Boss, I meant the interwined relationships between US Treasury/US Gov/Fed/$ Reserve currency/Oil Trade in $/Credit rating agencies/ IMF /creditor nations in asia and middle east yada yada.Carl_T wrote:Would you mind clarifying a bit as to who these players/rules/games/powerful families are? I totally don't follow.
For one I did not like him talking to them as if they were school kids. Talking down throws up some yellow flags (it is NFL season) for me. Come on, he himself pointed out the ruble has existed for 500 years, long before America was born. Now imagine, treating them like they were kindergartners trying to learn the basics of currency creation.Satya_anveshi wrote:Audience were "stupid" Russians? At least that could have been the speaker's assumption. Scaring the shite out of them with crash in oil prices, which is the basis of Russian economy. Some of them, to his dismay, didn't seem to bite and were laughing. If anything, when the USD experiences Hyper Inflation, price for a gallon of oil replaces price of a newspaper story of Weimer time. Meaning price of oil will explode rather than crash.SwamyG wrote:Again something is just not right about Maloney's talk. Can't place my fingers yet. But he seems to have climbed the stage to pat his own back, sell his merchandise, fear and sales?
Nice one.ldev wrote:Think about it. If Nixon had not taken the US off gold , China would have taken 200 years to achieve what it has achieved in 30 years. Fiat money creation to pile up debt is not the same as international settlement via the gold standard. The whole theory of trade via comparative advantage of nations is based on periodic settllement of international trade and not on an endless creation of debt to *settle* imbalances in trade. All I can say is kudos to the Chinese for having ruthlessly exploited this opportunity. Some might say that they paid a price for it. I would say that the price paid is a bargain considering that they shortened their developmental trajectory by somewhere between 70 and 170 years.
Total support for China from US elites the - democratic leadership from the Carter/Clinton era is reason for Walmart/Arkansas to be a giant trading company for PRC products.Sanjay M wrote:
The Chinese can thank the Atlanticists for the USA's blind tilt towards China in trying to offset Moscow.
Atlanticism dominance over US foreign policymaking isn't done yet, and so there will still be a huge amount of favorable lobbying in the US that the Chinese can count on to favour their interests.
Yawn. Try and then tell me.Sept. 15, 2010
Patience appears to have run out in Washington for the standard White House approach that favors quiet diplomacy for dealing with China over the dispute over the value of its currency.
In testimony to the House Ways and Means Committee, a wide array of experts said that quiet diplomacy has essentially been a failure. The only debate at the hearing was what new approach should be tried.
Hah. Barking dawgs seldom bite, geithner sahib. Kuch rang dikhao, phir jaane.Sept. 16, 2010
“China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to fully reflect market forces,” Geithner said in testimony prepared for the Senate Banking Committee. Geithner will also talk about the yuan with the House Ways and Means Committee this afternoon.
“It is past time for China to move,” Geithner said.
An undervalued yuan has helped China to boost exports and encouraged U.S. companies to outsource manufacturing to China from the U.S., Geithner said. He added that the yuan is held at a undervalued level by “heavy intervention” even as Chinese officials have pledged to allow the yuan’s value to be guided more by market forces.
Shux, despite my mistrust of cheena, have to admire its unapologetic pursuit of self-interest. Applaudable. The west has had it easy for way too long. Am happy somebody has arrived to rock the boat. Its success should be a beacon of light and hope for us other status-quoists to go on the offensive ourselves, down the line.Sept. 20, 2010
China pledged not to repeat Japan’s mistake and allow its currency to rise in response to foreign pressure, countering criticism from U.S. lawmakers that the yuan is undervalued amid a growing cross-Pacific row over Beijing’s currency regime.
“China will not go down the path that Japan did and give in to foreign pressure on the yuan’s exchange rate,” Li Daokui, an economist and member of the monetary policy committee of the People’s Bank of China, was cited as saying in a report by the state-run China Daily.
Li’s comments appeared to reference to the 1985 Plaza Accord that resulted in coordinated government intervention in the currency markets to bring down the value of the U.S. dollar amid concerns over a ballooning trade deficits with its most important trading partners.
There’s growing concern in Beijing that the strong-yen agreement doomed Japan’s economy.{It did.}
Attracted by the appreciating yen, cash flowed into Japan in the late 1980s, resulting in loose monetary conditions that helped fuel a bull market in stocks and real estate. The resulting asset bubble burst in 1990, followed by two decades of economic stagnation in Japan.
