Will Chimerica's Demise Take Down Global Economy? 69 comments
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In 2002, the global economy was weak and equity markets around the world were at multi-year lows following the greatest equity bubble and bust in world history. Many policy makers including Alan Greenspan, chairman of the U.S. Federal Reserve, feared a deflationary spiral of Great Depression proportions resulting from the stock market collapse.
To prevent such an outcome, the United States embarked on an historic monetary experiment to reflate a post-bubble economy by lowering interest rates to 1%, the lowest in 50 years. The result was a huge global economic boom which benefitted nearly every economy and every asset class on the planet. But the boom has turned to bust. In its wake, the cozy relationship between China and the United States that developed during boom time is unravelling.
Just Friday, Barack Obama slapped Chinese tire imports into the United States with tariffs of up to thirty-five percent. China was outraged and immediately threatened to retaliate. I now see a trade war between China and the United States as the biggest threat to global economic recovery.
With this trade war looming, one must wonder if Chimerica, the marriage of China and America as one economic entity, will end in murder-suicide, taking the global economy down with it.
Chimerica’s origins
Niall Ferguson and Moritz Schularick invented the term “Chimerica” in 2006 to describe the underpinnings of the 2000s boom. In their view, this economic upswing resulted from an America and China joined at the hip in a state of economic interdependence. Americans were the spenders and the Chinese were the savers and producers. The United States spent far in excess of what it saved. Meanwhile China ran a huge current account surplus, accumulating a $2 trillion stash of largely U.S. dollar-denominated international reserves, effectively funnelling America’s borrowed money back into the U.S. economy.
This state of affairs was always unsustainable – more so after the collapse of the associated credit and asset bubble exposed fissures in the global financial system in 2007. However, the flashpoint came in 2008 when the U.S. dollar plummeted to record or multi-decade lows against a host of other major currencies, leaving China’s reserves diminished in value. For the months since, the Chinese have expressed growing concern that they could get the short end of the stick if the marriage which created Chimerica dissolves.
Chimerica’s unravelling disturbs China
If one looks at any one incident involving China and the United States during the global economic crisis in isolation, it is easy to lose sight of the big picture. However, threading the events of 2008 and 2009 together makes a compelling case that the Chinese – U.S. marriage is coming apart.
The first indication of Chinese concern which I detailed came as the government-sponsored enterprises (GSEs) Fannie Mae (FNM) and Freddie Mac (FRE) collapsed last August. The Chinese had put much of their reserve money into GSE debt, believing it as safe as U.S. government debt. It was evident that the GSEs were not a safe investment except through an implicit government guarantee (as I said in May 2008). But when the GSEs collapsed, the Chinese were caught out and warned they could dump dollar-denominated assets unless they were made whole. Subsequently, Fannie Mae and Freddie Mac were nationalized and creditors were made whole.
The next flashpoint was created by comments by incoming Treasury Secretary Tim Geithner at his confirmation hearings before Congress. Geithner charged China with ‘manipulating’ its currency in an environment in which many western policy makers were openly blaming Asia’s mercantilism for the economic crisis. The Chinese retaliated, with Chairman Wen slamming the U.S. as a profligate nation in unusually stark terms that raised quite a few eyebrows.
At just about this time, the first hints of real American protectionism came into being in the form of the Buy America provision attached to the stimulus bill. There was quite an uproar from America’s major trading partners like Canada and China – and I saw this as a 21st Smoot-Hawley at the time, a view I still hold. (To make matters worse, the provision has had perverse consequences.)
By this point – early 2009, the Chinese were done. They had suffered the potential for massive losses through the dollar’s weakness and the failure of the GSEs. Now, they were being blamed for a crisis which began in the west. It was at this time that I noticed a steady drumbeat of ditch-the-dollar talk coming out of China. By the G-20 meeting in April, the Chinese central bank head Zhou outright called for a new international reserve currency.
The drumbeat of anti-Dollar news coming from China got louder and louder during the spring. The Chinese started settling trade in Yuan (Apr. 9) instead of dollars. The Chinese were discovered to be stocking up on gold supplies (Apr. 24). The Chinese central bank attacked the policy of quantitative easing in its quarterly report (May 9). The Chinese positioned themselves as the champion of emerging market nations and assembled support from Russia, Brazil and India for reforms in the international reserve system (Jun. 12).
And then came the retaliation.
