This page has been archived and commenting is disabled.

Stunner: China Set To Announce Record Trade DEFICIT In March

Tyler Durden's picture




 

Say goodbye to China's "export economy" paradigm. In a stunning development for trade hawks, and pretty much anyone who follows the biggest liquidity bubble in history, China Daily has announced China is about to announce a record trade deficit (yes, not surplus, deficit) for March. This makes the whole CNY undervaluation debate pretty much moot, as even China now moves into the ranks of net importers. From China's official daily newspaper: "The country will probably see a "record
trade deficit
" in March thanks to surging imports" and "will "fight
back" if Washington labels China a currency manipulator." Perhaps this finally explains where all the excess liquidity has gone: with China now not exporting to the US consumer, it has instead refocused on its own "middle" class. This means that Chinese administrators are much more focused on maintaining a stable economy, and will be much more concerned about economic overheating, which goes in line with the recent indications of material liquidity tightening out of Beijing. Market News reports that the actual deficit will come in at $8 billion for March, the first deficit since April 2004, when the gap was $2.26 billion. Maybe Albert Edwards will just have the last laugh with his iconoclastic prediction of a CNY devaluation.

More from the article:

After China's exports rebounded in
December, US legislators and economists have been demanding the Barack
Obama administration label China a currency manipulator in a US
Treasury report due out in mid-April, which will make it possible for
Washington to slap duties on Chinese imports.

"China's trade surplus with the US has been
turned into a key excuse by American economists to pressurize the
Chinese government to revalue the yuan," but, ironically, the calls
have been growing stronger even as the "surplus keeps falling", Chen
said.

The ministry also said on Friday that Washington's method of evaluating trade figures magnifies the deficit with China.

In the three decades up to the 2008 global financial crisis, China's exports registered annual growth of 20 percent but the surplus with the US contributed a big chunk to China's total. Last year, China had a surplus of $143.38 billion with the US, accounting for a hefty 73 percent of the total.

"The impact of currency revaluation on trade is limited," said Chen.


From July 2005 to July 2008, the yuan gained a cumulative 21 percent against the dollar, but China's trade surplus with the US kept rising. When the yuan was steady against the dollar from 2009, the trade surplus dropped 34 percent.

"The deficit has been vastly overestimated based on American statistics," and according to the latest report prepared by both sides, the US deficit for 2006 is "26 percent higher than it should have been," Chen said.

The scariest implication: China is quickly running out of dollars which it can then recycle into US Treasuries. This is surely the biggest nightmare scenario for Tim Geithner. While this explains the decline in indirect bidding, it also may go to refute the whole premise of China being behind the direct UK-based bidders is flawed. And if so, is it merely just the Federal Reserve doing all the buying in a covert fashion (via BlackRock or othewise) as some of the more conspiratorially-minded market followers have speculated?

Here is the most recent prophetic insight from Edwards, as of March 2, pertaining to this critical shift:

Clearly to the extent that the rise in China?'s official reserves depended on the size of its trade deficit, there will be reduced purchases of US Treasuries. But China has, in part, merely been swapping official dollar purchases of US Treasuries with surging imports of dollar-denominated commodities on the trade account (see chart below).



 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 03/22/2010 - 11:50 | 272262 John McCloy
John McCloy's picture

 They have their heart set on becoming the leading global economy. Dumping all their U.S. treasury holdings is a small price to pay to crash a seemingly "invincible" economy. They will never have a better oppurtunity to bring us to our knees considering the war and economic spending binge we are currently on. This is why deficits and debt are as much a national security threat as nuclear weapons and terrorism. The supposed leaders of our nation are placing us in a dangerous predicament.

Now the Chinese will just consumer their own goods.

Mon, 03/22/2010 - 12:01 | 272271 THE DORK OF CORK
THE DORK OF CORK's picture

Nobody Nobody can consume goods like Americans - they will have a tough time convincing the Chinese proletariat the benefits of getting into debt for immediate satisfaction.

China is in a similar postion as pre-depression era America - a massive surplus country that all of a sudden can't find buyers

Mon, 03/22/2010 - 12:38 | 272331 John McCloy
John McCloy's picture

   That is correct nobody can consumer like Americans. Even in this depression the zombies look for pleasure at the malls using their credit cards to further induce the temporary dream state. Imagine the chaos China is in for once the domestic retarded here in America learn to stop going to Crate & Barrel and Chili's between reality shows. I also do not think China will succeed in overtaking the U.S. since they are about to see a precipitous drop in U.S. consumer demand in coming months.

Mon, 03/22/2010 - 12:43 | 272337 THE DORK OF CORK
THE DORK OF CORK's picture

Well in the short term China is in big trouble but remember that after the Great Depression the world was your oyster - having said that China is in a poor geographical postion unlike the US which has access to 2 oceans etc etc.

Mon, 03/22/2010 - 14:17 | 272427 bingaling
bingaling's picture

They don't have to consume like Americans - The population difference can easily make up  what each consumer in The US consumes.

305 million US population vs 1.3 billion or 1300 million

On another note, there goes the only reason China buys our bonds .

Mon, 03/22/2010 - 14:25 | 272438 THE DORK OF CORK
THE DORK OF CORK's picture

Point taken but there is a lot of slack in the system if the Americans are serious about savings - besides I don't want anybody to consume stuff except me , we are living in a zero sum world now.

Mon, 03/22/2010 - 15:35 | 272537 Missing_Link
Missing_Link's picture

"We're living in a zero sum world now?"  Where do you get that, exactly?

It's not as if innovation and scientific progress have suddenly ground to a screeching halt.  There are plenty of extraordinary opportunities for non-zero-sum progress, particularly at the microscale and the nanoscale.

Mon, 03/22/2010 - 16:14 | 272596 THE DORK OF CORK
THE DORK OF CORK's picture

On the contrary I do believe that applied technology has slowed to a crawl since the 60s - there has been a few minor incremental developments ,no revolutionary physics that can be transformed into something real - just abstractions that cannot be observed in our reality - indeed physics has seemed to have entered a cul de sac of imagination.

OK we have fast computers - but what do  we do with all those electrons - we play with fiat electronic money ,back and forth up and down left and right. Also our scientists have become so enamoured with computer modeling that they fail to take the time to put the correct information into their electronic playthings - we have lost something vital I fear. 

Mon, 03/22/2010 - 18:30 | 272706 narlah
narlah's picture

It's a sickness of the system. All of the brightest went into finance, law and politics.

A schientists actually DO NOT find new things, they get bought and sold on the market as just any assets, a trade between big pharma and so on corporations. In a world that population thinks how to "get money" - well you get money. Happy ? Invention is continuing, but with each new invention the danger of the whole house of cars to collapse is greater. Someday a invention about zero point energy or unlimited food production will finally slip in the media, and this scarcity creating system will be gone.

