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Posts tagged ‘China’

China’s Meltdown Continues

China’s epic hangover begins. China’s credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC‘s dream that is at last coming down to earth with a thud. Chinese stocks are flashing warning signs. The Shanghai index has fallen 30pc since May. It is off 60pc from its peak in 2008, as much in real terms as Wall Street from 1929 to 1933. – Telegraph/Ambrose Evans-Pritchard

Dominant Social Theme: Don’t look now but China is fading.

Free-market Analysis: Ambrose Evans-Pritchard, one of the very best mainstream financial journos, is back with another update on the Chinese economic collapse, and we appreciate his updates. We’ve been harping on this theme for at least two years. Just Google “Daily Bell” and “China’s Potemkin Village.”

For a long time we were a lonely voice. Throughout the 2000s, China was the hot story in the mainstream press, and for many it still is. One of Fidelity’s managers who has lost some 30 percent of his clients’ money in China just announced he believed the Red Dragon had turned the corner and that his fund would benefit considerably. Good luck with that.

For us, the Chinese miracle, as we eventually came to understand it, was nothing but a concoction of central bank monetary stimulation and the relaxation of state controls on market-driven family businesses.

The larger industrial and banking entities remained firmly under the control of top-level ChiComs – though in a more hidden manner. Westerners were often fooled into thinking there was competition between these vast industrial entities when there really was not.

This is quite akin to what goes on in South America where a handful of top people usually run the important infrastructure businesses while everyone else trades cell phones on the street. The trouble with this sort of economic structure is that it is highly dependent on central banking.

It is central banking – the printing of money from nothing – that drives this sort of economy because the centralization is artificial and could only be maintained either by brute force or by control of the money supply. Those who control the money are the ones inevitably who end up in charge of society.

full article at source: http://www.thedailybell.com/3354/Chinas-Meltdown-Continues

Why We Should All Be Very Skeptical on China

By Michael Pettis

I’m often referred to as a ‘China Bear’ and that’s a word I really hate. I’m not a China bear—I’m a skeptic. And, in some of the incredibly feverish statements we’ve heard in the press and among my former investment banking brethren about the prospects in China, as well as in some of the things we hear about the imminent collapse of China, I have to say that I find much of that to be very very questionable and frankly nonsense. There are some very very big problems that China faces and a lot of the long-term expectations that many of us have for China, whether it is that China will be the largest economy in the world in 5 years—I’ll take that bet, it won’t—or whether it’ll collapse in five years—I’ll also take that bet, it won’t. I think the truth is a little bit more boring—it’s somewhere in the middle.

full article here :http://www.financialsense.com/contributors/michael-pettis/2011/10/21/chinese-malinvestment-is-worse-than-most-people-think

China Faces Hard Landing

by Staff Report at the Daily Bell

China risks hard landing as global woes spread … China’s carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years. Beijing is alarmed by inflation above 6pc and price-to-income ratios for property in the rich coastal cities … “There is a large potential risk,” said Zhu Min, the deputy managing director of the International Monetary Fund and a former Chinese official. Mr Zhu said China had doubled the loan ratio from below 100pc of GDP before the Lehman crisis to roughly 200pc today. The danger is that this excess could start to unwind just as the West goes into a sharp downturn, and possibly a double-dip recession. China and emerging Asia are fundamentally in weaker shape this time, having used up their “fiscal cushions”, leaving them with little leeway to cope with a fresh global shock. – UK Telegraph:

full report at source:http://www.thedailybell.com/2940/Biggest-Story-in-the-World-China-Faces-Hard-Landing

Is China Buying Gold to Challenge the U.S. Dollar?

By: Eric_McWhinnie

International supervision over the issue of U.S. dollars (NYSE:UUP) should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.” -China’s official news agency Xinhua

Gold (NYSE:GLD) and silver (NYSE:SLV) are often viewed by investors as a hedge against uncertainty.  Although the two precious metals (NYSE:DBP) can cause heated debates about their role in an individual portfolio, many would agree even a small percentage of a portfolio should be in gold or silver.  A study released earlier in the year by Oxford Economics recommends holding at least 5% of your assets in gold.  What if countries apply these principles to their reserve holdings?  The rising price of gold and silver has caught the attention of economic powerhouse, China (NYSE:FXI).

