China cuts interest rates again to spur economic growth

[NeverSure]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

you get it all wrong Harsh! you forget that commies are ruling in Russia and China and it is the sacred duty of every true-blooded American to negate facts and spread even the most ridiculous theories and calculation methods such as $4 trillion minus $1.1 trillion equals 3.6 trillion (posting #29) and China has no money and can't trade if the U.S. calls its debt (posting #50).

Naam, China owns just 1.3 trillion of US treasuries. The US could sell that much in new treasuries Monday morning and use the proceeds to pay China in full. Then China would own no $USD with which to engage in international trade.

China has been trying for some time to get some international recognition for its currency but it has failed. It can't trade in CNY.

BTW your laughing face there just makes you look silly.

Cheers.

[NeverSure]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

[h90]

Absolute desperation. The government acts like it's one giant company, instead of a nation. They look like Enron. No transparency and the government restricting short selling, restricting all trading in some stocks, putting government money into certain stocks to prop them up, and now this after hours interest rate cut to try and catch people the government thinks is on the wrong side of the trade into a whipsaw to help force exchange prices up. China is one dirty place to do business or invest. There is no "fine tuning" of the economy. It's all oafish, hamfisted overt attempts to manipulate and prop up a lot of companies whose real balance sheet may well be in the negative. Bad deal.

They are a giant and streamline dictatorship with pockets full of money, they have a lot more tools than western countries. On the first glance it doesn't look like a good idea, but if you look at the economic grow in Europe/USA and in China, than China did many things right in the past.

[h90]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

I am doubting that. When I look around in both private and company, I see lots of Made in China. Small amounts made Germany, some made in Turkey, Taiwan, etc etc. But only few made in USA. There are some but not that many. Sure not the same amount as Made in China.

[NeverSure]

Absolute desperation. The government acts like it's one giant company, instead of a nation. They look like Enron. No transparency and the government restricting short selling, restricting all trading in some stocks, putting government money into certain stocks to prop them up, and now this after hours interest rate cut to try and catch people the government thinks is on the wrong side of the trade into a whipsaw to help force exchange prices up. China is one dirty place to do business or invest. There is no "fine tuning" of the economy. It's all oafish, hamfisted overt attempts to manipulate and prop up a lot of companies whose real balance sheet may well be in the negative. Bad deal.

They are a giant and streamline dictatorship with pockets full of money, they have a lot more tools than western countries. On the first glance it doesn't look like a good idea, but if you look at the economic grow in Europe/USA and in China, than China did many things right in the past.

China is neither giant nor does it have pockets full of money. It is in a desperate liquidity crisis and looking everywhere for money. It won't succeed and is lingering on the edge of a crash if it hasn't entered it yet.

Cheers.

[Publicus]

sqare 'em!

yes this is like a pub, without the threats of physical violence - in fact there is way better conversation than the local pub here, this forum with its host of characters is up there with Reddit in my book.

but you have to admit that no pub conversation is of interest if "CCP" references are not used at least half a dozen times within a few minutes. cyrillic lettering even if wrongly applied = interesting, correct lettering "КHP" would be boring.

do you agree or yes?!

Communist Party of China.

Some people don't like the reference. There was China until 1949 when the Communist Party of China (CCP) took control. That is who we are dealing with, that is who is in charge there and that is what the problem is. Then again, some people don't like being reminded that that is who they defend, apologize for, promote at the expense of the United States. CCP = Twenty-first century fascism.

The CCP is "explained" around here by the same people who call Putin a chessmaster when Putin has never played chess against anyone he couldn't put in jail. Same is true of the CCP Boyz in the CCP China whose similar traditional Chinese game, Xiang Qi, has pretty much the same pieces and includes a river. The opposing kings can never "face" each other.

The current chairman of the CCP, Xi Jinping is btw known at home and abroad as a man of modest intellectual gifts. In the CCP China they call him 'chairman.' The title of 'president' is used abroad.

[NeverSure]

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

I am doubting that. When I look around in both private and company, I see lots of Made in China. Small amounts made Germany, some made in Turkey, Taiwan, etc etc. But only few made in USA. There are some but not that many. Sure not the same amount as Made in China.