Protectionism rises
On June 16, I wrote a post “Beijing starts a ‘Buy China’ policy” which clearly demonstrated that the Chinese were incensed by the Buy America provision in America’s stimulus bill. The trade war was on.
The ‘Buy America” and the “Buy China” provisions were nationalistic and prevented goods from other countries being bought. However, they were merely passive protectionism i.e. legislative exclusion of foreign goods and services. No tariffs were assessed.
But when Barack Obama chose to slap 35% tariffs on Chinese tire imports, this was an unmistakable act of active protectionism. This was the proverbial serving of divorce papers.
Expect prices to rise as a result:
Marguerite Trossevin, who represents a coalition of U.S. tire companies that import Chinese tires, said the tariff decision is “very disappointing.” She predicted price increases for U.S. consumers and losses for U.S. tire importers.
The Chinese have now said they will look to retaliate on U.S. poultry and auto products:
China announced dumping and subsidy probes of chicken and auto products from the U.S., two days after President Barack Obama imposed tariffs on tires from the Asian nation.
Chinese industries complain that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site yesterday. The dumping investigation relates to poultry alone, a spokesman said in Beijing today. The ministry didn’t specify the value of imports of the products.
To be honest, the protectionism should not be a surprise. Obama is no free-trader. And I certainly foresaw a rise in protectionism and indicated in December 2008 the United States was the likely first mover:
Tariffs, export subsidies and currency devaluations will roil the desire for free trade. Initially, countries will seek relief at the WTO (World Trade Organization) but later they will begin to act unilaterally. The U.S. will be the first to unilaterally retaliate.
Even the resistance to unwinding excess capacity and global rebalancing are all very predictable as nations retreat into nationalistic thinking when the chips are down. As far back as March 2008, I warned of a likely multi-cycle W-recession predicated on resistance to unwinding the status quo:
The global economy, now supported in the main only by the overextended U.S. consumer, finds itself at stall speed, susceptible to any number of potential exogenous shocks. Ultimately, the economic malaise created by this confluence of events will take years to unwind. A positive outcome to this process is dependent wholly on liquidation of excess credit and consumption.
This process will be extremely painful in the short term, but will lead to a healthy economy long-term. Unfortunately, experience shows that these painful steps will only be taken as a last resort. Moreover, geopolitical events become volatile in a world of economic insecurity, leading to political upheaval and protectionism. Protectionism is a natural outgrowth of nationalist economic policy as it transfers wealth from foreign producers to domestic producers by cutting off access to lower cost excess capacity in the goods in service sectors. However, this also serves to transfer wealth from domestic consumers to domestic producers by increasing the price of goods in the protected sectors, ultimately reducing consumption demand.
For these reasons, I am cautious about the long-term outlook for the global economy and the U.S. economy in particular. The likely outcome for the next decade is one of sub-par global growth with short business cycles punctuated by fits of recession.
Yes, trade and dumping are difficult issues. But, protectionism makes most everyone a loser. In June, I wondered should we expect a protectionist China. But I ended saying it was how the Obama administration responded to the green light given by the WTO to impose sanctions which would be most instructive. Obama has gone protectionist.
Chimerica marriage is ending in divorce
All need not be lost. Global re-balancing, where the American partner in this marriage does a little bit more of the saving and a little less of the spending and the Chinese partner does just the opposite, is what most economic counsellors suggest. This could save a strained relationship and put the partners on a sustainable path. This does seem to be happening.
Nevertheless, could this relationship between China and America be coming to an end?
I say emphatically yes. 100%. There is no going back now. Each partner in this marriage, China and the United States, has a bevy of domestic constituencies which are forcing a dissolution of the relationship. Hardliners in China want to move away from the dollar. And populists in America want to punish the Chinese for allegedly manipulating their currency and dumping goods below cost in America.
So, as surely as day turns to night, this arrangement between China and the United States will end. This marriage is over. The question is whether it will end gradually and peacefully in divorce or violently in murder-suicide. Right now, it’s looking like the latter.
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HOW do people who have saved money feel? More confident, happier, and more likely to be making aggressive plans for the future, and to invest in that future.
WHAT do people who have save money DO with that money? Spend it, though usually just a part of it, and usually on big, juicy capital investments like homes, cars, careers for themselves, and educations for their kids.
Viewing a return to saving a little of our cash every month as a BAD thing is hard for me to figure out...