“But what has the US done to reduce its trade deficit?” Li said. “The US should pay much more attention to its own problems.”{classic offense==best defense, eh?}
China's uncharacteristically firm response?Sept. 23, 2010
Democratic leaders in the House of Representatives will move ahead with a bill allowing the US to retaliate against China for manipulating its currency, a significant escalation of the dispute between Washington and Beijing.
Sander Levin, chairman of the ways and means committee in the House of Representatives, said on Wednesday the bill would be compatible with World Trade Organisation rules.
But in a largely untested area of trade law the measure will evoke opposition from Beijing and could lead to a legal challenge in the WTO. The bill will go to committee on Friday and could be voted on by the full House as early as next week.
“This bill is being advanced in the absence of effective action on a multilateral basis,” Mr Levin said.
Errr, and why is that yumrika's problem, wen granpa?? Oh, I get it, the CPC's gentle face is prepping for a "we're victims only, of evil imperialist hegemonic US designs against us" line down the line. Truly, so much to learn from the cheenis.Hours later, Wen Jiabao, the Chinese premier, told business leaders in New York that pressure on Beijing was unwarranted.
“The conditions for a major appreciation of the renminbi do not exist,” he said. If the renminbi were suddenly to rise by a large degree against the dollar, “we cannot imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs, and how many migrant workers will return to the countryside... China would suffer major social upheaval”.
Beware of Greeks Bearing Bonds
As Wall Street hangs on the question “Will Greece default?,” the author heads for riot-stricken Athens, and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.
By Michael Lewis•Photograph by Jonas Fredwall Karlsson
October 1, 2010
VOW OF PROPERTY
Father Arsenios at the Vatopaidi monastery, overlooking the Aegean Sea, in Mount Athos, Greece. He is considered by many to be Vatopaidi’s C.F.O., “the real brains of the operation.”
After an hour on a plane, two in a taxi, three on a decrepit ferry, and then four more on buses driven madly along the tops of sheer cliffs by Greeks on cell phones, I rolled up to the front door of the vast and remote monastery. The spit of land poking into the Aegean Sea felt like the end of the earth, and just as silent. It was late afternoon, and the monks were either praying or napping, but one remained on duty at the guard booth, to greet visitors. He guided me along with seven Greek pilgrims to an ancient dormitory, beautifully restored, where two more solicitous monks offered ouzo, pastries, and keys to cells. I sensed something missing, and then realized: no one had asked for a credit card. The monastery was not merely efficient but free. One of the monks then said the next event would be the church service: Vespers. The next event, it will emerge, will almost always be a church service. There were 37 different chapels inside the monastery’s walls; finding the service is going to be like finding Waldo, I thought.
“Which church?” I asked the monk.
“Just follow the monks after they rise,” he said. Then he looked me up and down more closely. He wore an impossibly long and wild black beard, long black robes, a monk’s cap, and prayer beads. I wore white running shoes, light khakis, a mauve Brooks Brothers shirt, and carried a plastic laundry bag that said eagles palace hotel in giant letters on the side. “Why have you come?” he asked.
How on earth do monks wind up as Greece’s best shot at a Harvard Business School case study? I work up the nerve to ask.
That was a good question. Not for church; I was there for money. The tsunami of cheap credit that rolled across the planet between 2002 and 2007 has just now created a new opportunity for travel: financial-disaster tourism. The credit wasn’t just money, it was temptation. It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied. Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German; the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way. No response was as peculiar as the Greeks’, however: anyone who had spent even a few days talking to people in charge of the place could see that. But to see just how peculiar it was, you had to come to this monastery.
Q&A: Michael Lewis talks about the banks that brought down Greece.
I had my reasons for being here. But I was pretty sure that if I told the monk what they were, he’d throw me out. And so I lied. “They say this is the holiest place on earth,” I said.
I’d arrived in Athens just a few days earlier, exactly one week before the next planned riot, and a few days after German politicians suggested that the Greek government, to pay off its debts, should sell its islands and perhaps throw some ancient ruins into the bargain. Greece’s new socialist prime minister, George Papandreou, had felt compelled to deny that he was actually thinking of selling any islands. Moody’s, the ratings agency, had just lowered Greece’s credit rating to the level that turned all Greek government bonds into junk—and so no longer eligible to be owned by many of the investors who currently owned them. The resulting dumping of Greek bonds onto the market was, in the short term, no big deal, because the International Monetary Fund and the European Central Bank had between them agreed to lend Greece—a nation of about 11 million people, or two million fewer than Greater Los Angeles—up to $145 billion. In the short term Greece had been removed from the free financial markets and become a ward of other states.
