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Jim O'Neill Bets The (Horse) Farm On Chinese Decoupling All Over Again

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Sun, 09/11/2011 - 19:58 | 1657930 eazyas
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Juan Mata Bitchz!

Sun, 09/11/2011 - 20:01 | 1657936 caerus
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Sun, 09/11/2011 - 20:04 | 1657937 DormRoom
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A corollary would be if the yuan is pegged to gold, a basket of commodities, or SDRs.  But considering the USD, EUR, and Yen are all in trouble, it's more likely the yuan will be pegged to gold, or a basket of commodities, or we'll just repeat the Triffin dilemma all over again, in 30 years times.


That is if the Large Hadron Collider doesn't doom us all with its improbability-6 sigma or greater--distortion of how the  wave function collapses.

Sun, 09/11/2011 - 22:22 | 1658294 snowball777
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I thought the pigeon saved us.

Maybe you're on a different timeline? ;)

Sun, 09/11/2011 - 20:03 | 1657944 Marcuz Aurelius
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Europe doesn't have a United vision, therfor it cannot make the moves the SNB did. the currency as we know it is doomed ! even if the backstopping of the greek default seems succesful its only temporarily.

Sun, 09/11/2011 - 20:04 | 1657947 maxmad
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so China just told us to f off!

Sun, 09/11/2011 - 20:05 | 1657951 dragoneyes74
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Here's my question: do people like Bernanke actually believe the QE programs will work, or do they know their hand is forced and they have to keep going into more and more debt to prevent systemic collapse?  Meaning, which is Bernanke more: ignorant, or corrupt?  Stupid, or a liar? 

Sun, 09/11/2011 - 20:11 | 1657964 maxmad
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They just know that they are destroying all FIATs and that there is a new currency coming soon...

Sun, 09/11/2011 - 22:50 | 1658354 AmCockerSpaniel
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Sun, 09/11/2011 - 20:11 | 1657967 gwar5
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Listening to this guy drivel on makes me realize why they need to control markets. They couldn't make a buck if they didn't.

I suppose a 50%+ drop in the USD with the loss of WRC status doesn't phase these guys because they are the ones who will pull the trigger when they are ready to profit from it.


Sun, 09/11/2011 - 20:13 | 1657973 LeBalance
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the sellers of the "free lunch" always find willing ears despite the consequences.

"it sounds too good to be true! we'll buy that!"


Sun, 09/11/2011 - 20:22 | 1658002 daxtonbrown
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"According to the GS Economics Department, if implemented, (Obama's) proposal would take fiscal policy from a 1.5 pct  of GDP reduction to a 0.5 pct stimulus. Put together with a clear bias to explore additional ways of monetary stimulus from the Fed, it is tough for me to see the big downside risks to the US economy, at least cyclically."


Step right up for your free bong pipes.

Sun, 09/11/2011 - 20:40 | 1658059 cranky-old-geezer
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Little does it bother the BRICer that the advent of a new reserve currency would have a devastating impact not only on existing risk markets, but on so-called risk free ones as well.

Yuan (or Remimbi or whatever China chooses to call their "official" currency) will be the next world reserve currency for the same reasons the US dollar is WRC now.

It amazes me that anyone at the squid would actually want another currency to be WRC so the US dollar can fall lower in this worldwide race to the bottom. 

Losing WRC status would not merely sink the dollar lower (as this squid prognosticator apparently believes).  It would collapse altogether  ...and wipe out the squid ...and the rest of the US financial system.

Sun, 09/11/2011 - 22:52 | 1658361 AmCockerSpaniel
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OK; So how and way is the US dollar the WRC?

Mon, 09/12/2011 - 05:44 | 1658789 defcon
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Because after the oil crisis of 1973 OPEC agreed un pricing oil only in dollars, and since oil is the blood of the world economy, you need dollars to survive. This keeps the dollar afloat, until when the oil producing countries would decide to price their oil in some other currency and that would be when USA will collapse.

Mon, 09/12/2011 - 14:07 | 1660268 AmCockerSpaniel
AmCockerSpaniel's picture

Right you are. Now we know what we got (WRC), but what was in it for the King.

Sun, 09/11/2011 - 23:28 | 1658427 eaglefalcon
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Yuan can't become WRC in near future because:

1) In order replace USD as WRC, the Yuan has to become "sounder" than USD.  The Chinese central bank hasn't accumulated enough gold to back a WRC

2) Whoever issues a WRC has to run a giant trade deficit so that other nations can pile up their reserves.  China probably understands the devastation a WRC has wrought on US economy and they'd be reluctant to accept such a hot potato

3) Chinese leadership is bunch of control freaks, who dread the idea of relinquishing the control of part of their currency to foreigners.  In fact, that's the main reason why the Yuan is not even fully convertible yet


Sun, 09/11/2011 - 20:51 | 1658104 jdelano
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Just trying to get a few more suckers into the market so the rest of gs can sandbag them. Blah blah blah

Sun, 09/11/2011 - 21:02 | 1658128 long-shorty
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any day that ends in "y" is a good day to short CLF at these prices. goodbye China bubble, goodbye ridiculously inflated iron ore price.