China sells cheap trinkets to the US which it made with cheap labor. The US has auto manufacturing for 17 different companies including most of the Japanese cars and German cars. BMW, Mercedes, VW - how many cheap Chinese items does it take to equal one $40,000 US car? One $100,000 Mercedes or BMW?

How about a $200,000 John Deere tractor or wheat combine? The US spends about as much on military hardware as all of the rest of the world combined and its - wait for this - Made In The USA.

Maybe you are in Walmart looking at trinkets But China doesn't have a Boeing.

The US manufactures it's own homes, commercial buildings and infrastructure - all site built. That's jobs and GDP.

I'm tired of this. I'm always surprised when anyone thinks that China, which manufactures for the West things invented in the West using equipment and techniques developed in the West and often under Western supervision is that big of a deal. China is the West's beotch serving at the pleasure of the West as the low cost, emerging market puppet.

Right now there are no tariffs on things China exports to the US. Free trade they call it. Someone mentioned something about China calling the US treasuries which is already impossible. BUT think what would happen to China if the US slapped its exports with a 25% tariff, making them non competitive against Made in America. Labor is no longer cheap in China and it's expensive to ship product across the ocean. In many cases the US has to first ship raw materials such as steel and cotton to China before they can manufacture. It costs too much to ship cotton to China and pay China to manufacture clothes that must then be shipped back.

The (China) emperor has no clothes.

Cheers.

You have the same Google I have. Check how much China imports into the US as a percentage of US GDP. It's minuscule.

[Publicus]

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

I am doubting that. When I look around in both private and company, I see lots of Made in China. Small amounts made Germany, some made in Turkey, Taiwan, etc etc. But only few made in USA. There are some but not that many. Sure not the same amount as Made in China.

Doubt all you like but it is no longer in question that manufacturing in the CCP China is in a steady decline. What had been a couple of negative reports this year are now a trend. The CCP China is no longer the world's cheap factory floor. The Caixin Manufacturing Index of 50.0 means manufacturing would be static, i.e., no growth, no decline. The index has barely been above 50.1 all of this year and it only keeps getting further and further below 50.0.

The final reading for the Caixin China General Manufacturing PMI came in at a 15-month low of 47.8 in July compared to 49.4 in June. Growth in China’s manufacturing output was restricted by a decrease in output, purchases, and new orders. Suppliers’ delivery times lengthened at a faster rate. Moreover, companies maintain relatively subdued growth expectations as demand conditions remain relatively downcast.

http://finance.yahoo.com/news/caixin-china-manufacturing-pmi-falls-162752514.html

By the end of 2013 the emerging markets identified on the following map had begun to attract manufacturing capital from the CCP China. These are at the present time the Post-China 16 with several more countries to come as ruling elites in other countries reorder their economies to accommodate a new industrial base of cheap labor producing cheap goods.

The party is over.....

The End Of Cheap China: The Next China Will Be The Post-China 16

"As a maturing China moves beyond the low-end manufacturing and export-led model that defined its dramatic three-decade rise, a new group of countries is emerging to assume that role in the global economy. The outlines of this group, the Post-China 16, or "PC16," are only now coming into focus. Indeed, the specific countries may change and the precise roles they play in this transition — their success in following the path China has trod — remain to be fully seen. This is a transition that is as yet pre-statistical; few if any reliable trade numbers or volumes now exist to plot the contours of this shift. But it is a shift that is already well underway."

https://www.stratfor.com/image/post-china-16-ascendant-manufacturing-countries

Post-China 16

The Post-China16 (PC16) will be necessary since to replace China and fill in for her on the international scene means having a staggering economy and an army of workers. It will take 16 countries to do that job today. The new workshop of the world will be Ethiopia, Kenya, Tanzania, Uganda, Vietnam, Laos and Myanmar amongst others

The PC16 is not just an arbitrary list of cheap-labor countries that seems like a good bet to announce, but they are the countries that are already seeing an increase today in their economic activity. It is happening right at the present time in the here and now and in no way is just a statistician’s forecast of what the future holds

China managed to build its present on the fact that the coordination of a hoard of workers meant that they were easily exploitable by the state and the Chinese administration with the objective of making sure that global markets were conquered. However, that is drawing to a close as China overtakes other countries in terms of production costs and wages increase. There are other countries that are cheaper. No country remains in the static position that it has always been in.

http://www.tothetick.com/post-china-16

The CCP China is not only in a decline, it is increasingly in a slow motion manufacturing withdrawal that all the data of the past two years indicate is steadily accelerating.

