Category Archives: China

Michael Hudson and Leo Panitch on BRICS Development Bank Salvo v. the Dollar

Yves here. I’ve refrained from saying much about the announcement of the plan to establish a $100 billion development bank by the BRICs nations (Brazil, Russia, India, and China) because the hype is ahead of the reality. Yes, it is true that the US has been abusing its role as steward of the reserve currency. QE has been a huge bone of contention in all emerging markets, since hot money has flooded in, while the Fed has, in an insult to the collective intelligence of the leaders of these countries, tried claiming that it has nothing to do with the influx. And they are bracing themselves for the tidal retreat when the Fed starts tightening. The US’ efforts to use sanctions to punish Russia have also focused the minds of these countries.

However, the formation of a development banks falls vastly short of the infrastructure needed for any country’s currency (or a basket of currencies) to displace the dollar.

Are US Bonds the Next Widow Maker Trade?

One the markets that has been least easy to predict this year has been US bonds. The long term US bond bears, that are often monetarists at heart and believe QE will bring inflation, have been queuing up to short. Likewise, post-Keynesian’s have pointed at Japan and laughed about secular deleveraging and widow-maker trades.

The fact is, the bears have been wrong all year, and even with recent inflationary rumblings are still wrong.

China Attacks Oz Banks for Laundering Flight Capital

Yves here. China is cracking down on flight capital, starting with Australian banks. As the most casual readers of the business press know, the international wealthy, particularly Russians and Chinese, have been using residential real estate in “world cities” as their favorite lockbox. As we’ve written, it’s stunning to see how much real estate has been hoarded in London. Mayfair was depopulated during the petrodollar recycling of the 1970s; now much of Belgravia, Chelsea near Sloan Square, and Kensington are visibly underpopulated. Vancouver has been bid to the sky by Chinese flight capital. New York is a big destination for Russian and Chinese investors, and Chinese money has been pouring into Australian real estate.

The Chinese move may be an admission of stress on the financial system.

France Has Hissy Fit Over BNP Paribas Fine and Dollar Dominance

France appears to have taken its public relations strategy for dealing with $8.9 billion fine against BNP Paribas from an old saying among lawyers: “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.” Here’s the guts of the French compliant, which is that the US is abusing the power of dollar dominance:

Michael Klare: Energy Companies Persuade Emerging Economies To Embrace Environmental Destruction, Erm, Growth

How major energy companies are selling their former first world product, fossil fuels, to the third world, replaying Big Tobacco’s ploy.

The Birth of a Eurasian Century: Russia and China Do Pipelineistan

Russia and China, along with other developing economies, are exploring ways to create an Eurasian alliance to go toe-to-toe with the US economic hegemony.

The Chronic Exporters’ Curse?

Why the much-envied position of being a chronic exporter isn’t quite a bed of roses.

Ilargi: A Stampede of Elephants in the China Shop

On the danger that China’s overgrown shadow banking system poses to the economy, and the practical and political obstacles to curbing it.

Pettis: 11 Reasons China Can’t Escape from Its Debt Overhang

China’s increasing debt level has goosed the economy. What form might the hangover take?

Are Administration Claims of Progress on TransPacific Partnership Negotiations in Japan Credible?

As readers may know, the mislabeled trade deal known as the TransPacific Partnership hasn’t looked like it has great odds of being consummated. But the Administration has been browbeating Japan, and has also been talking of breakthroughs in negotiations. Has the dynamic changed?

Reserve Currency: Is the Yuan Tearing Down the US Dollar?

40 central banks have invested in yuan. Should the US be worried?

China Rumored to be Shutting Down Bitcoin Sites; Why IRS Ruling that Bitcoin is Property is Fatal to Its Use in Commerce in the US

Bitcoin is getting hammered today.

Even the Chinese Can Tell the TransPacific Partnership is Unlikely to Get Done

You know it’s bad when parties who aren’t at the negotiating table can tell a deal is going pear-shaped.

Chinese Bond Default Rattles Markets; Harbinger of More Credit Woes?

A corporate bond default should hardly be a headline dominating-event unless the default in question is of a particularly large concern, or is tightly coupled (as in could, Lehman-style, trigger more distress) or is a precursor of things to come.

Wage Shares Fall in the US, Germany and Many Other Countries While Financial Shocks Hit Emerging Economies

ves here. This Real News Network interview with Yilmaz Akyuz, formerly the Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), describes how the problems that produced the financial crisis have morphed into new, no less troubling problems. One key part of this discussion focuses on how China has adapted to its considerably smaller trade surplus, and why having Germany as the new excessive exporter poses new perils to the global economy.