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Guest Post: Developing Crisis In The Developing World
Submitted by John Rubino via The Dollar Collapse blog,
Things have been a little erratic lately here in US, but not really headline-worthy. The economy continues to grow, sort of, houses continue to sell and stock and bond prices fluctuate but can’t seem to follow through in either direction. We are not, in short, engulfed in any kind of crisis.
But out in the world, especially in once-hot emerging markets like Brazil and China, the story is very different. As Prudent Bear’s Doug Noland explains in his most recent Credit Bubble Bulletin:
Meanwhile, the “developing” market Bubble continues to unwind. As leverage comes out of the commodities, currency “carry trades” and developing stocks and bonds. And as capital flight becomes a more serious issue, the marketplace must ponder the consequences not only of what a faltering Bubble means for scores of markets and economies, there is as well the issue of developing central banks having to sell from their trove of Treasuries and bunds and such to finance a surge in outflows (“hot” and otherwise). There’s even this new dynamic where Treasury yields rise on days of global currency and equity market tumult. It’s been awhile...
I suspect that the global jump in yields (and CDS and risk premiums) has more to do with de-leveraging than it does with tapering worries. This dynamic has caught many by surprise. The speculators anticipated cleverly exiting their leveraged MBS and other trades based on their expectations for Fed policy. Now, there’s a tremendous amount of unanticipated market uncertainty.
Japanese policymakers have really mucked things up. The Nikkei sank 6.5% Thursday and was down 1.5% for the week. Perhaps it’s a little early to pronounce the BOJ’s “shock and awe” monetary experiment a failure. The yen rallied 3.5% this week against the dollar. Against the Philippine peso it was up 4.5%, versus the South Korean won 4.1%, the Indian ruppee 4.3%, the Malaysian ringgit 4.0%, the Indonesian rupiah 3.2%, the Argentine peso 3.9% and the Brazilian real 4.2%. Indonesia raised rates to support its weak currency. The yen “carry trade” (sell yen and use proceeds to buy higher-yielding instruments globally) is doling out painful losses – forcing the unwind of leveraged trades across many markets. I wouldn’t be surprised if the yen short is the largest short position in modern history. The yen bears are now running for cover – causing all kinds of havoc in the currencies and securities markets.
“Emerging” Asian markets are in the middle of an unfolding financial storm. Friday’s 2.1% gain cut the Philippine equities loss for the week to 9.2%. Even with Friday’s 4.4% recovery, the Thailand stock exchange ended the week down 3.4%. South Korea’s Kospi dropped another 1.8%.
Latin America is as well caught in troubling dynamics. Brazil’s currency (real) traded to a four-year low against the dollar this week – despite currency interventions and the removal of taxes on financial flows and currency derivatives. Brazilian equities were hit for 4.4% this week, increasing y-t-d losses to 19.1%. Mexican stocks dropped 2.4%, boosting y-t-d losses to 10.2%.
The Shanghai composite dropped 2.2% in a holiday-shortened week. China pegs its currency to the U.S. dollar, so we can’t look to the performance of the renminbi for much of an indication of flows or mounting financial market stress.
I have posited that China is in the midst of an historic Credit Bubble. I have over the years tried to explain how interrelated their Bubble is to ours. Our mismanagement of the world’s reserve currency led to 20 years of huge Current Account Deficits. A significant portion of the Trillions of associated IOU’s have made it onto the balance sheet of the People’s Bank of China, especially over recent years. And no Credit system and economy has gone to greater excess during the post-2008 global reflation. It was the “fledgling” Credit Bubble spurred to “terminal phase” excess.
If the “developing” economy Bubble has passed an important inflection point, then China is vulnerable. If “hot money” is leaving EM [emerging markets] then China should be susceptible. And, let there be no doubt, when China finally succumbs global economic prospects really dim – and prospects for some fellow EM economies turn downright dismal. Recall how the tightening of subprime finance gravitated to “Alt-A” and then worked its way to the “conventional” core. And when housing in general began to falter the bottom fell out of subprime.
