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EU's Junker Openly Opposes US, Says Yuan Is Not Too Strong
In a direct affront to congressional scapegoaters and idiots everywhere, the EU's Junker has just hit the tape saying that not only is it wrong for the CNY to follow the USD's erratic movements, but that he does not believe the CNY is too strong. Well of course, it isn't: relative to the dollar, it is at parity. And looking at what the money printing idiot is doing it will get much weaker, which will make life for Europe an even bigger hell. Disturbingly for German exporters, Juncker said he does not expect concerted action to stop USD fall vs. EUR. Lastly, Junker notes what everyone knows - there is too much volatility between the main global currencies. This is also known as the initial phase in currency war. Just wait until India, and finally China, gets involved in devaluation. That's when it gets really "volatile." But when you have tapped all the organic growth in a failed economic system, what else can you do to avoid the hudnreds of millions of pitchforks politely demanding one's scalp.
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this is going to get ugly.
I keep thinking it will but the markets just go up up up and everybody is as happy as can be.
Computer went nuts.
Or possibly operator error. Garbage in, garbage out. :>)
I keep thinking it will but the markets just go up up up and everybody is as happy as can be.
I keep thinking it will but the markets just go up up up and everybody is as happy as can be.
What else controversial did he say, that Everest is not too short?
Why bother with devaluation. The world get together and agree to put a % tariff on all US exports to negate the US's currency manipulation.
It will never happen. Too many narcissists with agendas and testosterone in one room.
Is it me or is just about every 1st and 2nd world nation lining up with baseball bats to take a shot at the USA? Or is this simply posturing for domestic political consumption? You know how it works, right? You say you hate the USA to keep your natives happy, then you pull on the knee pads and go to work on Uncle Sam.
Of course, all 3rd world nations have been pissed off (or sucking on foreign aid) by the USA for decades. Ain't fiat world reserve currencies great?
Absolutely pandering.
We are despised around the world... I'm not surprised by the statements coming out of Germany and the EU... They seem to believe that the US has shot it's wad and the NWO will be EurAsian in nature... Good bye USA and UK, who will be relegated to 3rd world status.
Perhaps the message of the Fed's attempts to dump cheap (worthless) credit on the rest of the world is sinking in to policymakers worldwide.
Benny and Timmy have been trying their darndest to make China the global scapegoat in the world trade arena. Actions speak louder than words, and in the face of blatant attempts to devalue the $USD, Juncker and other global policymakers are coming up with the same conclusions. China has their issues, but many are seeing that the U.S. is the real enemy here.
If there ever becomes a concerted effort to put in credit flow restrictions and dump the $USD (still a small chance of that), all hell will break loose here. Again, the chance is small... but it's increasing each and every day.
the EU already has enough inflation. I guess BB will need to look for somebody else to blame.
Get rid of your worthless currency paper and get things that have value. The dollar is worth nothing but the paper it is printed on. Simply get rid of it since Benny wants to destroy its value while we hold on to it. Simply get rid of it. Keep as little as possible until the next system.
Once we get a new system. Argue the fact that the FED Is gone since they wrecked the last system. These game players will ceast to exist.
Just another step down the dark tunnel for the US.
Glad I get paid in AUD.
I guess this means we will soon see more debt trouble in Europe to squash the EUR.
i thought the disscussion was about yuan being too weak...
I think this is just the begining of a heightened, very messy and confusing fight.
It is as not as though Europe doesn't have equally severe problems.
A different type of shit is going to hit the fan. Enter Act 3 of this crazy play.
The difference is that Europe does not have a totally centrally planned economy. Brussels and the ECB may think they run it, but in fact they are just herding cats. Anything could happen to change Europe's game plan at any time, whereas back at the US Politburo...................
My bet is that Europe outlasts the US.
Well if Europe continues to have trouble climbing out of the bucket what card will they play, eject Greece? What country will say fuck it, where done for anyway and just go their own way.
Looking at all this mess it is a wonder gold isn't already 2,000
Seems Im sitting in the right country with righ currency, for the time being. AUD
In my view, it's not what "they" (the central planners) will do, it's what any one or more of the individual countries will do: Leave the EU, drop the EUR, sign a trade or currency pact with China or Russia, etc, etc.
When one is herding cats, a breakout can happen at any time.
Isn't that what the US Treasury and Congress are saying? That the YUAN should strengthen further?
German warning on ‘aggressive’ Chinese rivals
By Gerrit Wiesmann in Berlin and Daniel Schaefer in Frankfurt
Published: October 14 2010 20:05 | Last updated: October 15 2010 10:32
German companies have complained about state-owned Chinese rivals landing an increasing number of contracts in eastern Europe and central Asia by means of “price-dumping, aggressive financing and generous risk-guarantees” from Beijing.
