- falling down and rising up with the
demand supply cycles, losing and gaining business with an edge down
and edge up in competitiveness, killing the competition but only by
getting more skilled and bowing out gracefully when the better guy
takes your business- all in the name of fair game and the spirit of
free trade.
The world has grown superbly on this model- capitalism was definitely
the prescribed remedy.
Then entered the bad player in the game. The bad player which was
playing in the name of capitalism but whose methods were far away from
it. The facade that was created looked very much like capitalism.
Extremely competitive companies emerged in the business scene that
were able to produce everything at less than half the price. The world
loved it and business started flowing in the direction of China. What
the world didnot see, rather did not pay heed to was that these
weren't stand alone companies whose ultimate weapon for
competitiveness could be better skills or better management. It was
one gigantic company and its ultimate weapon for competitiveness was
monetary policy. It was the Chinese government that the world's
companies were pitched against in business.
It wasn't a fair game but the world played it; not because they didn't
see it or didn't understand it but because the companies of the world
were long used to fighting their own battles and the governments of
the world (developed world) had long distance themselves from
business. And the biggest reason was - the going was good.
Companies started outsourcing their businesses to China and they loved
the cost advantage. The nations watched silently as their jobs flew
out to China- all in the name of capitalism- free trade.
This kept on feeding the Chinese giant and no one worried that the
giant was growing abnormally. It was fed on steroids and it had the
potential of inflicting serious self harm too.
The self harm I am talking about is inflation. With a policy of
maintaining a strict peg to the USD, China has to print in and pump
Yuan into its economy every time Yuan tends to surge ahead on growing
exports. Experts are betting on enormous inflation in China for last
so many years. Inflation was the only remedy to get China back on
right track. But China was lucky(or shall I say unlucky) that
inflation did not rise then. It didnot rise because the world was on a
rapid growth track. Whatever extra money that China was pumping into
its own economy was going into creating more manufacturing facilities
to serve the growing world demand. China never had a dearth of cheap
labour and hence wage side inflation also didnt creep in.
But now when the demand has withered away the same pumping in of money
is creating serious inflation. No more new facilities are required
because demand is just not there. Providing work to existing
capacities in itself is a big task.
At such an hour when US prints more Dollars and thus indirectly
devalues its currency what could China do to maintain its peg. It will
have to print more money and that will fuel serious inflation. So its
a double whammy of inflation on China. What would it do if not raise
its rates. But will a rate rise help? Rising rates would boost its
currency and this will make the Chinese companies less competitive.
This will cause unemployment and unrest. Letting things as they are
wouldn't help the rising inflation. So does China has a way out of
this.
What is dangerous is that the world has developed a great dependence
on this abnormal giant. Its fall will not only hurt itself but also
the whole world.
Remedy lies only with China. If China manages a soft landing it will
be a miracle but if the Chinese bubble busts it will be a disaster.
Max is on a roll today.
http://www.youtube.com/watch?v=cTdLgtzD9eU
Removed
Don't blame the Chinese for this.
They are simply trying(and failing) to control the runaway cost-push inflation caused by HellyBenny and his printing press.
As for gold, if you own/trade it you should be used to this kind of BS price manipulation. If you're not, you'd better get used to it. Margin requirement increases are simple and meaningless compared to the shit TPTB will almost certainly try in the coming months.
Good points TF.
Keep in mind the big picture: The paper empire is coming apart at the seems.
I'm referring to the Ponzi based on everybody in the world simultaneously believing that King Dollar still has clothes, despite what they can see wth their own eyes. There are enough dollars afloat in the world to fill up every ocean, from 40 years of unrelenting printing and extend-pretend.
It comes down to this: the dollar's worth is based on a Byzantine web of international accords and cooperation. In times of grave crisis, those old agreements will inevitably need to be at the least re-negotiated, at the worst repudiated. All depends how much each counterparty will be hurting. And it looks like it's going to be a lot.
I see that AMZN is green, while virtually every
"hard asset" stock is getting killed this morning, and the F12 punching
GHS'rs are stampeding out of PM's today.
Wonder when Eric King might actually interview Jeff Bezos, since
AMZN has managed to escape today's carnage and is one of the only green
stocks on the Nasdaq 100 Heatmap?
Poor Peter Schiff, Jim Sinclair, James Turk.
Their Thanksgiving holiday was essentially ruined with the bombing of gold and silver this morning.
Most boring troll ever.
not only them...who knows how many others...those chinese...
Bought more Ag/Au along with the miners. All on sale today. Thanks China, GS, Robo, whoever ... :-)
Absolutely right! Yeah, silver dropped twice (or more) as much as gold and copper. The EU is falling apart, China inflation is going wild and yet gold and silver both drop. I added to my silver positions - all in now :-)
Yes, they are quaking in their boots, with gold back down to where it was THREE whole days ago.
