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CHINA'S PMI PLUMMETS, EXPORTS DECLINE, IMPORTS INCREASE DUE TO OVERVALUED YUAN [Copy link] 中文

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Post time 2014-9-8 09:29:31 |Display all floors
The month of August was full of red ink for China ever since its central bankers at PBOC decided to revalue the Yuan back to below 6.150, touching 6.140 in July, when China was just beginning to show some signs of growth again, with its PMI then rising to 51.7, but now, it has dropped back to 50.2, barely growing by a hair, and its exports growth declined from 14.5% in July to a much lesser 9% in August, while its imports rose, as predicted in my posts, from 1.6% to 3.0%.  In short, the PBOC by revaluing the Yuan to its CRITICAL LEVEL of 6.150 or less, has predictably caused the MANUFACTURING SECTOR OF CHINA TO STAGNATE AT ZERO GROWTH, its EXPORT GROWTH RATE TO BE CUT BY 50%, and its IMPORT GROWTH RATE TO INCREASE BY 100%.

Who is responsible for this INSIDE JOB on the economy of China?

The public whose jobs are on the line, the factories whose survival on the line, and the country whose defense capability depends on a growing economy is also on the line, all demand an answer from the PBOC, as to who is RESPONSIBLE FOR THIS SELF-INFLICTED DESTRUCTION OF CHINA'S MANUFACTURING ABILITY.



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Post time 2014-9-15 00:01:18 |Display all floors
This post was edited by abramicus at 2014-9-27 23:50

CHINA'S ELECTRICITY OUTPUT DROPPED BY 2.2% IN AUGUST.  THE GDP GROWTH RATE FOR THE THIRD QUARTER IS HEADING TOWARDS 7.0%.  VALUE-ADDED INDUSTRIAL OUTPUT GROWTH FELL FROM 9.0% TO 6.9%.  ON TOP OF WHICH CHINA'S AUGUST PMI FELL TO A DISMAL 50.2 ALL OVER AGAIN, AFTER A BRIEF RIVIVAL TO 51.7 IN JULY, DUE TO THE TEMPORARY DEVALUATION OF THE YUAN STARTING IN APRIL 2014, PEAKING ON JUNE 3, 2014, AT 6.254, AND ENDING IN JULY 2014, WHEN THE YUAN EXCHANGE RATE TOUCHED 6.20 YUAN/DOLLAR, AND IS NOW BELOW THE CRITICAL RATE OF 6.150, PREVIOUSLY DEMONSTRATED IN A PRIOR POST TO BE STATISTICALLY ASSOCIATED WITH A DROP OF THE PMI BELOW 50.0.  THE YUAN/DOLLAR EXCHANGE RATE AS OF TODAY, SEPT. 14, 2014, IS IN A HIGHLY RECESSIONARY TERRITORY AGAIN AT 6.140!!!

I HOPE LI KEQIANG IS READING CHINA'S ECONOMIC REPORT CARD FROM EVERY CORNER OF THE WORLD - CHINA'S ECONOMY IS FALLING APART - BUT THEIR SUGGESTED STIMULUS WILL NOT WORK, BECAUSE THE PROBLEM IS THAT THE MANUFACTURING SECTOR OF CHINA IS BEING STRANGLED TO DEATH BY THE OVERLY HIGH EXCHANGE RATE OF THE YUAN SET BY THE PEOPLE'S BANK OF CHINA.  ADDING MORE STIMULUS MONEY INTO THIS ENVIRONMENT ONLY CAUSES ANOTHER PROBLEM TO EMERGE AS A PALLIATION TO THE ORIGNAL PROBLEM THAT REMAINS UNSOLVED.  MORE SPENDING ON USELESS PROJECTS AND MORE LOANS TO BUILD BUILDINGS THAT THE PEOPLE CANNOT AFFORD TO BUY BECAUSE THEY ARE LOSING THEIR JOBS WILL ONLY ADD INFLATION TO CHINA'S RECESSION, I.E., IT WILL COMPOUND CHINA'S RECESSION INTO A FULL BLOWN STAGLATION, THAT IS SURE TO BRING NOT JUST THE ECONOMY BUT ALSO THE POLITICAL STRUCTURE OF CHINA DOWN.

THE SOLUTION IS TO KICK OUT THE ECONOMIC HITMEN IN THE PEOPLE'S BANK OF CHINA, DO AN ANTICORRUPTION INVESTIGATION INTO THEIR FOREIGN CONNECTIONS, AND DEVALUE THE YUAN BACK TO AT THE VERY LEAST 6.15 YUAN/DOLLAR, IMMEDIATELY.

IT IS TIME CHINA NATIONALIZES THE PBOC AND KEEP ITS BANKERS FROM STRANGLING THE CHINESE ECONOMY WITH ITS MISUSE OF PUBLIC ASSETS, LIKE CHINA'S FOREIGN CURRENCY RESERVES, TO BUY UP THE YUAN UNTIL ITS EXCHANGE RATE OVERVALUATION MAKES EVERY CHINESE-MANUFACTURED PRODUCT OVERPRICED AGAINST ITS COMPETITORS ABROAD, AND EVERY FOREIGN-MANUFACTURED PRODUCT UNDERPRICED AGAINST ITS CHINESE COMPETITORS INSIDE CHINA'S OWN DOMESTIC MARKET.

