1. China raised interest rates 25 basis points. The People’s Bank of China increased their one year lending rate and deposit rates 25 basis points on Saturday. The one year benchmark lending rate rose to 5.81% and the deposit rate rose to 2.75%. Chinese officials are attempting to reduce the amount of lending and credit expansion to drop the rate of inflation. In November, the inflation rate soared to 5.1% and was the highest rate in 28 months. It was driven mainly by food inflation and poor families spend up to half their incomes on food. The PBOC is shifting … …READ MORE
Tag Archives: China
5 things u need 2 know 2dy
Posted in Front Page Also tagged currency intervention, Japan, People's Bank of China, President Obama, Tim Geithner 1 Comment
5 Things U Need 2 Know 2Day
With the holidays fast approaching, here are the top 5 for the week.
1. China’s inflation is soaring, but China didn’t raise interest rates. As rumored, China’s CPI came in smokin’ hot at 5.1% and was a 28 month high for the nation. (PPI was up 6.1%.) Food was the big driver of higher costs and was up 11.7% in the month. History buffs know that the last political change in China occurred due to runaway inflation and a rising up of the population against the incumbent politicos. The good news is that the PBOC (People’s Bank of China) did … …READ MORE
Posted in Front Page Also tagged Bush tax cuts, Democrats, European Union, obama, Republicans, S&P 500 Leave a comment
Goldilocks Trade: China, Canada, US
Today, China, Canada and the US all released their monthly trade data and there were some surprises. First, China’s trade surplus narrowed from $27.2 billion in October to $22.9 billion in November. However, it did beat estimates of a drop to $21.2 billion. Chinese exports rose 34.9% to a record $153.3 billion and imports rose 37.7% to $130.4 billion. The United States accounts for $16.7 billion or 73% of the trade surplus. This fact will be further fueling momentum within Congress to bring a trade currency bill up for a vote in 2011. Expect the rhetoric to soar prior to … …READ MORE
Posted in Front Page Also tagged Canada, congress, currency trade sanctions, trade data, US Leave a comment
5 Things U Need 2 Know 2day
1. According to a top ranking Chinese official from Wikileaks, their GDP figures are “man-made.” Reuters reports that “Li Keqiang, head of the Communist Party in northeastern Liaoning province at the time, was unusually candid in his assessment of local economic data at a dinner with then-U.S. Ambassador to China Clark Randt, according to a confidential memo sent after the meeting and published on the Wikileaks website.” While this is getting the headlines, I would remind everyone that the US revises not only its GDP, but its employment data significantly at times. The best part of this Wikileaks story isn’t … …READ MORE
Posted in Front Page Also tagged Ben Bernanke, European debt crisis, Hungary, President Obama, QE2 Leave a comment
Here's what's up today:
1. China raised reserve requirements effective 11.30 for the 5th time this year. They are tightening to cool a CPI that ran at 4.4% last month. Food plays a large role in their CPI calculation and the population gets agitated when it goes up.
2. As I said in my blog for CNBC yesterday, the Chinese are reacting to inflation and to the Fed’s QE2. Sets up a situation where the Fed pumps money in, the dollars flow to China, China tightens in an attempt to sterilize the effect.
3. Ben Bernanke today called out China on their currency saying … …READ MORE
China is the future of the US
China is the future of the US
After the less than satisfying G20 meetings, the latest newsflow out of China is centered on what to do about inflation and how to counteract QE2. To wit:
• People’s Bank of China’s Prof Wang said, “The growth of prices has accelerated since September mainly because of intensive hot money inflows because of yuan appreciation and new quantitative easing measures by the U.S….It’s an urgent job for the central bank to tighten up liquidity and it needs new policy tools to do so.” Shanghai Securities News.
• China Investment Corporation’s Hong Kong chairman … …READ MORE
G20 Who Will Lead?
China’s trade surplus has soared and stands over 25% above the pre-crisis 2008 levels. This will be red meat for those pointing to China to address their current account imbalance as well as the weak currency issue. It will be almost impossible for China to state that they must be cautious in allowing the currency to appreciate due to a fragile export sector. However, China will not be the only country under fire.
With the heavy criticism of the Federal Reserve’s QE2 program and the general dismissal of US Treasury Secretary Tim Geithner’s 4% current account plan, the US appears … …READ MORE
There is no currency war…..(take cover!)
In a widely reported Bloomberg interview, US Treasury Secretary Tim Geithner said on Tuesday he sees “no risk” of a global currency war and wants to maximize incentives for China to allow its Yuan to rise in value. Reuters reports that he told the Charlie Rose Show in an interview that China would work against its basic development objectives if it kept its currency undervalued.
“I’m very confident over time that this is going to happen,” he said of Chinese currency appreciation. “We just want to make sure it’s happening at a gradual but still significant rate.”
Unfortunately for Sec. … …READ MORE
Posted in Front Page Also tagged ECB, Japan, South Korea, US Treasury Secretary Geithner Leave a comment
Krugman is Anti-Jobs
The only conclusion one can draw by reading NYT columnist Paul Krugman is that he is anti-economic and anti-job growth. No country has ever trade-sanctioned its way to prosperity.
On June 24th, NYT Op-Ed columnist Paul Krugman wrote a piece entitled, “The Renminbi Runaround.” In it, he reviews the recent Chinese announcement of currency flexibility, but Krugman believes it’s a joke with no meaningful change to the value of the renminbi.
He concludes by saying, “So what comes next? China’s government is clearly trying to string the rest of us along, putting off action until something — it’s hard to … …READ MORE
Bad Things Happening: Europe, China, IMF, SF Fed and European Unions
Stocks are dropping over concerns over Spanish bank funding, lower China growth, IMF warning on Austria, SF Fed warning on US states, and strikes in Europe.
ECB 1 year lending facility of 442 billion euros comes off on Thursday and Spanish banks are seen to be the heaviest borrowers from it.
The Conference Board significantly revises lower its estimate of Chinese leading economic indicators from +1.7% to +0.3%.
The IMF warns about Austrian supervision of foreign currency loans.
The SF Fed says state fiscal crises will get worse before they get better.
Greek and Spanish unions are either striking or … …READ MORE