 

Until then , ask yourself this question : "How the hell , on the plamen earth there is a country that can produce 10 times of what they need, that can feed half of the globe. And still worry your "trade deficits" or "empty cities" or hungry people. Time to wake up ? Perhaps.

Mon, 03/22/2010 - 19:32 | 272756 THE DORK OF CORK
THE DORK OF CORK's picture

Sure if capital went back into applied science then shortages would disappear over time -but our monetary system has not recognized true capital since 1971 when its symbolic representation was removed from the financial radar.

You stated that all the brightest have entered the field of easy money dreams and yet you also state that inventions are continuing , by whom - the dumb or the dumbest.

I have had logical conversations about zero point and yet no evidence that I can touch or feel - I do not believe in such tales because of this fact. I have information. now about the money transfers which seem real so I can accept those people who forward the theory that the financial system is corrupt to the core and I can act on this fact.

Mon, 03/22/2010 - 13:01 | 272346 Internet Tough Guy
Internet Tough Guy's picture

Ever see a chinese in a casino? They are the biggest gamblers and risk-takers in the world. And there are 1.3 billion of them. They will consume like locusts.

Mon, 03/22/2010 - 13:05 | 272351 Thoreau
Thoreau's picture

Or save like the Japanese.

Mon, 03/22/2010 - 14:20 | 272434 suteibu
suteibu's picture

BINGO!!!

Mon, 03/22/2010 - 15:37 | 272543 Missing_Link
Missing_Link's picture

Doubtful.  Chinese culture is dramatically different from Japan.

Mon, 03/22/2010 - 14:58 | 272486 Internet Tough Guy
Internet Tough Guy's picture

Apples and oranges.

Japan is a first-world nation. China is a poor nation whose citizens are forced to save but are desperate to raise their standards of living. Hundreds of millions of people are eager to have electricity, plumbing, better diets, all the things they know people in other countries have. Would you sleep on the floor and walk to work barefoot just so you can save money while making shoes for export? Or would you want to buy a pair of shoes for yourself?

Mon, 03/22/2010 - 13:13 | 272359 THE DORK OF CORK
THE DORK OF CORK's picture

Maybe you are right Tough Guy ,this planet is just getting too dam complicated to game with any confidence - even the central bankers are having a Tough time as inside information is remodeled in the world of cyberspace - I think the only solution is to drink more beer.

Mon, 03/22/2010 - 15:12 | 272505 faustian bargain
faustian bargain's picture

I think the only solution is to drink more beer.

Finally, a voice of reason.

Mon, 03/22/2010 - 15:38 | 272544 nuinut
nuinut's picture

Really? There is little difference between alcohol and reality TV, IMHO.

They both serve roughly the same purpose.

Mon, 03/22/2010 - 16:12 | 272593 faustian bargain
faustian bargain's picture

I was joking. Thanks for taking away the funny.

Mon, 03/22/2010 - 16:21 | 272605 THE DORK OF CORK
THE DORK OF CORK's picture

Nuinut I enjoy a different reality which the barman serves at regular intervals

Mon, 03/22/2010 - 14:19 | 272433 tmosley
tmosley's picture

There's the thing.  You don't have to go into debt to consume.  A long time ago in this country, Americans consumed less than they produced, and became wealthy because of it.  Consumer debt is what REALLY kills economies (along with taxation and regulation).

Read this and you will understand why that is the case: http://freedom-school.com/money/how-...nomy-grows.pdf

Mon, 03/22/2010 - 17:56 | 272681 THE DORK OF CORK
THE DORK OF CORK's picture

In a debt money system the vast amount of people have to go into debt to consume - money would simply be not available to trade otherwise.

Tue, 03/23/2010 - 05:38 | 273038 DirtySouth
DirtySouth's picture

Sounds to me like it's about time TPTB begin a new game, with a new set of rules.

Tue, 03/23/2010 - 09:29 | 273103 THE DORK OF CORK
THE DORK OF CORK's picture

Most likely the US treasury will wake up one morning and begin openly buying gold on the world market or possibly the BIS will offer a physical only auction of gold.

Mon, 03/22/2010 - 15:26 | 272526 Cognitive Dissonance
Cognitive Dissonance's picture

"This is why deficits and debt are as much a national security threat as nuclear weapons and terrorism."

Don't forget all those "profits" being reported by American companies, which are supposedly driving the stock market up. It most certainly could be considered a national security issue to have a strong stock market, right? So maybe the USG is allowing some/many companies to cook their books. Don't forget this little gem is still in effect.

"Intelligence Czar Can Wave SEC Rules"

And they don't even have to tell you they're doing it. You want profits, you got profits. Now where's my bonus? Don't sweep this away as a stray piece of information that doesn't fit your world view. Much stranger things have already come to light about this Ponzi. Assume this is being done because it would certainly explain a lot more that the "official" reasons for the so called economic recovery.

http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm?campaign_id=rss_daily

 

Mon, 03/22/2010 - 11:54 | 272266 Moe Gamble
Moe Gamble's picture

Commodity imports. Record stockpiles of oil, and growing.

Mon, 03/22/2010 - 12:57 | 272344 TheGoodDoctor
TheGoodDoctor's picture

Which is valid. They are trying to run the prices down while stocking up. They want more on the cheap. I think they are smart. Plus, they are going to get their people to buy gold and silver thusly making their gold, silver, Rare Earth Metals, etc. reserves more valuable.  I like this game of chess though. Or moreso Liar's Poker. It cracks me up. This is by far better than any reality TV.

I mean we have this now this week. The CFTC. Senate health care. Hell I don't even know what economic reports are coming out. Am I missing something else big?

Mon, 03/22/2010 - 14:15 | 272426 Dr. Acula
Dr. Acula's picture

"I think they are smart"

If the central planning committe's choices differ from those that market participants would ordinarily make, then they are harming the economy. Value is being imputed to capital based on the committee's arbitrary choices and their limited, centralized knowledge. Value is not being imputed based on market participants' subjective appraisals and extensive, distributed knowledge.

On the other hand, if the central planning committe's choices are exactly the same as what market participants would ordinarily make, then they have no need to exist.

So, the socialists are either harmful to the economy, or they are superfluous. I do not see how they are "smart".

 

Mon, 03/22/2010 - 14:26 | 272440 tmosley
tmosley's picture

They are smart in mitigating the damage already done to their economy by their dollar peg in such a way that it might actually benefit them.  If they just let it go, there would be a melt up in the Yuan and in PMs.