Edited August 30, 2015 by Publicus

[Naam]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

you get it all wrong Harsh! you forget that commies are ruling in Russia and China and it is the sacred duty of every true-blooded American to negate facts and spread even the most ridiculous theories and calculation methods such as $4 trillion minus $1.1 trillion equals 3.6 trillion (posting #29) and China has no money and can't trade if the U.S. calls its debt (posting #50).

Naam, China owns just 1.3 trillion of US treasuries. The US could sell that much in new treasuries Monday morning and use the proceeds to pay China in full. Then China would own no $USD with which to engage in international trade.

China has been trying for some time to get some international recognition for its currency but it has failed. It can't trade in CNY.

BTW your laughing face there just makes you look silly.

Cheers.

answering silly postings demand grinning faces

[Harsh Jones]

Btw if there is so much demand for US treasuries then why is the Fed the biggest owner of them ? Why is the USs own central bank the largest one holder of US debt ?

It's not.

has been for awhile now. 3 or so years

[Publicus]

 

squarethecircle, on 30 Aug 2015 - 13:25, said:

 

F430murci, on 30 Aug 2015 - 04:10, said:

Lol, you take the Internet rules way too seriously. Who really cares about the thread in the grand scheme of things? Open your mind Publicus.

yes this is like a pub, without the threats of physical violence - in fact there is way better conversation than the local pub here, this forum with its host of characters is up there with Reddit in my book.

Then again, can't knock pub conversation - didn't they say the late 18th century revolutions were founded in pubs?

And trolls are knocked out quickly - threads like this on Washington Post are usually quickly taken over by the 50 cent army. Nothing against trolls per se, we've all slipped into that mode before.

Back on topic. Warren Buffett (I believe) warned, "beware of geeks bearing formulas." Or another way to put it: look at overall principles at play here. As I see it PRC breaks down as follows:

on its side: massive, well-organized workforce. top-down authoritarian government, and I don't see this changing in our lifetimes or those of our kids, so if something needs to be done, nothing (other than the laws of nature) gets in the way. highly practical and adaptive in operation.

against it: workforce (overall) shows no signs of innovative imagination. authoritarianism makes the economy less exposed to market forces. heavy corruption throughout the system.

One more thing that comes to mind: at a business expo I went to on the east coast (out of curiosity), a local start-up founder was presenting. There were 2 obvious gov't liaisons in the audience (at least that's what the gut said - like career cops they tend to get an "air" about them that cannot be hidden). These 2 gov't liaisons grilled the start-up founder at the end. Like a police interrogation in front of everybody. Not sure how they plan to dominate by keeping tight-lid control like that.

 

so if something needs to be done, nothing (other than the laws of nature) gets in the way. highly practical and adaptive in operation.

Yep, got that right. Except that it is the most impractical and self-defeating idea on the planet. Always has been, always will be.

In economics the laws of nature are called the market.

The CCP Boyz don't go there, can't go there, won't ever go there. It's against their ideological political and cultural religion, which says to command everything and everyone in their charge at all times and under every circumstance, Nature first and foremost. This has been the religion in China for 5000 years to the present.

It's a guaranteed loser religion. Ideology btw is a brain disease. Nothing adaptive, pragmatic, practical about it. Nothing. Zero.

Edited August 30, 2015 by Publicus

[Harsh Jones]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

Germany surpassed the US in worlds leading manufacturing exporter in 1992 and China passed the US in 2008.

Germany exports 1.5 trillion worth of goods with a population of 80 million.

The US exports 1.5 trillion worth of goods with a population of 320 million.