Sun, 09/11/2011 - 21:56 | 1658251 PulauHantu29
PulauHantu29's picture

When ben takes a dump at the Fed, they can smell it in Beijing.

"The World is Flat"...some say.

..or do they mean, "The World is Fat?"

Sun, 09/11/2011 - 21:57 | 1658254 prophet
prophet's picture

G-20 works for me.  EU GU.

Sun, 09/11/2011 - 22:18 | 1658285 snowball777
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Anecdotes about horse racing, wants to buy Manchester, and believes Chinese inflation numbers?

People trust this fop with their money?!

Sun, 09/11/2011 - 22:25 | 1658292 CitizenPete
CitizenPete's picture

The FED and the Central bank in China ARE NOT BOTH RUN BY THE BERNANK ... 


Where the FED goes (hopefully down the toilet) is not where the China Central Bank will follow.   

Consumer and personal debt the top earners in China is non-existant compared to the US credit grubing masses.  People primarily pay cash or borrow from realatives for cars and houses -- not the bank. 

While credit has been leveraged in massive doses in the provences and some munis will find it impossible to may debt payments on credit used for infustructure expansion, Beijing has the money (inthe bank) to truelybail them out.   Unlike the USSA who prints their bailout money as if they could someday pay it back.

Is there polarization in China ... yes.   Is there inflation ...  yes seriously.   Are there challanges... yes.  

Are many average Chinese citizens buying silver and gold bullion ... no! -- this is total BS.  They are buying real estate ...  Does this sound familiar?:  "Safe as Houses"


Mon, 09/12/2011 - 00:40 | 1658560 Luke 21
Luke 21's picture

Where do they get these guys from? Decoupling should not even be argued. It is a fact that if the US slows down China will follow.

Mon, 09/12/2011 - 00:41 | 1658563 Ramboy
Ramboy's picture

Everyone in the states gonna be working for Egg Foo Young, Inc after spiderman's jobs plan fails.

Mon, 09/12/2011 - 01:05 | 1658599 PulauHantu29
Mon, 09/12/2011 - 02:47 | 1658685 Grand Supercycle
Grand Supercycle's picture

My long term indicators continue to warn of significant USD strength and AUD / NZD / EUR etc weakness and these signals have increased since 2009.

Unfortunately the March 2009 equity lows eventually will be breached.

Updated SP500 monthly chart at blog.


Mon, 09/12/2011 - 04:02 | 1658757 StychoKiller
Mon, 09/12/2011 - 06:54 | 1658843 Salamanda
Salamanda's picture

'...indictaors continue to warn of signifcant USD strength...".... ummm... strength based on what exactly??

"...and AUD/NZD/EUR etc weakness..."... one of these currencies is about to implode in on itself for some very specific and foundamental reasons... the other two are not. One of these currencies is so overloaded with soverieng debt accummulated from unprededented asymetrical fiscal malfeasance... the other two are not. One of these currencies has a collective banking industry that are so leveraged in toxic paper and debt that most are already insolvent and those that aren't soon will be when a certain member state spectacularly defaults... the other do do not. Two of these currencies are at record highs against the USD (thanks to much of the above)... one of these currencies is not.


Check your indicators GS... studying the technicals alone to find the trends (and ignoring the fundamental picture completely, which it appears is what you're doing here) in times such as these, can be a very dangerous game.

Mon, 09/12/2011 - 03:06 | 1658700 Coldfire
Coldfire's picture

It occurs to me that the global Ponzi squatting on our collective existence would die tomorrow if fatuous windbags like Jim O'Neill could just shut their pieholes for a couple of news cycles. Jim and his book-talking brethren are important that way. This brilliance certainly won't go to waste on the $1 (soon to be 0.5) trillion in assets at the GSAM beta factory.

Mon, 09/12/2011 - 03:16 | 1658722 guasilas
guasilas's picture

So, all his clients were short the swiss franc so they caught that immediate, and obvious 8% gain?

Mon, 09/12/2011 - 08:45 | 1659089 the last bagholder
the last bagholder's picture

The Renminbi may or may not officially become the next WRC currency but it will be the defacto unofficial reserve currency by 2015 for this reason: would you rather hold deprecating dollars of a western country that is set to grow only ~1% year over year for the next 30 years, or of China, which will grow 5%-10% per year for the next 30 years?

Tue, 09/13/2011 - 22:07 | 1666018 moxia19
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