This is a game of chicken with a train, but China has managed to project the illusion that they are still on the track, when in fact they have turned 90 degrees.  They are goading the markets to push the dollar up, and everything they want to buy down, like a boxer "slyly" letting people know that the fix is in, and then winning while a friend makes a big bet on him.  The knowledge that the fix was in sent the odds to the moon, and the boxer's bet would make him an instant millionaire.  At least, so long as he can avoid the mobster who paid him to take a dive.  In this case, the mobster is on life support, as is most of his crew.  They can't do anything to stop it.

Mon, 03/22/2010 - 15:12 | 272506 TheGoodDoctor
TheGoodDoctor's picture

Dr. Acula I mean what is the difference right now? Doesn't it bode well for the Chinese to get their raw materials on the cheap? Doesn't it benefit the US to have a strong dollar to sell their treasuries? What is the difference if the Chinese hold down the yuan when the US is holding down the prices of PM's artificially. I don't get it. You seem to want the game played fairly but it isn't being played fairly to begin with.

That is why it is so much fun to watch. I will stand by the chess comparison. Methinks even that it is just posturing by the US when they would rather have the dollar more valuable to sell treasuries and bonds. Am I missing something? Since when has the playing field been even?

Mon, 03/22/2010 - 16:59 | 272629 Dr. Acula
Dr. Acula's picture

"Doesn't it bode well for the Chinese to get their raw materials on the cheap?"

Is the market price of raw materials cheap? To say this requires making a prediction about the future, i.e. an entrepeneurial decision. An entrepeneur risking his own money must be careful, for he may face personal ruin. But the Chinese government gambles with others' capital, seized through force. They do not need to fear making bad decisions. If they fail, they can simply seize more and try again.

"Doesn't it benefit the US to have a strong dollar to sell their treasuries?"

 The dollar has the value it has due to consumers' subjective perceptions. I guess the question you are asking is "Should the US government use its printing press to produce inflation?". For the US government this would be great, as it impoverishes its subjects while strengthening its own balance sheet.  Voters mystified by Keynesian monetary fallacies will gladly sell their vote just to get the next hand-out from the government. Holders of dollar denominated-assets, however, will incur great losses from monetary supply inflation. For US savers and creditors, subject to legal tender laws, it amounts to theft. When the newly created money is injected into the economy it also plants the seeds for the next bust.

"That is why it is so much fun to watch. I will stand by the chess comparison."

Just remember that the board and the pieces were stolen. The person who carved the pieces, the owner of the machinery that does the carving, the woodsman who produced the raw material, the person who stains and paints the pieces  - all of them have been ripped off so this game can be played. And the pieces are not black and white, they are all Red. And both sides will lose.

Mon, 03/22/2010 - 18:31 | 272708 Itsalie
Itsalie's picture

Well, you are implying the market would always make choice that would not harm the economy. Maybe you have just returned from the mars. The market made most of the wrong choices for the last 2 decades, witness the drunk american consumers buying their fifth car in 3 years and nth 60 inch LCD TV, and of course all the bubbles that Mr Greenspan and Bernanke ignored. So your assumption on the wisdom of market participanst, like Krugman's of the "market" ability to absorb infinite US government debt, would need some calibration.

 

Mon, 03/22/2010 - 12:01 | 272272 Ben Graham Redux
Ben Graham Redux's picture

Are we the slightest bit surprised at this deficit?  Take a look at a chart of copper - someone was buying in February/March.  The dollar hit highs in February and commodities hit trading lows.  Of course they were buying to give the impression of not being currency manipulators.  Are we collectively this stupid?

Mon, 03/22/2010 - 12:19 | 272298 Simon Jester
Simon Jester's picture

 

Yes, indeed. We are collectively this stupid.

Mon, 03/22/2010 - 14:30 | 272444 tmosley
tmosley's picture

No, collectively, we are much, much stupider even than that.

Mon, 03/22/2010 - 12:26 | 272310 George the baby...
George the baby crusher's picture

You can fool some of the people part of the time, shame on you. I mean yes we are collectively that dim.

Mon, 03/22/2010 - 12:02 | 272274 BlackBeard
BlackBeard's picture

LOL welcome to loser's corner ya bunch of wangs!

Mon, 03/22/2010 - 12:59 | 272345 TheGoodDoctor
TheGoodDoctor's picture

Hey man enough with the racism! ;)

Mon, 03/22/2010 - 17:15 | 272643 Dr. Acula
Dr. Acula's picture

Why does having a trade deficit make you a loser?

I have a trade deficit with my supermarket. I buys lots of food there but they refuse to ever buy any food from me. Ex ante, I clearly value having food more than I value having green pieces of paper: otherwise I wouldn't have participated in the exchanges.

 

Mon, 03/22/2010 - 12:10 | 272286 nope-1004
nope-1004's picture

 is it merely just the Federal Reserve doing all the buying in a covert fashion (via BlackRock or othewise) as some of the more conspiratorially-minded market followers have speculated?

 

Yes, and that is why Bernanke and Geithner need to go to prison.

 

 

 

Mon, 03/22/2010 - 13:42 | 272389 Frankie Carbone
Frankie Carbone's picture

+10

Mon, 03/22/2010 - 12:15 | 272290 Ned Zeppelin
Ned Zeppelin's picture

I think I said as much last week - that I would not be so quick to point to the Chinese for covert Treasury purchases through the UK.  More likely, it is covert QE.  Especially if there is no surplus. 

Someone smarter than me could probably figure out what is really going on in our economy based on an analysis of this "unexpected" collapse of Chinese imports.  Lady cashier at the WalMart near me says the grocery part of the store is busy, the rest, not so much.

 

Mon, 03/22/2010 - 13:30 | 272374 farmjohnny
farmjohnny's picture

WalMarts here in WI look to have reduced inventories by about 10%-15%.

You can drive a cement truck down the isles now!

Mon, 03/22/2010 - 14:34 | 272451 tmosley
tmosley's picture

It's the same here in Texas.  They removed ALL of the seasonal materials from the large lanes dividing the grocery and the rest of the store.  Oddly enough, I haven't been to the other parts of the store in months, so sure enough, traffic is probably down on that side.

Mon, 03/22/2010 - 12:17 | 272294 Alexandra Hamilton
Alexandra Hamilton's picture

This is interesting news, if you believe the Chinese government's statistics, that is. Anyway, just in time for the Chinese. Now everyone is running a deficit, we are all doomed.

Mon, 03/22/2010 - 12:22 | 272300 THE DORK OF CORK
THE DORK OF CORK's picture

Everyone can't be running a deficit - is the US about to go into surplus soon....... shock horror..... that would be a movie I would like to see.

Mon, 03/22/2010 - 12:29 | 272313 Breaker
Breaker's picture

What is left to sell? Discount tickets to Disneyland?