Lol @ the US imports just a half trillion worth of goods from China. Just a half trillion eh ? And that's just China. Nevermind Japan and everyone else. China has implications for one country specifically and that is the US.

[Harsh Jones]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

I am doubting that. When I look around in both private and company, I see lots of Made in China. Small amounts made Germany, some made in Turkey, Taiwan, etc etc. But only few made in USA. There are some but not that many. Sure not the same amount as Made in China.

The US sells a an aircraft carrier or 2 and fighter jets to some arabs to pump their export numbers. You really have to look at the merchandise trade deficit for the US to get a real number. The merchandise deficit exes out the aircraft carriers.

[NeverSure]

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

Germany surpassed the US in worlds leading manufacturing exporter in 1992 and China passed the US in 2008.

Germany exports 1.5 trillion worth of goods with a population of 80 million.

The US exports 1.5 trillion worth of goods with a population of 320 million.

Lol @ the US imports just a half trillion worth of goods from China. Just a half trillion eh ? And that's just China. Nevermind Japan and everyone else. China has implications for one country specifically and that is the US.

Try to stay on topic, will you? You are mentioning exported manufactured goods. I'm talking about all manufacturing including for domestic consumption. I'm talking about what China exports to the US in contrast with what the US manufactures for itself.

The US is the world's largest manufacturer and the largest marketplace for manufactured goods. China's exports to the US hardly make a dent in that.

Cheers.

[Publicus]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

Germany surpassed the US in worlds leading manufacturing exporter in 1992 and China passed the US in 2008.

Germany exports 1.5 trillion worth of goods with a population of 80 million.

The US exports 1.5 trillion worth of goods with a population of 320 million.

Lol @ the US imports just a half trillion worth of goods from China. Just a half trillion eh ? And that's just China. Nevermind Japan and everyone else. China has implications for one country specifically and that is the US.

China has implications for one country specifically and that is the US.

It is vice-versa as some people keep getting themselves mixed up.

The CCP Boyz are furious at the United States and are now hollering at the Fed (in private) not to raise its rate. The Boyz are blaming the United States for their self-created ongoing precipitous disasters. Washington remains mum, probably up to the Fed's rate decision Sept 16&17.

For one thing, raising the Fed rate even to 0.25 automatically depreciates the yuan which the Boyz never wanted to do in the first place. Further yuan depreciation means the Boyz have to hit the print button at their personal People's Bank of China central bank. The Fed doesn't have to raise rate anyway because ending QE late last year then just talking about doing a rate increase has in itself turned emerging markets such as the CCP China in to submerging markets. China, Russia, Brazil, Venezuela, Turkey....the list is a long one indeed.

The Boyz depreciated the yuan because they don't have any US dollars cash bucks to pay on global trade credit accounts payable in USD only and due in the here and now. The Boyz and their private PBOC don't have any USD cash bucks to pay debts due now and payable in USD only. Carry trade is the most immediate culprit but there are a lot of trade debts due in the USDs only the Boyz don't have.

This actually has been developing since the Fed ended QE late last year. As US bucks started to decrease globally, the Boyz saw that their USD foreign accounts payable kept getting more out of whack from USDs on hand or available. Since last August the Boyz have sold $317 billion of forex reserves to support the yuan which has had to fill in. This month alone the Boyz dropped another $100 billion of forex. Yet the yuan can't possibly fill in for the USD and the Boyz know this, but the yuan is all they have. For better or for worse and for better left town long ago to disappear in to a ghost city.

The more the yuan depreciates, the more the CCP Boyz need USDs that are not in PBOC accounts and that aren't ever going to be there again.Yields of US ten-year bills meanwhile continue in their steady float.

The hopping mad Boyz have vowed to sell a bunch of Treasuries between now and the end of the year, as much as $500 billion but they are doing it out of a fury against Washington, and without a regard of the impact of it in the CCP China itself. Whatever USD the Boyz may get will go right onto the bonfire that is consuming exports, manufacturing, banking both official and shadow, bubbles throughout the economy, currency depreciation, markets crashing, foreign debts due in USDs the Boyz don't have etc etc.

