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Knight Research' Stunning Call: "The Game Is Over"
From Knight Research. Presented without commentary.
The Game Is Over
The simple story is this: We believe the structural and cyclical terms of global trade have finally reached their tipping point. This will catalyze a wholesale change in sentiment and a historic repositioning of risk assets. The emerging market global growth story is over.
- In meetings with clients throughout October, we began emphasizing our growing concerns about the nearly ubiquitous confidence the financial markets—and for that matter, global leaders and their body politic—have in China; and by extension, the rest of the emerging market story, commodities, and the direction of foreign exchange cross-rates.
- Not surprisingly, our concerns were met with varying degrees of resistance; but the overall consensus clearly favored a very bullish, asymmetric outcome over both the near and intermediate terms. When pressed as to our own sense of timing and specific catalysts for broad-based trend reversal, candidly we were unclear. Our sense then, was that the higher and faster the commodity markets pushed, the sooner the reversal would occur. But we have now clarified our view.
- In just the past several weeks, we believe the data and government actions out of China, the back-up in US interest rates, the Fed’s emphatic commitment to QE2, intensifying pressures across the EU, broadly rising commodity prices, government efforts to control hot money flows, have finally pushed the global terms of trade to their tipping point.
- And now, as is evident by the flight to safety, and growing evidence that China will soon try and effect price controls in addition to raising interest rates and significantly changing the rules for their vast network of Local Government Funding Vehicles (LGFVs); the writing is on the wall. The game is over.
- The simple story is this: The structural and cyclical terms of global trade have reached their tipping point which will effect a wholesale change in sentiment and a historic repositioning of risk assets.
- So what do we consider the “terms of global trade”? Structurally, per our top chart, they are the intersection of Government Policy (viz., rule of law, market systems, trade law, etc.,) Resource and Industry (viz., natural resources, labor/demographic pools, industrial advantages, import dependencies, etc.,) and Economic Security (viz., the sovereign’s competitive standing, the relative power/needs of the citizenry, the mandate/control of the government, etc.) And cyclically, (as represented by the light blue, bold arrows) the terms of trade are defined by the intersection of foreign exchange rates, commodity prices, and the cost and availability of trade finance.
- And in our assessment given:
- The structural breakdown of the credit and labor markets in the developed world and the anemic outlook for nominal GDP growth
- The immaturity of the developing world and their vulnerability to credit shocks and uncontrollable inflation
- China’s dependence upon non-economic, and unsustainable credit expansion to maintain growth far beyond natural export and domestic demand, and
- Asia’s dependence upon imported energy and agriculture
the game is over. Presently, we believe that the broad-based resurgence of investor confidence in the emerging market and secular bull market in commodities will end badly; proving that the rally which commenced in Q2 2009, was in fact an “echo bubble” facilitated by massive—and unsustainable—stimuli from the Chinese Government
- And although such cataclysmic shocks rarely result in rhythmic, straight line fractures, the chain of price adjustments should be relatively clear. Accordingly, we expect a shockingly powerful rally in the dollar, broadbased weakness across the commodity sector, a dramatic widening of emerging market credit spreads, and what could prove to be a stampede of hot fund flows out of the emerging markets.
- We appreciate both the gravity and the brevity of this note; but then again, the story is simple.
We believe that the end of the Great Consumer Credit Cycle and the vast structural differences in the terms of trade between the United States, the EU, and China, have finally caught up with the secular bull thesis on Emerging Market and Commodities. Quite ironically, the Fed’s aggressive policies will likely prove to be the catalyst which breaks China’s unbridled expansion of credit and non-economic growth, ushering in a wholesale rebalancing of risk assets.
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But... thats so sad for gold...
What about hyperinflation?? :(
I warned about buying gold, it trades on a market controlled by banksters and govts, I never trusted it for a minute.
Not mine. It trades in a sock drawer, controlled by a little key on my neck....Damn, now you know.
Knight's prediction falls within the Cone of Uncertainty.
As long as the USA and Europe are bankrupt, and have massive underfunded liabilities, seems to me that we will implode like the old Soviet Union did. Debasing the dollar as de facto default will create (nominal) higher prices. Looks like Stagflation to me. Weak economy, forced cutbacks, high prices.
China is racing to develop domestic demand so they will be less dependent on export to the West. If they succeed in this, they win.
gwar,
Personally, I KNOW they have already won.IMHO, the entire PacRim has their stuff together.
Anyone ever wonder why Rogers, and Faber, and the big fish are not IN COUNTRY?.They are where they are for a reason, and their a hell of a lot smarter than Knights.