It is said that gold prices have not increased, fiat currencies have decreased.  This is a concept not lost on the Chinese.  A new Wikileaks release reveals the thought process behind gold and fiat currencies such as the U.S. Dollar and Euro.  The new release says, ” China increases it gold reserves in order to kill two birds with one stone.  The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28):  According to China’s National Foreign Exchanges Administration, China’s gold reserves have recently increased.  Currently, the majority of its gold reserves have been located in the U.S. and European countries.  The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency.  They don’t want to see other countries turning to gold reserves instead of the U.S. Dollar or Euro.  Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaing the U.S. Dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold.  Large gold reserves are also beneficial in promoting the internationalization of the RMB.”

full article here at source:http://www.marketoracle.co.uk/Article30289.html

China Blasts U.S. Debt Problems, Urges New Global Reserve Currency

By the daily Bell

China on Saturday condemned the “short-sighted” political wrangling in the United States over its debt problems and said the world needed a new global stable reserve currency. “China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” China’s official news agency said in a commentary. “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” it said. – Reuters

Dominant Social Theme: It’s time to let Christine Lagarde and the other “wise leaders” at the IMF run the world’s money.

Free-Market Analysis: Well, this certainly comes as no surprise. We have been ringing the bell on this one for a while now. In fact, we ran a staff report back in March 2009, titled China Wants IMF to Manage New One-World Currency. The essence of what we said in that article, as well as many others dealing with Money Power’s insatiable desire to fasten a global currency yoke on the entire world’s population, is that out of the fiat-manufactured chaos we have today, it is likely that global order will be promoted as the cure to all our monetary ills. The IMF, a globalist organization to be sure, along with the World Bank, will be marketed by the establishment politicians, NGO think tanks and mainstream media outlets as the only logical way to alleviate the markets of their instability and overall confusion. The eurozone experiment alone should be enough of a wakeup call – for anyone that cares to see – that stitching together a bunch of systemically bankrupt nations’ fiat currencies does nothing to alleviate the rot inherent in the design and nature of the money-stuff system itself. We truly hope the world escapes from the grasp of the globalists’ fiat-fangs and that this plan of unification does not become a reality. What the world needs, in our opinion, are private currencies competing in a free-marketplace where governments have no involvement in either the issuance of currency or its management. Let the market decide what to use as money and keep the State and unelected global government agencies out of it.

source: http://www.thedailybell.com/2771/Daily-Bell-Briefs-China-IMF-World-Currency-US-Debt-Downgraded-ECB-Intervention

Comment:

 

Allowing Lagarde  of the IMF and her bad run a world currency is
definitely not the answer to the world’s financial problems .Things are bad but
we are not fools ,just look at the mess Europe is in ,all we will be doing is
allowing a new super select group of untouchables dictate to the world terms
that suite the super rich and well connected and we have enough of this in Ireland
.These are the same people that are telling us Austerity is the answer and at
the same time they tell us we need to grow our economies .But their imposed
austerity measures are in fact squeezing every drop of available credit out of
the economy and without credit for small business to restock and upgrade we
might as well whistle dixi for our food on the table !If Austerity worked all
the poor countries would be in the middle of boom times .No a world currency on
these people’s terms is the road to eternal financial slavery. No Thanks !

 

IMF = International Mafia Fund

Has anyone seen our child?

This article was sent into us to day :

 

By Clare Dwyer Hogg

In China, 190 children are snatchedevery day – more than twice the number taken in England and Wales in a year.The Chinese government does not acknowledge the extent of the problem, or thecause. The Single Child Policy has made it essential to have a son, leading tothe abortion of more than 40 million girls and setting the price on a boy’shead at more than six months’ wages.

The events of this summer mean that every one of us will have considered, for a moment at least, the horror of having a child snatched. The emotions parents must endure aren’t hard toimagine: the creeping numbness of realisation; the shock turning to panic asthe minutes tick by; the helpless reliance on the goodwill of others,particularly the police. In Europe, the cases of child kidnapping are sporadic.In China, however, they are increasingly common. Around 190 children aresnatched every day – stolen from their beds and the streets. This is more thandouble the average number of abductions recorded in England and Wales over awhole year. If 190 people were dying every day from the same illness, you’dcall it an epidemic. And that’s exactly what it is, except nobody really wantsto talk about it. Especially the Chinese government.