[Harsh Jones]

The US is the world's largest manufacturer, pumping out 1/5 of the world's manufactured goods. 1/5. Just the US.

The US has a GDP of about 18 tril, the largest national GDP in the world.

By contrast, the US imports just 479 Billion dollars from China. That includes goods and services. That's about 2.5% of the US GDP. Oh, and the US exports about $140 Billion TO China as partial offset. LINK

You continue to wildly overestimate the impact that China has on anyone.

Germany surpassed the US in worlds leading manufacturing exporter in 1992 and China passed the US in 2008.

Germany exports 1.5 trillion worth of goods with a population of 80 million.

The US exports 1.5 trillion worth of goods with a population of 320 million.

Lol @ the US imports just a half trillion worth of goods from China. Just a half trillion eh ? And that's just China. Nevermind Japan and everyone else. China has implications for one country specifically and that is the US.

Try to stay on topic, will you? You are mentioning exported manufactured goods. I'm talking about all manufacturing including for domestic consumption. I'm talking about what China exports to the US in contrast with what the US manufactures for itself.

The US is the world's largest manufacturer and the largest marketplace for manufactured goods. China's exports to the US hardly make a dent in that.

Cheers.

Not a dent eh ?

Nuclear submarines and aircraft carriers count under domestic US mfg. All of which are liabilities and have no productive utility. And financed largely by China and Japan. As was proved with the chart posted showing the largest holders of US debt.

Edited August 31, 2015 by Harsh Jones

[Naam]

Not a dent eh ?

Nuclear submarines and aircraft carriers count under domestic US mfg. All of which are liabilities and have no productive utility. And financed largely by China and Japan. As was proved with the chart posted showing the largest holders of US debt.

why waste time to discuss the brushstroke and the paint mix of an old master with blind people?

[F430murci]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

My how things when change, especially when China loses the ability to depreciate its currency. We will be fine. A small decrease in corporate profits to shareholders of companies like Walmart will be more than off set by the good of bringing jobs back to the US.

I am still laughing how your predictions relating China and Russia a while back are panning out. Ruble at 66, Russia depleting reserves to prop up economy, China a basket case with government interventions not working and eroding both reserves and national wealth at a dramatic pace.

[Publicus]

Not a dent eh ?

Nuclear submarines and aircraft carriers count under domestic US mfg. All of which are liabilities and have no productive utility. And financed largely by China and Japan. As was proved with the chart posted showing the largest holders of US debt.

why waste time to discuss the brushstroke and the paint mix of an old master with blind people?

Did I just read a line out of a Tom Clancy novel

I know that's you Dressler Working the keyboard from Vienna you are.

Also take a moment to advise your pal the US doesn't sell its aircraft carriers. His point is understood but it is misconceived. All the same, forget about the US selling its retired/decommissioned aircraft carriers. They get recycled into new Navy ship construction or docked as a museum. Anybody wanna buy an aircraft carrier I have some right sector contacts in Uzbekestan that have the shell hulls of some old Soviet ones.

And while we're at it, Germany's exports to the CCP China are lucrative without shame or reservation as the Germans send capital equipment to the CCP Boyz and super high and expensive technology the United States prohibits being exported to the CCP Boyz. The CCP pays very well to experts of Seimans, BSAF and many more to ply their super high tech skills to the People's Republic.

[Scott]

An off-topic post has been removed. I am not going to go back further in the thread, but let it suffice to say that this topic is about China; not about the US. Comparisons are OK, but off-topic discussions about other countries are off-topic and simply baiting members into an argument.

Please stay on topic.

[Harsh Jones]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

My how things when change, especially when China loses the ability to depreciate its currency. We will be fine. A small decrease in corporate profits to shareholders of companies like Walmart will be more than off set by the good of bringing jobs back to the US.

I am still laughing how your predictions relating China and Russia a while back are panning out. Ruble at 66, Russia depleting reserves to prop up economy, China a basket case with government interventions not working and eroding both reserves and national wealth at a dramatic pace.