Unless the problem is short term, and involving mistakes made by planners with plans focused WAY overmuch on the short term.
Yep, those folks are sweating when assumptions (like everyone spending 110% of their earnings) do not pan out.
Yes we do have real big problem with huge and growing trade deficits - it is completely unsustainable. Either we have to export a lot more or import lot less - likely will have to do both. Exporting with our price competiveness especially in a recession is a tall order, so importing less will have to be done.
All roads are leading to a trade war, so brace yourself. And don't bother listening to BB that the recession is over. Just remember he has been wrong about everything - just before the financial markets crashed last year - he was on record to say "system was getting stable".
On Sep 15 02:16 PM John Galt wrote:
> > The US and China are not "friends," and aside from the brief WW2
> interlude of cooperation against the Japanese, the two nations never
> have been.
>
> My biggest fear is war. Yes war, like world war. You know, people
> born in American territory shooting, bombing, and attacking people
> born in the Chineese territory.
>
Hold on - just a couple of posts above this you were at your xenophobic best telling us how people in Europe have no freedom !
(Not sure what your background is, but I've lived, worked and done business in the EEC and the USA and while things are done differently in each place, the levels of freedom are really no different. If you are talking about Russia, Ukraine or similar, of course you have a point)
If you really were referring to the EEC, it is people like you who exaggerate the differences between countries who actually allow politicians to whip up public sentiment to the point where war becomes possible.
On Sep 15 12:00 PM James Lewis wrote:
>Surely a country that believes in free markets, capitalist and democratic
> principles should reward those that contribute to these very principles
On Sep 15 03:19 PM chap08 wrote:
> Perhaps we should all try and be a little less xenophobic about the Chinese, the Europeans etc. etc.
On Sep 15 07:14 PM mna wrote:
> Wow, I never thought I'd see the day. the Union Protectionist Left,
> joined by the Flag Waving Xenophobic Right, is asking for direct
> confrontation with one of our largest trade partners, who has provided
> material goods for pieces of paper that will not be paid back at
> its full value. What could have caused them to join hands?
>
> I know. Stupidity.
>
> There's a reason why no economists favor trade protectionism. Do
> the world a favor and think a little bit before clammering for World
> War 3.
On Sep 16 10:08 AM coreopsis wrote:
"Asking Yanks to be less xenophobic is like asking a dog not to lick
its privates...just feels so good."
will you & Mike Oz be my new best friends ?
Just read through all of this & frankly feel like I need a shower ....
You rightly point out that this is a pretty rare event. But it happens occasionally, like every 80 years or so. The last time was in the 1930s. And we know what happened then.
"Too soon old, too late smart."
On Sep 15 07:14 PM mna wrote:
> Wow, I never thought I'd see the day. the Union Protectionist Left,
> joined by the Flag Waving Xenophobic Right, is asking for direct
> confrontation with one of our largest trade partners, who has provided
> material goods for pieces of paper that will not be paid back at
> its full value. What could have caused them to join hands?
>
> I know. Stupidity.
>
> There's a reason why no economists favor trade protectionism. Do
> the world a favor and think a little bit before clammering for World
> War 3.
I am amazed that so many obviously intelligent people
can dissolve into a gang of name calling idiots in 50
comments ... discounting the last three.
Mr Harrison, your over-hyping of the situation towards
the end of your article has set the tone for your readers
to follow. I do not believe that this is the end of US-Sino
relations on any level, US will just have to take its medicine
for trying to throw what little weight it has left around.
China will continue to turn screws on with buying own gold,
non-US asset purchases, more bilateral trade agreements within Asia & Latin-America, more purchase of SDRs & all the time slowly getting rid of US dollars out back door.
But I believe China also needs the US, as a primary market
for all those crappy goods you see filling WalMart, which your average town hall GOP American seems to love to buy.
We've had two legs of 'deep-recession' so far in this 18-year Night-cycle depression: 2001-2003 deep-recession #1, dot com bubble; 2007-2009, housing bubble deep-recession #2; another one's coming in 2010 as commercial real estate pops and residential mortgages begin to re-set...and these series of 'deep-recessions' (a euphemism for 'depression' the word no one in authority likes to use very much) until 2019, like a series of earthquakes and aftershocks.
