Chinese gov't officials are now intent to allow yuan to trade outside its borders as seen by the recent MCD yuan-denominated bond offering and another pending with WMT. American business is always a sucker for 1.3 billion population no matter how controlled it may be. Allowing the yuan to gradually float in a free market trading environment bodes well for a rise against the almighty buck.
Must piss off the Japanese to no end to see their yen rise against the yuan on all that debt accummulation by their big buddy next door. Thanks for the article.
In regards to real estate never going down, would it not be equivalent to say the yuan never goes up? Gov't manipulation played or plays a big role in both situations.
Yuan position remains my safe haven for 'cash' right now.
"Chinese officials have made it clear to the markets that the yuan would not be a 'ONE WAY STREET.'" - Seamus
Chinese officials know better than to run the yuan below the USD. The pressure is to unpeg and rise against it. The yuan has slipped lately but only about half a percent. Both currencies are losing buying power together but for how long before the U.S. is forced to default on its treasuries?
"In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of." - Confucius
Doubtful Chinese would dump U.S. Treasuries but rather THREATEN to dump treasuries while demanding payment in bullion. Instead of eviscerate the 401(k)s and trigger another Revolution, simply reset the gold price and pay off the Asian peril with all that Fort Knox gold. That devalues the dollar and removes runaway interest payments equal to the U.S. GDP all in one clean swoop. Timmy just resets the price of gold from $45 to $6,000 and Walla! No special Mickey Mouse treasuries required.
Forcing the 401(k) money into special treasuries just transfers debt from foreign invaders to heavily armed domestic fiefs. Has it helped Japan any to have all its insane debt be internal?
Remember U.S. sailor Steve McQueen yelling "What the Hell Happened?" with a bullet in his gut in the Chinese Emperor's palace square at the end of The Sand Pebbles? That could be the average American Joe with a 401(k) if the U.S. doesn't eventually give the Chinese the Fort Knox gold.
I'm holding my 'cash' in Yuan since it can't go down and only up relative to the dollar. When it unpegs it will be like winning the lotto.
Don't let my mention of textbooks perturb your well considered ruminations. I just like to rile you up.
Cheers.
Edit: Why do you think Wall Street set up GLD and SLV etfs?
He draws comparison to British use of opium to stop the silver draw down in trade with the Chinese and U.S. use of Treasuries now in a similar fashion. Catch his new interview at KWN too. Fascinating especially when he outlines the potential to settle with gold based on reset using GDP metrics.
Chinese gov't officials can take out the Fed whenever they choose by simply demanding payment in gold or else hyperinflate the dollar. Let's hope Hillary doesn't suggest default until a new administration is in place. QE cannot be reversed without gold payment or hyperinflation. It's going to be a currency event, not an economic deflation/inflation event like what davefairtex's economic textbook would suggest.
"Why would a Business property firm see value in a decrepit residential space?"
It's all about the management fees and commissions. If you can't make money selling, it's time to get into the leasing business. Around here, brokers are locking onto existing tenants with contracts to renegotiate terms and thereby nicking landlords 5% of duration rent with a base rental discount to stay put. They didn't happen before the banking crisis.
J. P. Morgan said today that they will be shutting down their proprietary commodity trading operations in reponse to the Volcker Rule in the Financial Reform legislation. - Bloomberg
"Bear markets exist for the purpose of exposing and eliminating the greed, the corruption and the fraud that thrived in the preceding primary bull market.
To my mind, the biggest fraud of the last fifty years has been the rise and acceptance of fiat "money." For that reason, I expect fiat money to meet its end before this bear market breathes its last. Judging by the size of the top, this could be the biggest bear market since the '30s. I believe this bear market means to take us back to basics and truth. That alone implies the end of central bank-created money and the rise of gold and probably silver. It may also end that immoral inflation machine, the Federal Reserve. Wall Street and its bankers now run the nation. That too will end.
The history of money in the US is a legend of lies, manipulation, immorality and greed. I think this bear market will end those lies, one way or another."
Mr. Russell has been writing that newsletter longer than we've been alive. The man has perspective just like the profound words of Steinbeck's "Ma" but more to the point of what we're in fur.
The rumor is that he's sought asylum and he's a CENTRAL BANKER. He must have been the happy idiot pushing hard to buy those U.S. treasuries ... probably all B.S. but it could also be interpreted that the Politburo is not happy with its central bank's consumption in U.S. Treasuries to the extent that one of its own is running for his life.
Rumored punishment for buying U.S. bonds is DEATH! Off with his head for such a bad trade decision. Obviously, China won't be buying more U.S. debt unless only to pump and DUMP.