Mon, 03/22/2010 - 12:33 | 272320 THE DORK OF CORK
THE DORK OF CORK's picture

The American Dream Baby - infinite growth with a few minor glitches

Mon, 03/22/2010 - 13:43 | 272392 Frankie Carbone
Frankie Carbone's picture

Trade is a zero sum game. If everyone's running a deficit, then who's running a surplus? 

Mon, 03/22/2010 - 13:52 | 272402 THE DORK OF CORK
THE DORK OF CORK's picture

I think I may have found the answer.........

 

http://www.youtube.com/watch?v=W8JLqsbK5V0

Mon, 03/22/2010 - 15:08 | 272501 Frankie Carbone
Frankie Carbone's picture

Well, it's plausible Dork..

Mon, 03/22/2010 - 15:15 | 272514 faustian bargain
faustian bargain's picture

I hear FRN's are in great supply.

Mon, 03/22/2010 - 12:20 | 272296 doublethink
doublethink's picture

 

The scariest implication: China is quickly running out of dollars which it can then recycle into US Treasuries.

 

But...but China is "stealthily" buying US Treasuries out of of the UK!

 

Ha!

 

Mon, 03/22/2010 - 12:19 | 272299 A Man without Q...
A Man without Qualities's picture

"The scariest implication: China is quickly running out of dollars which it can then recycle into US Treasuries."

This is not what I see, China is still receiving large quantities of of Dollars, but it is choosing to recycle into hard assets, i.e. commodities.  They can see Bernanke's plan is to devalue the currency by keeping interest rates too low for too long, so why would they want to be a part of that?

China's main objectives with foreign trade are employment for the peasants that leave the countryside and earning foreign currency to purchase the things they lack, such as oil and copper.  Also, by purchasing these assets from countries like Brazil, they provide the revenues for those countries to purchase Chinese goods, as they know the US consumer is a spent force.

If you look at the bulk carriers that go from Brazil to China but come back empty and the container ships that do the opposite, it seems clear what is going on.

Mon, 03/22/2010 - 12:26 | 272301 Mako
Mako's picture

They said NAFTA would consume the American manufacturers, they were wrong, Mexicians get paid too much, then they said China would take over, sorry China is going to collapse into a heap of a mess because now they get paid too much.  They have been building large cities that nobody even lives in to put up the appearance that everything is dandy.

The game is over guys, you have been on a race to the bottom for a while. 

The equation alway always always wins.

Credit creation has gone negative for 3 straight quarters, sorry but you can't pay interest on $52.9T with negative funds.... death spiral guys.

 

 

 

Mon, 03/22/2010 - 14:41 | 272457 tmosley
tmosley's picture

It's not that Mexicans get paid too much, it's that they are too corrupt, driving the cost of doing business higher.

China isn't going to "collapse into a heap of a mess" just because you wave your hands around and say so (despite what many on this site seem to think).  They are now an industrialized economy, meaning they can survive pretty much anything the world throws at them, so long as they refrain from imposing taxes and regulations, and keep corruption to a minimum.

Mon, 03/22/2010 - 16:04 | 272576 Mako
Mako's picture

They are going to collapse due to the lack of demand for their plastic junk and expose fiction they are living with just like the rest of the world.  

Just because you produce something means crap, the US was the China of the late 1800s and early 1900s... so what, the US collapsed basically.  

You are very confused as to how the global credit system is setup, there is no alternate system waiting when this one collapses.

 

Mon, 03/22/2010 - 18:28 | 272703 gdub53
gdub53's picture

China has a distinct advantage...no income tax and no religion

Mon, 03/22/2010 - 12:21 | 272303 Crummy
Crummy's picture

In light of this news I also have an announcement to make.

For every one pound of food that I eat, I take a three pound shit.

Mon, 03/22/2010 - 12:26 | 272308 anony
anony's picture

Then why don't you swallow gold, dollars, diamonds, and palladium?

Mon, 03/22/2010 - 12:31 | 272317 Breaker
Breaker's picture

Because then he would have to become a fairy tale goose. No fun being a goose. It would be a lot more fun being the goose's owner.

Mon, 03/22/2010 - 12:34 | 272322 Crummy
Crummy's picture

Sure, give me yours and you can keep the used toilet paper as collateral.

 

Mon, 03/22/2010 - 15:06 | 272500 Gold...Bitches
Gold...Bitches's picture

Then why don't you swallow gold, dollars, diamonds, and palladium?

Cuz diamonds hurt when they come out the backside.

Mon, 03/22/2010 - 12:23 | 272304 AnAnonymous
AnAnonymous's picture

The US is running out of ammo to smear China. This wont prevent them from antogonizing China on any topic that is. It will appear less and less legitimate. This is where it is turning more and more interesting.

Mon, 03/22/2010 - 12:23 | 272305 rational
rational's picture

Surely China will still be running a huge surplus with the US even if they drop into aggregate deficit? What was the prior aggregate surplus? How big is the swing? All commodity driven?  Some pretense of analysis, please!

Mon, 03/22/2010 - 12:25 | 272307 Teaser
Teaser's picture

Can someone help me understand something? China, with 1.3 Billion people or so, about 20% of world population has become a net importer?  So...who is exporting?  Not the USA, and not much of the developed world.   So, do we believe the Chinese stats?  Or do we believe what common sense tells us, that China is cooking the books even more than the good old USA? 

In other words, the #1 economy and the #3 economy are running trade deficits...roughly 60% of the world's GDP, so, the rest of the world should be exporting like mad?!?

Maybe my numbers are off, or maybe I am just not getting it.

Mon, 03/22/2010 - 12:31 | 272312 Mako
Mako's picture

China imports raw and unfinished goods, completes the product or semi-completes the product.... ships them to the world including the US.   Well, they are still importing but the exports have collapsed.

Everyone runs the same system, it's one big system with all contracts either directly or indirectly based on US consumption. 

Why is this surprising is what I am surprised about.   They are building large cities that nobody even lives in over there to keep the appearance everything is fine. 

Let me see... you think Americans are buying more stuff then 2 years ago or Europeans.  Come on people, China isn't producing more, not even close.  If they are, I would love to know who the buyer is.

 

 

Mon, 03/22/2010 - 14:30 | 272445 SilverIsKing
SilverIsKing's picture

Who besides "the man" lives in the moon?

Mon, 03/22/2010 - 20:34 | 272791 1fortheroad
1fortheroad's picture

More and more Chinese goods showing up here in Brasil.

Mon, 03/22/2010 - 13:04 | 272350 gmak
gmak's picture

Germany, Canada, SE Asia to name a few on the surplus side.

