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: Tim Geithner
5 things u need 2 know 2dy
Posted in Front Page Also tagged China, currency intervention, Japan, People's Bank of China, President Obama 1 Comment
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
Tax The Wealthy or Reduce Jobs?
With Congress set to debate extending the Bush tax cuts, there are risks to small business from raising taxes on the “wealthy”.
US Treasury Secretary Tim Geithner gave a speech yesterday in Washington on the Obama administrations economic case for raising taxes on high earners.
He states, “….But given the size of the deficits and debt that we inherited, we must provide that tax relief in a fiscally responsible way. We believe the best way to do that is by allowing the tax rate for the top 2 percent to go back to levels seen at the end of the … …READ MORE
China…..Ntg Yet!
Here’s the US Treasury’s terse statement on the Geithner visit to Beijing:
This evening in Beijing, U.S. Treasury Secretary Tim Geithner, President Barack Obama’s special representative, met with his counterpart Vice Premier Wang Qishan of the State Council and special representative of Chinese President Hu Jintao.
The two sides exchanged views on U.S.-China economic relations, the global economic situation and issues relating to the upcoming economic track dialogue of the second U.S.-China Strategic and Economic Dialogue, to be held in Beijing in late May.
Here are my major takeaways:
US Treasury Tim Geithner met with Vice Premier Wang Qishan and … …READ MORE
G20 Affirms Weak $
Over the weekend, the US dollar was pummeled as it fell against almost every major currency and every minor currency except one. Hmm, which one would that be? Before we get to that, let’s run through the top seven reasons the greenback got whacked.
1. IMF report saying $ overvalued.
2. G20 no mention of US dollar in statement
3. G20 no stimulus exit.
4. China warns US to reduce deficit.
5. US House passes HC bill that expands deficit $1.1 trillion.
6. India to exit stimulus.
7. Better than expected German IP at +2.7% ve 1.0%.
All of these … …READ MORE
Currencies and Exit Strategies
Here’s a quick back of the envelope list of countries and whether the currency’s strength will be a problem to engage in reducing monetary stimulus.
1. Australia: no problem
2. New Zealand: no problem
3. Canada: a problem
4. Brazil: a problem
5. China: no problem
6. UK: no problem
7. EZ: no problem
8. US: no problem……but no exit.
Brazil and Canada are clearly the poster children for currency strength duress as both those nations made it clear they are not happy with the situation yesterday. After the government denied on Friday then announced on Monday a tax on … …READ MORE