Repo 105: Lehman's 'Accounting Gimmick' Explained
Categories: Finance
11:55 am
March 12, 2010
by JACOB GOLDSTEIN
The big Lehman post-mortem released yesterday spills a lot of ink on a complicated accounting trick with an awesome name: Repo 105. Here's the story.
As the financial crisis grew in 2007 and 2008, Lehman knew it needed to reduce its reliance on borrowed money. But it was a bad time to sell stuff off and pay back debts. So Lehman made special use of something called the repo market.
Investment banks use the repo market all the time. It's basically a way for banks to borrow money from big companies that have extra cash sitting around.
To make the loan safer for the big company, the bank "sells" the company some asset — like a bond. That way, if the bank goes bankrupt before it repays the loan, the big company can sell the bond and get its money back.
Inside Job Synopsis: From Academy Award nominated filmmaker, Charles Ferguson, comes Inside Job, the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, “Inside Job” traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia. Narrated by Academy Award® winner Matt Damon, Inside Job was made on location in the United States, Iceland, England, France, Singapore, and China
Inside Job will be released to theaters on October 8, 2010.
Read more: INSIDE JOB Documentary http://www.daemonsmovies.com/2010/09/02 ... z10hG5iroY
This is good news for everyone I think but let's not put down European train technology to contrast it with China's since the Chinese trains were developed in co-operation with European and North American firms such as Siemens, Bombardier and Alstom.
I was working with the city of Nanjing recently on their transportation system and one thing I was surprised to learn was that Nanjing bought one subway car from France and then copied it and produced the rest on its own. The French had virtually given Nanjing the subway car in the naive (in China) hope that they would be able to sell Nanjing more cars and equipment.
I don't know if the same (illegal copying) strategy was used in the train that is the subject of this article but I continue to be surprised at how gullible foreign firms are in dealing with China. The foreigners give away their technology and soon Europe will be buying cheap copies of their own technology from China.
- Jay C, Singapore, 29/12/2009 16:34
Read more: http://www.dailymail.co.uk/news/worldne ... z10ht3YIKm
The "foreigners give away their technology" at the right time to make sure that China catches up with the technology.ShivaS wrote: I was working with the city of Nanjing recently on their transportation system and one thing I was surprised to learn was that Nanjing bought one subway car from France and then copied it and produced the rest on its own. The French had virtually given Nanjing the subway car in the naive (in China) hope that they would be able to sell Nanjing more cars and equipment.
I don't know if the same (illegal copying) strategy was used in the train that is the subject of this article but I continue to be surprised at how gullible foreign firms are in dealing with China. The foreigners give away their technology and soon Europe will be buying cheap copies of their own technology from China.
Oh, read it all, gentle readers.The spin-meisters continue to package things that ought to incite outrage in anodyne wrappers in the hope no one will look inside. “The new normal” and “structural unemployment” join the universe inhabited by such gems as “extraordinary rendition” and “pre-emptive strike”.
“New normal” is particularly insidious, since it implies that we must accept current conditions, since they are “normal” hence it would be abnormal and/or require exceptional effort to experience anything else. “New” acknowledges things have changed, but “new” usually has positive connotations, and masks the fact that pretty much nobody except the banksters and some members of the top 1% are exactly keen about present conditions. It also had no footprint of how things changed; if you didn’t know what it stood for, it could just as easily be used to describe a dramatic natural shift, for instance, how the weather changed in the wake of the Krakatoa eruption.
“Structural unemployment” is not only sneaky, but also downright misleading. The catchphrase is meant to convey that unemployment just can’t be helped, it results from fundamental problems in the job market. Now since we have on average something like one job opening for every five unemployed people, even if structural unemployment was a real phenomenon, it is far from sufficient in explaining why we have U6 unemployment at over 16%.
The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.
Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.
Plead he might, but tempers in Washington are rising. Congress will vote next week on the Currency Reform for Fair Trade Act, intended to make it much harder for the Commerce Department to avoid imposing “remedial tariffs” on Chinese goods deemed to be receiving “benefit” from an unduly weak currency.