Mon, 03/22/2010 - 14:45 | 272465 tmosley
tmosley's picture

Not to mention their trade agreements in South America and Africa.  Most of those nations have ALWAYS been net exporters.  They don't have the leverage to get stuff in exchange for little pieces of paper like the west does.

Mon, 03/22/2010 - 13:10 | 272354 hedgeless_horseman
hedgeless_horseman's picture

There is new 911 in my driveway, and I cooked a nice Argentine steak last night, using French cookware, served on English china, with an excellent Aussie wine, served in (formerly) Irish crystal, while listening to a Japanese stereo.

Mon, 03/22/2010 - 14:16 | 272422 FoolMeTwice
FoolMeTwice's picture

And the label on all these says hecho en chine :)

Mon, 03/22/2010 - 12:26 | 272309 HEHEHE
HEHEHE's picture

I don't know whose I government I believe less, China's or ours.

Mon, 03/22/2010 - 12:29 | 272314 Hondo
Hondo's picture

Be very careful what you believe this data may mean.  Economic data coming from China is very suspect most of the time although there are many who take it as gospel.  I for one don't.  I don't even believe the US's collection methods I'm sure not going to believe in China's.

Mon, 03/22/2010 - 12:31 | 272316 GoldmanBaggins
GoldmanBaggins's picture

This release is likely BS. Timed to keep China out of the CM category due to be announced on April 15.

Mon, 03/22/2010 - 12:36 | 272323 Mako
Mako's picture

What is BS is people like you that can't explain how China is exporting more to people that don't have money ie credit.   You honestly believe China's exports haven't collapsed?   What planet are you guys from?

Let me see they are exporting more?  Ok, to who?

Their exports started collapsing in 2008 and they didn't turn off the importing used to make the exports that are now not selling.  

 

 

Mon, 03/22/2010 - 15:48 | 272564 merehuman
merehuman's picture

dummy responds

trade war, currency war and information war. By now we should all know not to trust anymore. 

We trusted politicians, scientists and bankers. They have all failed us.

Who do you still trust? 

At a young age i found parents could not be trusted. They left 

Between 7 and 10 i learned adult cheated each other. Sex

In 62 kennedy and cuba missiles put the future in doubt forever.

13, came to the states enthralled with the wonder of USA

17 in the Army now and learning racism is in america. surprised by that

and also surprised that people lied . Naive, oh yes.

at 23 i learned the world is illusion. But we must play our part.

The path i chose turned out to be a flim flam.

Now no religion is trusted.

All along i have encountered sadistic dentist, incompetent doctors and thieving mechanics.

I still trusted bankers and politicians until recently.

59 now and compared to many i am doing fine, all i owe is 15,000 in taxes.

Now i am gonna join the crowd and not pay these taxes. Shoot me. I dont give a shit. I have been dissappointed by this life once too often.

I apologize for being so far off tangent. impulsive , compulsive sagitarian that i am.

 

 

Mon, 03/22/2010 - 16:06 | 272584 Mako
Mako's picture

We are lied to from the day we are born.   Eventually you will the results of the using the equation which liars will say is sustainable.   The Truth has always been right in front of you but sometimes things that a right in front of you is the hardest to see.

 

 

Mon, 03/22/2010 - 17:13 | 272644 decon
decon's picture

Mako,

I've always loved your message since this was a blog early last year.  You cut right to the chase by pointing out most everyones linear thinking within an exponential financial system.  The system was pre-ordained to explode eventually just like our species expansion on the planet

Mon, 03/22/2010 - 16:39 | 272624 Hondo
Hondo's picture

That's not an agrument that is a statement based on conjecture.

Mon, 03/22/2010 - 16:42 | 272627 perchprism
perchprism's picture

I'm sure China has/had contracts with commodity suppliers that had to be honored even after it became obvious that the global economy was cooling off.  Then, until imports come back into balance with exports, there will be a quarter or two where commodity imports exceed finished goods exports. 

Mon, 03/22/2010 - 17:38 | 272661 bingaling
bingaling's picture

+10

Exactly people are taking the fact that the dow is 10600 and thinking all is back to normal .NO Fn way . People have forgotten The Dow got here on a couple of small blips that are nowhere near past levels - the only thing that has happened is the basement got temporarily flooded with dollars and a little bit of the shit on the floor happened to float the rest is still underwater . China is not BSing on this ,they pulled out the truth and now no one wants to deal with it .

Mon, 03/22/2010 - 12:35 | 272324 gatopeich
gatopeich's picture

Yeah, like who is the exporter now?

Mon, 03/22/2010 - 12:40 | 272330 Mako
Mako's picture

China has been a net importer to the rest of Asia for years, they buy goods and services from the rest of Asia, final product goes out to the World and the US.... the exports dropped off a cliff in 2008 but they haven't been cutting the imports (or as much).

Actually they are increasing their contracts on raw materials over the long-term, to whom they are going to sell all these things to I would love to know.  

 

Mon, 03/22/2010 - 12:40 | 272334 Double down
Double down's picture

They are gamblers!  They have doubled down on the inflation trade.  Gawd, just imagine if the Fed fails to reflate the economy.  Like Hugh said:  "The gamma can kill you"     

Mon, 03/22/2010 - 12:45 | 272336 Mako
Mako's picture

Bingo we have a winner.  Best post of the day.   China is the biggest speculator on the block, the doubled down on the bet they could beat the equation or more like the US could beat the equation. 

 

Mon, 03/22/2010 - 17:43 | 272669 bingaling
bingaling's picture

They didnt double down - they are hedging their reserves - they still hold a ton of treasuries if deflation arrives they can buy the world if inflation arrived they were screwed . Hence the buying of commodities and material - It's a hedge

Mon, 03/22/2010 - 12:54 | 272342 Ben Graham Redux
Ben Graham Redux's picture

This is precisely the way I see it.  Does anyone wonder why they've sent a top trade minister here?  The Chinese bet the ranch on inflation and now we're getting deflation.  By the time we get hyperinflation, the Chinese will have had to sell off their stocks.  In short, we're kicking them while their crotch is exposed.

Mon, 03/22/2010 - 14:52 | 272475 tmosley
tmosley's picture

...

China has enough US reserves to cause hyperinflation overnight (1.2 trillion vs a circulating 200-someodd billion).  They don't give a flying crap about the value of US currency, they care about getting the natural resources they need to produce.  They will consume what they produce themselves, or export it to those nations that have things that they need to continue production.  Hell, just cutting off the US would probably cause inflation to take off, as the cost of goods from anywhere other than China will drive US consumers out of the poor houses and tent cities (we've already given up our old McMansions for the poor house) and into caves (if they're lucky).

