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Chinese Hawks Appear: PBoC Advisor Says Time For Rate Hike Is Now
Tom Hoenig's Chinese doppelganger has finally appeared. Yesterday we pointed out that the Chinese economy is now in unsustainable overdrive mode and is likely at most months away from entering runaway inflation mode. Today, Li Daokui, a monetary policy committee adviser of the People's
Bank of China, was quoted by the China Business news as saying conditions necessitated a start to policy
tightening. Should the PBoC decide to do the right thing and officially enter a tightening mode, watch oil and copper, not to mention the BDIY, to crumble by 10%-15% overnight.
More from MarketWatch:
A top Chinese central bank official said the time is now right to raise interest rates, according to Chinese report Wednesday.
"This round of price inflation was triggered by 'cost-push' movement, but if monetary policy is too loose, it will cause cost-push inflation to become more serious inflation," he was quoted as saying.
Li pointed to the risk of negative real interest rates leading to a massive withdrawal of funds from the banking system.
Li, an academic with a doctorate from Harvard University, was one of three economists appointing earlier this year to the PBOC policy committee and is seen as relatively hawkish. Read Caixin Online article about Li's appointment.
And here is the funny bit, and a confirmation that the Chinese-US symbiotic relationship is one in which both countries share the same central bank and same deranged money printer.
The same China Business News article, however, also cited Bank of China
economist Cao Yuanzheng as saying China was unlikely to hike rates
before the U.S. Federal Reserve for fear that a growing rate
differential would lead to hot-money flows into the country.
In other words, because Bernanke won't hike rates until 2013 (let's face it, he won't) he will doom China to hyperinflation, as while the US has roughly 30% excess capacity and has to be "filled out" China does not have the benefit of being able to wait 3 years before the rate goes up. Should the PBoC keep rates as is for even one more year, the bubble that will develop in China will make our own 2007 experience look like tame by comaprison.
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Apologies in advance Tyler, got to get the word out on this.
Deepwater Horizon Control Solution, version Deux
www.squareandc.net
Updated, gentler on the eyes, with a lot more information. Please post at as many places as you can, e-mail to your buddies etc. Times a wasting.
To all the snarlers from last time, thanks for taking a look at least.
Not farming for Ip addresses or anything of the sort. Just trying to reach an informed audience, from where it might leap into a meme-esque public consciousness and to the right eyes/ears.
I'm serious and so is the problem. If the oceans go, no gold, no s&p, no forex, no SHIT.
For the thousands who did visit from this site, thanks for stopping by, do so again and if called this time, spread the word. Incredibly hard to reach people on site or at BP etc., especially sitting here in India.
Keep the faith but know that this poor black swan (literal) is beyond sad.
Thanks. You can e-mail me from the site for friendly words of advice and encouragement.
Let me guess - you called BP directly to inform them of your brilliant solution and the receptionists broke into uncontrollable laughter - right? This is why you think posting on a financila website might by some magic get you past those receptionists?
This is what I suggest - dress like John Travolta - tight pants - a must. Go in person to BP and shake your booty - Iam sure those southern belle's will give you a shot.
Only if he can MOVE like Travolta.
C'mon...we may all be much too grownup for disco, but the boy made it look FUN.
Saturday Night Fever, a couple weed bikkies, fairly passable wine and a friend or two with a sense of humour - all make for a really fun Sunday afternoon!
Fool, hmmmmm..... have you seen how much poetry and philosophy is written and quoted on the comment section of this web-site? Calling ZH a financial web-site does it a disservice and you truly are a fool. Unless you think finance is an island.
And why waste energy typing out an insult?
And this to the fool that followed up your insult with more silliness.
Interesting.
May you eat your words.
Remember - tight pants - and practise wiggling your booty in front of a mirror before you try to impress the receptionists! Good luck man!!
OWE NO!!!
How is Australia (and the dumber parts of Canada) going to keep taking on a lifetyme of unpayable debt so that we can pretend we're all richrichrich, just like the big wheels in New York...if China isn't lending out low-interest schmuck money!!