This week provided a bevy of notable China-related headlines: From the Financial Times: “China Debt Auction Failure Raises Liquidity Fears;” “Fresh Data Highlight China’s Sluggish Growth.” From Bloomberg: “China Debt Sale Fails for First Time in 23 Months on Cash Crunch;” “China Local Debt Audit ‘Credit Negative,’ Moody’s Says;” “China’s Leaders Face Test of Growth Resolve After May Slowdown;” “China Export Growth Plummets Amid Fake-Shipment Crackdown.” From Reuters: “Fitch Warns on Risks from Shadow Banking in China;” “China Estimates Fake Trade Invoicing at $75 billion in Jan-April;” “China State Auditor Warns Over Local Government Debt Levels.”
The price of Chinese sovereign Credit default swap (CDS) “insurance” jumped from 92 to 113 in three sessions, before dropping back down to 98 on Friday. Chinese interbank lending rates have recently spiked higher – and there were even reports of several borrowers forced to pay up for increasingly scarce liquidity. There were debt auctions that did not go smoothly. The currency forwards market is showing some atypical downward pressure on the renminbi.
Many believe this newfound tightness in Chinese money markets can be easily resolved by liquidity injections from the People’s Bank of China. And perhaps Chinese monetary and economic managers still have things under control. If so, the same clearly cannot be said for many of their fellow “developing” policymakers. Capital flight is always extremely difficult to manage.
I worry that the world has never faced the possibility for such destabilizing flows and speculative de-leveraging. To be sure, global markets have never been as dependent upon the power of central bankers. And in my mental tallies of risk and complacency, I never envisaged they could so elevate in tandem.
So can the US stay placid when the rest of the world turns chaotic? Highly doubtful. There’s a market phenomenon in which one investment play blows up and forces those on the wrong side of the trade to dump their liquid assets to raise cash. Which causes the high-quality assets to fall as much or more than the junk. As Noland notes, the world’s premier liquid asset is the Treasury bond.
If the developing world’s need to raise cash is a factor in the recent spike in US interest rates, this implies a feedback loop in which rising US rates further destabilize emerging markets, forcing the sale of more Treasuries, and so on. Can the Fed stop this? Not unless it wants to buy up not just the newly-issued Treasuries as it does now, but the trillions of dollars of bonds that might be dumped once things really get going.
It’s important to understand that we’re here because for years the developed world in general and the US in particular have been exporting their problems to the developing world via monetary policy. We fund our overspending by creating a bunch of new dollars, many of which flow beyond our borders looking for higher yields. They land in, say, Brazil, pushing up both local asset prices and the exchange rate of the real. So individual Brazilians see their cost of living rise while Brazilian exporters are priced out of global markets. This is the currency war that Brazil’s government has been complaining about.
Then the hot money flows back out, causing a different set of problems for a country that has spent the past decade trying to adjust to excessive capital inflows.
The result: some seriously fragile banks and over-leveraged companies and investors, any of which could trigger a nationwide crisis.
The same general process is at work in other major emerging markets, with each in its own way now posing a threat to the global financial system — at the pinnacle of which sit the S&P 500 and the Treasury market, looking an awful lot like Southern California real estate circa 2007.
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The fire's lit......just a matter of time until it hits the gas cans
Odds are good the gas cans are in Syria, being watched over by the guy with the soulful eyes.
Turkish police accused of using chemical weapons against demonstrators.
https://twitter.com/emreckmak/status/346040417386635264/photo/1
https://twitter.com/abdullahovic201/status/346041486330171392/photo/1
Turkish police raids Hilton Hotel without a warrant.
http://www.youtube.com/watch?v=o_qVBf6-7Ew
Turkish union federation to call general strike after police raidhttp://www.ynetnews.com/articles/0,7340,L-4392680,00.html
Vehicle has drifted protester who writhing in pain
http://www.youtube.com/watch?v=qLZgLLdi2RY
Erdogans deploys Turkish army against protestors
http://www.rightnow.io/breaking-news/gezipark_bn_1371328420738.html
#Erdo-gone
Everyone who enters Taksim Square will be treated as a terrorist: Turkish EU Ministerhttp://www.hurriyetdailynews.com/everyone-who-enters-taksim-square-will-...
Tear gas is a chemical weapon
Just look at Greece. They're the latest member of the "Developing World" and they're already in trouble.
