Yuan

According to media reports, the People's Bank of China is considering phasing out the dollar as the reference currency or peg for the yuan, and to start using gold as the reference point.

The reports have not been confirmed officially, but there has been official comments to that effect in recent years and Chinese academics have advocated backing the renminbi or yuan with gold.

Beijing's possible move to back the yuan with gold would be a strategic move in order to, lessen the risk of inflation, increase the yuan’s attractiveness as an investment medium and create faith in the yuan as a reserve currency.

• The Department of Justice has opened an initial probe into the metals warehousing industry (WSJ)
• Obama Says Budget Debate a Battle for Middle Class Future (BBG)
• Death Toll From Spanish Train Crash Hits 77 (WSJ)
• ‘Fabulous Fab’ takes to witness stand (FT)
• Banks Said to Weigh Suspending Dealings With SAC as Charges Loom (BBG) - what about Anthony Scaramucci?
• How the Muslim Brotherhood lost Egypt (Reuters)
• German Business Confidence Rises for a Third Month (BBG)
• Fraternities Lobby for Tax Break Without Hazing Penalties (BBG)
• China charges Bo Xilai with corruption, paves way for trial (Reuters)
• Airbus Pushes Higher-Density A380 to Counter Luxury Image (BBG)

• Humans Beating Robots Most Since ’08 as Trends Shift (BBG)
• Easing of Mortgage Curb Weighed (WSJ)
• European Banks Face Capital Gap With Focus on Leverage (BBG)
• Signs Suggest China Warming to Idea of Stimulus (WSJ)
• China Coal-Fired Economy Dying of Thirst as Mines Lack Water (BBG)
• Jeans and shoes show criminal underbelly of China-EU trade (Reuters)
• How U.S. drug sting targeted West African military chiefs (Reuters)
• Japan scrambles jets after China plane flies by southern islands (Reuters)
• Apple Plots Return to Growth After Coping With Aging Lineup (BBG)
• AT&T Falls Shy of Analyst Estimates as Discounts Hurt Margins (BBG)
• SAC insider trading case takes twist (FT)

• Biggest Banks Face Fed Restoring Barriers in Commodities (BBG)
• SAC to Employees: Cohen Didn't Read Dell Email at Heart of SEC's Case (WSJ)
• Second (and Third) liens are back, and so is 2005: As Banks Retreat, Hedge Funds Smell Profit (WSJ)
• Singapore funds benefit from Asian wealth (FT)
• 2 years later the lies haven't changed one bit - Tepco hit over slow admission of radioactive leak (FT)
• How big tech stays offline on tax (Reuters)
• Hilton Leads Rush to Africa in Fastest Boom (BBG)
• U.S. and UK fine high-speed trader for manipulation (Reuters)
• Key witness takes stand in SEC case against Goldman's Tourre (Reuters)
• Boomer Sex With Dementia Foreshadowed in Nursing Home (BBG)
• Bentley SUV gives £800m boost to UK car industry (FT)

“All warfare is based on deception.” – Sun Tzu

• Earthquake Sends Kiwis Screaming From Wellington Buildings (BBG)
• China quake death toll more than doubles to 54, hundreds hurt (Reuters)
• In 2011, Michigan Gov. Snyder said bankruptcy wasn't an option for Detroit. Two years later, he changed his mind (WSJ)
• GlaxoSmithKline says Chinese laws might have been violated (FT)
• SEC Tries Last Ditch Move to Put SAC’s Cohen Out of Business (BBG)
• Detroit’s Bankruptcy Reveals Dysfunction Common in Cities (BBG)
• Obama to start new offensive on economy (FT)
• As WTI and Brent reunite, Gulf of Mexico faces squeeze, not glut (Reuters)
• Extended Stay Files for Public Offering (WSJ)
• Apple Developer Website Hacked: Developer Names, Addresses May Have Been Taken (MacRumors)
• Treasuries Not Safe Enough as Foreign Purchase Pace Slows (BBG)

Overview of the investment climate.  

• Detroit ‘Gut Kick’ Poses New Test for Long Suffering City (BBG)
• Florida lawmakers urge overhaul of 'Stand Your Ground' law (Reuters)
• Investors pour huge sums into US equity funds (FT)
• Snowden Standoff Threatens Obama-Putin Moscow Summit (BBG)
• China, U.S. companies' great hope, now a drag (Reuters)
• Morgan Stanley stock traders rebuild burned bridges (Reuters)
• Huawei spied for China, claims ex-CIA head Michael Hayden (FT)
• Gorilla Flipping Homes as Rebound Revives Rapid Trades (BBG)
• BRICS joint action at G20 summit may be wishful thinking (Reuters)

• MSM always "ahead" of the curve: Fed’s Messages Raise Volatility in Threat to Profits (BBG)
• Bernanke Plays Down Link Between Jobless Rate, Fed Moves (WSJ)
• Draghi to Carney Face Test Backing Guidance on Rates (BBG)
• House Republicans Vote to Delay Obamcare Mandates (Reuters)
• China media accuses Japan PM of dangerous politics (Reuters)
• China will replace America as the leading superpower, global attitudes survey finds (SCMP)
• Nonqualified mortgages make up as much as $1.5 trillion of the $10 trillion home-loan market (BBG)
• Dell $24.4 Billion Buyout Plan Is a Nail-Biter as Vote Looms (BBG)
• Republicans could see more bruising Senate primaries (Reuters)
• GM delays Chevy Cruze debut by a year (Reuters)
• Peltz needs support for PepsiCo restructuring dealsa (FT)
• Sweaty Wall Streeters Skip Booze for Spin-Class Meetings (BBG)

At first, it was just GlaxoSmithKline, which “confessed” to having paid bribes in China, including “sexual bribes.” Now more drugmakers are on the hot seat.

Sunday's 'golidlocks' data dump from China was enough for many to herald the turn is in and it's all plain-sailing from here, but the reality is a little different (as always). As Bloomberg's Michael McDonough notes, there is little upside for the yuan given China's slowing economy and a strengthening US Dollar. The gloomier outlook may also weigh on domestic equity markets. The Shanghai Composite Index has underperformed global peers in the past year. The pace of expansion may fall below the government’s goal of 7.5 percent and that may prompt a rate cut and/or an accelerated pace of infrastructure project approvals. Policy makers need to prove they remain in control, meaning GDP growth must finish the year at or above the target (even if it means inflation and social unrest), but for now, the following four charts suggest all is not well with the 'soft-landing'...

• India Joins Brazil to China in Efforts to Tighten Liquidity (BBG)
• Seven dead as police and protesters clash in Egypt (Reuters)
• U.S. senators fail to cut deal, head for showdown on filibuster (Reuters)
• Gasoline Tankers Beating Crude for First Time on Record (BBG)
• Smithfield's China bidders plan Hong Kong IPO after deal (Reuters)
• Bitcoin ETF plan struggles to find support (FT)
• Big Home Builders Gobble Up Rivals Starved for Cash (WSJ)
• Putin wants Snowden to go, but asylum not ruled out (Reuters)
• Zimmerman's lawyer calls prosecutors 'disgrace' to profession (Reuters)
• McDonald’s to bring Big Mac to Vietnam (FT)
• Korean Pilots Avoided Manual Flying, Former Trainers Say (BBG)

Dispassionate review of some of next weeks important developments.

Tired of tapering talk? We couldn't resist. Then, on to more pressing matters. Seems an investment in China might just not be what it seems to be.  Think Three Paddy Hat Monty.

The internet is on the verge of transforming manufacturing and China's dominance in this industry will soon be under serious threat.