THIS IS A HATCHET JOB.

IT MUST END.

OR CHINA WILL END ITS PEACEFUL RISE, AND THE CHINA DREAM WILL BECOME A NIGHTMARE OF MASS PROTESTS IN EVERY CITY, IN EVERY PROVINCE, TO STOP THIS CARNAGE ON THE JOBS AND LIVELIHOODS OF HUNDREDS OF MILLIONS OF DECENT, HARDWORKING, CHINESE MEN AND WOMEN, WHOSE FACTORIES ARE LIKELY TO BEGIN LAYING OFF STARTING NOW.


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Post time 2014-9-16 22:49:05 |Display all floors
This post was edited by MrMao at 2014-9-16 22:49

























































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Post time 2014-9-17 12:08:28 |Display all floors
The Renminbi exchange rate STILL stands at 6.144783 Yuans to 1 US dollar as of September 17, 2014.

Prediction:  China's Manufacturing PMI for September 2014 will DROP below 50.0.

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Post time 2014-9-23 12:14:10 |Display all floors
SURPRISE, CHINA'S MANUFACTURERS PMI FOR SEPTEMBER ROSE TO 50.5!!!

But, factor in the fact that the PBOC took an extraordinary step of earmarking 500 billion yuans to be lent to 5 major banks over a period of 3 months, unofficially leaked to the press on September 17, 2014, and you can see that the bump in the PMI of a mere 0.3 points is well within expectation.

Today, the Yuan/Dollar exchange rate remains at a high level of 6.14.  

If the PBOC were so sure its exchange rate was correct, it would not have had to inject 500 billion yuans into the banking system last week.  It could have achieved the same effect on the PMI by devaluing the Yuan to 6.18, without the risk of adding to inflation.

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Post time 2014-9-27 14:21:50 |Display all floors
This post was edited by abramicus at 2014-9-27 15:45

TIME FOR THE CHINESE LEADERSHIP TO TAKE OVER THE PBOC AND DEVALUE THE YUAN TO 6.15.

The question framed by the WSJ is off the mark.  The question is not whether or not Zhou is on the way out.  Nor its corollary, as to who will take his place.  Neither rumors have basis in fact, but the pattern of creating a rumor in order to prevent it from happening has occurred many times before, and each time with the opposite effect of the rumor's apparent intent - Zhou emerged the winner against the baseless rumors made against him.

On August 26, 2010, the Weibo supposedly published an unfounded rumor, that Zhou was about to lose his job because he lost $430 billion dollars in the US Treasury market, and later on, it changed to Fannie and Freddie stocks.  A week or so later, he emerged as the winner, a proven survivor, with enhanced prestige and power.  Remember, it was in July 2010 that the PBOC began its current disastrous relentless revaluation of the Yuan that reduced the annual growth rate of China's GDP from 14% to barely above 7% today.

In 2012, it was Zhou who told reporters that he might be retiring, and seemed to be writing articles summing up his past achievements in the vein of an autobiography.  Then, the opposite happened, and he was retained against the almost iron-clad rule that top leadership positions must not be assumed past 65 years of age, and was appointed by Xi for a third term.

So now, in 2014, how should we take this rumor from a China-unfriendly WSJ article?  Taken in the context of all previous false rumors mongered about Zhou, it probably was the Western way of ensuring that their man would remain in office, given the intense criticism being leveled on the PBOC as China's GDP annual growth rate is crashing below the State Council mandated 7.5% annual growth rate.  And, an honest analysis of the causes of China's economy crashing will point squarely to the irrational revaluation of the Yuan against the dollar and all currencies as the chief culprit, which forces all Chinese manufactured goods to be overpriced abroad in dollars, and at the same time, overpriced in Yuans compared to foreign products in the domestic market as well.

Because the PBOC has been emboldened by this "ricochet effect" of the false rumor of Zhou's stepping down to further revalue the Yuan to 6.12 by the end of this week, on September 26, 2014, which will almost certainly force some factories to default on their loans, to lay off workers, and to close down permanently, the subtance of the false rumor must now become the substance of a real inquiry by the State Council, to take over the PBOC and wrest the control over the Exchange Rate of the Renminbi from the hands of a clique of foreign-trained economists, to make the People's Bank of China serve the people, and not be served instead by the people, and to help the Chinese people produce and not to make them unproductive.

If the State Council does not have the guts to force the Exchange Rate of the Renminbi to devalue, to at least 6.15 yuans/dollar, and preferably to 6.20 yuans/dollar, then it will have only itself to blame for the coming hard landing, if not crash, of China, Inc., which will become the laughing stock of the world for having dropped the giant rock of its foreign currency reserve on the feet holding up the body, the manufacturing sector, leading eventually to economic recession accompanied by inflation, or the death spiral of STAGFLATION.  The $430 billion lost in 2010 in US Treasury values will be peanuts compared to this coming crash.

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Post time 2014-9-28 11:37:50 |Display all floors
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