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UN Blasts American Push To Force Chinese Currency Flotation, Warns That Current Markets Have The "Makings Of Highly Correlated Big New Bubbles"

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Tue, 03/16/2010 - 16:43 | 267725 Ripped Chunk
Ripped Chunk's picture

And the UN has some great economic minds...............................

Tue, 03/16/2010 - 20:05 | 267921 knukles
knukles's picture


And Scientific; Anthropological Global Warming
Medical; Flu Pandemic, WHO.
Budgetary; Prolific Graft and Waste
Disarmament; Int'l Nuclear Nonproliferation.
Desires for Global Taxes and Currency

Character...Assholes Don't Even Pay Their Own Parking Tickets

Shared Sociopathic Compulsions with Wall Street

Stick 'em Back Under Their Rocks.

Thu, 03/18/2010 - 00:22 | 269010 dnarby
dnarby's picture

Not to be pedantic, but it's "anthropogenic".

Tue, 03/16/2010 - 16:44 | 267727 buzzsaw99
buzzsaw99's picture

Obviously those bitchez don't know who we are. USA! USA!


Do as you're told or get mutilated by our corrupt geriatric ninja fedgub beochez!

Tue, 03/16/2010 - 16:45 | 267730 deadhead
deadhead's picture

The global “casino”, nearly empty a year ago, is crowded again, and many new bets are on the table. However, the recovery in the real economy is modest at best. In fact, the rebound of stocks, commodity futures and currency trade in several emerging and developing economies since March 2009 displays the makings of highly correlated big new bubbles and the threat of a new round of financial crisis. 

They could have saved a lot of time and just said "echo bubble".

for those who talk of bernanke as the great historian, he seems to have missed the part about boom, bust cycles.  his failed policies have created an echo bubble in one year, with absolutely no success on the underlying economic and financial issues, mainly: 1. a major bank crises 2. high debt on consumer and gov'tal and some corp levels. 3. massive unemployment.  

it ain't gonna work bernanke until the deleveraging begins and we have not even started with the banks.  there is your future history folks.

Tue, 03/16/2010 - 20:43 | 267943 Howard_Beale
Howard_Beale's picture

It's like Rod Serling enters the frame "You are entering another time, another dimension..." fade to black.

When Reggie shows the derivative exposure of JPM, it will only take an LCTM or European debt default (child's play these days) to tip the scales. The ripple effect will be huge. All off balance sheet, of course, but that's when the smart money will move in for the kill.

Tue, 03/16/2010 - 16:50 | 267731 THE DORK OF CORK
THE DORK OF CORK's picture

I smell globalists........

SDR slavery anyone anyone , well then we have more forceful means at our disposal - bring out the BIS  - we will see how you can resist such debasement you Republican scum  

Tue, 03/16/2010 - 16:51 | 267732 Mad Max
Mad Max's picture

The uhnn-?  They're still around?  I thought they learjeted themselves to death at climate change conferences, in between polar bear roasts.

Tue, 03/16/2010 - 16:51 | 267733 GlassHammer
GlassHammer's picture

Who cares?

Its not like what we do has to make sense to anyone.

Tue, 03/16/2010 - 16:56 | 267738 Cheeky Bastard
Cheeky Bastard's picture

dog and pony show 

Tue, 03/16/2010 - 17:25 | 267760 deadhead
deadhead's picture

cheeky....i'm glad you are back.  your insights are most valuable!  thanks.

Tue, 03/16/2010 - 17:48 | 267786 Cheeky Bastard
Cheeky Bastard's picture

dude, my insights are, AT BEST, a notch above retarded.

but thanks. its nice to be back. i kinda missed this place. that is if one can miss bytes and letters.

Tue, 03/16/2010 - 17:56 | 267800 deadhead
deadhead's picture

my insights are, AT BEST, a notch above retarded.

nice try but it won't work with me.  i've read your stuff from day one.

Tue, 03/16/2010 - 17:59 | 267806 merehuman
merehuman's picture

vultures and meat.

Tue, 03/16/2010 - 18:04 | 267815 Cheeky Bastard
Cheeky Bastard's picture

 Boats 'N Hoes 

Tue, 03/16/2010 - 16:57 | 267741 ThreeTrees
ThreeTrees's picture

While I like the more realistic view the UN expresses here with regards to bubbles and the flaws in current macroeconomic policy the Libertarian in me chafes at the call for increased governance coupled with economic doublespeak.

“markets” were permitted to manipulate currencies in a way that made some sovereign governments and central banks look like penniless orphans

Wtf does this even mean?  Markets can't manipulate anything.  Central Banks manipulate markets, period.  Sounds to me like more anti-free market rhetoric.  Although I guess it's to be expected that an organization with a mandate for coordinated, global governance would buy into the socialist market fallacies.  Larger, more coordinated interventions in the free-market will not fix anything because their tool kit is precisely what causes the problems in the first place.