Anyone who thinks WE come out on top of them is nuts.
While the Fed has been whacking off.
China, has been buying everything energy related, and hard asset related on every corner of the Globe.
This is not for NOW, this a wiley fox, thinking 20 steps ahead.
They are Communist first,and their plans will go thru, one way or the other.
They also are IMHO the wealthiest nation on the Globe, and I am not talking Yuan here.
When they see inflation rising, they make moves to slow it down.
Not like our Numb nuts we have.
When they see inflation rising, they make moves to slow it down.
Funny, isn't it. They tighten rights (the right thing to do), market goes down (right again), we scream "it's gonna blow!"
Haven't we learned ANYTHING?!
Had Greenspan (who belongs in jail for the incompetent or fraudulent) simply applied the breaks a few times, we may not be in a hole nearly this big.
You have to get the slack out or you get a Greenspan.......JERK....that takes your head off.
That Greenspan hasn't retired his 'advice tours' only proves we elevate the most shameless sorts. He should take the Japanese bow on this one. There is no honor or intellectual integrity at the very top of the oligarchy. There can't be. If there we're, the whole oligarchy would be healthy and benevolent.
China's economy is a funny thing.
We really know shit about it.
It's as transparant as a 20 inch lead plate.
The Chinese government is all about communication, honesty and openess.
NOW WHY WOULD I THINK THEY ALSO AREN'T GOING TO "FIX" THINGS?!
HA!!!
FRAUD = MC²
I don't think we've reached the point that Knight is theorizing. But we're closer. Many economies of the world are on an unsustainable track. And they're more vulnerable than ever due to huge interdependency.
The ride from here gets more volatile. Smart money has already booked some profits. The Fed and others are misreading signals (like there's "No Inflation" (!) ), and yes they can screw up (ha!). What everyone needs to realize is that the US formerly had a giant free market which now has been converted largely to a State Run Enterprise to compete with China. And the financial sector is still extremely overweight versus everything else. Don't trust the financial sector to pull the US out of the next rut.
It really might be closer then you think.
Factory orders in Europe just fell of a cliff these last 2 weeks.
Retail is seeing drops in sales of 20 to 25%!
Game is over? Really? Is that why Chinese solars are getting whacked hard (again)?!? Check out the solar slaughter in last 5 trading days, and ironically Credit Suisse's Kumar agrees with Cramer that solars are done (gimme a break!):
Leo, Europe announced that the Solar panel subsidizing will stop in 2011 for the private sector.
You could have seen this comming months ago man!
Like I said, the solar sector is the absolute worst place to be right
now.
I warned you Leo, the day they broke off from the highs on
huge volume last January.
I told you this sector would be dead for
years.
This group seems to me basically a derivative of oil prices with insane beta.
If you want to invest in energy, buy oil. You aren't likely to take a 40% scalping in a week. There are far fewer crazy people trading alongside you. You have actual data on rig counts and inventories and demand and things like that.
To me, a bunch of the commodity charts I looked at look like absolute hammered shit, and I wouldn't be taking any of them right here.
Leo coughin up blood.
Don't kick em when he is down. I think he is, at times, obnoxious but there is no use or glory in gloating. And he has the stones to post the charts when he is down. That is more than I can say for a lot of fair weather folks around here.
Good luck Leo. I wish I knew the right greek toast. Opa? I salute you.
Hang on Leo.
Leo rubbed some noses in solar on the way up... He was man enough to rub his own in it on the way down... yeah, I will drink with you Leo
Anybody looked at the Gold and Silver tickers?
Quotes "unavailable"!!
Guess something might happen tomorrow?
RIG RIG RIG THE GAME...
SLOWELY DOWN THE STREAM!!!
MERELY! MERELY! MERELY!
LIFE IS BUT A DREAM!
GAME OVER MAN, GAME OVER!
http://www.youtube.com/watch?v=dsx2vdn7gpY
We're in some real pretty shit now! Game over man, game over! WTF are we gonna do now huh?
"...secular bull thesis on Emerging Market and Commodities."
Wait!! Nobody in their right mind seriously BELIEVES this is a "secular bull"! It's plain obvious that everyone knows that speculation, no longer investment, is the new name of the game. How can anyone truly believe this is in any way "secular"?
And what about the elephant in the room....PRINTING?
The terms are all wrong, outdated and irrelevant! Cant call pure FRAUD a secular bull market, Im sorry thats BULLSHIT!