In a paper seen by the Financial Times, German industry’s Committee on Eastern European Economic Relations warns that China seems driven by geopolitical rather than economic goals, with potentially dire consequences for the European Union.
The committee, which represents five industry associations and 140 top companies, called on Berlin to lobby Beijing and European countries to ensure China does not help its exporters more than other nations.
The call comes amid tensions between Beijing and the west over exchange rates and perceived impediments to trade and investment in China – and also reflects fears about Chinese companies’ increasing technological know-how.
A number of leading German industrialists, among them the chief executives of BASF and Siemens, criticised China this summer for its procurement practices and for a forced transfer of know-how in return for market access.
In a speech on Thursday to the committee, Angela Merkel, the German chancellor, did not address these concerns directly but said it was “urgently necessary” for Europe to compete harder with China for raw materials, another bugbear of German industry.
In a list of “Chinese activities”, the paper cites how the state-owned China Overseas Engineering Group won a motorway project in Poland by undercutting the next-cheapest bid by a third.
In Serbia, the paper says, Chinese groups won a bid to build a €170m ($240m) bridge due to a €145m loan at less than half the market rate from the Export-Import Bank of China.
Kazakhstan is said to have switched to refinancing its banks via Chinese counterparts.
“The financing terms for Chinese suppliers often betray a huge degree of state subsidy, say in the form of very low rates for long-term loans from the Exim Bank,” the paper quotes the German banking association as saying.
The committee says there is a “direct correlation” between Chinese banks’ risk assessments of potential foreign projects and “the strategic interests of the political leadership in Beijing”.
oh and these guys want the fucking yuan in the oil basket and they want the yuan tied to the euro? They really want the CCP buying the euro?
Don't do business with China, it's as simple as that. They are not and have never been a trading partner.
As for the OP, China is ALREADY manipulating its currency and has been for decades. That's the goddamned problem.
I'm not sure how this is derived. My visit to China left me with the notion that the RMB was 50% undervalued compared to the purchasing power of my USD at the time. Nearly everything I spent money on seemed to be at a 50% discount.
The ZH boys have apparently gone dyslexic on this one ...
By Carolyn Henson
Of DOW JONES NEWSWIRES
LUXEMBOURG (Dow Jones)--The current volatility on the currency market is a concern, Luxembourg Premier and head of the Eurogroup of finance ministers Jean-Claude Juncker said Friday.
"Exchange rates should reflect economic fundamentals. We don't think for the time being that exchange rates are reflecting economic fundamentals," Juncker said at an event in Luxembourg.
He added that at this time there was no concerted intervention on the currency market planned.
Juncker, who heads the group of finance ministers whose countries use the euro currency, said economic growth in the euro zone remained "fragile" and there were dangerous imbalances within Europe that needed resolving.
These internal imbalances mirrored wider global imbalances which were increasing once more after the economic crisis.
"China saves too much and doesn't consume. The U.S. should save more and consume less," he told a Chamber of Commerce meeting in Luxembourg.
In other words :
For the US to save more and consume less, it needs to address its current account deficit. It needs to import less and a weaker dollar will facilitate this.
For China who needs to save less and consume more, a stronger Yuan will allow more imports and lessen the competivity of exports ...
Benny is a dumbass. Timmy should protect the dollar. They are going to get us killed. WTF ? Inflation ? hell I cant afford anthing as it is. *disclosure* I am not a bankster.
Money printing idiot. LOL
Nobody has a choice when faced with a predatory nation with a currency ponzi like China.
China has been relentlessly devaluing for decades. Only now does it finally pose a grave threat. I mean, the US...we have no fucking industry left. We let Japan do this shit now China. Our factories have closed, the industry is gone, oh but the executives are rich.
The morons who pushed this had to have the credit bubble to maintain consumption rates. Without that, our economy would have renormalized, the trade balance, the FX, etc., LONG ago.
But NOOOO...China recycled into USTs, permitting continued debt growth so that they could keep their currency artificially cheap. Now, we have a massive workforce that cannot afford the products because they're not paid well enough. The opposite of the Henry Ford maxim.
Without the debt bubble game, none of this would have happened. The US would have seen inflation and it would have become cost effective to onshore production long before we lost basically EVERY productive endeavor.
Oh, and China's growth rate would have inflected LONG ago as well. But they can't stand that. I mean, China really believes it is the "Middle Kingdom" as in the center of all existence. Just look at their olympics, look how they deal with criticism, look at how they talk. China is itching for a fight to be king of the hill. Some type of war here is inevitable.
Maybe not (war). Although one has to consider that the "currency war" is just that, much as the cold war included Vietnam, which was of course quite hot.