Japan has intervened to stop the strong yen tipping the country into a deflation death spiral, though it too has a trade surplus. There is suspicion in Tokyo that Beijing’s record purchase of Japanese debt in June, July, and August was not entirely friendly, intended to secure yuan-yen advantage and perhaps to damage Japan’s industry at a time of escalating strategic tensions in the Pacific region.
Brazil dived into the markets on Friday to weaken the real. The Swiss have been doing it for months, accumulating reserves equal to 40pc of GDP in a forlorn attempt to stem capital flight from Euroland. Like the Chinese and Japanese, they too are battling to stop the rest of the world taking away their structural surplus.
The exception is Germany, which protects its surplus ($179bn, or 5.2pc of GDP) by means of an undervalued exchange rate within EMU. The global game of pass the unemployment parcel has to end somewhere. It ends in Greece, Portugal, Spain, Ireland, parts of Eastern Europe, and will end in France and Italy too, at least until their democracies object.
Aha. But what's a few trillion more? By induction, deficits should never matter if they haven't so far, eh?East Asia’s surplus states seem structurally incapable of compensating for austerity in the West, whether because of the Confucian saving ethic, or the habits of mercantilist practice, or in China’s case by the lack of a welfare net. Their export models rely on the willingness of Anglo-PIGS to bankrupt themselves.
What? And how is the current price of late medieval era gold computed exactly?The latest Fed minutes are remarkable. They add a new doctrine, that a fresh monetary blitz – or QE2 – will be used to stop inflation falling much below 1.5pc. Surely the Fed has not become so reckless that it really aims to use emergency measures to create inflation, rather preventing deflation? This must be a cover-story. Ben Bernanke’s real purpose – as he aired in his November 2002 speech on deflation – is to weaken the dollar.
If so, he has succeeded. The Swiss franc smashed through parity last week as investors digested the message. But the swissie is an over-rated refuge. The franc cannot go much further without destabilizing Switzerland itself.
Gold has no such limits. It hit $1300 an ounce last week, still well shy of the $2,200-2,400 range reached in the late Medieval era of the 14th and 15th Centuries.
And it will. It certainly will.We have a new world order where China and India are buying gold on every dip, where the West faces an ageing crisis, and where the sovereign states of the US, Japan, and most of Western Europe have public debt trajectories near or beyond the point of no return.
{AEP takes articulation to art form levels only...jai ho, jai ho}
The managers of all four reserve currencies are playing fast and loose: the Fed is clipping the dollar; the Bank of England is clipping sterling; the European Central Bank is buying the bonds of EMU debtors to stave off insolvency, something it vowed never to do just months ago; and the Bank of Japan has just carried out two trillion yen of “unsterilized” intervention.
Of course, gold can go higher.
Acharya wrote: The "foreigners give away their technology" at the right time to make sure that China catches up with the technology.
There is whole lobby in the western countries which support china from policy matters to tech transfers including "giving away". Free advice is given for monetary policy and economic policy
In either case, it is PRC's win against others...Singha wrote: however its not fair to say all these stuff were given for free - iirc PRC signed deals worth billions $$ with such cos to import 1000s of rakes
and finally may be license producing and stealing/cloning now in parallel using different cos interlinked via panda telegraph.
even a vital high speed passenger and freight corridor project like mysore-blr-chennai will likely take 10 yrs to get off the ground due to
environmental, land acquisition, secularism and other issues
An “international currency war” has broken out, according to Guido Mantega, Brazil’s finance minister, as governments around the globe compete to lower their exchange rates to boost competitiveness
Mr Mantega’s comments in São Paulo on Monday follow a series of recent interventions by central banks, in Japan, South Korea and Taiwan in an effort to make their currencies cheaper. China, an export powerhouse, has continued to suppress the value of the renminbi, in spite of pressure from the US to allow it to rise, while officials from countries ranging from Singapore to Colombia have issued warnings over the strength of their currencies.
+1.shyam wrote:So, did the trade war start?
US sets duties on copper pipe from China, Mexico
Trading in shares of Progress (PGN), a Raleigh, N.C., utility operator, were halted for five minutes Monday afternoon after the stock briefly plunged 90% for no apparent reason.
A pause that sort of refreshes
The stock dropped from around $44.50 to $4.57 just before 1 p.m. EDT before resuming trading above $44 a few minutes later. The New York Stock Exchange, where Progress shares are listed, said the troublesome trade took place on the Nasdaq.
On Oct. 4, mutual-fund executives will convene in Washington at the Investment Company Institute, the trade association for fund managers. People familiar with the situation say a few attendees are determined to push for a plan to restrict high-frequency trading, the rapid market activity that lately has caught the attention of investors large and small
..