Tue, 03/16/2010 - 17:25 | 267762 aurum
aurum's picture

markets cant manipulate anything?

goldman manipulates all day everyday and they arent a.....oh wait i just answered my own question...goldman is THE central bank..had to throw to that in.

Wed, 03/17/2010 - 07:14 | 268172 Grappa
Grappa's picture

How can anyone anymore even speak of free-markets? There hasn't been free-markets in the last 30 years. Probably never.

Tue, 03/16/2010 - 17:01 | 267743 Bob
Bob's picture

A very timely report.  Let's see what the MSM does with it (sumpin tells me cries for Chinese blood are gonna be real popular on Fox, Rush, etc., at the very least.) 

Tue, 03/16/2010 - 17:16 | 267754 masterinchancery
masterinchancery's picture

Actually, Rush has expressed the opinion that attempts to blame the Chinese are ludicrous.

Tue, 03/16/2010 - 17:01 | 267744 buzzsaw99
buzzsaw99's picture



I find your lack of faith disturbing. Feel the wrath of Lord Blankcheck bitchez!

Tue, 03/16/2010 - 17:02 | 267745 10044
10044's picture

2 things can happen now:
-riots around 42nd st
-tarrifs to be put up to protect American jobs

If people were smart, both would happen

Tue, 03/16/2010 - 17:21 | 267757 tenaciousj
tenaciousj's picture

I will bet my own currency (tenacious bucks) that neither will happen.

FYI, for anyone wanting to follow along TENUSD is currently at  1.21

Tue, 03/16/2010 - 18:02 | 267812 merehuman
merehuman's picture

42nd st hookers, waving, arms in air

Tue, 03/16/2010 - 17:06 | 267747 Tripps
Tripps's picture


Tue, 03/16/2010 - 17:11 | 267749 Ras Bongo
Ras Bongo's picture

S&P : RSI (5) at 95.22 today on the daily chart.

Is this the final blow off top?

Some think it is imminent:



Tue, 03/16/2010 - 17:29 | 267765 deadhead
deadhead's picture

don't most folks use RSI (14)?  i really think that is the case.....anyways, rsi is certainly up there....

Tue, 03/16/2010 - 17:13 | 267751 chindit13
chindit13's picture

Like the Lehman expose, er, Examiner's Report, this will be ignored by a market hell bent on "predicting" an ever brighter future in retail, housing, gadgets and especially CRE.

Nothing will stop until there is complete and utter collapse.  Bernanke stated as much today, though he doesn't know it. 

Wed, 03/17/2010 - 07:16 | 268173 Grappa
Grappa's picture

I do really wish that you're wrong...

Tue, 03/16/2010 - 17:14 | 267752 Hondo
Hondo's picture

Well, the onus of consumption was squarely on the US to buy Chinese crap..which they did at incredible levels........matter of fact they couldn't get enough of the crap.  Wal Mart is the US distributor of Chinese crap.

Tue, 03/16/2010 - 17:17 | 267755 Fritz
Fritz's picture

The US is the bubblemaster.

They ain't seen shit yet. 

Tue, 03/16/2010 - 20:46 | 267944 Dr. Richard Head
Dr. Richard Head's picture

Bubbles might not work as bubbles need suckers in mass amounts.  These suckers take it in the tail while the bubble is blown into said tail.  While many suckers are indeed present, their ability to borrow their way into this bubble has diminished greatly.  Some of us have actually closed out the gate to our aforementioned tails.  Right now the bubble is being blown by the Fed who is instinctively sucking the bubble up its own tail.  What's that word where one is able to suck their own......never mind. 

While this circle jerk grows tiresome, only one other trick in the book is available with out dropping bombs on the Chinese.  I would think we have seen what is coming and I anticipate that the forthcoming protectionist measures will backfire miserably and blow a big old stinking load of reality on the face of the Fed and Capital Hill. 

Loads to the face....uh.......uhuhuhuh....yeah!

Tue, 03/16/2010 - 22:21 | 268010 Buck Johnson
Buck Johnson's picture

Thats the problem with this whole bubble scenario.  There is only one bubble left, and thats soverign debt (Treasuries, muni-bonds etc.).  You see this is the problem, you or I or anybody on this blog doesn't have 500 million or a few billion or more to buy this junk.  They have to go to the big or moderate players and try to scam them, and there not buying.  What we have is a circular firing squad where everybody that has money and power are trying to threaten the others into taking their junk in order to keep their country afloat and nobody is buying.  So the only way is to have other countries central banks buy our debt or the other, but as you saw with Portugal a month ago (failed auction) and Greece (a successful failed auction) the only way to have a successful auction in the US is to buy your own debt and act as if somebody else is buying it.  This is like the snake eating its tail because it's hungry.


