Asbytec

G20 Urges 'Balanced Global Demand'; China Says 'No'

Hey, got several useless umbrellas I'll let go for cheap...no, you can just have them. I am sure you won't complain, as you're apparently above such behavior..well, except for bashing yanks.

There is a difference between stating fact and whining. Learn that difference, because the one you attribute to my post is a childish one. It's the way you see the world, though childish eyes. Trust me, it shows.

On Sep 28 01:00 PM coreopsis wrote:

> Whine...sigh...always like to see Yanks doing what they do best...whine
>

G20 Urges 'Balanced Global Demand'; China Says 'No'

On Sep 27 12:05 PM kinky wrote:

> To Asbytec:
> They produce in mass what the world order, we wanted >cheap,why they have to bother with quality. You better direct your >comment to the middle men and why not to Wall Mart? Buying >cheap only cost you more in the long run so it is time for you to >start looking at an not cheap umbrella which I hope you can find
>or you can afford . Why it is when producing counterfeit they are
>excellent?
>Our taking too many vacations while they were sweating >unstoppable to satisfy demand did pay for them. Trade will be >imbalanced as far as is paid with fiat money or credit cards.

Okay, some good points. I have heard it argued, and agree, we...the middle men...have imported cheap goods to 'hide' inflation. This is us doing it to ourselves with their help. Our trade relations is a dissertation in itself covering gluttony, debt, bubbles, you name it.

I live in Asia, not the US. I suspect the products the US (middle men) import are of descent quality, as I remember. I've bought fishing gear from Walmart and got many years of good service from it.

It's apparent umbrellas imported here are not. Here, at least, it's bad. I shudder to by stuff made on mainland China, but often have little choice. Most of the stuff sold here is manufactured there and dumped here. The markets and malls are jammed with such stuff. I'd love to buy a descent umbrella, to find one made in the US.

I have heard, but have not collaborated, there exist different export quality standards for developed nations and emerging nations. It appears to be true.

No doubt they are making great strides as a manufacturing nation, building a middle class, and playing hard ball on free trade. (Korea see's China's trade practices as a model for success.) In fact, we have allowed, no, we've welcomed such a relationship. We are reaping the whirlwind today: a collapsed financial system that is (consumer) debt heavy, severe current account deficits (one of the twin pillars of doom), and (the other pillar) funding our public debt.

This is the part of our current crisis I hope and pray 'corrects' in a big way. We become less debt reliant, both public and private, and we balance our trade more closely. And for China to say, "No," demands a response. This is the root of my tongue-in-cheek comment to make them buy their own umbrellas. Let them get wet when their umbrellas fold up during a microburst.

G20 Urges 'Balanced Global Demand'; China Says 'No'

I wish China would buy their own cheap stuff...I am tired of replacing umbrellas every week.

Extreme Pessimism Suggests Dollar Oversold

Are equities oversold?

Dollar Worm May Be Turning

I have been a dollar bear for the last year, despite the severe chastening here in SA. The latest developments do make one (re) think. But, we gotta remember, though, deflation is still afoot. So, who knows, really. Just gotta remember we're in a rally, not yet a recovery.

Of course this says the dollar should recover based on any flight to safety. But, as a fundamental, being a safe haven currency doesn't say much for the green back. It should have it's own intrinsic value.

It's not comforting to know our (fiat) store of wealth (and I use that term loosely) maintains its value based on fear of everything else. But, with near zero interest rates, fears of (hyper) inflation, and huge trade deficits...what else does it have? <sigh>

I'd be curious to know how the new global financial regulations affect global liquidity. I hope it tends to strengthen the dollar based on a smaller supply. That would be sweet.

The Yuan Remains the Source of Friction for the U.S. as Well as for Europe

Nice article, right on. I am pleased the Obama administration decided to take some action. It's not enough, just a warning shot across the bow, but that's okay for now. Our current account balance must improve. Period. I wonder how the EU will cope, if they can or will support huge trade deficits for decades as the US has done. And I wonder if that will threaten the euro's status as a reserve currency in the decades to come.

