It’s easy for Americans to pooh-pooh bearish talk about the dollar. Yet the sterling was once the reserve currency, and has fallen, what, by 80% since it lost its standing. With increasingly dubious accounting and lax enforcement, the US capital markets no longer stand out by virtue of being better regulated. Yes, they still may […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns China is really looking at a lot of other options to get away from the U.S. dollar. The latest report is that it has been building huge gold reserves. There is no doubt that China wants to get out and away from the U.S. dollar now. […]
Read more...We’ve mentioned earlier that it was inevitable that China would reduce its purchases of Treasuries, independent of its desire to diversify away from them. With trade falling (although China still has a high surplus) and hot money inflows reversing direction, China has less reason to buy foreign assets. From the New York Times: Reversing its […]
Read more...We’ve been treated as being a bit daft when we dared suggest that the dollar’s status as reserve currency was at risk. But after the Fed moved officially to quantitative easing last week (after saying it they might go that route back in December), the euro strengthened. Many have argued that that the ECB lacked […]
Read more...Ooh, the posturing is getting interesting. As we noted in Links last night, Timothy Geithner has already climbed down from his “currency manipulator” saber rattling by pressing the G-7 to deliver a much more China-friendly statement on what they’d like to see it do with the yuan (the original version urged letting it appreciate. the […]
Read more...No details up yet on my cheapie version of Bloomberg, will update when more is in. Recall, however, that many analysts foresaw a fall in China’s surplus. It had stayed at near record levels despite falling volumes of trade overall because imports fell faster than exports. Well, many imports are used to produce exports. As […]
Read more...Reader Nivethan pointed to a Bloomberg story, “China Says 8% Growth Within Reach Using $585 Billion Stimulus.” This may be a tad more significant than it appears (I also looked at Xinhua, but got the singular, and probably completely unfair impression that Wen’s speech to the party Congress was of the “give everyone at least […]
Read more...Note the wording Goldman used in describing the implications of the decline in income tax revenues in China, via Bloomberg (hat tip reader MIchael): “Tax data show much sharper deceleration in income and consumption in the past few months than suggested by official retail sales or income growth figures,” Goldman Sachs analysts Joshua Lu, Caroline […]
Read more...Economy could begin to recover in April, claims Gordon Brown Telegraph. Subhead: “The economy could begin to recover as early as April 2, Gordon Brown has signaled.” If by “recover” one means “temporarily looks as if it is no longer getting worse,” even I might agree that is possible. From Merrill Lynch’s Fund Manager Survey […]
Read more...Although fuel supply trends are only a crude (no pun intended) indicator of economic activity, the reversal of China from stockpiling diesel to being a net exporter is considerable, and demand for diesel is weak. While the steep contango for diesel indicates that traders believe the low prices are temporary, the glut is so large […]
Read more...The China bulls have commented approvingly on the growth in loans in China, seeing it as a sign of pending recovery, along with an upswing in stock prices. We’ve pointed out that economist and China commentator Michael Pettis has heard quite a few reports that many of these loans were in fact sham transactions to […]
Read more...It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs) to take issue with an emerging consensus. Nevertheless, I will stick […]
Read more...The big year to year fall in Chinese exports, at 17.%, far in excess of expectations, was accompanied by an even bigger decline in imports, still leaving China with a near-record monthly trade surplus. Thus, while China’s foreign exchange reserves are continuing to mount, the fall in each side of the trade equation, exports and […]
Read more...On the one hand, the demand by China that the US somehow guarantee its $682 billion in Treasury holding reads like a political and negotiating strategem rolled into one. It reenforces the idea that the economic crisis is the solely the fault of the corrupt, profligate West and it constitutes a demand that the US […]
Read more...Kenneth Rogoff, writing for Project Syndicate, argues that if China’s stimulus succeeds, it will do so at the expense of intermediate-term growth. He echoes the widely-held view that China needs to move towards a paradigm that gives more weight to domestic consumption. The problem is, however, that a transition will be awkward and is likely […]
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