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

[ExpatOilWorker]

Looks like Publicus was right all along:

China dumping Treasurys? Here's what you must know

http://www.cnbc.com/id/102954541

[NeverSure]

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

US Treasury yields are up this week. The more it looks like there may be a recessionary/deflationary cycle the more people want to hold USD - been that way for a long time. If China sells USD to raise money to prop up its Yuan, stock market, banks, real estate market - others will only get more worried and buy USD as they have been this past week.

China also can't sell itself out of USD or it will be out of the international trading market - something it can't do. Same for Brazil.

China is between a rock and a hard place and is a lot worse off than it's admitting. Its financial issues are easy for the world to see, though.

[ExpatOilWorker]

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

US Treasury yields are up this week. The more it looks like there may be a recessionary/deflationary cycle the more people want to hold USD - been that way for a long time. If China sells USD to raise money to prop up its Yuan, stock market, banks, real estate market - others will only get more worried and buy USD as they have been this past week.

China also can't sell itself out of USD or it will be out of the international trading market - something it can't do. Same for Brazil.

China is between a rock and a hard place and is a lot worse off than it's admitting. Its financial issues are easy for the world to see, though.

If would be an easy choice if I should park my life savings in either the greenback or the redback. The penny seems to have dropped for rich Chinese also and they are starting to park money outside the great wall.

How much Treasury bills can China sell before it will affect its international trading ability?

[NeverSure]

How much Treasury bills can China sell before it will affect its international trading ability?

Hard to say. It needs enough to convince people it can continue to pay in USD because its money isn't acceptable.

Thailand typically holds $200 bil to $300 bil in US treasuries for the same purpose.

Some people don't seem to understand that these countries have to hold these treasuries. The USD is the international currency of trade - the international unit of exchange and these countries buy and sell in USD even among themselves. When there's talk of a lower Chinese or Thai currency making exports cheaper for buyers it just means they have to give fewer USD to equal the home currency.

Cheers.

[Publicus]

Yep, China is a disaster. So is Russia. Luckily, the guys in control in the US are smart to not let us be taken down with them.

The US economy is built on selling Chinese made goods at wallmart, home depot, staples to people working for minimum wage at wall Mart home depot and staples.

So how is an economy that is vendor financed by China going to function without China ?

And Americans think everyone in the west is in this boat. Germany has higher wages then the US yet has a trade surplus with China. The Eurozone as a whole is a net creditor with balanced trade

My how things when change, especially when China loses the ability to depreciate its currency. We will be fine. A small decrease in corporate profits to shareholders of companies like Walmart will be more than off set by the good of bringing jobs back to the US.

I am still laughing how your predictions relating China and Russia a while back are panning out. Ruble at 66, Russia depleting reserves to prop up economy, China a basket case with government interventions not working and eroding both reserves and national wealth at a dramatic pace.

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

Most of these economies live in the real world and are subject to a business cycle

They are command economies driven by policy ideologies who have deep pockets to stuff and that have nothing whatsoever to do with the market or its business cycle. Anyone who fails to realise or recognise the fact lives in a perpendicular universe.

The major problem the CCP Boyz in Beijing have had is that 30 years ago they set up and pressed the button on an economy that made no allowance for externalities. The Boyz starting with Deng Xiao Peng set up a CCP economy for the CCP Boyz only in China only, separate and apart from the world.

So when the 2008 crisis hit the Boyz were thrown off their mighty strides.

They hit the print button and shot out yuan by the ream and now they have a national debt twice and a half the GDP with a bunch of ghost cities to show for it, not to mention bridges connecting bridges from other bridges leading to more bridges, over there.

Their command economy was always going to outrun and overrun its mileage, which it did by the time Xi Jinping and PM Li Kejiang took over starting in late 2011. Xi and Li needed to transition to a consumer based economy based on domestic production. They are spinning their wheels for two reasons.

One is that CCP entrenched interests that profit from the present base of infrastructure and debt are not budging. Secondly, China is not Thailand. While the Thais --the Koreans, the Malays, the Filippinos, Indonesians etc-- max out their credit cards, the Chinese max up their savings accounts. The CCP Chinese are not buying beyond what they have gained to date, nor will they. The CCP Chinese always save for the rainy day and they no longer believe or trust that the Boyz can deliver their promises. The Chinese are a far cry from being the consumers the Thais are, or that others are. Very far from it.