The world has blown enough bubbles (in particularly the US) that the only thing left are the countries debts.  China doesn't like to be told that they need to do this or that especially when they haven't demanded higher interest rates for their Treasuries and other bonds that they bought.  I mean thats gratitude, China could come out and say from the state that we want higher rates of returns on our investments otherwise we will STOP BUYING YOUR DEBT.  This way the ball is in our court and its a shot across the bough of the US.  Because by the Chinese saying this it upsets the markets and the bond markets big time and they want better returns also.  And if the US doesn't do that then the market will see the US can't do it and that they essentially aren't able to fund their debt they issue.

This act would force the US to make a decision, save the domestic economy or save our whole economy (international).  They will pick international and try to BS the domestic so that they can still be considered a country.

Tue, 03/16/2010 - 17:38 | 267771 chinaguy
chinaguy's picture

Fortunately, this isn't getting a lot of press in China. Yet.

With the recent Olympics in China, the World Expo this year & the manner in which China recently bitch-slapped the West at the Copenhagen Climate Conference, China, IMO is drawing a line in the sand.

They are saying: "Look world, we are a "Big Dog" now with the potential to become "The Biggest Dog". We are going to assert ourselves as a World power so you'd better treat us with due respect".

I'm not saying I agree with this, but this is what I've seen unfolding.

In China "face" is much more important than folks realize. You push the Chinese into a corner, now, at this particular point in history, and the results will be more than posturing. Causing the Chinese to lose face, now, might cause them to hurt their own self interests "to save face", because the monetary value of saving face is more important than the folks crafting anti-Chinese policy realize.

Go on, stick it to the Chinese! I speak Mandarin, have life long Chinese friends and a Chinese god son. And when history records that pushing China, at this point in time, probably wasn't the best idea.....well, too "F"ing bad.

Tue, 03/16/2010 - 18:08 | 267819 merehuman
merehuman's picture

am german, but agree with you re Chinese.

I am surprised by the forbearance China has shown so far.

Tue, 03/16/2010 - 17:44 | 267780 RSDallas
RSDallas's picture

There always has to be someone else to blame now doesn't there Chuckie.  I really kinda (well maybe not) like to see what the reaction would be if China just said Thank you, but no thank you at the next auction and then make it known in the press. 

Tue, 03/16/2010 - 17:53 | 267791 suteibu
suteibu's picture

This is just too good.  The US, who has tried its best over the years to downplay the US authority in the UN to make it more "global", is now being bitch-slapped by the UN at the behest of China.  Man....talk about the chickens coming home to roost.

Tue, 03/16/2010 - 20:49 | 267948 Dr. Richard Head
Dr. Richard Head's picture

My tin foil hat once told me that the US was really the UN.  Guess I could throw that NWO nonsense out the window...or do I?

Tue, 03/16/2010 - 17:53 | 267792 carbonmutant
carbonmutant's picture

Dr. Panitchpakdi's country which is Thailand is very dependent on trade with China. Floating the yuan would make Chinese goods more expensive for his people.

This is not exactly an unbiased report.

Tue, 03/16/2010 - 18:00 | 267810 suteibu
suteibu's picture

Who would you expect to be unbiased on this issue?  Chuck Shumer?  The fact that the US suffers from the action of China (even if that were true) doesn't mean the rest of the world, who continues to buy goods from China, should suffer so that the policy-makers in the US can cover up their flawed policies.  I would think this is the best use of the UN in my lifetime.

Tue, 03/16/2010 - 17:56 | 267797 faustian bargain
faustian bargain's picture

UN, schmoo-in.

Tue, 03/16/2010 - 18:14 | 267825 pak
pak's picture

A bunch of freaking socialists, that's what these UNCTAD guys are.

Of course, it's always "the North" (what a useless word, is China in the Southern Hemisphere?) that's guilty, and the rest of the world are just innocent victims.

"The global “casino”, nearly empty a year ago, is crowded again, and many new bets are on the table". Does anyone happen to notice that the whole "reflation" casino is being managed by the Chinese now?

"Expecting that China will leave its exchange rate to the mercy of totally unreliable markets.." - do they mean the Chinese have done nothing in the last 10 years that made the "bubbles" so big and so dangerous? How could the US flood these "markets" with a huge oversupply of liquidity without the Chinese complicity?

"Unreliable markets"? Who said markets should be.. what? reliable? and what is this supposed to mean?