Today's commentary snatched from Jesse's Cafe. Jump on the hyperinflation train ...
"The kindest thing I can say about a stock market that rallies on the 'stronger than expected' news that annualized growth in second-quarter GDP was revised from 2.4% to just 1.6%, instead of to the expected 1.4% (keep in mind those numbers are quarterly growth rates raised to the fourth power), or that gyrates over meaningless swings in seasonally-distorted weekly new unemployment claims, is that it is irrational, unstable and terribly dangerous.
As the renewed tumbling in the U.S. economy throws off statistics suggestive of a continuing collapse in business activity, as a looming contraction in third-quarter GDP becomes increasingly evident to all except Wall Street and Administration hypesters, who professionally never admit to such news, it would be quite surprising if the financial markets did not react violently, with a massive sell-off in the U.S. dollar contributing to and coincident with massive sell-declines in both the U.S. equity and credit markets.
Recognition is growing rapidly of the re-intensifying economic downturn. Yet, little analysis so far has been put forth to public as to some of the unfortunate systemic implications of this circumstance. The problems range from extreme growth in the federal government's operating deficit, tied to reduced tax revenues and to bailout expenditures for the unemployed, bankrupt states and continuing banking industry solvency issues, to U.S. Treasury funding needs to pay for same. The latter issue promises eventual heavy Federal Reserve monetization of Treasury debt, with resulting inflation problems and eventual hyperinflation (see the Hyperinflation Special Report)."
Those are some valid points coming from the guy whose data is replacing BLS data and its penchant for big revisions.
I used the GM Volt as an example of inflation. It was argued over the weekend that the Volt pricing around $42,000 was due to technology cost and not inflationary metrics. Well, David, please consider this WSJ article from today:
"GM has set the compact car's base price - $16,995 - higher than that of the competing Honda Civic and Toyota Corolla."
No new tech for efficiency but its base product - the Chevy Cruze - now comes with 10 airbags. I just wonder if those airbags are dismissed middle management execs?!
Price inflation is alive and well at GM. The only way to increase GM's bottom line now is through PRICE INFLATION since increasing market share and cutting costs are not what gov't sponsored entities (GSE's) do. See Fannie Mae and Freddie Mac for further clarification. (Hint: GSEs monopolize market share with a guarantee and grow until the global economy emplodes.)
By the way, the Volt tech should not be so costly since it certainly is not innovative: Battery operated electric stuff has been around for half a century. Remember that game 'The Operation' with tweezers and a buzzer? That was fun especially when the alkiline battery was introduced and we could play for another hour.
"My feeling (not strongly held): bounce along the bottom here (with perhaps a head fake in each direction) for a couple of days, and rally on Monday when there's no bad news to interfere."
Personal Income and Outlays due at 8:30 am EST on Monday. Expected weak numbers should rally the bond market and put pressure on equities. It's a significant enough report to move markets.
Weak feelings ["My feeling (not strongly held)"] can bite you in the ...
"As superman once said, 'my work here is done' - attempting to have a fact-based discussion with a faith-based individual is just wasted effort."
Are you saying faith in NYT reporting is just a wasted effort? I may have to agree with you there but unfortunately the article quotes from direct testimony under oath.
We now know the TARP funds were replaced with funny money. That's a fact based on the testimony. No one knows the details surrounding "federal funds" but why swap bonds for bonds when you can print it from thin air and lie to the public about how TARP was repaid? Sorry your textbook doesn't explain that trick.
End of the day, the Volt at $42,000 is INFLATION based on increased money supply to get it built and save the UAW pensioners in exchange for a Democratic bloc vote.
Seamus -
Chinese gov't officials are now intent to allow yuan to trade outside its borders as seen by the recent MCD yuan-denominated bond offering and another pending with WMT. American business is always a sucker for 1.3 billion population no matter how controlled it may be. Allowing the yuan to gradually float in a free market trading environment bodes well for a rise against the almighty buck.
Must piss off the Japanese to no end to see their yen rise against the yuan on all that debt accummulation by their big buddy next door. Thanks for the article.
In regards to real estate never going down, would it not be equivalent to say the yuan never goes up? Gov't manipulation played or plays a big role in both situations.
Yuan position remains my safe haven for 'cash' right now.
"Chinese officials have made it clear to the markets that the yuan would not be a 'ONE WAY STREET.'" - Seamus
Chinese officials know better than to run the yuan below the USD. The pressure is to unpeg and rise against it. The yuan has slipped lately but only about half a percent. Both currencies are losing buying power together but for how long before the U.S. is forced to default on its treasuries?