The thing is you can make assumptions with this brief piece. Yeah, if the whole model is (and it is) based on cheap labor and materials and transportation - and all this combines with an explosion in commodities that have to be passed on to a customer thats broke and can only buy/pay for a fraction of what they once did, then yeah, if you want to slap a "tipping point" label on it, then sure.
The thing is you can make assumptions with this brief piece. Yeah, if the whole model is (and it is) based on cheap labor and materials and transportation - and all this combines with an explosion in commodities that have to be passed on to a customer thats broke and can only buy/pay for a fraction of what they once did, then yeah, if you want to slap a "tipping point" label on it, then sure.
But we have now clarified our view.
In case anyone was wondering, the USD and treasuries are now all of a sudden very valuable despite lacking any type of scarcity, its like sand on the beach, each grain of sand is worth at least a million
In my opionion this article is purely a Management of Perceptual Economics (MOPE) piece possibly written to support desired outcomes for China.
The truth is that short of Ron Paul closing down the Fed, the Fed is the anchor for what happens because as the sole entitity with ability to create the reserve currency in unlimited amounts it operates on the primary premise, in my opinion, of protecting the major US and Western European banks.
The idea that we have reached some tipping point and that the dollar will all of the sudden be stronger, the euro weaker and that commodities will sell off and the stock markets will crash sounds more like a form of hypnotism designed to help an entity to achieve a market position rather than something based on the fact that the status quo will be upheld. The status quo is that the Too Big to Fails in the US and abroad are systemically interdependent and that through whatever means are necessary (read QE to Infinity and Beyond) the banks will be held up, no pun intended. Yes, it is the holders of the primary fiat currencies that are held up but none the less, to hold up the main TBTF financial entities, currencies must be debased, the stock market held aloft, and in turn commodities become the new "money," because they hold value a lot better than an electronic hex value backed by nothing but VLSI circuits and software that is good at adding zeroes.
The toxic waste can be marked to any thing as long as banks can continue to receive unlimited QE.
The coordinated media attacks about China implementing price controls and the attacks on the Irish bond market all coming on the same day and coupled with all the press calling for an end to QE are in my opinion the work of some very smart entities who want the dollar higher and the price of goods lower. Who could it be? Hmmm, planning on implementing price controls.
Coordinated media and bond attacks speak of MOPE comming from the other side of the court to the Fed. In the end, here in the US, the Primary dealers who pay a good deal of the Politicians election budgets are going to quite all the anti QE talk and in the end the only thing left for QE to do is increase; The dollar and the rest of the currencies that are QE'd directly or indirectly via the Fed's mission to keep the global financial system from systemic meltdown will continue to devalue and war will be averted hopefully.
This is in lieu of sovereign default in Europe and the United States and a complete and total meltdown. At this late stage of post gold standard / infinite borrowing life, the Fed is the only life support system remaining for the Western World. Its a crime we arrived at this place but there is no choice but QE and currency debasement for the West.
If China really cared about inflation as a priority, in my opinion they would allow their currency to float freely and inflation would disappear over night and perhaps we might see factories starting to come back on line in the US. Not going to happen.
Don't bet against the Fed and those whom it serves.
what is a more fitting end to the "echo bubble" than for an age-old former Dow 30 member to go phoenix-rising in a 1999 bubblish mania and frenzy?
WARNING! ACHTUNG!
This is an obvious propaganda. Look at the source, they are from www.knight.com which is ranked by alexa as almost an non-existent web traffic. probably they were set up as a propaganda tool by the you know who. Besides, where all the money will go when "THE GAME IS OVER"? Into dollars? They are either incompetent or the most obvious propaganda tool
what is the impact of increased chinese interest rates on commodity prices?
their official inflation is much higher than their increased interest rates, commodities will go up much higher. Just make sure you stay away from commodity futures markets because they are full of fraud
the knight rider
toe razor
.....mad max like a motherfucker
from the whistling overhead, it sounds like an early salvo in a currency war to me
the game is over. Presently, we believe that the broad-based resurgence of investor confidence in the emerging market and secular bull market in commodities will end badly; proving that the rally which commenced in Q2 2009, was in fact an “echo bubble” facilitated by massive—and unsustainable—stimuli from the Chinese Government
if their game is over, and our game is obviously over....then the next game is, a nice game of thermonuclear war?
