Skip to comments.World asleep as China tightens deflationary vice
Posted on 02/13/2014 10:42:42 AM PST by mgistEdited on 02/15/2014 10:48:52 PM PST by Admin Moderator. [history]
World asleep as China tightens deflationary vice We keep our fingers crossed as we glimpse the first foam of a deflationary Ch'ient'ang'kian coming our way from China. The world's central banks have no margin for error Societe Generale has defined its hard landing as a fall in Chinese growth to a trough of 2pc, with two quarters of contraction. .snip. The balance of evidence is that most powerful Chinese leader since Mao Zedong aims to prick China's $24 trillion credit bubble early in his 10-year term, rather than putting off the day of reckoning for yet another cycle.
(Excerpt) Read more at telegraph.co.uk ...
Chinese Communist Party Leadership: “Sure, we know what we’re doing. Don’t worry....”
okay....I’ll be the first to ask....what the heck does it all mean?
what the heck is shadow banking?
The Chinese play Go.
The reference to China “pricking the credit bubble” and refusing to prolong the day of reckoning sounds contradictory to the later reference to a possible “massive expansion of credit.”
I am seeing a continued deflation in rent prices here. Not major yet, but in the past year I have decreased rents about 50 dollars per unit to remain competitive.
More accurate valuations of all the traditional coming to maintain legitimacy .
It is what they call investment trusts in China.
The Chinese banks only offer low interest rates on regular accounts. However, they have set up off-the-books trusts that offer an 8-9% return to wealthy investors by investing in risky projects. These are now about to blow up.
I think they are referring to a credit expansion (bubble) that has already happened in China, not the future fix. I am like many on this thread who do not fully understand this article since it it is written poorly and jumps around alot, but if you assign "past tense" to the credit expansion, it helps a lot.
Thank you, your explanation makes sense.
Shadow banking is financial institutions that act like a bank, but are not regulated like traditional banks.
Shadow banks do something similar. They raise (that is, mostly borrow) short-term funds in the money markets and use those funds to buy assets with longer-term maturities. But because they are not subject to traditional bank regulation, they cannotas banks canborrow in an emergency from the Federal Reserve (the U.S. central bank) and do not have traditional depositors whose funds are covered by insurance; they are in the shadows.
What I understand is that China has been pumping out money, within China, and around the world, in the form of loans, especially in emerging economies. They have decided to slowly stop the money flow, and the effects of that are worrying a lot of people.
It is sort of like what would happen if the Feds took their money out of the stock market? Wallstreet could simply slow down, or it could be a disaster. That’s what I understand.
I am certainly not asleep. I am keenly aware of just how much of the world’s mineral wealth they control. I, unfortunately, have to get a large percentage of my raw materials for manufacturing from Chinese sources. Try getting Molybdenum, Tungsten, and Neodymium from a non Chinese source. I dare you.
Hey, no problem! The Chinese are so much smarter than us ignorant white people. At least that's what that Tiger Mom lady keeps telling me.
Where is 'here'?
“The US couldn’t contain Lehman contagion, but in China all contracts can be renegotiated, “
What does that mean? Specifically?
Anyone please jump in here.
Between ChiFi and AlGore, American sources of those minerals were shut down during the Clinton Administration.
What about Molycorp in the Mojave desert?
I’ve followed Ambrose Evans-Pritchard for quite a few years and over time its become painfully obvious that he rarely gets things right...
The Chinese low balled prices for a number of years slowly taking out their American competitors and once they were out of business the Chinese started tightening supplies. I believe American companies are working their way back into the business again.
Ban their slave labor garbage from our country, or at the very least, slap a 100 percent tariff on it (or whatever percentage it takes to drive the price up to where nobody will pay it.)
RE: “I am seeing a continued deflation in rent prices here.”
Where is “here?”
He is clearly a learned and gifted financial writer.
But, as to market prophecy, he is usually a Perma-Bear, and that has been a catastrophically wrong call since 2009.
He is also a Keynesian psychopath.
In the history of the world we have NEVER had as much stimulus and money printing as we have now, but Ambrose rarely writes a column without crying out for MORE!
“The Telegraph” needs a new copy editor.
Anyone notice what’s wrong with the headline?
The editor wrote “Vice.”
He means “Vise.”
I didn’t know about Molycorp. Thanks for the info. I would be safe in assuming they were grandfathered in before all the ludicrous regulations kicked in.
Maybe he is due to get something right?
Looks like Maine according to “chickensoup:;s Freeper page.
Good article at popular mechanics about Molycorp. This one is pretty good too, especially the comments below the article.