We would have to quit saying we 'skipped the recession'.
We would not be 'the lucky country'.
It would appear that 'everyone' doesn't want to live here (where it's different) and willing to pay anything to do so.
We'd have to find something other than the Sydney Morning Shill to read.
And, most of us would have to get a LIFE outside of the damn wage factory.
Shit ya larrikin. What makes you such a downer alla time.
Gee thanks, Ren. There goes my secondary plan of emigrating Oz-ward.
I suppose a South Pacific island will have to suffice.
:-D If it's any comfort, we DON'T have so-called 'non-recourse' mortgages, so house prices will probably drop a LOT quicker than they did in the US! Banks won't be able to maintain a 'shadow inventory' so we'll have a lot of accidental landlords & indebted citizens dumping property right & left.
So, you can still come!! Just give it, like a year or so...
Plus, the government has still not figured out a way to ruin the light, the air, the climate, or the wonderful wonderful country towns. And some of us may not be the most financially gifted, but even if we're poor it's still a lot of fun being here!
In all honesty and in all seriousness, I WELCOME SO HARD the busting of the bankster credit bubble here in Oz. It's almost solely responsible for the downside of living here, and when it goes, so will most of the downside.
And there is a LOT of upside to being here! Just not for those who want to 'climb the property ladder'.
Perfectly stated Renfield. It was a great, fun, cheap, active place to grow up. The bankster cartel has screwed it royally. Nobody can afford to do anything there anymore. I'll be making a trip back in August, which will further consolidate these thoughts almost certainly.
A lot can happen between now and August - my husband and I have been watching some country town listings go from $550K, to $438K, to 'tell us what it's worth' (as long as it's worth over $400K)...sigh. Maybe in a year? I hate being patient.
Hey, just let me know if you'll be around Sydney at that time and will feel like wasting an hour! Me & my husband could shout you and the missus a Kilkenny down in the Rocks and then we could have a good whinge about the 'property ladder' (the one that goes straight down).
Ha! Would love to join you, I'll be on the "other" coast however!! We can still whinge here at ZH though, gotta love it!!
nope.. nobody can hike.. its like a junkies limbo.. drugs more drugs and finally the golden shot!!
"Li, an academic with a doctorate from Harvard University"
Pffft...... he doesn't know shit then. In 1923 the Reichsbank lifted its discount rate to 90%, what good did it do?
The quantity (a.k.a. Harvard) theory of money is a load of baloney.
Oh, noes...the Chinese have been Harvard-ized. That means the Keynesian contagion has reached the Middle Kingdom. We're doomed...DOOMED!
WE'RE ALL FREAKIN DOOMED!
(I've been waiting so long to say that.)
"You gotta watch out for those Harvard boys." - Pres O
All while the Energy Wizards may start to get a CLUE. OR ARE THEY JUST IN BED TOGETHER.
http://bit.ly/1ax9Pw
If global demand goes into the tank, Where does China Sell?
What does that do to the Baltic Dry?
Once Speculation is taken out of energy trading?
Then what? Prices go, where?
Deflation is not deflation if prices still go up. Prices only go down if demand is less. If demand is less and prices still go up, the game has been rigged.
Rigged by WHO? Who has a stake in higher prices?
"he will doom China to hyperinflation" - NO he wont - the PBoC by way of pegging its currency to the USD is pegging its monetay policy to the US monetary policy. If they want to raise rates then they are perfectly free to do so - its then up to the PBoC to deal with capital inflows however they see fit. Or perhaps they could just let the RMB float - they're big boys in Beijing,no?
Another Harvard graduate? They seem to be everywhere.
At some point they are going to realize they can stop domestic inflation dead in its tracks by initiating hyperinflation abroad, simply by dumping US treasuries and dollars.
That day is fast approaching.
Oh yes and when they dump the US assets whats gonna happen to the RMB - thats right it going up up up and up in value