or dice....whatever....i'm gonna drink some more now
In conclusion, this accumulation of events, centred round a G20 summit that was patently incapable of resolving the sources of economic, financial and monetary tension between its principal members, contributed to a decisive advance in the world’s collective awareness of the process of global geographic dislocation under way. And in its turn, this increased awareness will, as from the beginning of 2011, accelerate and amplify the changes affecting the international system and our various societies, generating non-linear, chaotic phenomena such as those described in this issue of GEAB and previous issues. As we emphasised in September 2010, we focus on the fact that chief among those phenomena will be the entry of the US into an austerity phase, beginning in spring 2011. But we also bear in mind that one of the surprises of the next eighteen months could simply be the announcement that the Chinese economy had overtaken the US economy as from 2012 as the Wall Street Journal of 10/11/2010 indicates in its report of the Conference Board’s analysis (24).
http://www.leap2020.eu/GEAB-N-49-is-available-Warning-Global-systemic-crisis-First-quarter-2011-Breach-of-the-critical-threshold-of-global_a5458.html
the mortgage market was not the final ponzi unit...soon we'll see some new fancy FASB statements (e.g. fin. investments) allowing companies to hide losses and understate liabilities (e.g. discounting liabilites for non trading etc.)
or do you find a better ultimate ponzi unit that the whole market (just applying fraud)?
The H. Dent Theory..
Its may not be over, but much more dangerous because the new Congress will be all over the FED and banks like flies on oatmeal exposing the lies/coverups slowly and painfully like taking tape off a open sore.
Whats up with the GM IPO hype. Goodness you would think that GM was google not an old line car company run for the benefit of the bloated unions.
Also the Congress is not going to subsidize CAs bloated budget and deficits which will put more downward pressure on munis.
China tonight announces...wait for it...price controls! Woot!
It should be fun to watch the algos try to figure that one out in the middle of the GM poison IPO.
Good grief. Toss in a few cross words out of Ireland and it could be quite the blood bath.
gold is not other commodities....gold is all by itself.....yes prices continue to go up and bernanke see no inflation theres no doubt there is a resource grab the next 10 years as there is no credit however technically the author maybe right on other commodities until 2012 when we are supposed to "START" inflation here in the United States. I guess it will be hotdogs and rice for the kids after 2012. The shelves will be empty as globalization has ended and the gold standard is about to begin. I hope you all are ready to pay for gas in "gold terms" can't wait for that.
Let me add to my last post because the bankers are very good and duping the public.....First its Gold revaluation and of course the dollar gets strong its now backed by gold but at what price is the question as soverign debt gets flushed......Inflation starts after that........
Can't go wrong with food, fuel, and PM's in times like these.
here's the deal-due to 1 child policy china has millions of men who have never gotten laid-a bad enemy to have in war! any type of war-anyway,the whole thing will collapse before the dollar is wonderfull again.ps the reason there is so much negativity here is that THE USA HAS NO INDUSTRIAL BASE,SKILLED LABOUR FORCE,OR TRADE PROTECTION.ok? so,how is that optimistic? we have lots of poetry majors and unemployed film editors. millions of ppl will never have a job their entire life unless the fed monkey is ripped off our back and shot. twice.
Ah....I see the obfuscation from Hong Kong is rocking and rolling. Post aholics gone wild. Sweet. Carnage in the am. Futures have already popped their wad...on what is ultimately very bad news. More currency wars...leading to trade wars.
Sweet. Post away Hong Kong....
well i'm in america-that's why i know were fuked-yes,europe is more fuked. but we are as well.
I'm half way to believing you based solely on your "command" of the language.
And yes, we are all fucked, buddy. The problem is global.
Game over until the next POMO.
lol it would be nice if everybody woke up and realized this whole system is...nah that would never happen-look bristol palin!
China may have some bubblicious activity going on, no doubt. However, they have all the factories, the production, and a massive labor force. They have the productive capacity that we've been squandering for 30 years. Their goverment is foolishly throwing money at the problem, subsidizing industries and companies and peging their currency to the USD, a shipwreak in the making. But there's a huge difference between us and them, and this is key: they don't have to borrow money. Sure, they're throwing good money after bad, but when the "game is over" it's the US that is going to be waving the white flag... if we can afford one. This article is infuriating.
this is what i was trying to say thank you- and to quote apocalypse now "charlie's idea of r'n'r is rice with a little rat meat-we have people freaking out when there are no mcnuggets!
What is this, a moron contest?
Seriously Eagles...do you really think the Chinese economy does not tumble down the proverbial rabbit hole if the US cracks? You cannot actually believe that one will fall and the other will rise. If you believe that, you are stupid, or you have an agenda, or you're stupid.
