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A EU free Saturday morning shall we? Michael Pettis (not yet available for publication) believes...

A EU free Saturday morning shall we? Michael Pettis (not yet available for publication) believes Wednesday's reserve ratio requirement decrease in China is more about the PBOC trying to offset what he believes are continued net outflows of speculative capital from the country. The yuan is no longer a one way bet, and in fact has been trading down sharply each day before the PBOC steps in to fix it.
Comments (9)
  • Why wouldn't money flee a totalitarian state?
    3 Dec 2011, 10:28 AM Reply Like
  • Yes China will be affected by worldwide austerity, EU sovereign debt issues, and worldwide looming recessions. No way for China to avoid it.
    3 Dec 2011, 01:04 PM Reply Like
  • Can't wait to hear Pettis' thoughts on the move! I'm sure they will offer some new perspective on the matter that no one has yet realized. It will be a must-read.
    3 Dec 2011, 01:13 PM Reply Like
  • pettis is almost the only person worth reading. him, and "shareholders unite" although they don't talk much about china. (and krugman)
    16 Dec 2011, 01:48 PM Reply Like
  • i believe china will push on the gas again (pettis would agree), and people will forget about this soft spell at least for a couple yrs.

     

    but pushing on the gas only works while inflation is under control. i believe china is heading for US in 1970s style problems.
    16 Dec 2011, 01:49 PM Reply Like
  • Those are probably my two favorite right now too. I generally recommend everyone I follow though (including myself) :).
    16 Dec 2011, 05:47 PM Reply Like
  • not sure i comprehend the issue . . . or in other terms ... So what?

     

    the yuan at its current value can buy other countries' denominated assets at a better value than it can within its own confines. seems to me it suggests the yuan IS high in value and the natural reaction of economics is to have it go consume other assets at "relative" cheap prices which would in the long run create equilibrium.

     

    the other point mentioned ....
    internal fear and/or couple with the first generation of citizens that actually CAN find a way to invest abroad ...
    it's only natural they would seek to diversify.
    3 Dec 2011, 02:51 PM Reply Like
  • His comments on the net outflow of speculative capital should be interesting.
    3 Dec 2011, 02:56 PM Reply Like
  • China is a shi+hole.
    3 Dec 2011, 04:39 PM Reply Like
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