Post Tagged with: "inflation"
In Bullish Mode
I was on BNN this past Friday talking to Howard Green about China, banks and GE. My comments were pretty near-term bullish on the whole regarding Chinese growth, bank dividends, and bank reforms. The longer-term is another issue. Here’s what I see happening. The Chinese economy, like the two other big EM economies in Brazil
Some Thoughts On Potential PBOC Tightening Path
We don’t want to get too caught up trying to guess the timing of the PBOC’s moves. Suffice to say that over the next year, it will continue to use a combination of policy rate hikes, reserve requirement hikes, and currency strength to help limit inflation pressures. We go back to the most recent tightening cycle for clues on future PBOC monetary policy. Currency gains are likely to be used to limit imported price pressures. During the PBOC hikes in 2006-2007, CNY appreciation was quite significant and encompassed gains vs. USD of 1.5% in Q2 07, 1.3% in Q3 07, 2.8% in Q4 07, and the peak of 4.2% in Q1 08. In other words, the PBOC used a combination of rate hikes, reserve requirement hikes, and currency strength to help battle rising price pressures. That’s what we see happening in 2011 too.
Brazil: we expect to see a continuation of the currency war in coming months
The Brazilian finance minister Guido Mantega continues to worry about the flood of money coming from Europe and the US and has said Brazil will take more steps to defend its currency. Mr. Mantega was quoted saying "With the situation in Europe under stress, we expect to see a continuation of the currency war in
Three observations on China’s purchases of Japanese assets
by Marc Chandler Three observations to share about China, regarding purchases of Japanese assets, suspension of 3-year debt auction for tomorrow and rate hike possibility. First, Japan’s MOF reported that China bought JPY262.6 bln of Japanese debt instruments in Oct. Its purchases were concentrated in the bills sector (JPY232 bln) and accounted for 23% of
Hellmeyer Interview Part 2: The uber-bullish case for the global economy and real assets
by Lars Schall Folker Hellmeyer, chief analyst at Bremer Landesbank, gave an exclusive interview to chaostheorien.de. Yesterday we ran the first part of that interview with his take on the so called “Currency Wars,”China’s role as a stabilizing factor in the world economy and the outlook for precious metals. Today we continue that interview concentrating
Inflation or Deflation: Peter Schiff versus Gary Shilling
This is a very good debate between Garry Shilling, a prominent deflationista, and Peter Schiff, a prominent inflationista, because it shows you the core substance of the arguments on the inflation-deflation debate. I am calling this one for Shilling. His arguments regarding deleveraging and its longer-term deflationary impact are more compelling. Schiff’s arguments about central
The government has a printing press to produce U.S. dollars at essentially no cost
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S.
The Dirty Dozen
In the following post I list a number of risk factors which I believe investors should give serious consideration, but I do not for one second pretend for that list to be exhaustive. Neither should you read anything into the order of which those risk factors are listed. If you want my assessment of how to rank the various factors, you need to take a look at the risk scatter chart at the end of the letter
Indonesia Upgrade Soon, But IDR Remains Hostage To Risk Appetite
Moody’s put Indonesia’s rating on review for possible upgrade. This is a stronger statement than the June move to positive outlook on the Ba2 rating (equivalent to BB), and we think an upgrade will be seen soon. Indeed, the agencies are really behind the curve as our own sovereign ratings model has Indonesia at BBB+/Baa1/BBB+ compared to actual ratings of BB/Ba2/BB+. Fitch’s BB+ is the closest to our view amongst the three major US agencies, but all should be moved upward
There is No Food Inflation; the BLS Made Sure of That
Below are some monthly lists of items removed from the monthly Consumer Price Index Summary calculation and the excuses for doing so. (The lists were cut-and-pasted from the BLS website at the time. It looks as though the BLS only posts tables (no words) from the monthly CPI releases prior to May 2007.) There is nothing particular to the months shown. The reader may note the lists stop in 2006. This is because the BLS stopped releasing the list of items after December, 2006; possibly because the deception was so clear as to show the entire CPI calculation is a fraud
Chinese inflation and European defaults
Part 1. Will Europe face defaults? Its official – Spain and Portugal will need to be bailed out soon. How do I know? In one of my favorite TV shows, Yes Minister, the all-knowing civil servant Sir Humphrey explains to cabinet minister Jim Hacker that you can never be certain that something will happen until
Is China Being Political or Just Plain Stupid?
By Vedran Vuk With consumer prices in China up 4.4% this October over last year, the country has taken another move to avert inflation: price controls. There’s just one problem. Thirty years ago this would have been a viable policy alternative, but those days are long gone. In fact, the vast majority of economists agree