The FX Mexican Standoff

 

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  • #27102

    Theodor Horydczak Lincoln Memorial 1925 There has been quite a bit of talk lately over the need for a new Plaza Accord, something several parties saw
    [See the full post at: The FX Mexican Standoff]

    #27103
    Dr. Diablo
    Participant

    I’m amused by the accusations that China posts false numbers. This compared to the U.S. who has false unemployment numbers, false population numbers, false workforce numbers, false GDP numbers, false inflation numbers, false interest rates, false housing numbers, false business starts, false oil production, false foreign aid numbers, false internal aid/transfer numbers, false medical numbers, false GOA numbers, false accounting (FASB), withheld accounting (Fed asking not to admit oil losses), misleading accounting (import/export categories changed to hide specific events), false budget numbers (SS transfers and comparison of national debt to reported debt), withheld accounting (Saudi Treasuries not public).

    Oh wait, need I go on? I can, for hours and hours. And it’s not like Europe has accounting either. Clearly engagements getting Greece and Italy in, then shackling them to the mast with more lies and false numbers demonstrate this. So the point is that China lies more, or less than us? More than Europe? That there’s more, or less market confidence in them, and by whom? They’re stronger, or weaker than us and according to what measure? That’s the question, isn’t it? And how can we say “we know”, you know, because “we know”, when we just reviewed how all the data we have is demonstrably, hilariously, egregiously, false.

    I agree. China’s going to have a rough time. But that ain’t just a mote in your eye, brother. The situation in the West is very, very bad.

    #27106
    jal
    Participant

    Dr.Diablo:
    As you stated, Our social economic system can only operate on lies.

    #27108
    Raleigh
    Participant

    Dr. Diablo – all figures are complete lies and fudged. Agreed. Why wouldn’t they be? They’re all in cahoots, every single central bank. That’s why they meet all the time, to keep the big pile of fudge from exploding. China is a product of the U.S. Without Western technology, know-how, and direct foreign investment, China would still be back in the Dark Ages. U.S.-made, prime Grade A (or maybe Grade C- now) beef. The country was used, both by the Chinese elite and Western elite. If the Chinese people end up benefiting somewhere down the line (maybe 20 years from now, maybe never), it will purely be by accident, an after-effect of the initial looting by the elite.

    Here’s the difference I see between the two parties: the corrupt Chinese elite are getting their money out and buying up our countries. Correct me if I’m wrong, but I do not think that is allowed in China. There was talk in 2015 of relaxing the rule that said you had to study in China for at least one year before you would be able to buy a property. How many people are going to do that? Was this required of them? Want to start a business in China? I believe you have to have a Chinese partner, otherwise it’s not allowed (at least that used to be the case). And How about India? No? How about Thailand, Indonesia, Cambodia, Vietnam? Properties have increased exponentially in many Western countries as a direct result of this corrupt money flooding into our countries, making it very difficult for younger citizens to afford to live in the city they were born in.

    So, yes, all lies and jest, but some countries appear to be more equal than others. The Asian countries actually protect their citizens, yet their own citizens freely travel to buy up everyone else. The Western countries’ currencies have gone way down (aside from the U.S.), making it even easier for the Chinese to buy up property.

    China needs to devalue, and it will happen soon. When it does, the Chinese elite will have their helicopters ready just in case the natives start to get angry.

    #27109
    Nassim
    Participant

    Diabolo,

    Quite agreed.

    They put out lots of predictions about Russia going down the tubes because of sanctions and the much lower oil price. Now, they have largely stopped that and have decided to focus on China instead.

    There is no question that there is massive fraud going on in China and that capital has been leaving for a long while. If you take your eyes off the debts and the accounting, the fact remains that China has a huge legacy of fixed assets – factories, roads, cities, ports, ships – that it does not really need and cannot fully utilize.

    Similarly, Russia still has its Soviet era infrastructure, lots of new factories (not on the scale of China) and their oil in the ground.

    What exactly does the West have? The factories have largely gone and the inherited infrastructure is not being properly maintained – and “global warming” often gets the blame when there is flooding and so on.

    When there is a proper financial reset, who in your opinion is going to be better – or less worse – off?

    #27110
    Raleigh
    Participant

    Nassim – just take a look at where the Chinese elite are fleeing to – the West. That might inform us of who is going to be better – or less worse – off. They might be hedging their bets by moving abroad, but something tells me they know more than we do.

    #27111
    Nassim
    Participant

    Raleigh,

    By chance, on my way to a Greek street festival in Melbourne yesterday, I passed a house auction. It was a 2 minute walk to the centre of Chinatown.

    Several Chinese were watching the procedure, but not bidding. They let two white guys outbid one another. The place went for A$2,250,000. A 3-bedroom, 2-bathroom,2-car house on 4 floors and a tiny area of land. Here it is:

    https://www.domain.com.au/29-punch-lane-melbourne-vic-3000-2012476714

    My wife has recently been to some auctions and has also noticed few Chinese bidders. I know it is a tiny sample, but. I suspect the Chinese are being a bit more careful.

    #27116
    Raleigh
    Participant

    Nassim – “…Chinese are being a bit more careful.” Yes, I think they are. Probably finding it harder to get their money out of China. Plus, I think a lot of the people who could afford to buy the higher-priced homes have already bought – the smart money. Or I should say the ones with “inside information” about what’s going to happen.

    #27121
    rapier
    Participant

    Could someone tell me how money leaving China is being exchanged for dollars or Euros or whatever? In any case much of it is being used to buy assets, real Estate and financial which is great for those markets but only adds to the main disfunction of our age, asset inflation.

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