Recovery? Isn't it nice to be talked to by our leaders as though we were children? "Oh, the recessions over, dear. Nothing more to worry about." Did he say 'Bernanke', or 'Burned Yankee'?
On Sep 15 06:39 AM CautiousInvestor wrote:
> The basic model is broken: the US needs to spend less and invest
> more; the Chinese need to save less and spend more. What we shared
> in the past is unsustainable with too many imbalances.
>
> The Chinese are struggling as desparately as we are and many of the
> statistics being released in China are highly misleading; contrary
> to what is being reported, Chinese consumer spending as a fraction
> of GDP is declining. At the moment they are ever more dependent upon
> state driven invesment, some of which is being directed into building
> surplus manufacturing capacity.
>
> They cannot transition to a consumption driven economy any more easily
> than we can transition to an investment and export driven economy;
> there will be painful adjustments. Current tensions identified by
> the author are symptoms of these underlying stresses and China's
> determination to be something more than a source of low cost labor
> to the western world and evolve into a super power in its own right.
>
>
> What distinguishes the two countries is that China has an idea as
> to what direction it wants to move towards; the US bogged down in
> deleterious debates as to how to share an ever shrinking economic
> pie. China will eventually eclipse the economic power of the US,
> it's only a matter of timing. Along the way, there will be natural
> frictions as China and the US rebalance their relationship.
>
>
I think someone needs to explain to you that a 'trade war' is not the same thing as a 'war'. A 'trade war' is a euphemism for negotiating for fair trade and using international trade panels to adjudicate trade disagreements. A real war is much different, in fact.
Asking a non-Yank not to be hyper-emotional in his/her/their/its knee-jerk anti-Americanism is like asking a fish to understand a bird's perspective.
On Sep 16 10:10 AM coreopsis wrote:
> Clammering for war is simply the Yanks asking to be allowed to do
> what them's do best.
By Jason Subler
Reuters
Wednesday, February 25, 2009
BEIJING - China might not have engaged in the kind of overt protectionism of the "Buy American" programme recently, but it has enough barriers to free trade and investment in place to leave itself open to such charges down the road.
Beijing has pulled out all the stops in recent weeks to pillory the United States for the local content requirement of its stimulus package, with commentaries in state media calling protectionism a "poison" and a parade of officials pledging China's commitment to free and open trade.
That may have helped reassure China's trading partners that it is not planning to throw up fresh tariff barriers or otherwise block imports, but its own web of often opaque and subtle blocks on foreigners' participation in the economy hardly leaves it beyond reproach, analysts say.
Thus, while Beijing may be enjoying something of a hiatus from criticism over everything from its lax protection of intellectual property rights to the value of its currency, it can probably count on fresh attacks if it does not address the fundamental question of imbalances and ensuing trade surpluses.
"China doesn't have many tools to encourage its consumers to buy more to absorb the contraction abroad. That will lead to a transition period which is going to be very difficult, and that, I'm afraid, will be plagued by protectionism against it," said Joerg Wuttke, president of the European Union Chamber of Commerce in China.
"They don't have the moral high ground, that's for sure."
First, take government procurement.
Despite Beijing's vows that it will not implement "Buy Chinese" provisions as part of its 4 trillion yuan ($585 billion) stimulus package to stave off a deeper economic downturn, it already has a strong local content policy for many products, Western business groups and diplomats say.
Those restrictions are not always explicit, as in the case of "Buy American".
But in practice, the overall effect of its often obtuse bidding processes, technical standards and other regulations is that foreigners are regularly at a disadvantage when bidding for government contracts or tenders.
"The reason that China doesn't have the option of imposing 'Buy China' rules is that it already has them in place," said Arthur Kroeber of the Beijing research firm Dragonomics.
The EU Chamber cites the example of a Western company whose joint venture (JV) bid for the right to run a network of petrol stations in one city but saw the tender handed to a state-owned competitor that it said had offered a much less attractive bid.
Provincial officials also routinely favour companies from their own tax bases, a trend that appears to have picked up in recent months as local governments look to prop up their own economies. [ID:nPEK176822] [ID:nPEK178419]
Beyond government procurement, Beijing maintains strict controls over foreign firms' participation in the economy, barring them from strategic sectors such as some areas of resource extraction and restricting them in many others.
For instance, foreign auto makers may only produce via JVs, and may have a maximum of four JVs in the country -- two for passenger cars and two for commercial vehicles.