Mon, 03/22/2010 - 16:10 | 272586 Mako
Mako's picture

huh, sorry those credits are already produced.  Inflation is the rise of the money supply which is the total credit/debt supply.   You read too many bad books from people that want to sell you a gold mine somewhere in the deserts of Africa.

 

A dumping in US Ts would spike rates making borrowing even higher, so not do you have negative credit creation you would have huge borrowing costs.   China has no ability to make Americans borrow more, which is really the issue.   Unfortunately there is no way out for the rats.

Mon, 03/22/2010 - 12:54 | 272340 Comrade de Chaos
Comrade de Chaos's picture

" From China's official daily newspaper"

 

- those words make me rather sceptical about validity of data they represent. Number of facts will contradict those findings:

a) US trade deficit has increased in the last three month.

b) Germany & EU exports with China being the main destination for their heavy machinery and related goods have fallen.

c) Japanese trade surpluses with China being a huge destination of those, have all but disappeared.

 

p.s. Tyler, there is a website for official Chinese statistics. While the last two months do show increase in the local consumption, those numbers are much lower than the same indicators during the previous year. (despite the fact that those months contain the chinese new year.)

Mon, 03/22/2010 - 12:52 | 272341 The Pets.com So...
The Pets.com Sock Puppet's picture

I thought that this Chinese trade "defict" was mostly attributable to the long celebrations surrounding the Lunar New Year, where factories ceased operations. It was predicted.

Mon, 03/22/2010 - 13:05 | 272348 Crummy
Crummy's picture

Hey, you try riding your bicycle to work through all those spent fireworks...

 

Mon, 03/22/2010 - 15:57 | 272569 gridlocked
gridlocked's picture

They seem to have missed that but I have read this as well.

Mon, 03/22/2010 - 13:06 | 272352 Brick
Brick's picture

China's daily newspapers are as capable of getting things totally wrong as US newspapers. Having said that it may be possible that china really is runing a deficit, just not with the US. As the dollar climbs against the euro and other currencies so does their export engine to Europe and India begin to falter. Remember that only about a third of chinas exports go to the US so what happens elsewhere is still important. Look to Canada, Australia, Brazil and Germany to be buying those treasuries now. Needless to say it will all swing full circle around again, taking a slice of each economy as it does so.

Mon, 03/22/2010 - 13:18 | 272362 Thoreau
Thoreau's picture

The Chinese are suddenly net importers because "their" numbers say they are; and because it serves their economic and political interests at this time. This is a clever chess move to silence all those "revaluation-mongers" in the West, and in Congress. Face it, the Chinese are still kicking our arses by continually playing one-step ahead.

Mon, 03/22/2010 - 13:27 | 272372 Mako
Mako's picture

China is/has been making long-term contracts on virtually all raw materials imports for years now... those contracts just don't disappear.   Exports fell off a cliff or if that did not happen please let me know who they are selling this plastic junk to. 

 

It's over, just like it was over in 1929-1930... The UK was unable/unwilling to demand additional credit, US (the China of that time) was unable to export to the UK and the rest of the World.  UK demand collapsed and that was it. 

The system is the exact same system as it was back then, the players have just switched seats.

 

Mon, 03/22/2010 - 13:38 | 272386 ThreeTrees
ThreeTrees's picture

Preach.

 

+1

Mon, 03/22/2010 - 13:57 | 272406 equity_momo
equity_momo's picture

Exactly.

The short-tack traders amongst you may want to focus on Chinese names for the biggest collapse , relative to the S+P.

What concerns me is what the USD does. The Brits screwed many with their gold standard deviations in the 30s , the US has no such benchmark to devalue against.  Currency race to zero's is a loser for all involved.

Will the US pull a surprise dollar devaluation - is that even possible? Its essentially a hard asset linked to oil. Will the Saudis allow oil above 150? The World economy likely wont function in that scenario. And the US will lose AAA which seems to defeat all other purposes.

The bottom line is deflation or default. The alternative is simply too ghastly (Zimbabwe/Weimer)

WW3? Cui bono?

20 lost years like Japan is about the best we can hope for in a slow gradual deflationary process. Lets just hope our policy makers have a better end-game than the Japs.

 

Mon, 03/22/2010 - 14:27 | 272442 Mako
Mako's picture

Not going to happen.  Japan had the rest of the world to supply the demand so they never really collasped.   There is no other world for the United States to suck off of.

It's simply over, upright monkeys are unable to graph exponential growth on a chart and figure out there is no way to supply that past about 60-80 years.

Mon, 03/22/2010 - 14:56 | 272483 tmosley
tmosley's picture

No need for official devaluations, since the dollar isn't officially worth anything.  Just print and extend, and hope the bad things go away.

Mon, 03/22/2010 - 13:28 | 272373 lindonmarc
lindonmarc's picture

Time to load up on DIS, my friends.

 

 

 

Mon, 03/22/2010 - 13:32 | 272377 islander
islander's picture

China is (importing) selling garbage to its own middle class.

 What freaking middle class. Despite of the propogana their is no middle class, in China, only those few who have positions , that give them enough finances to be able to service their debt. When the double dip hits, and results in a full blown US and world wide depression, Chinas economy will implode. China's demand economy is a ticking time bomb. I don't give a dam, what Marc Faber, Peter Schiff, or Jim Rogers say.  Tick, Tock, Tick Tock.

Mon, 03/22/2010 - 13:56 | 272404 toathis
toathis's picture

and the USA will be just fine, right?

I would rather have China's bubbles than the USA's bubbles anyday!

 

They will come out of this Grand Global Depression much better than the failed former- United States

Mon, 03/22/2010 - 14:28 | 272443 Mako
Mako's picture

There is no seperate system.   It's one global system which is supplied new demand from the United States.  

Those china men will be going back to the rice patties on the bicycles they road in on.

 

Mon, 03/22/2010 - 14:52 | 272478 Whats that smell
Whats that smell's picture

A good read here:

http://www.fundmymutualfund.com/2010/03/bloomberg-china-rules-hurt-us-co...

I like the paragraph that starts with: Don't worry

I still remember Bill Clinton and every Repub telling about how many great jobs we would gain trading with Red China.

Mon, 03/22/2010 - 15:00 | 272490 tmosley
tmosley's picture

Hate to tell ya, bub, the Chinese are savers, not debtors.

 

Also, to claim that China has no middle class is asinine, like claiming there is no Moon.  It is abundantly clear to anyone who has been there that there is in fact a huge and growing middle class there.  This is the only possible result of industrialization.  Without a middle class, industrialism falls apart very quickly, and China started off without one.  If China produces a large amount of goods, this proves the existence of either a thriving middle class, or a nation populated by selfless robots (people don't work in factories unless it allows them to progress).