If Obowelmovement declares a no fly zone over Syria and the next day Putin flies a few Mig 29s over Syria w/ Russian markings this " let's aid the rebels" shit would be over real quick. That or Europe is threatened w/ "nat gas shortages" this coming winter.
What an epic battle: Obowelmovement versus PutinItInYourAss. And there's only one cup. Someone's gonna get dirty.
If that dick Putin doesn't fuck that asshole Obama, we are going to get shit all over our dicks and pussies.
Some guy at an NSA office in Maui just creamed his jeans. And then he bought a new pair with taxpayer money.
Declaring a no fly-zone over Syria would be problematic, as without any sanctioning from the UN it is clearing and an infringement of sovereignty and for all intensive purposes an act of war, and has the possibility to drag all the other players (and their toys) onto the playing field.
"infringement of sovereignty" -thanks- I needed a laugh.
It's about as funny as "WMD"...
Both players word choices serve both domestic and foreign ambitions. One sheep has his head out the window while the other cowers in the back seat, but all the sheeple are just along for the ride, during the latest round of globalists vs NWO (or whatever nom de plume TBTP chose to drop this time).
Screw the UN and Oblahblah!
US out of the UN and UN out of the US!
Putin wrote his PhD on the use of energy in foreign policy.....
You might be right. Russia got europe, that is Germany, by the balls.
European allies sit dooming this and that.
It will be US operation only
Odds are good the gas cans are in Syria, being watched over by the guy with the soulful eyes.
McCain is running his mouth about the US having to do more than just arm the rebels. Bastard.
Looks like it's gonna be thermonuclear war... toe to toe with the Russkies.
In the bunkers, they need 100:1 women:men. For the children.
Slim Pickens... God bless you wherever you may be...
http://www.youtube.com/watch?v=RLPnnPHkIuc
Loved that movie, didn't even have to look at the link! Ride that atombomb to the ground!
Gentlemen, you can't fight in here, this is a war room.
More like the man with the shifty eyes.
If the earlier ZH article on DBank is any indication of the bank problems and their fragile state then it will make Lehman look like child's play.
Lehman was child's play. The futures market will be the last to go, as it is the biggest one, but all the supporting beams will fall one by one as the load on each leg becomes too great.
You mean you can't reflate a real productive economy by printing currency? Holy shit. Who knew? P.S. May I have my Nobel Prize in economics for seeing this coming now? I promise I'll share it with the ZH folks who taught me.
It's gonna require you to change your name to LetThemEatShit
How would that be a change?
Pretty snappy there pappy...
LOL. Now seriously, how can China be considered an emerging market at this point? THAT is horseshit. Sure they have 50% of their population still living in squaller, but that's a far leap from the 90% a few years ago. It seems like America has over 50% living in squaler in the big cities-or on the edge TODAY-and the only way they're not rioting is because of SNAP cards. When that ends, we'll have a movie.
Yes....I chuckle when people think America is first world...let's take all of the debt fueled social programs that China...or a majority of the world.....don't have....and let's see how first world we are.....
I sprained my ankle a few months ago. Swelled up like a mother fucker and I was worried it was broken. Went to the ER with my Cadillac insurance. 3 nurses and 2 doctors asked me if I wanted pain medication (with a suspicious tone). I said "no" even though it hurt like hell, just to say FUCK YOU to these fucks. Then the fucking insurance company is sending me letters asking me if it's anyone's fault so they can sue. Aren't these the guys arguing for "tort reform?" Jesus.
US pays 17.6% of GDP on healthcare, that's 5% more than any other 'developed' country and double that of socialized medicine in the UK.
Insurance companies are fucked if they are regulated while hospitals have unlmited pricing power-similar to the partial fucked deregulation of the power generation - utilities industry a few years back.
and tangentially, drug companies rape taxpayers by charging medicare x times what they charge the ROW.
Yeah, interesting point.
We don't see the lines at the soup kitchens, because they're electronic now.
My pappy always told me, "son, don't go out there on those internets and stir up no trouble. Them boys watchin' you."