The bottom line is that the CCP Chinese remain quintessentially Chinese, i.e., they fully demand and completely expect the Fed to act in the interests of the CCP. The Boyz demand and expect this of the global markets, POTUS, the US Treasury, IMF, the Fed, everybody and all of 'em. This is an old and ancient Chinese mindset and it has been nothing but disastrous and even catastrophic for China and the Chinese.

The Chinese need now for the first time to enter the real world which is also the modern world going forward. The world of markets.

Edited September 1, 2015 by Publicus

[ExpatOilWorker]

http://www.cbsnews.com/news/chinas-sale-of-us-debt-safety-valve-or-cause-for-concern/

Worth quoting:

"Chinese demand for U.S. sovereign debt has only grown in recent years. In 2007, China held $388 billion in Treasuries, which at the time ranked the People's Republic behind Japan. But as of June, China's hoard of American debt had more than tripled to $1.271 trillion, according to the Congressional Research Service, the biggest position held by any nation and a substantial portion of the $6.175 trillion of Treasuries held overseas."

and....

"Peter Kenny, chief market strategist for Clearpool Group, a trading software and execution firm, says reports of China selling U.S. debt are not a cause for concern, noting that Treasuries remain an "iconic pillar of stability" for the global financial system."

[Harsh Jones]

The sooner the financial side of China implodes the better. Their trillions of dollars will be flooding the forex markets which which leads to velocity induced inflation in the dollar. Then the run will be on. Brazil has 295 billion dollars in treasury paper too. They will be next to liquidate to fund their expenses. Which will dump even more dollars on the forex markets. Countries don't export for the privilege of funding US profligacy. They export to pay for imports and save the difference for a rainy day and guess what, its raining. And they will soon find out that it wasn't such a good idea to save the difference with uncashed checks from the US. The first one out profits the most.

The financial side of China will indeed collapse (and bring a certain other financialized economy down with it), but when the dust settles, they still have all the capital goods in the form of plants , factories and equipment. Most of these economies live in the real world and are subject to a business cycle. They are not in the business of enforcing the petrodollar and gunpoint and running dollars through financial meth labs in New York and London.

US Treasury yields are up this week. The more it looks like there may be a recessionary/deflationary cycle the more people want to hold USD - been that way for a long time. If China sells USD to raise money to prop up its Yuan, stock market, banks, real estate market - others will only get more worried and buy USD as they have been this past week.

China also can't sell itself out of USD or it will be out of the international trading market - something it can't do. Same for Brazil.

China is between a rock and a hard place and is a lot worse off than it's admitting. Its financial issues are easy for the world to see, though.

When bond prices fall, bond yields rise. So those rising yields you are seeing, are US treasury prices falling. (China dumping treasuries probably has something to do with it)

During the 1000's of point selloff in the dow in the last week, the dollar fell. It did not rise. The Euro went way up. Just today, with US stocks down, the dollar also went down and the Euro up.

China and Brazil have inked currency swaps all over the world. Bypassing the dollar.

[Publicus]

Who does one have confidence in?

The Fed and the US Treasury Department, or the People's Bank of China which as the central bank is entirely the personal instrument of the Chinese Communist Party.

Yes, it is a loaded question but it's a loaded equation. It's an equation in name only because they are not at all equal in any respect.

The Boyz for instance are hollering at the Fed not to raise its rate when the Fed does not need to raise its rate, and certainly not at the present time.

The Boyz said the other day they're going to sell off $500 billion of T-Bills over the next six weeks. Fact is the Boyz need USDs. Yet the more they sell the less the USD they continue to hold are worth. The more the yuan devalues. The more yuan needs to be printed. The only way to correct the cycle is to get more USDs.

Yet......

Jeffrey Snider of Alhambra Investment Partners thinks Chinese banks and corporates are actually running out of dollars and the PBOC had to act quickly to prevent a market panic.