Your bias is showing. Some kind of exhibitionist here.
Despite your pair of creamy, milk-laden jugs, I beg to differ re the gentlemen you name above.
Their holiday is not ruined because they are not amateurs. They have been correct for ten years or more. They see how how the chess moves are converging to present another leg up.
Now guys on margin, who bought "looking for a pop" just got the hose again. They add liquidity and the Sinclairs and Turks of this world sell into spikes to those speculators.
But a pro is unfazed by this small setback.
First Junk -- always the same crap, i.e. tits and propaganda.
more like tits & dumb-ass
'Robrokenrecorder'
update: well, like most of Robo's calls: that didn't last long...
Mike Pettis ~
http://mpettis.com/2010/11/chinese-inflation-and-european-defaults/
The big concern in China now is rising inflation. The market is obsessed with fears over what steps Beijing will or will not take to combat rising prices. Beijing has already hiked interest rates, raised reserve requirements, imposed price freezes, and is reportedly going to tough out the existing lending quotas. Beijing may even throw in the towel and declare a “new normal.” According to an article in Wednesday’s South China Morning Post:
Beijing is likely to raise next year’s official inflation target and tighten monetary policy, state media said Wednesday, amid expectations for consumer prices to continue rising.
The Central Economic Work Conference, which is expected to meet next month, will probably hike the government’s annual inflation target to 4.0 per cent from 3.0 per cent this year, the China Business News said, citing an unnamed source. The conference is the most important economic policy making event of the year and gathers top Chinese leaders, usually including President Hu Jintao and Premier Wen Jiabao.
As I mentioned in an entry last month, it was going to be very hard for the banks to stay within this year’s RMB 7.5 trillion quota, and there was a real question about whether or not the regulators were going to enforce the quota. On Tuesday evening the PBoC even announced that it was going to face challenges in controlling the lending pace for the rest of the year. Separately, Tuesday’s Bloomberg had an interesting article on the subject:
China’s biggest banks are close to reaching annual lending quotas and plan to stop expanding their loan books to avoid exceeding the limits, according to four people with knowledge of the matter. Industrial & Commercial Bank of China Ltd., Bank of China Ltd. and Agricultural Bank of China Ltd. are only extending new loans as existing ones get repaid, the people said, speaking on condition of anonymity. Lenders are also cutting holdings of discounted bills to make room for longer-term debt, they said.
SPX will close up 5-10 points today
Take heart, gold bulls. Gold is the Bridge Over Troubled Waters. Anyone with real money to protect around the globe is going there. Hot money moves in and out and turns on a dime. THe pattern we've sen over the last 10 years and most acutely in the last 2 is intact: wealth is being protected as faith in paper currencies and the political structures that support them is crumbling further and further.
Perhaps Eric King at KWN should start interviewing the CEO's of some shoe companies.
It is bar none, one of the strongest sectors on the NYSE.
Why is that?
Because shoe sales are completely and totally unfazed by:
1) European sovereign debt problems
2) Commodity margin increases
3) Inflation/deflation debates
4) N. Korea, Afghanistan, Iraq
5) Currency gyrations
Imagine being fully invested in these stocks, having comfort that you don't have to worry about COMEX slap downs, dollar movements, FOMC jawboning, etc. Just sit back and rely on the indefatiguable "resilient consumer", who is going to spend no matter what.
LOL...
Got Crocs ? Up $3 in November
Lol'
Robo how do you know everybody who likes gold if you do not like it.
Right, Caviar; Check these leads on left column of Drudge:
EU Debt Crisis Escalates
Now Rescue Threatens Germany
Irish Bond Yields Hit high, Banks Sink
Day of Reckoning Nears
Portugal Denies Report on Bailout
Next Debt Crisis May Start in Washinton
Drudge starting to look like ZH !
Even Robo can't come up with enough tits and propaganda charts to stop the avalanche of awareness sweeping the world.
Has ZH home page frozen? Even the squawk has frozen, but I'm still getting updated postings. ??
Regards.
Thank you China for a Black Friday special on physical PMs.
Nice clean H&S top on gold today...told a friend to short IAU 13.5; we'll see what happens at the 13.0 neckline
whoops. I hope your friend is forgiving...
Is that what you want on your tombstone? Or would you rather have, "it really is wave 5 this time"? Head and shoulders. LOL.
LOLLOL
Gold puts up more heads and shoulders than an Irish lynch mob--short either at your peril.
not to mention it's more likely H&S continuation then "top"
I do not see where the raised the margin on silver. I also think this is a good buying op. Monday many people are going to take delivery. lets see what happens.
Neither do i, but the market does what it wants to do.
I use every dips as a buying opportunity. Why? Because I know it's going to go up in the long term.
There's probably going to be more margins req. in my opinion.