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GLOBAL RESET - WHEN THE FED HIKES INTEREST RATES [Copy link] 中文

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Post time 2015-8-30 06:30:56 |Display all floors
. . . ONLY THE DOLLAR WILL BE LEFT STANDING.

The interest can be paid by printing more fiat money to pay the world with, and the world has no choice but to accept it as payment.  The ONLY international reserve currency that can claim it, and make it stick.  Period.

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Post time 2015-8-30 11:39:14 |Display all floors
The FED is trying not to raise rates.

The FED got a little help from the PBOC when they depreciated recently.



The FED and the PBOC working hand in hand.......



But they proofed the financial markets......Wall Street can certainly recovered....but Shanghai Index, that is another story.



I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2015-8-30 13:52:15 |Display all floors
When a Butterfly Tries to Fly Like a Bird, Its Wings Can Only End Up Broken - Until China Can Station Troops Around the World to Effect Regime Change on Countries that Refuse to Hold Yuans as Reserve Currency, It Has No Business Trying to Imitate America - It Becomes a Joke, Were the Cost Not so Catastrophic on the Chinese People.

China cannot do what America does, for the simple reason that China cannot pay its dollar-denominated debts of nearly 3 trillion dollars by simply printing dollars to equal the principal plus interest.  But China is acting as if it could, through overvaluing the Yuan, and allowing private and government groups to keep borrowing in dollars, that the PBOC would end up paying through reducing its foreign currency reserves, now less than 3.65 Trillion dollars worth.  China is blowing through more than 40 billion dollars a month pretending it can keep the Yuan overvalued against the dollar.  All the Fed has to do is raise the interest rate, which it has to do not in order to sink China, but because otherwise inflation in America would become a serious problem next year if it does not raise rates this year, and China's products overpriced as they already are at 6.40 CNY/USD, would be ever more overpriced in dollars abroad, and in yuans at home, making Chinese manufacturers suffer losses of revenue, profit margins, and eventually, suffer inability to service their own debts in Yuans and in Dollars, resulting in factory closures, mass layoffs and social uprisings.  The culprit is not the Fed, having to raise interest rates, which it has no choice but to raise or Americans will soon find food and rents go over the roof if it does not.  The culprit is the PBOC and its backers at the top who see their political stature reflected in the value of the Yuan, regardless of its adverse consequences on the livelihood of the factory owners and workers, who stand to lose their investments and their jobs all in one swoop.  

And, if all indicators are right, the US economy is heating up right now.  Sales are going up everywhere.  People are buying.  If interest rates don't go up soon, inflation will take off.  And once the expectation of inflation is built into the valuation of investments and savings, it becomes a self-fulfilling vicious cycle.  The Yellen administration is unlike the Bernanke and Greenspan crowd who cater to Wall Street wishes, putting the stock market ahead of the real market.  Yellen will raise rates because otherwise the standard of living of Main Street will be eroded by inflation.  And printing money into an inflation is like adding fuel to the fire, so fiat does not work here, only raising interest rates will work.  Yellen will raise rates, Wall Street will tank, and the Chinese economy plus stock market, will also tank.  In the end, the dollar will be left standing, but still able to buy whatever the American economy needs, which is what in the end matters.



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Post time 2015-8-30 22:47:42 |Display all floors
If China depeg from US dollar, then all the US wall street hedge fund will make free money in yuan carry trade, which will become part of the complete financialization of american economy.  This is crazy.

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China is merely doing what the US has been telling others to do, which is to work hard to produce things people want to buy at a good price.

The US has forgotten what it preaches and like the Brits it has fallen into a SICK financialization of the economy where more than 40% of total profits in the economy come from NON PRODUCTIVE financial speculation with derivatives, naked shorting, fronting, High Frequency Trading and other nonsense they have invented in order to steal from those who actually produce something.

Ordinary Americans are screwed

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Post time 2015-8-30 22:56:19 |Display all floors
bushier Post time: 2015-8-30 22:47
If China depeg from US dollar, then all the US wall street hedge fund will make free money in yuan c ...



it is called diversification from factory jobs.


US has succeeded where China is still dreaming of getting more service sector jobs.









I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2015-8-31 02:05:02 |Display all floors
This post was edited by abramicus at 2015-8-31 02:12
bushier Post time: 2015-8-30 22:47
If China depeg from US dollar, then all the US wall street hedge fund will make free money in yuan c ...

Impossible.  Contrary to what you said, hedge funds cannot make free money in the yuan carry trade when China depegs from the dollar.  In fact, most of them are betting on the Yuan remaining overvalued against the dollar, and will suffer losses if China allows the Yuan to devalue according to market demand to 6.50 or even 7.00.  

You try to sound professional but you do not know what you are talking about.  Scaring people with big words like the Yuan-carry-trade as if people in the know should agree with you.  They don't, and will never agree with your attempt to deepen the deception of the Chinese economists and public to continue to overvalue the Yuan, as if it will prevent the hedge funds from looting China.  The opposite is the case.  Overvaluation of the Yuan is what is giving the hedge funds their free lunches every single day.

This is what Bloomberg as late as August 25, 2015 said about the "Yuan Carry Trade":

"China just gave investors one more reason to shun the most popular trading strategy in the $5.3 trillion-a-day currency market.  Carry trades, or borrowing one currency cheaply to invest in a higher-yielding asset elsewhere, were already suffering the biggest losses since 2008 as the rout in emerging markets sent potential purchases tumbling. By cutting interest rates two weeks after its shock devaluation, China effectively crossed the yuan off investors’ shopping lists, too.
Add to this a surge in volatility -- which is kryptonite for these transactions because it can wipe out the profit from the interest-rate differential -- and carry traders are finding fewer and fewer ways to make money. JPMorgan Private Bank and the asset-management unit of Bank of China both say the strategy’s best days are behind it."

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Post time 2015-8-31 04:41:54 |Display all floors
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