In another sign of repeating 2015, the Chinese are beginning to mobilize their “reserves” again. Three years ago, in a futile attempt to staunch CNY’s stubborn “devaluation” various government authorities blew through just about $1 trillion. It didn’t work. You would think that everyone could learn from this episode. I think the Chinese did, which is why in 2017 they [...]
Since December 2015, China’s powerful politburo has met nine times to discuss the economy. The Political Bureau of the Chinese Communist Party Central Committee is a group of 25 top officials who control pretty much everything. The politburo’s smaller Standing Committee is the very top echelon of the Communist Party. Members of the politburo are given top jobs in the [...]
For days after China shocked the world in August 2015, “devaluing” its currency seemingly out of nowhere, there was only confusion as to what had just happened. Going by nothing more than the mainstream media and economic narrative fed to it by central bankers and Economists (redundant), you wouldn’t have known anything was wrong at all. Manipulating currency for an [...]
Banks in China have to hoard liquidity ahead of their weeklong holidays, twice each year. The bigger of the two, related to the Chinese New Year, occurs in either January or February. The second, associated with China’s National Day, takes place at the beginning of every October and is still a formidable challenge to the monetary system. Depositories build up [...]
China’s economy is not crashing. Hyperbole works both ways. Last year and this, the smallest increment above a prior number was broadcast out as the greatest thing ever (US wage growth in particular), irrefutable proof of globally synchronized growth. Now that that’s over with, largely, there will be a tendency toward the other extreme. The latest Chinese economic statistics are [...]
If it sounds like the United States is divided and on the verge of some really nasty times, what must it be in Brazil? In early September, Presidential candidate Jair Messias Bolsonaro was stabbed in plain sight at a campaign rally, the attack caught on video and widely circulated worldwide. It was an ugly reminder of the direction being taken [...]
File it under “what were they thinking?” In March 2015, confronted by a severe external monetary squeeze, the PBOC made a truly radical choice. Maybe it was that for a few months anyway things looked a little better. The eurodollar system had practically melted down globally first on October 15, 2014 (collateral) and then in December 2014 and January 2015 [...]
The Asians are selling their Treasuries again, which can only mean one thing. The mainstream media will offer all sorts of explanations as to why that might be and not a single one will be correct. China and Japan are offloading US$ assets primarily federal government debt for vastly different reasons. Their decisions spring from the same source, but Japan’s [...]
Whether or not any central banker chooses to appreciate the fact, money is an important economic tool. Before it ever gets to be a store of value, there has to be some correct supply so as to become a medium of exchange (and almost by virtue a unit of account). The problem throughout history has been to foresee and then [...]
There was an old joke among bond investors that use to say no AAA-rated bond had ever defaulted…because it was downgraded several times first. By the time the issuer was in restructuring, it was junk accredited long before then. It ceased being funny around February 2007. There is something similar and similarly tragic that takes place in the wider macro [...]
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