US consumption built the Chinese economy.
i think we agree- i'm just saying they seem to be better positioned to "survive". i do not see any high speed trains being built here, do you? i know china has horrible human rights violations but i am also looking at a 3 yr old in an airport being fondled in the name of security-felt up or step through radiation "gate"-o the reason? a man, who the state dept admits they helped board a plane without a passport,lit his panties on fire. not good....
You are posting from Hong Kong. You are making an argument based on headlines you are reading online.
Listen, missle, we do not agree. You are trying to assert a rationale wherebye China is all good, and the US is all bad. Well, you are only half right.
But whatever. Just thought I would post up to your nonsense. You are winning the mornon contest, BTW...so keep it up!
wooh wooh no i do not think china is all good-@ i'm not chinese-they do NOT have a sense of humor! but sice you mention it, i did read how they tried to put a new toll in an oft travelled roan in china- the people just took the "man" on and got rid of the toll. no, i'm no fan of china-it's just i am also not a fan of every tax dollar going to pay interest on the money OUR gov. should be printing.
Three minutes worth of trading, and futures being cut in half on the cash, and CNBC World declares, "Markets are shrugging it off."
We are fucked for many reasons...not the least of which is the fact that, globally, we have absolute morons controlling media.
Hard to believe it has come to this.
what if it turned out that obscure "knight's research was right? lol i love how buffet thanked the gov. for the banker bailout-yea,good for you warren-not so good for anybody not worth $2 billion +....
you know who is making money? CNBC'S coke dealer-they spent the entire morning telling aaron burnett how pretty she looked(she cleaned her hair 4 once)
Finally a voice of reason in the darkness of insanity. As if there has ever been a rigged market in the essence of trading??? A sure trade? Give me a break. History has taught us that there is no such thing and never will be. How come the markets aren't blasting to new highs? Especially if they are rigged? It is easy when the USD is depreciating but not so easy when it is strengthening. I have been saying what these guys are saying for about a month now and it is nice to see that the FREE markets will win out in the end. They always have and always will. When you have only 3% or less bullish sentiment on the USD that is when it reverses. See what happens to the Gold bugs to by the way and the Silver bugs. The stregth and power of this move is going to shock a lot of so called geniuses. Oh and by the way....Gold is no hedge against deflation. Get ready for the next and most painful leg down.
Watch what happens once the Iraqi Dinar revalues: China's Yuan will be unpegged from the US Dollar in exchange for some juicy 40 year Iraqi (cheap) oil well leases.
I seriously doubt the House of Ishmael is going to let these two foreign powers suck them dry, though.
Hmmm. Still no one gets this. Sorry for the repost placed in another thread.
Old News Reel - Council of Foreign Relations
http://www.youtube.com/watch?v=Ouq3XwqCWpg
History is your friend. Use it to outwit the villains.
cool video- very "none dare call it conspiracy" dec 21 2012 the fed's (old) charter runs out-is that what the hippies are talik' bout? lol
Ghost. It's not about hippies, rather society control. Drop your bong & step away from your keyboard.
http://www.jedh.org/
2012 is not the end of the world. In the planners eyes, 2012 is the beginning of global communism.
o i was kidding-i just find it (the date) a bizarre coincidence
No problem.
SDDS/QEDS Data
http://www.jedh.org/jedh_instrument.html
Tyler & company will enjoy this data. Media mouth breathers may hyperventilate into a brown lunch bag while live on air.
that jedh is an epic clusterf&ck....
For those with brains who want to know who is behind NWO and Council of Foreign Relations and the shills like G Edward Griffin who try to confuse you here is a good video
http://www.erichufschmid.net/MasqueradeParty_Part_3.wmv
is hufschmidthe Vatican did it guy or is he a the jew's did it-i'm leaning jews based solely on here in the states-o and we gave israel 200 billion in aircraft-TO STOP BUILDING SETTLEMENTS FOR 90 DAYS.....
The Zionists are Jew-ish, an admixture of Ashkenazis & their Edomite cohorts. The Ashkenazi are not semites, they are descendants of Japheth:
Genesis 101Now these are the generations of the sons of Noah, Shem, Ham, and Japheth: and unto them were sons born after the flood.
2The sons of Japheth; Gomer, and Magog, and Madai, and Javan, and Tubal, and Meshech, and Tiras.
3And the sons of Gomer; Ashkenaz, and Riphath, and Togarmah.
Edomites are descendants of Esau, who have a mental hang-up about losing first born rights to Ya'akov over a plate of rice and beans. It was lentils, I know...