"In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of." - Confucius
Be patient, grasshopper.
davefairtex -
Doubtful Chinese would dump U.S. Treasuries but rather THREATEN to dump treasuries while demanding payment in bullion. Instead of eviscerate the 401(k)s and trigger another Revolution, simply reset the gold price and pay off the Asian peril with all that Fort Knox gold. That devalues the dollar and removes runaway interest payments equal to the U.S. GDP all in one clean swoop. Timmy just resets the price of gold from $45 to $6,000 and Walla! No special Mickey Mouse treasuries required.
Forcing the 401(k) money into special treasuries just transfers debt from foreign invaders to heavily armed domestic fiefs. Has it helped Japan any to have all its insane debt be internal?
Remember U.S. sailor Steve McQueen yelling "What the Hell Happened?" with a bullet in his gut in the Chinese Emperor's palace square at the end of The Sand Pebbles? That could be the average American Joe with a 401(k) if the U.S. doesn't eventually give the Chinese the Fort Knox gold.
I'm holding my 'cash' in Yuan since it can't go down and only up relative to the dollar. When it unpegs it will be like winning the lotto.
Don't let my mention of textbooks perturb your well considered ruminations. I just like to rile you up.
Cheers.
Edit: Why do you think Wall Street set up GLD and SLV etfs?
"I think [GLD] will fail and the investment and short covering today caused will fuel the downside move." - Bev
Even with the bullion banks closing up their prop desks and no longer holding the price underwater?
Jim Rickards covers trade imbalance between the West and China here:
http://tinyurl.com/396cd2y
He draws comparison to British use of opium to stop the silver draw down in trade with the Chinese and U.S. use of Treasuries now in a similar fashion. Catch his new interview at KWN too. Fascinating especially when he outlines the potential to settle with gold based on reset using GDP metrics.
http://kingworldnews.com/kingworldnews/Gold.html
Chinese gov't officials can take out the Fed whenever they choose by simply demanding payment in gold or else hyperinflate the dollar. Let's hope Hillary doesn't suggest default until a new administration is in place. QE cannot be reversed without gold payment or hyperinflation. It's going to be a currency event, not an economic deflation/inflation event like what davefairtex's economic textbook would suggest.
Cheers.
gforce -
"Why would a Business property firm see value in a decrepit residential space?"
It's all about the management fees and commissions. If you can't make money selling, it's time to get into the leasing business. Around here, brokers are locking onto existing tenants with contracts to renegotiate terms and thereby nicking landlords 5% of duration rent with a base rental discount to stay put. They didn't happen before the banking crisis.
Taken from Jesse's Cafe:
http://www.reuters.com/article/idUSTRE6824E420100903
JPM and now GS. Is this why the M&A action is picking up with the miners? No Wall St manipulator to whipsaw the deal ...
Jack -
I lost last week on an HK play but nat gas should start a seasonal uptrend in Sept.
J. P. Morgan said today that they will be shutting down their proprietary commodity trading operations in reponse to the Volcker Rule in the Financial Reform legislation. - Bloomberg
Now that's a game changer in the metals.
Get yours.
Thanks for this blog, Bill. Your daily views disseminated to the people is nothing less than revolutionary. I learn from you every day.
Cheers.
Mac -
August 30, 2010
Richard Russell:
"Bear markets exist for the purpose of exposing and eliminating the greed, the corruption and the fraud that thrived in the preceding primary bull market.
To my mind, the biggest fraud of the last fifty years has been the rise and acceptance of fiat "money." For that reason, I expect fiat money to meet its end before this bear market breathes its last. Judging by the size of the top, this could be the biggest bear market since the '30s. I believe this bear market means to take us back to basics and truth. That alone implies the end of central bank-created money and the rise of gold and probably silver. It may also end that immoral inflation machine, the Federal Reserve. Wall Street and its bankers now run the nation. That too will end.
The history of money in the US is a legend of lies, manipulation, immorality and greed. I think this bear market will end those lies, one way or another."
Mr. Russell has been writing that newsletter longer than we've been alive. The man has perspective just like the profound words of Steinbeck's "Ma" but more to the point of what we're in fur.
Cheers.
Vad -
The rumor is that he's sought asylum and he's a CENTRAL BANKER. He must have been the happy idiot pushing hard to buy those U.S. treasuries ... probably all B.S. but it could also be interpreted that the Politburo is not happy with its central bank's consumption in U.S. Treasuries to the extent that one of its own is running for his life.
