Post Tagged with: "China"
What can we learn from the policies that spurred the Industrial Revolution?
Some of the dominant policy issues of today – immigration, energy, the emergence of China – have their analogues in the great Industrial Revolution. The key government policies that laid the foundation for the Industrial Revolution in England include supporting the immigration of skilled workers, allowing for private ownership of farm land, weakening the unions of the day (the guilds), and addressing the energy crisis (in charcoal). And contrary policies in Italy and Spain – countries that were far wealthier and advanced than was per-Industrial Revolution England – derailed a similar revolution from occurring in continental Europe.
England would not have been anyone’s first bet as the cradle of the Industrial Revolution
Private Lending: Disintermediation in China’s Banking System
The consequences of negative real interest rates and financial repression. We know how this story ends. Keep this one on your radar
Faber: Market May Fall Below 1,100
Marc Faber told CNBC yesterday that he thinks the S&P500 could fall to as low as 1010 by the end of the ongoing sell-off. Faber also believes gold could fall. However, he believes both markets are oversold and is more keen to buy gold on a rebound than equities
Jim Chanos: China has tons of contingent debt via state-owned enterprises
The overall gist of Jim Chanos’ comments on Bloomberg yesterday were that China has off-balance sheet contingent liabilities due to its implicit commitment to state-owned enterprises which are kneee-deep in land and property speculation. See Michael Pettis piece on The debt-financed investments of Chinese state-owned enterprises for a comprehensive analysis of this problem
Monetary Policy and the Future of China
There is a road open for China involving controlled inflation that would lead to re-balancing, both domestically and internationally, which has some uncertainties. These must be compared to those of sustaining the export-led growth model, basically an even bigger currency mismatch in the PBoC balance sheet and ever more unproductive capital investments
Big in Japan
As I see it, Japan’s problem was that during the 1980s it was so addicted to investment-led growth and artificially cheap financing that it misallocated capital on a massive scale and failed to include the resulting implicit losses in its GDP calculations. If you look at real per capita household income and household consumption growth during the period of Japan’s stagnation, you will find that both of them rose fairly rapidly. This isn’t what typically happens during a US-style financial crisis, when household income suffers
Why Made in China Costs More in China
Chinese goods cost more in China because of currency, taxes, transportation,logistics and inflation. The Chinese get the jobs, while Americans get the consumer products; The Chinese government gets the dollar, but the U.S government gets to spend the dollar! The Chinese like to say: the Americans get a better deal!
Some predictions for the rest of the decade
Markets have been crazy this month, but rather than try to wade through all the news, much of which doesn’t seem to have much informational content, I thought I would duck out altogether and instead make a list of things I expect will happen over the next several years
Life On the PMI Cold Comfort Farm
As the heat wave which has been hanging over Southern Europe for the last couple of weeks steadily eases off there is little sign that any of the warm air which is dissipating is reaching the chilled motors of the European and Chinese economies. The results of this months PMI readings are at best more of the same, and at worst show continuing deterioration. While current conditions stabilised in some areas, new orders, and especially new export orders often hit new post-recovery lows. There is every likelihood that the final August global readings will be much more of the same
Buy the Rumor, Sell the Fact Ahead of Jackson Hole
Global stocks continue to push higher ahead of speech tomorrow; dollar remains soft. Fed unlikely to deliver QE3 tomorrow and therefore markets may be disappointed. Is a potential change in PBOC policy in the pipeline; Hawkish comments from Polish central bank
Eight thoughts at the end of a tumultuous Week
This has been an extremely tumultuous week throughout the capital and commodity markets. August itself has been a cruel month. The German stock market has lost around a quarter of its value. A marked slow down in the US and Europe in Q2 has given rise double dip fears in the former and compounding difficulty achieving deficit targets. There are a number of take-aways for investors from this week’s developments
Foreign capital, go home!
Once again we are hearing very worried noises from various sectors about the possibility of a reduction in Chinese purchases of USG bonds. Is the PBoC going to stop buying USG bonds