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Shanghai SE 50

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Ah so!

 

China is soaking up the global stimulus money....(not sure the Chinese banks are to blame entirely)

 

To be expected really...i.e. where would global investors expect growth/recovery first? The highly credit worthy chinese economy.

 

Interestingly this is perhaps how the massive global stimulus money will end up getting into Gold. i.e. via Chinese investment banks/the state.

 

Will China export its inflation? (the 'boom' of Ka-Boom theory).

Anecdotally I've heard this is already happening in manufactured goods.

 

 

 

 

 

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Ah so!

 

China is soaking up the global stimulus money....(not sure the Chinese banks are to blame entirely)

 

To be expected really...i.e. where would global investors expect growth/recovery first? The highly credit worthy chinese economy.

 

Interestingly this is perhaps how the massive global stimulus money will end up getting into Gold. i.e. via Chinese investment banks/the state.

 

Will China export its inflation? (the 'boom' of Ka-Boom theory).

Anecdotally I've heard this is already happening in manufactured goods.

How could they? The western consumer is down and out for the count. The chinese consumer looks like a pipe dream for the moment. Given the weakness of the real economy, commodities and stocks will have to crash again [speculative boom/bust]. Makes more sense to worry about deflation not inflation.

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How could they? The western consumer is down and out for the count. The chinese consumer looks like a pipe dream for the moment. Given the weakness of the real economy, commodities and stocks will have to crash again [speculative boom/bust]. Makes more sense to worry about deflation not inflation.

In the short term perhaps but looking at the bigger picture I'm seeing the ability of the consumer countries ability to create wealth diminishing and the same ability of the BRIC countries increasing.

 

I'm seeing supply destruction in the consumer countries which will make them even more reliant on imports from China. The price of which will slowly edge up (or quickly in the case of currency collapse).

 

The Chinese market share in manufactured goods must be increasing faster than ever before.

 

Deficit spending will increase in the consumer nations thereby weakening their currencies further also leading to inflation. All roads lead to inflation IMO.

 

Sure we are still seeing deflation in things bought with debt, and may still for some time. But those items bought with cash are going up. E.g. fuel and food.

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In the short term perhaps but looking at the bigger picture I'm seeing the ability of the consumer countries ability to create wealth diminishing and the same ability of the BRIC countries increasing.

I agree in theory... but I think it may take quite a while for the world economy to be rebalanced. Economies were coupled unsustainably. They will need to decouple and rebuild before "recoupling" in reverse where emerging economies might begin consuming our exports with our economies accordingly producing more. I think this will take a long time and the interim period could involve quite an extended slump

 

I'm seeing supply destruction in the consumer countries which will make them even more reliant on imports from China. The price of which will slowly edge up (or quickly in the case of currency collapse).

Yes, but demand destruction could meet and cancel out supply destruction here as consumers in the west tighten their belts. If so, we might not see much inflation in imported goods as there will be less demand for them. This would also no doubt have an adverse effect also on exporting countries. Our currency may well weaken on the fx market, but only investors may be aware of this. Joe six pack will value his money more than ever as there will be less of it about.

 

The Chinese market share in manufactured goods must be increasing faster than ever before.

Xie's articles state that stimulus is inflating stocks and commodities and not going into the real productive economy.

 

Deficit spending will increase in the consumer nations thereby weakening their currencies further also leading to inflation. All roads lead to inflation IMO.

I think the most likely reason currencies will depreciate is due to the government debt. As this becomes increasingly unsustainable, investors will baulk at buying further debt. the currency will become less desirable/valued and devalue against stronger currencies on the fx market.

 

Sure we are still seeing deflation in things bought with debt, and may still for some time. But those items bought with cash are going up. E.g. fuel and food.

Deflation is the over-riding factor here. We have seen inflation already in asset prices, and will at times continue to see it in stocks and commodities [speculative hot money] but they will continue to collapse because the real underlying economy can not support them. If the currency also eventually depreciates, why not consider the unit of currency deflating/devaluing then you have the one single unifying idea of deflation. Beauty in simplicity. :)

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http://newsvote.bbc.co.uk/1/shared/fds/hi/...welve_month.stm

 

No pull-back whatsoever. China in recession? Not evident.

 

WTF?

 

This should pretty much answer it - same as Peter Schiff has been saying for a long time with regards to China turning into a consumer society using their supluses.

 

http://www.marketoracle.co.uk/Article11644.html

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Nice thanks.

 

Any ETFs follow the Yellow bull?

 

see here

 

Update on China - are the ETF's an easy way to keep track?

 

As listed on the LSE

 

FXC ISHARES PLC ISHARES FTSE/XINHUA CHINA 25

http://www.londonstockexchange.com/exchang...2KXK85IEGBXETFS

 

XX25 DB X-TRACKERS DB X-TRACKERS FTSE/XINHUA CHINA 25 ETF

 

The above have charts that seem pretty identical, perhaps not surprising. There seem to be more transactions going through FXC so that might be one to watch

 

 

Also

O094 ISHARES PLC ISHARES FTSE/XINHUA CHINA 25 (OTC)

last transaction back 5 feb 2009 apparently !