My pappy said son you gonna drive me to drinkin if you dont stop drivin that
hot
rod
Lincoln
+1 for quoting the world's first rap tune..."They arrested me and threw me in jail and called my Pappy to throw my bail and he said son...."
you two need to get a room
Nobody can talk about this with any certainty because the cat is out of the bag and it's a LIGER.
Lot of Collapse Blogs these days....
Trudat, but that's one word you won't see MSM parade around infinitely as the next big thing.
Bloomberg loves "recovery". It's in every sentence.
A prequel to the three commandments if you may:
Recovery is Collapse.
You can't rebuild if there's not a collapse first. Of Building 7. [police whiistle] "Stop criminal with the big pop"!
Ah, yes the beloved ZH reset meme.
Reset. Rebuild. Recover. Restore. Resume.
There will be no such thing. It takes easy oil to make it work, and it's gone, and that's forever.
The direction is down, and that's also forever.
Thanks CO. Not many understand that reality.
Financial Collapse will take us to the floor, Peak Oil will use a right hook or left jab and knock us back down every time we try to lift off the mat.
For a Long long time.
If we've very lucky, we get the return to 19th century technology and lifestyle after massive depopulation. If we're not, they will neglect to turn off the lights when they leave and the nuclear power plants go China Syndrome one at a time, in which case we get The Road to The Beach. Those left at the end can sing a last chorus of Waltzing Matilda before the radiation gets them.
Kinda makes me nostalgic for the days of 'green shoots'
"Lot of Collapse Blogs these days...."
That was predictable. Just have a mix of reprints from established sites, with a smattering of own and friends' opinions. Why post sage comments on ZH for free, when you can make money with same comments on your site, that's all about gloom, doom & boom, guns & ammo, PM and prepping? Follow the money trail and anticipate human nature to remain constant.
"The economy continues to grow, sort of"
That is where I stopped reading. There is no real growth in the economy, therefore the rest of his analysis is garbage....
SNAP is growing so i'll accept your apology at any time....
And it keeps us from seeing the bread lines from the Depression, so its all good right?
Soup lines
free loaves of bread
five pound blocks of cheese
bags of groceries!
Social security
has run out
on you and me
We do whatever we can
Gotta duck when the shi!t hits the fan.
https://www.youtube.com/watch?v=5y4sZzbBOfU
https://www.youtube.com/watch?v=zyvMdqvH2zg exactly the same only different
"Economy" is just a synonym for "debt".
Once that's understood, all becomes clear.
Turkish Military enters the Game.
Turns out point #7 came true. Never CS gas children if you don't want it to turn serious. (At least, in civilized countries).
p.s. The OP ignores Brazil's "Salad Revolution". It's therefore junk. Fuck me, the 'professionals' who get paid to analyze are slow. And here was I dreaming of that most elite form of occupation where I could data crunch and project and analyze and feed off the data in real time and have the Smart MoneyTM acting on it.
The Emperor has no clothes.
Like you know who used CS.
I think Hillary did it. And at this point it doesn't make any difference.
The IMF is asking that you buy the news books. New reforms are the answer for troubled failures. In the meantime, skies are blue and please join the IMF membership program to earn exclusive SDR point perks.
/sarc
Never use /sarc.
If the fuckwits mis-understand, gut them in public. This is war, not some fucking knitting circle, we've no use for this kitten glove crap anymore. 90,000 dead in Syria. This isn't a game (well, it is a Game, it's just not one you should address with such child-like mimetic toys).
If...
Golly gee willikers Aurora. ZH membership is just having a Coffee klatsch. Can you bring me a cup of tea? One sugar with a spill of crème. I like it stirred three times before adding the sugar.
OMG! Told you he was a heretic. Cream in Tea? And not milk added before you pour the hot water on the bag? The EMPIRE demands an airstrike! Lemon we might understand, but cream. This person is obviously not a homo sapien!
(And no, that's not even a joke: you fucked that one up Royally. Way to advertise your abhuman qualities there, it's almost as bad as the 24 yr old "female" who didn't know what cystitis was. If you're gonna play, do it properly, or fuck off. What are you, some kind of lower caste? That was painfully obvious. Well done, you just made yourself known, and a target through your own ineptitude. In the real world, you just got made. Fucking lower caste muppet).