If I am not mistaken, the Edomites requested Rome to be annexed to Israel about 200 BC.
What does the Bible say about these two groups?
Revelation 3:9
Look, I will force those who belong to Satan's synagogue--those liars who say they are Jews but are not--to come and bow down at your feet. They will acknowledge that you are the ones I love.
For more information, Google radiation experiment + Sephardic children.
you know how i know gold is about to bust? every 5 minutes somebody want's you to buy there's. there are no ad's on fox saying" buy canned goods, schmuck"
This kind of hyperventilating drivel only diminishes the reputation/value of ZH.
really? so you agree with jon stewart? "relax, everything's fine"
Stunningly stupid article. Commodities rally for the past two years was apparently "facilitated by massive—and unsustainable—stimuli from the Chinese Government". Right. Of course it was. Not out of need for raw materials, not out of desperation from investors getting tanked on equities, not out of fear of currency devaluation. Nope, apparently the whole thing was stimulated by China.
It'd take me hours to pick this apart, but suffice to say, it's crude, imaginary, and quite possibly written by a slightly dim-witted teen who picked the wrong words from the thesaurus to cause maximum mischief. The actual "Terms of Trade" across organizations in the same country as well as across international boundaries vary greatly according to local laws and customs. To write that this will somehow implode the emerging markets after all these years, or assert that it will have a detrimental effect on trade suddenly, is, for want of a better word, crap.
What is so hard to understand? China HAS been stockpiling raw resources for years. You don't think that has an effect on commodity prices, do you? What is the stretch here?
As well, China has so overbuilt in terms of real estate, that their forward demand for things like iron ore and copper will likely be very much moderated based on materials in store.
So I'm not at all sure what your outrage is, but I am guessing it has something to do with your lousy housing allowance there in Hong Kong.
Wrong on all counts. It's London, and the housing allowance is pretty good. :)
Stockpiling raw resources? Ever heard of the term, "Strategic National Stockpile"? No? Then read a book on it. They buy steel, copper, zinc, lead and aluminum. They are the world's largest commodities importer and they buy to offset production for exports, which all end up in the West as finished goods anyway, the rest into improving their infrastructure which, despite what you see on tv, is in desperate need of improving outside the cities. If that's stockpiling then the commodities are being "stockpiled" into buidlings, roads, cables, and finished goods for sale.
As for "overbuilt on real estate", that's crazy talk considering their population and where most of them live and work now. There is a demand for better living spaces, it's just not that affordable to most of them yet. - That's just my opinion based on per capita earnings and population size.
The issue of "stockpiling" isn't stockpiling at all but about the minerals that China produces: bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus, some of which have export duties on them. The US and other importers want these cheaper and more readily available for their own industries whilst the Chinese insist they need them for their own. It's the most elementary part of economics, the demand versus supply pricing. As long as there is a Global demand in these and precious metals - not just in China and the US - and supply is tempered by who can pay the highest price, asserting that demand will suddenly no longer be there (When everyone is arguing about the need to secure raw materials for their own countries), and prices will drop is, quite simply ludicrous.
The article has misunderstood or misrepresented the current problems of wanting China's raw materials cheaper by the West. The largest movements in prices in recent times have not been in bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, or yellow phosphorus, but what China has to IMPORT to sustain its manufacturing and infrastructure. i.e. We may be selling our commodities at a higher price to the Chinese, but we want theirs cheaper. A lot cheaper. So we accuse them of hoarding.
Try to make your point without making personal remarks. I don't give a shit who you are or what you do, and I would like to keep it that way. Capiche?
China?
If you read this last Spring, you'd have been frontrunning the stockpiling...
One of my top 5 sleeper articles for 2010.
http://online.wsj.com/article/SB1000142405274870460810457522011289870713...
Thank you, Fraud-Esq! I wish I could simply write a couple of sentences and provide a link instead of going into keyboard diarrhoea mode. Once I get started I can't seem stop.
I come to ZH to get a different/better perspective on the way things really are, and avoid the infantile propaganda touted by the usual media suspects, not to have the Fox/MSNBC cliches spouted back at me. Watching/reading US media about China is like witnessing Orwell's Two Minutes of Hate these days. Just like in 2003 about Iraq. The principle here is if you repeat lies and unbalanced views enough times, others will propagate the same. This article is a good case in point - China is trying to sell their natural resources at a higher price (Who wouldn't), but the real reasons are much more complex and logical than the usual, "'Cuz they hate our freedoms", and "Cuz they're greedy", which is basically the drivel they feed the American public these days (again). The real movement of prices, and the crux of this article is in the price of commodities China imports, and I don't see that bursting unless a billion people suddenly disappears, they cancel all the infrastructure programs, and every wholesaler in the world suddenly comes down with the plague.
