Debt Rattle March 8 2016


Home Forums The Automatic Earth Forum Debt Rattle March 8 2016

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
  • #27259

    NPC Communist Party Young Communist League, Washington, DC 1925 • China Exports Crash 25.4%, Imports Down 13.8% (ZH) • Conflicting China Policy Object
    [See the full post at: Debt Rattle March 8 2016]

    V. Arnold

    Wow! The more things change the more they stay the same; the guy, right of center (in the photo) holding the sign “Fight police brutality”. Here we are almost a century later still fighting the same bullshit.
    As a species (at least in the U.S.) we’re effectively stuck. You don’t believe it? Just look at the election campaign; same old same old. The harridan Clinton is spouting the same confused, contradictory, bullshit as usual. And the PC crowd is lapping it up.
    As to the world economy? Buckle your seat belts; on second thought; maybe you don’t really want to; death will be quicker, if not kinder.
    God help you; surely, nobody else can or will…

    Dr. Diablo

    They like to pick on China, but the highlighted facts are not relevant.

    One, the PBC has come out and said they are pegging the basket, not the US$, so the USD/CNH is totally spurious. It’s not meant to track. Unless they’re making a point about the choice of doing that, which the author is not. And yes, the Yuan may devalue, but what does that mean when the whole world minus the US$ falls in sync? Doesn’t that really mean the US$, and only the US$, is rising? How does that point to China?

    Two, Chinese imports are down, as are exports. China is a factory, people. That’s not reflecting China in any way, but that **the rest of the world is in a Depression**. Yes, that’s hard on China, but China neither caused it, nor is related to it except as a victim. It hurts, but where is the cause, and who is more in trouble? Which would you rather own, the bankruptcy, or the factory?

    Next article, Moody’s: “The depreciation of the RMB can therefore only be avoided by stepping back from the commitment to a more open capital account..” They may or may not be trying to avoid a depreciation because they’re cutting out the U.S. from relevance, and pegging their real trading partners. If the whole world falls away from the US and US$, they can then trade amongst themselves, leaving the US$ in awful, crippling Deflation. So who would be hurt? The whole world, whose economies are trading again, or the U.S.?

    Velocity of money: Velocity cannot be measured, it is imputed. So doesn’t the lowest velocity only tell us that China is printing money fastest (increasing the supply, thus lowering velocity), something we already knew?

    Stockman: “Markets are therefore unhinged from any connection to fundamental economic and financial reality…” which as Rapier says, points out that money too is now unhinged from any connection to value.

    Speaking of which, the BIS–the boss of Central Banks–just warned central banks that negative rates will cause more problems than it’s worth and they should knock it off. But that might re-connect money to value and re-inspire price discovery in markets, a thing they can’t allow. E.g. we’d discover a Dow 6,000 and the collapsed tax revenue to match.
    The BIS generally pipes in when it’s too late, after having told them to get their heads in the noose.

    “What a difference a few weeks make. Market sentiment seems to have improved and the fears of imminent recession now appear a touch hasty.” –MSNBC See above. I mean, you are kidding, right? Unemployment is 50% in many parts of Europe, Baltic Shipping is down 90%, worldwide production and sale of goods is collapsing. Markets clearly do not have price discovery and do not reflect economies, a fact you might have noticed over the past 15 years since dot-com. But, that’s MSNBC for you, the short bus of news organizations.

Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.

Sorry, the comment form is closed at this time.