Hiding Bear Posted February 27, 2004 Report Share Posted February 27, 2004 China Regulator Warns Of Investment Bubble By Peter S. Goodman Washington Post Foreign Service BEIJING, Feb. 26 -- China's senior currency regulator warned Thursday that the billions of investment dollars surging into the country may be generating a potentially dangerous bubble, adding to recent speculation that the government may slightly increase the value of the country's currency in order to cool growth. "The inflation rate is rising, and the asset bubble problem is starting to get worrying," Guo Shuqing said in a statement published on the Web site of the State Administration of Foreign Exchange, which supervises inflows of foreign money. http://www.washingtonpost.com/wp-dyn/artic...-2004Feb26.html SOHU, NTES, SINA anyone? Tanks. Rapid foreign investment is forcing the country's central bank to step up purchases of foreign currency to maintain the fixed exchange rate of the yuan, also known as the renminbi. Last year, China's foreign reserves grew more than 40 percent, to $403 billion, according to the government. Although the government has sold billions of dollars worth of bonds to absorb some of this money, China's banks have lately shown a reluctance to buy. Translation: China picked up $150 billion US in the last year through trade and through forex to fix the value of the yuan. They produced about $150 billion of new yuan to buy the dollars. When they tried to sterilze this intervention by issuing bonds, interest rates went up. China decided inflation was better than interest rates rising too high to support the dollar. Once again, inflation wins. Link to comment Share on other sites More sharing options...
machinehead Posted February 27, 2004 Report Share Posted February 27, 2004 The official discount rate in Japan is 0.1%. It was at 1% in 1995...then dropped to 0.5% in late 1995 and held there until 2001 when the FED started chopping due to the collapse of debt inflationary potential in 1999... Right. I was taking a wild guess at the whole yield curve ... the whole spectrum of the Japan government's borrowing. At one point, they had even pushed 10-year JGB's down to 0.7% or so. Of course, they have some older higher-yielding bonds in the portfolio, too. Whatever the exact weighted yield, it's tiny. Just a couple of points rise in inflation, and Japan's interest bill could double in the space of a couple of years. If you wanted to design a hyperinflationary set-up, I couldn't think of a more promising one. Link to comment Share on other sites More sharing options...
Hypertiger Posted February 27, 2004 Report Share Posted February 27, 2004 Japan Premium 3 Months rate is in a range from 0.01% to 0.005%... Think of savings as stored grain...Once the storage of grain stops your chances of starvation becomes inevitable... Link to comment Share on other sites More sharing options...
zensmoke Posted February 27, 2004 Report Share Posted February 27, 2004 EU: Tariffs on U.S. Goods to Start Monday The European Union will start imposing sanctions on U.S. goods as of Monday because of Washington's failure to end export tax breaks that have been ruled illegal by the World Trade Organization. http://www.timesdaily.com/apps/pbcs.dll/ar...7/APF/402270726 Link to comment Share on other sites More sharing options...
Guest Posted February 27, 2004 Report Share Posted February 27, 2004 That GDP numer was "selected" as a counterveiling force for the soon to be announced University of Michigan Consumer Confidence Survey number...which will be ugly. Consumer spending is 70% of GDP. Auto sales are falling, and the consumer is getting less confident. Their tax refund spending is likely already priced into the maket, as witnessed by the retain stocks. Watch the Ten Year Treasury Yield today to see if strong GDP numbers drive up mortgage rates. Politically, jobs numbers will need to show improvement too, so the mortgage rates may rise. Link to comment Share on other sites More sharing options...
brian4 Posted February 27, 2004 Report Share Posted February 27, 2004 Morning Gang- Good posts for so early-window at the bell for 50 minutes-lock n load. Link to comment Share on other sites More sharing options...
zensmoke Posted February 27, 2004 Report Share Posted February 27, 2004 Gap and Crap---or---Gap and Go? Link to comment Share on other sites More sharing options...