Mon, 03/22/2010 - 16:15 | 272592 Mako
Mako's picture

Their system is just like our system, if you were correct there would be no Chinese currency in circulation.  There would be no Yuan, no Yuan deminated bonds, etc. 

The US were savers in 1920s, didn't mean crap.... collapsed.  The US exported to the UK and the rest of the world, the UK peaked and it was good night for the world including the US.   There is no backup system. 

People better wake up really soon, if you think those Chinese are any better off you are in for one wild ass eye awakening experience.   What do you think all their tanks are for? 

 

Mon, 03/22/2010 - 13:34 | 272380 Shiznit Diggity
Shiznit Diggity's picture

Brilliant maneuver by China: silence the critics by drawing down reserves to swing from surplus to deficit in the trade account, timed perfectly to coincide with the ides of April.

Mon, 03/22/2010 - 13:35 | 272381 Rick64
Rick64's picture

 A chess match and the U.S. and China are the chess pieces. While they are fighting each other they don't realize they are being moved by a bigger force.

Mon, 03/22/2010 - 13:37 | 272384 Jim in MN
Jim in MN's picture

I'm just imagining one giant People's Liberation Army survivalist bunker after another over there...tanks and artillery pieces covered in piles of copper, nickel, gold ingots, Peruvean guano, what have you....

As long as the harvests come in....the mandate of Heaven remains and the temples (cities) will continue their march to the sky....

NOW WITH UNLIMITED MINUTES!!!  And....the beat goes on....

 

Mon, 03/22/2010 - 13:41 | 272388 verum quod lies
verum quod lies's picture

Please, please, stop, I am having trouble laughing and typing at the same time. As many have pointed out: What virtually every country is now a net importer? Absurd, impossible, and funny at the same time. O.K., let me get this straight, the biggest export led growth model in maybe the planet’s history just went from being the largest exporter to a net importer just when a trade war was brewing over their clear manipulation of their currency relative to the U.S. dollar? In addition, they are a pack of communist liars, and we all just are supposed to accept this as fact? Does motive or history ring a bell?

 

Final point, even if this seeming absurdity were true, it doesn’t mean they aren’t manipulating their currency relative to the dollar. When they remove their peg, then they can begin to make that argument, not before. Boy, that’s a good one.

Mon, 03/22/2010 - 13:45 | 272394 AnAnonymous
AnAnonymous's picture

When the US removes its various pegs on the USD, oil being not the smallest, singling out China for currency manipulation will suddenly appear easier.

Mon, 03/22/2010 - 14:22 | 272397 Leo Kolivakis
Leo Kolivakis's picture

Can the world run current account deficit with itself?!? Of course not, unless the global underground economy is exploding everywhere, including in China.

Mon, 03/22/2010 - 13:59 | 272410 verum quod lies
verum quod lies's picture

I was talking about specific currency manipulation, not the post Nixon exchange rate regime itself (which China signed up for). Note, the oil producers are free to price as they wish (e.g., Iran or HugoChavezLand), but China had and has decided to undervalue its currency relative to the U.S. dollar. Hating the U.S. doesn't change that basic fact.

 

Mon, 03/22/2010 - 14:36 | 272453 AnAnonymous
AnAnonymous's picture

That's rich. Everyone is free to do anything. Anyone can stroll the streets and is free to kill as long as it is accepted that jail or getting killed is the result of this free action.

Somehow, still, oil producers might consider that getting invaded because of unpegging oil from USD and start an oil market in euros for example is not the epitome of freedom. So yeah, they are free to price as they wish as long as it is priced in USD. Making it that people who buy USD buy oil. As oil is needed by so many people...

The US has proven lately that they are ready to defend the link between the USD and oil at all costs, including at point of guns.

Blindly loving the US does not change that basic fact.

Mon, 03/22/2010 - 14:32 | 272450 PierreLegrand
PierreLegrand's picture

This is playing out like Peter Schiff predicted...kind of scary that he saw this shit coming.

Mon, 03/22/2010 - 16:03 | 272580 Hulk
Hulk's picture

Precisley. Notice how when Schiff talks, he is so sure of himself,

like he has seen it all before. Kind of like Mako's posts.. Hmm....

Mon, 03/22/2010 - 14:42 | 272459 Miles Kendig
Miles Kendig's picture

As the idea that a US consumer led recovery leading to a generalized reflation gets incinerated.

Mon, 03/22/2010 - 14:42 | 272460 Gimp
Gimp's picture

Economic statistics out of China by a controlled government caveat emptor.

Like our Housing Surplus and Unemployment numbers. Don't forget that Fannie mae and Freddie mac are profitable institutions and none of the 1,000 lobbyists in DC have ever influenced our politicians.

Beam me up Scottie...now.

Mon, 03/22/2010 - 14:42 | 272461 verum quod lies
verum quod lies's picture

Am I missing something here? You are equating an actual currency peg with a theoretical offense/defense strategy? So the U.S. invaded Afghanistan to enforce its "link" to Afghani oil? But the Chinese were forced to sign up for the WTO?

Mon, 03/22/2010 - 15:17 | 272520 AnAnonymous
AnAnonymous's picture

What theorical?

Buying USD is buying oil. This inflates the demand on the USD.

The US has proven they are ready to use guns to maintain the linkage.

WTO? How does it come here? How does it relate?

China pegging to the USD is a reactive move to the multiple pegs the US has developped for their currency. When the US has removed those pegs, their claim on China peg will become legitimate. Up to that point, it is just a ganglord blaming another ganglord to do something the former performs himself.

As to Afghanistan, where is the oil? Afghanistan is much more a story of supply line to secure isnt it?

Mon, 03/22/2010 - 16:52 | 272630 verum quod lies
verum quod lies's picture

No, “buying USD” is not the same as “buying oil” (e.g., again, not all oil is priced in USD); but you knew that yet wrote it anyway. Yes, the U.S. has invaded Iraq, and , yes, your linkages are theoretical (for example, the real cost of invading Iraq alone is many times the cost of any oil the U.S. will get out of it; so it ain’t just the oil driving that process, or pricing in USD). Regarding Afghanistan, you are just repeating my point (i.e., it ain’t just the oil; and no there are better, cheaper strategic places to secure before that place if your supply line conspiracy theory were driving things).