/cull
The Squid changes for each incarnation it sees. My motto is to play with it. Oh, and one thing: all of my links are tailored to this audience, not vice-versa. You should be very careful gleaming anything from my input. It's all tailor made viral weaponry, has nothing to do with who I am. (Including the IP address - in fact, you should probably consider that part of the camoflage. When in Rome, act like a Roman, of course).
Gremlins? A favourite of mine.
Let's imagine that the spooky-dook stuff about assumed identity doesn't cover actual human shells yet, shall we? Or shall we pretend the organic neural net doesn't exist either? (Don't worry - do a fucking GREP - I've proved multiple times even when told the truth they can't grasp it, even with shitty stuff that's on Wiki. That's the joke. Man, everyone is so paranoid and doesn't get it. Sigh).
Tl;dr
You're all neurotic muppets. No-one cares if we come out, most can't grasp it, the others will love it for "the secret sauce" and a minority will help us as long as it gets them close to something special. This shit is sooo obvious. What is this? 5,000 years of paranoia? Derp.
What an utter boorish crunt you are Machina! You must have a complex of some sort to be so snobbish. But I generally like your posts as being somewhat informative, even though you wear you intellect on your sleeve. Carry on!
Tall poppies just grow back taller. Get off your knees, citizen.
And here I was hoping someone would get the Empire references, and lo! it comes along.
Afgan poppies. The back-bone of the modern world, indeed. As for the accusations of "borish cunt", well - now that is a tell of MI6. Sorry my old bean, I was just flushing game, don't get too annoyed by it, pip pip.
not at all my son, you're good to go! don't let that glock 21 hanging from my armpit bother you at all...like I said you have good stuff to say, even if it is peppered with the obscene term or nine, LOL!
Don't sugar coat it Aurora, How do you really feel?
Bored by your species I think covers it.
And really bored of this 1.0 old school bullshit twinky-toed control ethos that says we have to maintain, extend, pretend and shepherd the herd, because we fear the outcome of what "happens without control".
Science moved on: grow up, apply it fuckwits. Stasis is death.
For example: we know how to upgrade mental and emotional well being through diet, drugs [non-addictive / toxic], electrical stimulation and so on, and we do not do it because fucking Coke (etc) wants to make a profit.
Fuck the Corporations: I'd be impressed if they were turning out the Übermensch through their products, but they're not, they're parasites.
Fuck them and fuck their phony economy. Upgrade this species, and do it fast. I detest your parasites, they're pathetic. Give me a symbiont any day that has potential. 200 years of misunderstanding ecology - fuck your species and fuck your stupid, silly and banal attempts to create a world while burning most of it into non-existence. Fucking primates.
Hmm. That's the polite version I used for Bilderberg meetings; my actual feelings are totally different. Hint: you're on the internet, you muppet - there's no emotional transference barring what you feed into it. It's a MIRROR. Do a fucking GREP already, I've told you this about 7 times now. DERP DERP DERP. I AM 12 AND WHAT IS THIS?
The Game? You failed. What are you? Some kind of leper?
and a unix junkie to boot...for a pre-teen you are pretty arrogant lol...no worries m8, just takin the piss out of ya, you don't know what is going to come through that door!
I have no problem with people taking the piss out of me. Do it, do it all day long.
I have a problem with the people who can't have the piss taken, and resort to the boot to enforce their sad little egos.
Indeed, I know the feeling! I like a good piss-up. In the end as long as bullets don't fly, we're good to go, sticks and stone you know.
Looks like we have a public party suicide watch on are hands. NSA, can you lend us a hand?
Here's a hint. Never threaten someone who you don't know, unless you're packing a military. Especially if you're hacking into a domestic laptop that contains no data barring games. (That's the tell - nothing to see here Officer. If it's open and totally clean, chances are, it's built that way. DERP. Guess you missed the references to camoflage, oh well).
And I mean that seriously.
Oh, and you fucking slave, it's "our", not "are". You're already made, little parasite. Cream in Tea. Cream in Tea. Cream in Tea.
I'd be a lot more worried about your next higher step on your hierarchy, slave, you got made. They don't like that. They don't tolerate failure.
Oh, and if you're concerned: I have a DeadSwitch. Most of us players do.
