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China says banking system liquidity in the country "remains ample" and notes that June M2 growth...

China says banking system liquidity in the country "remains ample" and notes that June M2 growth of 14% is close to "the full-year target of 13%." In an effort to allay concerns about a cash crunch, the PBOC said Sunday it will "use a mix of price and quantitative policy tools to adjust liquidity in the banking system" in order to ensure prudent "growth in money, credit and social financing."
Comments (12)
  • Teutonic Knight
    , contributor
    Comments (2000) | Send Message
     
    How could they have 'liquidity' issue? Push come to shove they could just dump U.S. Treasuries to cover, lots of room there.

     

    The Empire is strong.
    14 Jul 2013, 02:15 PM Reply Like
  • 13761362
    , contributor
    Comments (382) | Send Message
     
    hmmm. "we will dump our prime source of capital so that..." i'm really struggling with filling in the blank on this one. these are very powerful City States in China and it sure seems like we've a 180 going on here of epic proportions. "competing with Japan was almost impossible for the Americans to do." i wish China all the best should they follow your advice.
    14 Jul 2013, 02:46 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "just dump U.S. Treasuries to cover"

     

    Who will buy them. or at a massive discount.

     

    Then who would buy Cn e(X)ports, USA interests will raise, consumerism would die.

     

    Cover what? Any RMB inflow back into Cn would cause massive inflation.

     

    That is a reason that the Cn govt. avoided the 2013 stimulus as that would impoverish a significant %age of the masses.
    14 Jul 2013, 03:19 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2000) | Send Message
     
    Sam, do yourself a favor; just Google 'GDP China'; what do you see with the graphs of Chinese GDP compared with the US?

     

    China's recent decade GDP vector is straight up, vertical. If this isn't a huge bubble forming, what is it? Huh?

     

    A Huge Bubble is indeed forming, gathering steam; the bursting of this bubble will be the final epic major worldwide collapse to come just around the corner.
    15 Jul 2013, 11:09 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2000) | Send Message
     
    Compared it with the crashing graphs of GLD, and BBRY of late, doesn't it look quite familiar?

     

    The Chinese Bubble will be the finale of the Mother of All Bubbles, after the S&L, the dot.com, the housing, the sub-prime, and the U.S. Treasuries.
    15 Jul 2013, 11:15 AM Reply Like
  • Tom Guttenberger
    , contributor
    Comments (717) | Send Message
     
    Growth = bubble. Brilliant, seriously.
    15 Jul 2013, 12:55 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    The Chinese domestic consumer economy is likely to grow, along with a change of balance between imports and exports. It is not difficult to envision China exporting inflation in the future.

     

    What China has at present is a large super-saver class, given the relative lack of entitlements (retirement and health care). Many Chinese do not take it for granted that they will draw from government programs. The question is whether this changes culturally over time, and China starts to run deficits and debts.

     

    Even with all of the stimulus programs, the Chinese saver yields at least 3x what U.S. savers can in jumbo CD markets. That loan growth in China is netting the depositor a cut of the bank loan profits. Is it another credit bubble a'la U.S. 1998-2008 (+/-)? China still has significant GDP growth, which we'll find out more about later today. Moderation from 8+% is probably likely, but even 7% is significant, and don't forget China imported inflation for many years.

     

    China and Japan are both creditor nations, with significant Treasury holdings in reserves. Japan is already on record for having sold some holdings into the markets commensurate with the JGB rout to avoid further carry trade losses. Both nations are probably watching the U.S. very closely in defining their Treasury holdings. The question is whether they consider these holdings permanent to-maturity or carry trades.
    14 Jul 2013, 04:42 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "The Chinese domestic consumer economy is likely to grow."

     

    As a %age of GDP?

     

    " It is not difficult to envision China exporting inflation in the future."

     

    If I recall correctly Cn was blamed for exporting inflation in 2007.
    China Would Welcome a U.S. Slowdown - Businessweek
    http://buswk.co/141X8XG...‎
    Jan 24, 2008 - It would weaken demand for Chinese exports and, in turn, help cool off ... off China's overheated economy, which in 2007 grew at its fastest pace in 13 years. ... the overheated economy and soaring inflation, with little success.
    14 Jul 2013, 04:53 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Hmm...China could blame the U.S. for exporting inflation...and they'd be correct.
    14 Jul 2013, 05:11 PM Reply Like
  • Tom Guttenberger
    , contributor
    Comments (717) | Send Message
     
    Ya, as it turns out the credit spreads widened from banks competing over funds to lend, it would appear. It is amazing to think that this was actually "normal" monetary policy in the no-too-distant past. I remain having a hard time imagining that things are overly perilous there in consumer or real estate lending at least for the time being.
    14 Jul 2013, 05:01 PM Reply Like
  • Ron Myers
    , contributor
    Comments (256) | Send Message
     
    China should just modify their inflation statistics by excluding everything going up in price more than the target rate. Then they could print infinite money like everyone else and not have these silly problems like competition for funds.
    14 Jul 2013, 05:15 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    " just modify their inflation statistics"

     

    the sample basket of commodities is not practical on many premises.

     

    1) It represents the consumption of the middle class which is in the top 5% in the country.

     

    2) There is no ideal consumption basket in a single region, as some drive, some motorbike and some use transit.

     

    3) Each region can not have comparative consumption baskets, e.g. how can one compare what Shanghainese consume as to some one in Wulumuchi consumes.

     

    Cn CPI figures are fairly worthless, but then USA CPI (because of welfare) lacks credence.
    14 Jul 2013, 11:44 PM Reply Like
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