“Chinese banks, which previously had surplus dollars had to go tap international markets to get dollars for corporations as Chinese exports started to slow down in 2012 to finance trade,” he said. This would explain the yuan constantly trading at the lower end of the band set by the PBOC for the past year.

It would also explain the incessant selling of foreign exchange reserves by the PBOC to support Chinese private sector dollar demand: The reserves are down by $317 billion since August 2014, according to Bloomberg. Snider believes even China’s massive $4 trillion pile might not last forever:

“The outflows have been tremendous. There is no guarantee that this will remain stable, and if conditions worsen, it could grow exponentially into a run,” he said.

“From the Chinese perspective they don’t have any choice anymore, they are stuck. There is no orderly transformation here,” said Snider. Because of inherent problems within the economy and investor losses in every asset class, it seems there is no way back. “They will try to convince market participants that this is the worst and it’s going to get better from here.”

http://silveristhenew.com/2015/08/18/chinese-stocks-extend-plunge-despite-stable-yuan-as-margin-debt-drops-first-time-in-8-days/

Trading today, so far, seems to confirm that the PBOC simply broke and couldn’t sustain whatever it was doing to try to stabilize China’s precarious financing situation.

The yuan’s move is thus not “stimulus” but rather admitting that the “dollar” problem is more than even the vaunted PBOC can handle; they stuck it out for almost five months (perhaps commendable in the attempt) and gained less than nothing in the end.

http://stealthflation.org/2015/08/12/so-far-inevitable-dollar/

Edited September 1, 2015 by Publicus

[Harsh Jones]

How much Treasury bills can China sell before it will affect its international trading ability?

Hard to say. It needs enough to convince people it can continue to pay in USD because its money isn't acceptable.

Thailand typically holds $200 bil to $300 bil in US treasuries for the same purpose.

Some people don't seem to understand that these countries have to hold these treasuries. The USD is the international currency of trade - the international unit of exchange and these countries buy and sell in USD even among themselves. When there's talk of a lower Chinese or Thai currency making exports cheaper for buyers it just means they have to give fewer USD to equal the home currency.

Cheers.

From Australia's central bank website.

http://www.rba.gov.au/media-releases/2015/mr-15-06.html

The Reserve Bank of Australia has signed a new bilateral local currency swap agreement with the People's Bank of China (PBC).

As with the initial agreement in 2012, the main purposes of this agreement are to support trade and investment between Australia and China, particularly in local-currency terms, and to strengthen bilateral financial cooperation. The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi (RMB) and to make RMB-denominated investments.

China and Australia in $31bn currency swap - FT.com

www.ft.com › World

Mar 22, 2012 - China has signed a $31bn currency swap agreement with Australia, a step towards boosting the renminbi's profile in developed markets.

European Central Bank and China strike currency swap deal

www.ft.com › World › Asia-Pacific

Oct 10, 2013 - The swap line, at Rmb350bn ($57bn), will be China's third largest. ... Central Bank and the People's Bank of China have established a currency swap ... governor of the Banque de France, said an ECB-PBoC swap line “would ...

Brazil and China agree currency swap - FT.com - Financial ...

www.ft.com › Markets

Mar 26, 2013 - Brazil and China sealed a $30bn currency swap agreement on Tuesday ... expected to be of little use in day-to-day trade, the deal will guarantee.

China signs currency swap deal with UAE - FT.com

www.ft.com › World › Asia-Pacific

Jan 18, 2012 - China and the United Arab Emirates signed a multibillion-dollar currency swap deal in the latest indication of the growing political and ...

Russia Seals Deal With China on Currency Swap - WSJ Blogs

blogs.wsj.com/.../russia-moves-closer-to-china-with-currency-swap-deal/

Oct 13, 2014 - The central banks of Russia and China have announced today a 150 billion yuan currency-swap agreement which would promote the ...

China and Japan sign a currency swap agreement during ...

www.chinainvestin.com/index.php/zh/china-offshore/news/1334

China and Japan sign a currency swap agreement during Christmas. By Wang Bin. The internationalization of the RMB did not stop its process over Christmas, ...

Edited September 1, 2015 by Harsh Jones