Too fuckin' true, tea, milk and hot water in that order, sugar is for pussies! Lemon to stop the scurvey...barbarians! I'm a yank and know this!! Although I had the displeasure of spending 10 bloody years in Jamaica!
What have the bloody Romans ever done for us...
No milk. Ever.
Lemon is to take the limescale out of the water.
bwahahahaha
Do I have to do a /sad panda here to complete the joke?
Well, I just did it. (And you need to brush up on your English skills, if you want to play in nadsat). Yes, we do S E E Y O U.
How's the holiday in the dacha this time of year? ;)
A bit of the ole in out in out m8? Another good movie...a Clockwork it was! Just like it ever was, as it is now. Control of the Machine.
I will fight the powers someday, as I would rather die standing then live on a bent knee, take that to the bank.
Got that NSA? Hope so.
You are indeed a clown
- Biography
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RelationshipsSecond Clown: Who builds stronger than a mason, a shipwright, or a
carpenter?
First Clown: Ay, tell me that, and unyoke.
Second Clown: Marry, now I can tell.
First Clown: To't.
Second Clown: Mass, I cannot tell.
First Clown: Cudgel thy brains no more about it, for your dull ass will not mend his pace with beating, and when you are ask'd this question next, say "a gravemaker": the houses he makes lasts till doomsday.
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- Become Aurora Ex Machina's Contact
HistoryYes, I am indeed a clown, a tiny mouse with no inside intel, no importance and who just wants you to smile. Call it ZH comedy mascot hour.
Not sure that's worse than outing your tea preferences as a tip off to where you've been stationed for a long time though. Still, +1 all the way up since you got the joke.
Of course all of what I said in this thread is a complete farse, and mean nothing by it, just taking the piss, even out of the NSA!
+1
"This is war..." by another name.
Interesting article. The point about treasuries is in-line with another recent article by Ilargi over at The Automatic Earth, who actually quotes Bruce Krasting regarding what is called the 'convexity vortex' among bond traders. It's a completely believable scenario, albeit a bit scary in its implications.
AutomaticEarth is a great site. Ilargi and Nicole Foss(aka Stoneleigh) have been putting out great stuff for years.
This is a list of their Primers. Highly recommend them.
http://theautomaticearth.com/TAE-Primers/
I've been reading their stuff for years, and yea, their primers are great.
Tried to read it on and off in 2011 and 2012. Too much peak this peak that stuff.. Not my cup of tea.
Duh, I wonder why. They(Ilargi & Stoneleigh) First started as OilDrum Canada. They did too much Financial stuff so they left and started AutomaticEarth.
"We are not, in short, engulfed in any kind of crisis."
Huh? What have you been smoking?
Shorts.
It all sounds bullish to me Right tptb will have to bring out the big guns cause we cant have all this messy crisis stuff going on 185b a month for starters Abe style across all assets
Martin Armstrong often quotes Herbert Hoover about international currency movement at that time. It's where we are at.
$USD will be the last standing till about 2015.75 Then... (Au/Ag's rise will be in swing then) according to Marty.
http://armstrongeconomics.com/armstrong_economics_blog/
"During this new stage of the depression, the refugee gold and the foreign government reserve deposits were constantly driven by fear hither and yon over the world.
We were to see currencies demoralized and governments embarrassed as fear drove the gold from one country to another.
In fact, there was a mass of gold and shortterm credit which behaved like a loose cannon on the deck of the world in tempest-tossed era."
Herbert Hoover Memiors, 1952 Greatest Bull Market In History, p354
Cyprus is only the first domino to fall in selling its gold. There will be others soon. What else are they going to sell? Treasuries? Bwahahaha! World dumping of treasuries will spike their prices towards zero!
a few years ago the threat of China repatrtioting USTbonds was met by the Fed/UST preemptive action of massive printing of cash. that cash was probably all burned, when the threat turned up empty. its a game of chicken, because selling the bonds (repatrioting because there is no market) means that you are selling into an inflationary (value falling) market. if you're China and you have a trillion in USD what do you buy? we don't make anything do we? we won't sell you the military hardware. we would be glad to sell you real estate, (at inflated prices, remember the BOJ did that in the 80s, and got burned) so what do you do if you're China? oil at USD is overpriced, so is GOLD. what a laugh, you can buy more reruns of the Beverly Hillbillies. learn from Japan, we screw everybody, equal opportunity
Okay,one more time.