 

The WTO, well that and things like the IMF just happen to be what your beloved Chinese communists signed up for in order to trade with countries like the U.S. For example, and trying to keep this on point to the question of currency manipulation: the “definition of currency manipulation is very explicit in the surveillance provision related to Article IV, which refers to it as ‘protracted large-scale intervention in one direction in the exchange market.’ ‘In one direction,’ of course, means buying foreign currencies since this is the way to maintain an undervalued currency in order to gain an unfair competitive advantage.” And that is the issue here. Pricing Saudi oil in USD largely because of historic and other relationships long established before the Chinese communists decided to join the WTO and related organizations, etc. isn’t the issue according to such rules as those put forth by the WTO or the IMF, for example. So, according to trade rules/law (and just plain common sense), the Chinese have clearly “manipulated” their currency relative to the USD. For me, and even the Chinese communists, it seems very clear that the Chinese have “manipulated”, the trickier question is why has the U.S. waited until now to officially respond? Unemployment pressure, simple incompetence, black helicopters ... ? The WTO indeed.

 

P.S. I would suggest to try to keep focused on the issue(s) at hand (i.e., currency manipulation that can be proved, and trade figures that are real), not personal pet theories of why Bush, Obama, or others like them do expensive, destructive things around the globe.

 

Mon, 03/22/2010 - 15:35 | 272535 delacroix
delacroix's picture

pipeline, opium, minerals, forward base

Mon, 03/22/2010 - 14:45 | 272466 williambanzai7
williambanzai7's picture

BANZAI7 BULLETIN: FLASH: Bands of cash drunk mainland tourists are scooping up all manner of high priced merchandise in a designor label feeding frenzy not seen since Suzy Gershman first landed in Hong Kong...

Mon, 03/22/2010 - 14:58 | 272487 truont
truont's picture

Yup, everyone is running a trade deficit...sure....

Mon, 03/22/2010 - 15:14 | 272509 billwilson
billwilson's picture

Your mistake is to believe any number out of China. Do you really think that a trdae deficit and international howls on the peg at the same time are a coincidence?

 

The Chinese government  puts out whatever statistic it wants to make its point. - it literally just makes them up.

Mon, 03/22/2010 - 15:56 | 272568 dnarby
dnarby's picture

LMFAO.

They have learned the game well!

Mon, 03/22/2010 - 15:17 | 272517 Jim in MN
Jim in MN's picture

seriously though, what if the VALUE of exports dropped while the value of imports rose?  If the shipping containers marked 'finished trinkets' got cheaper (deflated) while the shipping containers marked 'industrial commod--er, items of actual value' got more expensive, then the balance of trade would shift even if the number of items exported and imported stayed the same.  I mean, this isn't the  whole story but it's part of the story.  Now if China decided to mark down the notional value of their exports (partly because we're paying them in increasingly worthless dollars and partly because the actual price is lower) then who's to say?  We don't know anything about the Chinese economy anyway, at least not until we see the satellite pics of smoke rising from the cities...

 

Put another way, where is the graphic in the main post in value terms instead of annual percentage changes?  Maybe it's a close call, maybe not.  Gotta see the "data".

Mon, 03/22/2010 - 15:37 | 272541 three chord sloth
three chord sloth's picture

The scariest implication: China is quickly running out of dollars which it can then recycle into US Treasuries.

Well, we'll know if that's true soon enough. If they don't buy enough US treasuries, the yuan should begin rising against the dollar. (Correct me if I'm wrong here... isn't that how China keeps its currency cheap? They buy treasuries [support the dollar] with their trade excess?)


Mon, 03/22/2010 - 15:41 | 272552 captain sunshine
captain sunshine's picture

The chinese know that real money will be real commodities in the future. What if the renminbi was worth 3 times as much in a few years?  I think they are waiting for the right time.

Mon, 03/22/2010 - 16:31 | 272619 b_thunder
b_thunder's picture

The chart in the bottom of the article explains it all:  while Chinese exportd are rising, the imports of raw materials (i.e. hoarding) has greately outpaced the growth in exports.

Those pig farmers who are stocking up copper, coal and iron ore soon to ge in a world of pain, but that's beside the point.

One way to fight high commodity prices is to increase the value of RNB, isn't it?  especially since China has bilateral deals in place with every major commodity producer.

Mon, 03/22/2010 - 16:39 | 272625 TheMacroView
TheMacroView's picture

And yet the US still can't stop blaming China for its own deficit....

The Macro View

http://themacroview.wordpress.com

Mon, 03/22/2010 - 16:58 | 272635 jedwards
jedwards's picture

LOL How convenient! Just in time to prevent the US from calling them currency manipulators!

I can't believe all you guys actually bought this!  All these months, you cry over how manipulated the Chinese numbers are, and once they produce numbers that coexist with your view of the world, you believe it hook line and sinker.

They lied about the numbers before, they're lying about the numbers now.  End of story, period.

Mon, 03/22/2010 - 19:41 | 272760 pc_babe
pc_babe's picture

Nariah said ..

".... All of the brightest went into finance, law and politics." 

Ha ha funny... I would argue the opposite. 

Keep the soliptic humor coming ... good one. 

Mon, 03/22/2010 - 20:15 | 272784 htp
htp's picture

In this global power chess game, the US elite have consistently underestimated China. They think China will be as easy to deal with as Japan was. A Plaza Accord basically ended Japan's rise.

China is in a much stronger bargaining position than Japan was. Japanese cars are good, but replaceable. You can buy US brands or import from elsewhere. Quality may suffer a bit but it's no big deal. There is no replacement for China. It would take decades for India to develop the infrastructure needed to handle manufacturing on such a scale. Smaller South Eastern Asian countries simply do not have enough resources. The current American economic model totally depends on cheap products from China.

For that reason trade war will not happen, despite the high decible threat of it coming from the US. China fully understands the situation. But they don't want to directly and openly call the bluff, which would be embarassing to the US side and might force Washington into doing something they did not intend to do in the first place.

China's bogus claim of a trade deficit in response to accusations of currency manipulation is meant to provide a face saving way for the American side to back out of the current dilemma.

Wed, 04/14/2010 - 07:45 | 299674 mark456
mark456's picture

ucvhost is a leading web site hosting service provider that is known to provide reliable and affordable hosting packages to customers. The company believes in providing absolute and superior control to the customer as well as complete security and flexibility through its many packages. windows vps Moreover, the company provides technical support as well as customer service 24x7, in order to enable its customers to easily upgrade their software, install it or even solve their problems. ucvhost offers the following different packages to its customers

Thu, 02/24/2011 - 01:22 | 991885 shawnlee
shawnlee's picture

Their system is just like our system, if you were correct there would be no Chinese currency in circulation. There would be no Yuan, no Yuan deminated bonds, etc.

The US were savers in 1920s, didn't mean crap.... collapsed. The US exported to the UK and the rest of the world, the UK peaked and it was good night for the world including the US. There is no backup system.

People better wake up really soon, if you think those Chinese are any better off you are in for one wild ass eye awakening experience. What do you think all their tanks are for?

longines watch|642-681|70-294|thomas sabo chain

Do NOT follow this link or you will be banned from the site!