I think it was Robert Heinlein who said that the Chinese are natural merchants and mandarins (civil administrators). To paraphrase, if you throw two Chinese down a well, they will grow rich selling rocks to each other, build a society, and raise families.
"...and I don't see that bursting unless a billion people suddenly disappears, they cancel all the infrastructure programs, and every wholesaler in the world suddenly comes down with the plague."
That's exactly what's in the plan: global depopulation agenda.
It is real.
I'm smiling as I write, but there's a part of me that's chilled to the bone. Over population and dwindling resources are undeniable problems that face our generation, but depopulation through conflict is an idea that disgusts me to the core as the dreams of the criminally insane. Nobody could be that evil, surely? Well, perhaps in the Pentagon. Having travelled a great deal more than I ever want to, I have a slightly better faith in the fundamental goodness of humanity, especially ordinary hard working people everywhere who would never allow that to happen (again). Misplaced faith may be, but I think it is better than the alternative. :).
a little off topic..
IS TYLER SIMPLY MICHAEL KREIGER ?? http://www.youtube.com/watch?v=EjIWH7CSP8U
keiser reminds me of lee harvey oswald. hmmm...
i think max has gone over to the russians-like sorcha faal-actually,i think max IS sorcha faal
I called my broker to go long the dollar.
He said, "One ply, or two?"
We prefer "no ply"... also known as gold.
going long in this case entails buying one of those jumbo sized walmart 89 rolls packages
Game over is right. China to spend their dollars like mad men. The ninja warriors are going for everything from gold to the kitchen sink. What they do not get will be left overs for those who did not realize the game until now. The game is over, folks.
The correlation between accusations from the US and a weaker dollar/CNYuan is thus; fascists wish for China to spend Chinese Reserve dollars. Walled Street wants all dollar reserves China has in the bank back on the market, in hopes the monie can be turned for a righteous profit.
Walled Street has dollars too, and so they will chase the big monie if it moves. The game of chicken is almost over now that margins are compromised on such important aspects like commodities. Once the levy breaks, the FIAT will try to swim and it will flood the system. Never mind the trillions all Sovereign creditor nations have, how many trillions does Walled Street have? The game of Chicken is over.
are you glen kealey? lol anyway i agree. the ?is-will we go to war with china to make them (keep)taking dollars? yes, i'm serious....
Not glen. I don't know who junked you. The US Government goes to war, that is what it does.
see-i really see that as an outcome. i mean, would they gin it up with a fake reason like ww1@2? or just say it "we are freeing them from the bond's of the yuan"
"we are freeing them from the bond's of the yuan"
A line from the book.
Fuck it, push it all into the pot Ben and announce "the Mother of All QEs". Yea baby. Then, cut to Sarah Palin and her new show. Yea people. We're insane. And it shows. Yay.
Love the Show.
She's gonna split the Repugnants in Two!
Thanks John McCain!
And there you go...the IMF comments on the Hong Kong property market...negatively. No. It cannot be. China is the light of the world.
Welcome to the inflation born of central planning. If next you want to rant about QE2...instead, look in your Hong Kong mirror.
Is the Shanghai negative yet?
WALTER
HAS THE WHOLE WORLD GONE CRAZY? AM
I THE ONLY ONE HERE WHO GIVES A SHIT
ABOUT THE RULES? MARK IT ZERO!
The Pomeranian is excitedly yapping at Walter's elbow, making
high body-twisting tail-wagging leaps.
DUDE
Walter, they're calling the cops,
put the piece away.
WALTER
MARK IT ZERO!
SMOKEY
Walter--
WALTER
YOU THINK I'M FUCKING AROUND HERE?
MARK IT ZERO!!
Buy dollars!! HAHA
walter- you want a toe? i can get you a toe in 3 hours!!!
MARKET ZERO.
see-you do play with words in a kealey like fashion-i can understand you, however.
working the soil is a pain in the ass. That is why other avenues were explored.
http://www.youtube.com/watch?v=BpAxV6uUxsM
working the soil is a pain in the ass. That is why other avenues were explored.
The Chinese establishment can't afford for growth to stop. It would cause too much political unrest. But they have plenty of cash saved away for a rainy day so Knight's predictions will come to naught for now.