The Fed does not buy Treasuries from the auction. They don't buy from the US Treasury.
They buy from the Primary Dealers who bought at the auction.
Now, understand what that means. If the PD bought at auction for 50 billion dollars there is no reason why the Fed has to pay 50 billion dollars. Instead they might pay 60 billion if that's what they want to inject. The PD will not complain.
So this meme that the Fed will run out of bonds to buy is just wrong. They can simply overpay, which drives yields down.
You buy agri land, food manufacturers, O&G companies, distressed high-tech equity and so on and so forth. Just watch them.
What kind of philistine adds the milk before the hot water?
Steep the tea in a pot of not quite boiling water for 1-2 minutes (longer than 3 and you may as well tip it out).
Turn pot 3 times clockwise, 4 times counter.
Pour into china, add dash of milk. Stir with silver spoon, trying not to scrape the china as you do so.
Pip pip indeed.
Or you can make very strong tea and dilute to taste with hot water.
No milk. Ever.
Steeping for too long destroys the flavour dear chap.
And no milk?
Earl Grey perhaps. Spot of milk in my English Breakfast thank you.
If ypu had ever frequented a chai stall in India you would never drink tea again.
They add condened milk to cold water,the dregs of tea,boil up, and strain
thru' muslin.Of yes , with lots of sugar.
On Brazil.....
I cannot disagree that Brazil has been at the receiving end of US monetary policy which has caused asset prices and the cost of living to rise over (say) the last decade. Apartment prices in any one of the Rio beach communities (Copacabana, Ipanema, Barra de Tijuca) are beyond belief. The cost of shopping in supermarkets, furniture stores, tech gizmos and many other products is higher than London, even though the products are very often grown or manufactured in Brazil. These high prices are not due to high wages. No no - avergae wages in Brazil are still less than half those in the UK. They are due to high transport costs caused by poor infrastructure, high federal/state taxes and high corporate profits due to minimal competition because of extreme trade barriers and high taxes on imported goods. The result is a nation with very little price competition.
But Brazil also suffers from having a President (Dilma Rousseff) who is a socialist, just like her predecessor, Lula. Between them they introduced enormous government bureaucracy (created jobs for the unemployed) and higher taxes on the working population to fund expensive socialist spending programs, mostly related to the poor and unemployed, and of course slush buckets for the political elites to feed on. At the same time, little money has been spent on improving the nation's infrastructure which is in urgent need of maintenance and development.
Unless and until the Brazilian govt redirect state spending towards improving infrastructure, forcing its own industry to invest in R&D and domestic production by introducng fair competition, and cuts bureaucracy, the country will continue to be an exporter of raw materials and little else.
There's little sign of any of that happening any time soon since the Brazilian population have become used to socialism.
If the US no longer feels it has to follow the rule of law, then other countries will do the same. The peace and trading agreements we have known throughout most of the world will be a memory.
Still looking for the link someone posted, where the writer states that the FED is quietly printing and storing new $100 FRNs, to be released in 3Q12. As the global currencies and economies go into ever greater jerks and convulsions, more 'scandals' and Wag the War Dog will be needed to keep the masses from panicking and/or revolting against TPTB.
He goes on that as almost all countries are hooked on fiat and sucked into the QE vortex, that a new global currency will be issued: The SDR. It will allegedly be backed by a basket of real assets that are specific to a country. Since China, for example, does not have energy or food assets to export, their SDRs will be backed by a lot of gold. The US, on the other hand, won't need so much gold, as it has so many natural resources. Domestically, all countries will still continue with their own 'currencies' (new notes issued?), to keep the masses calmer, but these will be indexed to the SDR.
This means, that we would then have an effective 1-world currency (a GPS for currency), all going via WB, IMF, BIS. The banksters will then have taken over the world, w/o the masses realizing what really happened: They now own the real assets that constitute their new currency. They will, quite literally, "own the world". They will be like kings of old.
Not an original idea, but an interesting hypothesis, that has been 'repackaged' with the New $100 FRN twist added for flavor.