The Bernanke Dollar Call?

Morph, China is fearing for it's productive survival. They will have to inflate harder to devalue their currency against a falling dollar even as current account deficits improve and China's exports are down 26%(?) This is a protectionist proposal coming from a command economy. No one will take it seriously. The dollar is not dead, yet.

Ever wonder why they offer contradictory policies of buying more US bonds while calling for a new global reserve currency? Strange.

The Bernanke Dollar Call?

One of the major woes debasing the dollar is our current account balance, which will continue to improve through the year and into next. Don't write the dollar off, yet. All currencies are distressed.

The Bernanke Dollar Call?

Thank you for the chart on deflation. Interesting and scarey.

I believe the ECB will eventually come to terms with QE and near zero interest rates, especially as the dollar index falls.

China, too, will most likely buy bonds instead of US products to keep it's currency pegged to a falling dollar.

The currency wars are underway. The dollar will survive. And inflation will be upon us in time.

What Is Going On With Gold?

I can't believe I like what Allah had to say...LOL

Trace is right about gold, too. It has stood the test of time. No arguments. Get some.

Bruce, you are exactly right. I've argued Bernanke is trying to unstick the credit markets by flooding it with dollars and removing the logs. Absolutely. Any better ideas? Gold bugs, speak up...

Velocity will be out of control, thank you for saying that. Interest rates don't create money so much as provide lubrication to the wheels. But, the Fed, despite pop fiction believe to the contrary, is nto stupid. they will fight it when it shows. By then, the MZM supply may have shifted to bank reserves. Oh, yea, inflation threat is real.

I realize I may have misspoken about the yuan. Contracts to China are settled in yuan, so demand for the yuan is already there. It's the printing of new yuan and buying dollars that have filled China's reserves.

What Is Going On With Gold?

Andrew, I agree with your assessment of the AU.

Paul is correct about perceptions of the US economy recovering first and the strength of the dollar. But, there is more to it and it's deflation related.

SW, that's interesting (good subject for further research.) But, can you imagine the strength of the yaun if this were true? It appears to be against China's interests. With China's huge exports, to settle in yuan means a lot of yuan will be repatriated. China cannot inflate it's way out of that appreciation. And if it tried, would you invest in yuan based assets?

Look, if the Gulf states developed their own regional currency, fine. It will suffer such appreciation too and oil prices will go through the roof. I know they'd love that, but... Regional currencies have inherent weaknesses in that they are dependent on the performance of member states. The euro has this weakness, too.

Furthermore, the euro will never displace the dollar, either. EU demographics are all wrong and the EZ could not sustain the resulting huge trade deficits and currency appreciation. Nope, the dollar is poised to remain the world's reserve currency. It's the only one with the strength to do so, despite this correction.

As for the blog above stating the Fed is trading paper for MBS's, I don't know if this is much of a problem...backing dollars in real assets rather than promises. Okay, yes, the assets are worth less and falling in value. But, at some time in the future, the housing market will recover. So, balancing the Fed's books with worthless securities today may prove beneficial in a few years.

I still feel most gold bugs tend to not get the point (I may be wrong) the dollars created from decades of excesses are actually disappearing as deleveraging progresses. The question is, how far will this go? This will help determine the value of a dollar in years to come. The proverbial dam has sprung a leak and Bernanke has his fire hose trying to refill the reservoir. He can't keep up, especially with banks hoarding cash.

Now, I am not saying don't by gold. It's a great investment. But, what I am saying is take into account the dynamics of the dollar. We have to put our love for gold and dollars...and country...aside, as one blogger said, and face reality.

Ah, there goes my credit rating. Supporting the dollar always knocks off a few points in "gold" posts...LOL

What Is Going On With Gold?