zensmoke Posted February 27, 2004 Report Share Posted February 27, 2004 *DJ SINA To Buy Crillion For 60% Cash, Rest In Stock >SINA Link to comment Share on other sites More sharing options...
machinehead Posted February 27, 2004 Report Share Posted February 27, 2004 EU: Tariffs on U.S. Goods to Start Monday The European Union will start imposing sanctions on U.S. goods as of Monday because of Washington's failure to end export tax breaks that have been ruled illegal by the World Trade Organization. http://www.timesdaily.com/apps/pbcs.dll/ar...7/APF/402270726 Among "funnymental" influences on the market, protectionism is one that I take most seriously. A trade war now would just wreck the market. There's essentially zero chance that the U.S. Congress will repeal the offending export subsidies in an election year. So the European tariffs will get bigger and bigger. And Congress may even respond with its own tariffs. If that happens, Dow 5000 here we come. Link to comment Share on other sites More sharing options...
Hypertiger Posted February 27, 2004 Report Share Posted February 27, 2004 The official discount rate in Japan is 0.1%. It was at 1% in 1995...then dropped to 0.5% in late 1995 and held there until 2001 when the FED started chopping due to the collapse of debt inflationary potential in 1999... Right. I was taking a wild guess at the whole yield curve ... the whole spectrum of the Japan government's borrowing. At one point, they had even pushed 10-year JGB's down to 0.7% or so. Of course, they have some older higher-yielding bonds in the portfolio, too. Whatever the exact weighted yield, it's tiny. Just a couple of points rise in inflation, and Japan's interest bill could double in the space of a couple of years. If you wanted to design a hyperinflationary set-up, I couldn't think of a more promising one. Rates are lowered in search of volume...to support debt inflation... Eventually the rates reach a point where the volume dries up...then you can not survive on those rates...Debt inflation then turns into debt deflation... This process that we are at the tail end of began 45+ years ago...so not much longer to go with rates this low... Inflate or die means that rates must continue going down forever or the system implodes... We are at the point where rates can not be lowered enough to sustain this scam much longer... Late 2004 early 2005 is where you believers in the Hyperinflationary miracle are to have your dreams come true...Unfortunately it is where your nightmare will begin... I see no hyperinflationary set up...Prehaps the filth at the top will bid up the last loaf of bread but they will continually cut production to get there... I guess if you own the last loaf of bread your Hyperinflationary masterstroke will work but 100's of millions will not be playing your game... Link to comment Share on other sites More sharing options...
zensmoke Posted February 27, 2004 Report Share Posted February 27, 2004 NEW YORK (Dow Jones)--The Federal Reserve has arranged a weekend system repurchase agreement Friday, the Federal Reserve Bank of New York confirmed. Federal funds were trading at 1 1/16%, above the Fed's 1% target rate when the central bank entered the market. The Fed's execution of the weekend operation was expected. (Dow Jones Newswires) Link to comment Share on other sites More sharing options...
brian4 Posted February 27, 2004 Report Share Posted February 27, 2004 Patience yesterdays intra day highs are still intact and so is my stop-Nazy is going nowhere. I agree with MH the European tariffs ARE a BIG deal and will kill the markets. Link to comment Share on other sites More sharing options...
brian4 Posted February 27, 2004 Report Share Posted February 27, 2004 double top on spoo cash within 1 tick. Link to comment Share on other sites More sharing options...
zensmoke Posted February 27, 2004 Report Share Posted February 27, 2004 The euro remains under selling pressure after the release of surprisingly low euro-zone inflation numbers earlier in the day fueled speculation the ECB might cut interest rates, possibly as soon as next week. ....... Whether they will move as early as next Thursday is a matter of hot debate in the currency market. (Dow Jones Newswires) Link to comment Share on other sites More sharing options...
brian4 Posted February 27, 2004 Report Share Posted February 27, 2004 stopped on the spoo's for a 3 point loss-minor-just bought March 1150's stop 1153. Link to comment Share on other sites More sharing options...
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