You Americans made the biggest mistake in your history 30 years ago when you made friends with the Chinese to destroy the Soviets - and helped them find their way out of the Medieval Age where they were stuck. Look, they now think they have a right to twist anyone's arms as they wish!

If the UNCTAD people solicited a bribe from the CPC to write this piece they're mean and dangerous. If they didn't, they are foolish - and thus much more dangerous.

Tue, 03/16/2010 - 18:21 | 267838 doublethink
doublethink's picture


China has been revaluing its currency over the past few years (see interactive chart below): from USD 1 = RMB 8.6 to RMB 6.8; that's a 21% increase.




Tue, 03/16/2010 - 19:56 | 267915 RhoRhoRhoBoat
RhoRhoRhoBoat's picture

Terribly incorrect assumption in the above article:

"Yet what is possibly the most damning observation for a push to CNY flotation is the following chart which compares the relative levels of the DXY and CNY. Obviously, as the DXY strengthened, the CNY compensated by strengthening alongside. Yet as the DXY has weakened, the CNY has remained at a fixed level. The ironic observation is that the Chinese currency, at least as determined by some relative ratio with the US Dollar is, in fact, overvalued, and likely by about 10%."

The CNY is FLAT relative to USD, the USD is weaker against currencies EXCLUDING China.  This, it is boneheaded to try and claim the CNY is "overvalued" relative to USD (which is the implication in that poor analysis), only that it may be "overvalued" against the other currencies, which is still a tenous claim at best.

Tue, 03/16/2010 - 20:02 | 267922 MikeNYC
MikeNYC's picture

The UN itself was the home of one of, if not THE largest pre-Madoff fraud. Remember when stealing $20B meant something?


Everyone seems to have forgotton what a giant money-stealing machine oil for food was, operated with the assistance and to the benefit of many UN staffers.


The UN also seem unable to build a single building, the new HQ,  on budget and schedule.


I'll take financial advice from MC Hammer before I listen to the UN about any economic matters.

Tue, 03/16/2010 - 20:54 | 267951 Dr. Richard Head
Dr. Richard Head's picture

This is true, but the virus has now spread and all available hosts have been consumed.  It is time for the beast to consume itself.  It's like a big old Texas Holdem Tourney and the big boys are starting to go all in.  This should be fun to watch.  Possibly painful for us all or possibly the greatest moment of Darwinism to ever happen.  An evolutionary extinction of currency happening so fast time seems to stand still?

I like to think the later as it goes well with a nice sour diesel sativa. 


Tue, 03/16/2010 - 20:37 | 267941 Pinefox
Pinefox's picture

Whether China's currency value has caused the US problem or not, for Chuck Schumer to blame the Chinese for all of our problems is down right ludicrous. Just another indication of how dysfunctional our government is. From the Community Reinvestment Act, Freddie Mac and Fannie Mae, relaxing lending standards, the Fed leaving rates so low under Greenspan fueling the real estate bubble, ad nauseum, we have shot ourselves in our own foot.

Wed, 03/17/2010 - 00:23 | 268091 Lonewar
Lonewar's picture

And today China announced that it will revalue its currency.

One Yuan is now equal to, and tradable at any Bank of China branch in Mainland China, for 1/10th gram of .999 pure gold.

In other news China also announced that it is selling ~$850 billion in US Treasuries and will only buy more at a yield of 10+%.

Also China stated that it is buying ~$750 billion US dollars worth of .999 pure gold that has been assayed by a Chinese refinery.

Wed, 03/17/2010 - 06:02 | 268160 Alexandra Hamilton
Alexandra Hamilton's picture

Judging from this snippet:

Rates in the North are generally
close to zero, whereas maintaining “confidence” in
countries with weaker currencies – under the aegis
of IMF programmes since the onset of the crisis

has called for higher rates than before. The first
results of the new “confidence” in weak currencies
are ominous. An appreciation of the Brazilian real
and the Hungarian forint has forestalled urgently
needed gains in competitiveness and could again
lead to severe overvaluation
, a dramatic distortion
of trade patterns and new imbalances.

Unctad thinks that the IMF is instrumental in in enabling currency speculation which is detrimental to the real economic interest of countries.

I think they are right.

Wed, 03/17/2010 - 10:44 | 268271 Attitude_Check
Attitude_Check's picture

It is just as ignorant to say that the entire problems of the developed world's economies is a undervalued Yuan, as it is to say that Chinese intentional undervaluing of the Yuan has had no effect.


Sadly the folks who are now jumping on this bandwagon are idiots of the first kind, while this UN letter is by idiots of the second kind.  Now who is benefited by each group's common idiocy?  This is only the next small skirmish in the up-comming world-wide trade war.  It will be getting ugly soon I suspect.

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