Again, reiterating Carl's blog. It takes a good long time to deleverage from 350% of GDP. I believe we're in the long and painful process of doing just that. In the end, there will be less debt (money.) We can start over building debt (money to buy homes, cars, gas, etc.), and hopefully at a slower, more sustainable pace.

China will just have to make do on single digit growth in the coming decades. And you guys holding a lot of gold will do just fine. So will the dollar...once the trash is taken out. But, it will be a bumpy ride. Anyone following the volatility in the currency markets? Jeeez, I feel like giving up.

What Is Going On With Gold?

Ok, while it's true all fiat currencies fail, it's also (mostly) true all currencies are fiat. If and when they fail, they will do so at different rates and different reasons. When and if this happens, my bet is the dollar will come out on top.

I think Carl is right on. Yes, gold is a good investment. But, we may see a prolonged period of deflation and deleveraging. Dollars are disappearing. They have to in order to reboot our banking system. Anyone doubt it's highly over leveraged? Anyone thing reserve banking can support infinite debt? Nope. As in a related article on SA, recessions are necessary. This crisis is necessary.

The dollar has been slowly depreciating against the euro for a decade, due in large part because we created so many of them.This is unwinding. Now, what better happen, and I am hopeful will happen, is the fed and the Government will take this opportunity to get a handle on money creation. In the coming decade or so, we will not have the excessive easy money of the Greenspan years.

But, reigning in the money supply will take time to come about. It will probably happen after deflation eases and inflation kicks in. Yes, we may see a period of inflation, maybe hyper inflation. But, when? This is the question. I am betting Bernanke will fight inflation as aggressively and as creatively as he induced it.

A fiat currency earns it strength through government enacting laws stating it will be used as a medium of exchange. One can go to jail for not accepting a dollar in commerce within the US. Externally, the dollar has value not because it is backed by anything, but faith the government will not alter it's value significantly. Ok, argue the Fed is inflating like mad men. Yes, they are. But, so are other nations inflating. And dollars leveraged are disappearing. So, the net change in value depends on supply, which has both diminished and grown.

I've had my windscreen washed at traffic lights. And China is not going to declare war on the US or dump it's reserves. Did you get that info from a gold bug blog? China is a lot of things, but it's not stupid. I wish Jim Cramer well on his investments there...LOL. Think the dollar is weak, try the yuan. Now, there is a conspiracy to debase a currency. Look, China is already suffering millions of lay offs and reversed flow from the urban job market. And all this from a US recession.

User is correct. Beggar thy neighbor has begun. It almost has to.

Yes, there are some major differences between Japan and the US going into QE. They complicate the results we can expect.

By all means, buy gold and hold into it. I say, buy the actual metal, not promises of future delivery. But, why does it seem every gold bug can find reasons to thwart the dollar and give examples of investors scrambling back to the cliff? I guess we find ways rationalize what we want to believe. (also guilty as charged.) It gives us hope and something to talk about over dinner...

What Is Going On With Gold?

Nice thoughts. I am a dollar bull, though get disappointed and on the edge of my nerves sometimes. Ah, who doesn't?

I am sure coming out of this crisis will be beneficial for the dollar, despite the threat of inflation. We'll have tighter credit, leaner spending habits, and some controls over money creation.

Don't Expect the Dollar to Repeat Its 2008 Performance

Well, if the world switches to another currency, bring our dollars home and burn most of them. Let this new magical currency soar in value as they try to print enough to keep up with demand. That'll be fun.

And what about China in all this? What about the interest of other nations with huge dollar reserves? I am not up on the geopolitical ramifications of such a currency move, I guess they better get this past George Bush, Sr., first, eh? ;-P

Besides, the dollar flows up and down at the whims of the markets. It's the nature of the dollar beast. So, this "new" currency will have troubles from the onset: high valuation, probably higher oil costs, and some geopolitical resistance from some pretty powerful players.

This currency valuation is one reason the euro will not replace the dollar. The euro would soar through the roof and the EZ will run huge trade deficits. The other is EZ demographics.