The problem? While some fund leaders have praised high-frequency trading for making markets more efficient, others contend that the profits earned by fast traders may come partly at the expense of ordinary investors.
Are you talking about unfair devalued currency bill?Watch this space. Next week US kangress votes on a bill that makes skulduggery by geithner and buddies a little less easy than at present.
China seems to be better balanced than India. India needs to increase its share in the industry and reduce some in the agriculture.Acharya wrote:labor force by occupation,India=agriculture (52%), industry (14%), services (34%)
China=agriculture (39.5%), industry (33.2%), services (27.2%)[
I actually like India's position at this time. During realignment, common man will not suffer. Post realignment, we will get aligned proportionately. JMHT only.SwamyG wrote:China seems to be better balanced than India. India needs to increase its share in the industry and reduce some in the agriculture.Acharya wrote:labor force by occupation,India=agriculture (52%), industry (14%), services (34%)
China=agriculture (39.5%), industry (33.2%), services (27.2%)[
This is important, if true. Unkil has to co-opt the cheenis simply because its khanomy is rapidly heading drainside.(Reuters) - China is set to leap-frog industrial powers Germany, France and Britain to become the IMF's second or third most-powerful member under plans being discussed to give emerging nations greater influence.
What about Des, one may rightly wonder.Bigger voting power would give countries like China greater sway over IMF lending decisions and more influence over global economic policy.
The IMF proposal increases the voting share of emerging nations as part of a plan that would also boost IMF resources to $1 trillion or more.
It also lessens the power of large European countries and smaller ones like the Netherlands and Belgium.
{Long overdue, IMVHO. BTW, why no mention of UQ, eh? }
In three of four scenarios presented by IMF staff to the Fund's board last week, China jumps into third place after the United States and Japan from its current sixth place. In one proposal, China overtakes Japan and moves into second place. The scenarios cover the IMF's 20 largest member countries.
What about the oiro poobahs, then? Surely, they wouldn't just roll over?The shake-up under discussion by IMF member countries would give many large emerging economies, including Brazil, Russia, India, South Korea and Turkey more voting power at the Fund, according to an IMF document obtained by Reuters.
ndia would go from 11th position to 9, a ranking currently held by Canada. Brazil would go from 14th to 11th. Turkey would leap to 20th place from around 30th.
United States would remain the IMF's most powerful member with 17.67 percent of the overall quota share, effectively giving it veto power at the Fund.
Major economies are pushing for an agreement on the issue at a summit of leaders of the Group of 20 developed and emerging powers in Seoul in November.
G20 leaders agreed last year to a shift in quota shares of at least 5 percent to developing countries at the expense of over-represented member countries.
Discussions on the proposal began in earnest at last week's board meeting at which emerging and developing countries pushed for quota increases at the upper end of staff simulations.
...
The negotiations on quotas are taking place alongside a separate power struggle over Europe's dominance on the IMF board, the lender's main decision-making body.
In an unprecedented move on Aug. 6, the United States declined to back a resolution that would have maintained European dominance over the 24-member board.
Analysts said the move showed frustration by the United States with Europe's reluctance to give some of its power to emerging economies.
In reply, Germany suggested that Washington give up its veto power in the IMF as a compromise, a move analysts said would never pass the U.S. Congress because of the United State's significant financial contribution to the IMF.
HEar, hear.On Friday, Brazil's representative to the IMF board, Paulo Nogueira Batista, accused Europeans of dragging their feet.
"Advanced countries talk loftily of shifting power to emerging markets, but we now need more than speeches and noble declarations," he wrote in an opinion piece in the Financial Times. "Real IMF reform is a critical test of these countries' willingness to adapt to a changed world."
SwamyG Ji,SwamyG wrote:^^^
Can you elaborate?
Read it all.Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested.
They should “not expect” to live off interest, he added, admitting that low returns were part of a strategy.
His remarks are likely to infuriate savers, who are among the biggest victims of the recession. About five million retired people are thought to rely on the interest earned by their nest-eggs. But almost all savings accounts now pay less than inflation.
The typical savings rate has fallen from more than 2.8 per cent before the financial crisis to 0.23 per cent last month.
Mr Bean said he “fully sympathised”. But he continued: “Savers shouldn’t necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit.”
He added: “Very often older households have actually benefited from the fact that they’ve seen capital gains on their houses.”