Look at it this way, we are where we are. Where to from here? ( I'm surprised that no one is talking about a cap on any one holder of US debt ... the FED included)
The question I would like to see asked is, how indeed do Americans begin to onshore jobs? I think that this is the only question that is relevant and am quite frankly astounded at what a poor job the supposedly labor friendly Administration has done. As effective as a deer in the headlights. Or perhaps these grand transitions need much more time than we are willing to concede. I suppose that "Labor" in that sense is what grew out of the 30s as America's agit prop response to the Soviet Union and its workers paradise. What we wound up with a few decades later was General Motors and the UAW, a complete and utter monstrosity, gone hyperbolic. We see this same utter disregard for future cash flows and liability mismatches in municipal workers and pensions etc. I ascribe it to the same logic.
The Chinese should be (and I'm sure many really are) extremely grateful for the US to have consumed to a near "Mr. Creosote" moment while aiding in their development. As was / is / should be the rest of Asia. Japan, Korea, the Tigers etc. have benefitted marvelously from their exports to the US. Now, that game is running its course.
Isn't The Middle Kingdom strong enough to stand on its own two feet now? The problem there is that the Middle Kingdom has always and only looked inward for its truths. I do not think that their transition to a major global power is going to be easy and in fact may never really be accomplished. The intransigency in the face of currency revaluation appears to be a tell that they really are not ready at all. The problem is the old dog will no longer hunt.
On our side, at some point you have to pay your bills. The argument that pissing off China will lead to inflation is probably valid to a degree, but what good is a carriage of cheap goods at Walmart going to do for you if you have no job and your government has run out of money to pay for you while you wait to "retool"? There is going to be a wake up and smell the coffee moment. Instead of creating more entitlements, the government is going to have to be the shepard of less, but less includes motivating small business while guiding initiatives along a strategic framework, for example a DARPA like seeding so that private business can implement and bring to market energy efficencies etc.
My stomach really sank when I saw in the paper the other day that Ford was finally coming out with a new Ranger that got better gas mileage etc.... but that they were not going to sell it in the US ! They are concentrating on the F-150 getting better gas mileage. I thought to myself, you have got to be fucking kidding. Driving while looking in the rear view mirror ... I don't see any way around the need for government sheparding. The problem is how to get the Multinational's hands out of Uncle Sammie's pockets. What's good for Apple may not be so good for the US unless you want to move to Shanghai ...
I find it absolutely nonsensical to say that the US can no longer manufacture stuff it has offshored. If the labor cost of AAPL in Shanghai is somewhere about 3 cents on the dollar, then the profits generated are probably absurdly high, or mismanaged along other points in the chain. Most products today are low labor intensive at any rate. Japan has high labor costs but they have modernized their plant and are highly efficient. If Americans say that we can't do what Japan has done, I would say you have to be kidding me ...
Excellent analysis. Pretty much mirrors my thoughts exactly ... except that I don't see any chance of a democratically elected (and oligarch controlled) US congress doing any shepherding of investment into small business (or, indeed, changing course in any way). Their nests are feathered by big business, big unions, and big international committees.
I personally think that the only way out for the US is for the states to dismantle the Union and for each state, or alliances between states, to get their shit together ....... quick smart!
I'm thinking of local powers like Silicon Valley which might offset the darker corporate / political incest. Look at the latest announcement by Google that they were investing in an offshore wind farm grid. They were brought about by venture cap and both the investors and their successful end products carry political weight ... and I imagine that they do work to a degree with the government.
There are manifestations of political / economic power that are new creations. I would say that ZH is becoming more influential because the truth is contagious while the headlines are at times salacious ... A great American tradition in the lineage of Benjamin Franklin. We need more new but it is an uphill battle. It's probably always been an uphill battle though.
Getting shit together is imperative but I'll respectfully disagree with the dismantling. I say take it back. A constitutional revolution ...
There is a mistake in this article. Never mind, but it should be corrected:
Juncker said, the Yuan (CNY) is undervalued.
He also said, the Yen is not overvalued.
http://www.reuters.com/article/idUSBRM00216820101015
You can only feel sorry for the Japanese. And China will at all cost avoid another Plaza Accord, which brought about the massive Yen appreciation under which Japan is still suffering. As we are in the initial stage of a currency war and reemergence of protectionism, we should carefully study the causes and effects of the Plaza Accord.
Your headline is slightly inconsistent with the statements...
In addition to relevant commentary above, here is another reference -
http://www.bloomberg.com/news/2010-10-05/eu-s-juncker-cites-divergence-w...
GOLD updated chart showing parabolic move.
http://stockmarket618.wordpress.com
Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
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