----------------------

Anyway FXC

 

FUND:

iShares FTSE Xinhua China 25

 

DEALING DATE:

25-Jun-09

 

NAV PER SHARE:

Official NAV USD 110.672

 

 

 

GBP (Equivalent) 67.009

 

 

 

EUR (Equivalent) 78.6609

 

NUMBER OF UNITS IN ISSUE:

8,700,000

 

CODE:

FXC LN

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Also rather newish - about 1 year old I think is a currency fund for the Yuan

 

WisdomTree Dreyfus Chinese Yuan Fd (ETF)(Public, NYSE:CYB)

 

Anyone have any opinions on currency ETF's - these are totally new beasts to me!

 

I suppose these might even justify their own thread

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Will China export its inflation? (the 'boom' of Ka-Boom theory).

Anecdotally I've heard this is already happening in manufactured goods.

 

I think its more the case that US is exporting its inflation to places like China who will have to accept devalued Tbills in the longer run

 

But in return I do think that the offshoring of manufacturing in places like China is going to hit US & Europe hard as globilised fims have much spare capacity and have spare plants that are hanging on by a thread in the so called developed world. These plants will now/soon be closed and we will see a "deflation" in US / Europe.

 

France may/will try and lead Europe into some sort of protectionist manouveres but I do reckon that US needs China's support in funding its deficit and that will restrict US in this respect

 

UK has already opened its doors to offshore manufacturing a while back.

 

Thats my pet theory for the time being, time will tell

 

Will be interesting to see how spats like this turn out and which "side" is the "winner" - or maybe as usual there will be only loosers

 

http://in.reuters.com/article/economicNews...-40673520090629

 

BEIJING (Reuters) - The third U.S. investigation in 10 days which could lead to duties on Chinese steel imports is a shocking sign of trade protectionism, China's commerce ministry said on Monday.

 

The U.S. Department of Commerce on June 26 opened a probe into whether China has dumped or subsidised wire decking sold in the U.S. market, following the launch of similar investigations into wire strand and steel grating the previous week, the Chinese ministry said.

 

China's massive industrial overcapacity, its low labour costs and efficient infrastructure mean Chinese goods are spilling out into world markets, threatening profit margins, jobs, and the very existence of some sectors in Europe and the United States

 

 

 

 

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http://newsvote.bbc.co.uk/1/shared/fds/hi/...welve_month.stm

 

No pull-back whatsoever. China in recession? Not evident.

 

WTF?

 

 

There are many indicators that show in hindsight that the 'rally' started in q4 2008.

 

Emerging market stock indices and commodities included.

 

 

 

 

313q9go.jpg

 

Also various sentiment indicators.

 

k20cuf.jpg

 

 

I now think the price action on Western markets with a March low was the aberration.

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There are many indicators that show in hindsight that the 'rally' started in q4 2008.

 

Emerging market stock indices and commodities included.

 

 

 

 

313q9go.jpg

 

Also various sentiment indicators.

 

k20cuf.jpg

 

 

I now think the price action on Western markets with a March low was the aberration.

 

Indeed Nov08 was the kick-off

 

see:

http://newsvote.bbc.co.uk/1/shared/fds/hi/...welve_month.stm

 

Note this is also the time the HK dollar stopped appreciating against the dollar (I think the same goes for the Yuan)

 

So what are we seeing here really (in the Shanghai SE 50)?

 

THE COLLAPSE OF THE DOLLAR.

 

ie. as the Dollar is tied to the Yuan/HK Dollar then as it falls the price of assets in China must rise.

 

in effect....HYPERINFLATION?

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THE COLLAPSE OF THE DOLLAR.

 

ie. as the Dollar is tied to the Yuan/HK Dollar then as it falls the price of assets in China must rise.

 

in effect....HYPERINFLATION?

 

 

 

No but we are seeing wealth transfer

 

re my earlier post about likely effect on USA manufacturing

 

this is already visible - look at Japan

 

http://www.allacademic.com/meta/p_mla_apa_...0522_index.html

 

Since the 1980s, 'kūdōka' - hollowing-out due to offshoring - has evoked fears of an undermining of Japan's industrial base and employment. Not unlike in the U.S. today, when the relocation trend accelerated in Japan in the 1990s, policymakers became increasingly proactive in designing subsidy and employment support programs for companies keeping jobs at home. Is hollowing-out economic reality or political hysteria? What is the domestic economic fallout of offshoring? How many jobs have been lost, supplier relations cut, and industrial prowess given up in Japan? By looking at economic and labor market data, this paper finds that hollowing out has indeed hurt the small firm sector, but it has not affected industrial power, because innovation and critical component manufacturing has largely remained in Japan. In fact, for many firms offshoring to Asia has been insufficient in scale to optimize on cost, partially due to Japan's protective policies.

 

Is hollowing-out economic reality or political hysteria? What is the domestic economic fallout of offshoring? - its both IMO and it leads to downward pressure on wages in Japan/US etc as money/manufacturing runs to the most efficient home available

 

 

 

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