Onerous technology transfer requirements in sectors such as trains, together with evidence Chinese firms are not keeping the technology in the country as agreed but are exporting it to places such as Africa, are another deterrent, business groups say.
"We just want to have a decent chance, level playing conditions in order to bid for projects," Wuttke said.
So what can Beijing expect?
Western companies have long been pushing for greater access in a range of sectors, from insurance to logistics. Stagnating growth in their home markets could give them, and politicians back home, an incentive to step up those efforts.
"One area we think is particularly important is service market access. For the U.S. in particular it's an area of strength ... and yet it's a relatively closed sector here," said Robert Poole, vice president for the China operations of the U.S.-China Business Council.
While Beijing has avoided antagonistic policies like those of India, which has temporarily banned imports of Chinese toys and said it would slap safeguard duties on Chinese aluminium imports, some of its own steps could hand ammunition to critics abroad.
Its stimulus spending has focused mainly on boosting domestic demand through infrastructure and other investments. However, authorities have also increased export tax rebates for products ranging from textiles to machinery as part of plans to support nearly a dozen important industries.
That kind of overt support for exports, at a time when the U.S. trade deficit with China hit a record $266.3 billion in 2008, could grate on critics abroad and potentially bring its currency policy back into closer focus.
"The yuan is an issue, and then the export tax rebates," said Sherman Chan, an economist with Moody's Economy.com in Sydney.
Beijing has kept the yuan in a tight range of around 6.84 per dollar over the last seven months, having let it rise 19 percent since revaluation in 2005.
"People think that the yuan has been artificially kept at a very low rate in order to sustain China's export competitiveness," she said.
Beijing's susceptibility to charges of subsidising its industry may explain in part why it has gone on the offensive, including by sending a buying mission to Europe on Tuesday.
But such efforts, which some analysts see as little more than public relations exercises, are unlikely to do much to stave off future complaints, potentially ranging from anti-dumping investigations to cases at the World Trade Organization (WTO).
BusinessEurope, a lobby group, said China's curbs on raw materials exports may violate WTO rules. [ID:nLO424688]
At the root of the problem is the overcapacity China has built up in many industries as part of its investment- and export-led growth model, and whether it can boost domestic spending and reduce excess capacity quickly enough to close the gap now that overseas demand is plummeting.
While some of the specific industry support plans, notably that for autos, focus on consolidation, there is evidence that some heavy industrial companies are receiving special injections of loans to keep them afloat, said Kroeber of Dragonomics.
"That does mean that (they) are sustaining excess capacity and increasing the likelihood that China will continue to export steel and all of this stuff," Kroeber said.
"So that is a problem," he said.
The only reason I could fathom is that this helped them negotiate from strength with a visible threat.
"The whole campaign on IMF SDRs and questioning the dollar initially
left me scratching my head"
Me too, until I ran a playback on some of my own articles on SA & also some from Trader Mark & a few others.
I am forming an opinion that this is all part of a longer term hedge against the dollar going forward, along with the recent IMF purchase, bilateral trade agreements, asset purchases in Australia / Lat-Am (paif dor in dollars)& gold stocking that has been going on.
All parts of the same puzzle.
knee-jerk anti-Americanism is like asking a fish to understand a
bird's perspective."
Touché Mr Clark ... like that a lot
Illegal Subsidies: China’s economic growth plan is based on promoting exports at all cost, and regardless of legality. To accomplish this, the Chinese government provides massive subsidies to many of its industries to allow them to produce goods for export at an artificially lower cost. For instance, the Chinese government holds down the cost of fuel and electricity, which makes the cost of production lower. Also, the government provides free land and utilities to companies in key economic sectors, limits competition by regulating distribution of products, hands out free to low-cost loans to favored companies, and utilizes many other methods of promoting its export industries at the expense of those who play by the rules.