The EU seem to have a rescue package for Ireland. So that will help prop the Euro up against the dollar. The Eurocrats in Brussels know they have to save the Euro to keep the EU as a functioning entity. And they will stop at nothing to keep it alive because its their gravy train.
The UK government isn't doing QE and has an austerity program instead, so no devaluation against the dollar there.
There is a problem with some of the Chinese companies on stock exchanges outside China - but in terms of the global economy that's a drop in the ocean.
And the US Fed is just giving money to bankers to fund their bonuses which they can then hoard which won't create jobs in the real world.
Exactly what is the driver for this tipping point?
Bob Prechter has been saying the same thing since 1997?
They traded rice since 17th century...
Market can make crash but what else then commerce on earth? Not much.
New rules ok, but not the end of the game.
Those heavily invested long in foreign markets will not like this.
Start researching what happens during World Wars folks.
Hardly over. The bull market just started.
Hopefully, this pilots and tampons thing will be over soon.
Pilots and tampons:
http://snipurl.com/1h3dia
Its been game over for a while, the carcass just needs to be cut down.
That direction down...what are the knock on effects of that? What is the economic multiplier of housing construction?
The great hope of the world China hasn't been enough to pull everybody out of the hole, and now they will have to cut back by some degree you would think to deal with inflation and bubblets.
AND if Ireland takes its bailout, how long like Greece do they again have troubles, and how long before Portugal, Spain..... the German people will be rioting by that stage.
They are going to have to decide who takes hair cuts, who gets dumped and so forth. Simply bailing countrie and States out only delays and expands the problem to a short time later, whils austerity measurers royally fuck the economy....
No way out except hair cuts alround. But are the looking for ways out or just ways to maintain and increase the wealth and power of banks.
You're thinking about free market economics.
But that isn't fully applicable to PIIGS bailouts.
The Eurocrats dream of greater European integration - a federal Europe. They will sell their children and grandmothers into debt slavery rather than accept anything that puts their pet project at risk.
And a lot of European banks are heavily exposed to Irish debt... banks which have already been bailed out by their governments... Which is easiest? Prevent Irish debtors from needing a haircut or justifying to their voters and to markets why they've had to bail out their own banks again?
The entire financial marketplace has become nothing but an elaborate ponzi scheme / musical chairs and when the music stops, and it will eventually stop, many will find they have nothing left.
Liquid and on the sidelines spectating is the place to be but most are degenerate gamblers now and cannot profit take and mitigate, they feel compelled to keep on gambling. Good luck with that approach.
Like, things are a mess.
The Knight article contains almost nothing of interest and they are wrong about the effect on the dollar. When the "tipping point" comes, it is the US dollar that will be devalued, because it is the US that has the gigantic trade deficit. US workers have to be paid less or they will not be able to compete with Chinese workers.
Furthermore, the Fed has decided that the only way out of the debt trap is inflation. Gradually, as other countries accept the coming American devaluation, they will stop trying to match our inflation. It is far more likely this will lead to a sudden run on the dollar than that the dollar will miraculously become a strong currency again.
Wow, this looks like what we did to the Native Americans, the Inuit, and the Hawaiian people...Wonder how much longer this proud nation of obese consumers will be around...
3,2,1,0
Our present exports of cancer, diabetes, war materials and horrible movies is not sustainable? WTF?
How's this even possible? We're out of people to store more fat on in America, and all are McMansions are full of crap we don't use...And NOW, we're being told that other people in other countries don't want to be as fat as us and have as much useless crap as us?
We'll bomb them into compliance!
Just another brick in the vault kinda week.
http://wallstcheatsheet.com/breaking-news/economy/ghost-towns-in-china-prove-gdp-is-a-farce.html
And another ramp in the overnight futures. What resistance you cannot negotiate in "free market" trading, you gap over when everyone is sleeping. I'd gladly live in a lean-to and on grubs and berries just to see these areseholes fry.
Economic Crunch (Part II) :-
"Come on Down".
+-
Wonder what the final straw will be? A further run away from the €uro wouldn't help..
All eyes on Dublin then, Spain looks like it dodged the bullet for now with its bond auction.
Glad we're well stocked with food.
i finally got to reading this today. Seems as though somebody left the gate open; the junker goblins are loose in the house and yard!
The game is never over, it just changes.........
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Time to find a nice place build my bunker.
http://www.travelsradiate.com/north-america/canada/saskatchewan/unlucky-...
Looks like i can find some peace there....might do a bit of prospecting also.. he he