Visual aid:
http://tinyurl.com/29qyb6v
Cheers.
Rumored punishment for buying U.S. bonds is DEATH! Off with his head for such a bad trade decision. Obviously, China won't be buying more U.S. debt unless only to pump and DUMP.
http://www.stratfor.com/analysis/20100830_china_ru...
Who's gonna fill those shoes? Who's gonna fill thooose shoooes?
Today's commentary snatched from Jesse's Cafe. Jump on the hyperinflation train ...
"The kindest thing I can say about a stock market that rallies on the 'stronger than expected' news that annualized growth in second-quarter GDP was revised from 2.4% to just 1.6%, instead of to the expected 1.4% (keep in mind those numbers are quarterly growth rates raised to the fourth power), or that gyrates over meaningless swings in seasonally-distorted weekly new unemployment claims, is that it is irrational, unstable and terribly dangerous.
As the renewed tumbling in the U.S. economy throws off statistics suggestive of a continuing collapse in business activity, as a looming contraction in third-quarter GDP becomes increasingly evident to all except Wall Street and Administration hypesters, who professionally never admit to such news, it would be quite surprising if the financial markets did not react violently, with a massive sell-off in the U.S. dollar contributing to and coincident with massive sell-declines in both the U.S. equity and credit markets.
Recognition is growing rapidly of the re-intensifying economic downturn. Yet, little analysis so far has been put forth to public as to some of the unfortunate systemic implications of this circumstance. The problems range from extreme growth in the federal government's operating deficit, tied to reduced tax revenues and to bailout expenditures for the unemployed, bankrupt states and continuing banking industry solvency issues, to U.S. Treasury funding needs to pay for same. The latter issue promises eventual heavy Federal Reserve monetization of Treasury debt, with resulting inflation problems and eventual hyperinflation (see the Hyperinflation Special Report)."
Those are some valid points coming from the guy whose data is replacing BLS data and its penchant for big revisions.
Spooky bad.
I used the GM Volt as an example of inflation. It was argued over the weekend that the Volt pricing around $42,000 was due to technology cost and not inflationary metrics. Well, David, please consider this WSJ article from today:
http://tinyurl.com/37uj66v
"GM has set the compact car's base price - $16,995 - higher than that of the competing Honda Civic and Toyota Corolla."
No new tech for efficiency but its base product - the Chevy Cruze - now comes with 10 airbags. I just wonder if those airbags are dismissed middle management execs?!
Price inflation is alive and well at GM. The only way to increase GM's bottom line now is through PRICE INFLATION since increasing market share and cutting costs are not what gov't sponsored entities (GSE's) do. See Fannie Mae and Freddie Mac for further clarification. (Hint: GSEs monopolize market share with a guarantee and grow until the global economy emplodes.)
By the way, the Volt tech should not be so costly since it certainly is not innovative: Battery operated electric stuff has been around for half a century. Remember that game 'The Operation' with tweezers and a buzzer? That was fun especially when the alkiline battery was introduced and we could play for another hour.
I rest my case.
Cheers.
Down, down, down ...
http://tinyurl.com/yqh2kc
All out.
Chart looks good with nat gas ready to rumble in Sept. as a seasonal rebound is due. Oversold here.
Sold SLW today for a nice gain.
FD: Holding HK for a loss.
davefairtex -
"My feeling (not strongly held): bounce along the bottom here (with perhaps a head fake in each direction) for a couple of days, and rally on Monday when there's no bad news to interfere."
Personal Income and Outlays due at 8:30 am EST on Monday. Expected weak numbers should rally the bond market and put pressure on equities. It's a significant enough report to move markets.
Weak feelings ["My feeling (not strongly held)"] can bite you in the ...
Cheers.
davefairtex -
"Perhaps its the impending COMEX default?"
Gold and silver options expiration on August 26th ...
Cheers.
davefairtex -
"As superman once said, 'my work here is done' - attempting to have a fact-based discussion with a faith-based individual is just wasted effort."
Are you saying faith in NYT reporting is just a wasted effort? I may have to agree with you there but unfortunately the article quotes from direct testimony under oath.
We now know the TARP funds were replaced with funny money. That's a fact based on the testimony. No one knows the details surrounding "federal funds" but why swap bonds for bonds when you can print it from thin air and lie to the public about how TARP was repaid? Sorry your textbook doesn't explain that trick.
End of the day, the Volt at $42,000 is INFLATION based on increased money supply to get it built and save the UAW pensioners in exchange for a Democratic bloc vote.
TARP funds were swapped. Let's move on, superman.
Cheers.