Illegal Dumping: Dumping goes hand-in-hand with subsidies in nonmarket economies like China. The result of these subsidies is that companies can afford to flood export markets with products priced below where they should be priced. American companies cannot compete with these artificially priced products, and are being run out of business. The International Trade Commission currently has 61 separate orders outstanding regarding China’s dumping in industries from paint brushes to hammers, from paper clips to industrial bearings, from tissue paper to steel. (U.S. International Trade Commission, Antidumping and Countervailing Duty Orders In Place as of January 18, 2008, By Country, January 18, 2008)
• Currency Manipulation: From 1994 until 2005, China explicitly pegged its currency, the yuan, to the dollar, at a rate of roughly 8.28 yuan to the dollar. Since the Chinese economy was growing faster than the U.S. economy during this period, the result is that the yuan was significantly undervalued. This made China’s exports to the U.S. relatively cheaper than they should have been and made U.S. exports to China more expensive than they should have been. This had twofold negative effects on American industry. On one hand, the relatively cheap Chinese imports drove domestic manufacturers, who could not compete with that price, out of business. On the other, the relatively expensive imports of U.S. products into China limited consumption of U.S. goods there, putting many export-intensive U.S. companies out of business. Since 2005, China has allowed the yuan to appreciate slowly, although it is still dramatically undervalued. (Congressional Research Service, China’s Currency: A Summary of the Economic Issues, July 11, 2007)
• Labor Rights Abuses: China’s abuse of its workforce also contributes to the artificially low cost of Chinese goods. Millions of child workers and forced laborers are used to make products for export to the U.S. Independent labor unions are forbidden, and workers who attempt to form them are fired, imprisoned, or worse. These violations of internationally accepted workers’ rights artificially depresses the labor market, leading to Chinese products being cheaper because the companies only have to pay workers 15 to 50 cents per hour. (AFL-CIO, Section 301 Petition Against the Chinese Government, July 2006)
Better style: Asking a Yank to construct a metaphor in English is like asking a fish to fly.
Darlin', it juz cant be done.
On Sep 16 12:59 PM Paul Harper wrote:
> "Asking a non-Yank not to be hyper-emotional in his/her/their/its
>
> knee-jerk anti-Americanism is like asking a fish to understand a
>
> bird's perspective."
>
> Touché Mr Clark ... like that a lot
To quickly summarize, Mr Milligan-Whyte's series outline a grand strategy for a global partnership between America and China. He posits that neither the United States nor China can combat terrorism, failing or failed states, or climate change alone. Mr Milligan-Whyte's think-tank, the Center for America-China Partnership, is explains that although America's foreign policy has always revolved around 'win-lose' strategies, China is currently pursuing a 'win-win' strategy with America. His book explains how, by returning to the foreign policy advice that JFK and George Washington left the US, America can deal constructively and mutually beneficially with China.
It is a fascinating read, and I encourage you to read it.
Matt.
On Sep 17 04:52 PM matthewnlu wrote:
> I have been following your blog recently, and I'd like to share a
> series of books with you; President Obama and Secretary of Sate Clinton
> are both reading the first book of this series in preparation for
> Mr Obama's visit to Beijing in November. The book is China &
> America's Leadership in Peaceful Coexistence by John Milligan-Whyte.
>
>
> To quickly summarize, Mr Milligan-Whyte's series outline a grand
> strategy for a global partnership between America and China. He posits
> that neither the United States nor China can combat terrorism, failing
> or failed states, or climate change alone. Mr Milligan-Whyte's think-tank,
> the Center for America-China Partnership, is explains that although
> America's foreign policy has always revolved around 'win-lose' strategies,
> China is currently pursuing a 'win-win' strategy with America. His
> book explains how, by returning to the foreign policy advice that
> JFK and George Washington left the US, America can deal constructively
> and mutually beneficially with China.
>
> It is a fascinating read, and I encourage you to read it.
>
> Matt.
However, they are sitting on nearly a trillion in dollar assets, send about $200B in exports each year to the US.
In the longer term, no question that they want to diversify away. The reasons you cite are true and indicate this commodity diversification. But if the chinese want to keep the export model, then why would you pressure the dollar and strengthen the Yuan (or not allow it).
See my post in detail on this.
seekingalpha.com/insta...
On Sep 16 12:58 PM Paul Harper wrote:
> On Sep 16 12:03 PM Plant the seeds wrote:
>
> "The whole campaign on IMF SDRs and questioning the dollar initially
>
> left me scratching my head"
>
> Me too, until I ran a playback on some of my own articles on SA &
> also some from Trader Mark & a few others.
> I am forming an opinion that this is all part of a longer term hedge
> against the dollar going forward, along with the recent IMF purchase,
> bilateral trade agreements, asset purchases in Australia / Lat-Am
> (paif dor in dollars)& gold stocking that has been going on.
>
> All parts of the same puzzle.