The government doesn’t want to talkabout it because it’s a short step from fully acknowledging the kidnappings tohaving to address why they’re happening. Which means entering dangerousterritory – a root cause of such large numbers of children being snatched isthe fact that having a son in China is a necessity. He carries the family name,he is the child who will provide for his parents as they age. A daughter willleave the family to marry into another name, passively obliterating her ownfamily line and leaving her relatives without the assurance of help in old age.The One Child Policy – which Save The Children calls a ‘mass, live experiment infamily life which is unique in the history of the world’ – has resulted inprohibitive family-planning laws in China: prospective parents must have abirth permit before conceiving, and while rural families are allowed a secondchild if their first is a girl, urban families must pay a fine for flouting theone-child rule. And if you haven’t had an abortion to get rid of your femalechild (although it is now illegal, around 40m girls have been selectivelyaborted since the One Child Policy was instituted in 1979), how can you be sureto get a son? Sometimes the only choice seems to be to buy a stolen child,gender already determined.

‘I did think about suicide,’ saysLi, a woman in her early twenties. ‘I missed my child so much.’ It has been ayear and a half since her little boy, Chen Jie, was taken. He was five yearsold, playing at his grandmother’s vegetable stall in Sichuan, when Zhang, atrusted neighbour, passed by. Offering to bring Chen Jie back to his mother -and persuading the reluctant boy with the promise of sweets – Zhang left,taking the child with him. This was the last time Chen Jie was seen by hisfamily. Later, when parents and grandmother realised that neither had thelittle boy, they ran to Zhang’s door, desperately hoping he was there. Calmly,Zhang claimed that after giving him money for sweets, he’d left Chen Jie at theapartment block. Their suspicion of his involvement in their son’sdisappearance could not be translated into evidence – even though when thegrandmother confronted him later, she said he yelled, ‘I sold the kid, OK?’After police questioning, however, Zhang was free to go about his normalbusiness, unlike the Chens.

‘Sometimes I don’t want to carry onmy life,’ Li continues. She has come close to killing herself many times, shesays, but is always stopped by the thought of how disappointed her family wouldbe. Culturally, the responsibility for the family weighs heavily: Li and herhusband, Lung, already feel they have let their parents down by depriving themof the grandson who would carry on the family name. Once, Li admits, she wasready to jump from the top of a public washroom, but the owner of the buildingdragged her home. ‘She tried to prevent me from thinking that way,’ Li says.’She knew a story in which a mother who lost her child killed herself byjumping off a building. After her death, the father sold the house and lostcontact with everyone. Never came back. Later, their friend found the child andbrought him home, but the whole family was gone.’ Li has thought about thistragic twist many times. ‘If you die, and your child comes back one day, heloses his mother forever.’

Li and Lung Chen are determined todo anything to get their son back, but their options are severely limited. Themedia is too close to the government to be used as a tool, and even joining aparents’ support group must be done in secret. They saved up 600RMB – that’s£40 – to put Chen Jie’s picture on a poker set that features missing childrenon every card; in their desperation they’re gambling on gamblers. Putting up’missing’ posters of Chen Jie, his eyes staring out brightly even from aphotocopy, was risky because it’s forbidden (the authorities aren’t keen tohave the reminder of missing children on show), but they did it. Hiring a privatedetective cost money, but they did that, because the detective has a reputationfor successful rescue missions. Speaking to Westerners about their plight wasdownright dangerous, but they’ve done that, too.

The production team behind the EmmyAward-winning documentary The Dying Rooms, which in 1995 uncovered the neglectof abandoned children in Chinese state-run orphanages, went back to China thisyear. The idea behind the first documentary was that China’s One Child Policy,the population stabiliser, had led to the abandonment of girls – this, andtheir subsequent abuse in some cases, was recorded as tragic confirmation. Morethan 10 years later, the team – this time headed by debut director JezzaNeumann – went back to investigate another consequence of the One Child Policy:the tens of thousands of Chinese children being trafficked every year.

Needless to say, if you’re making adocumentary about child abduction, looking for the abductors, the need forundercover filming is paramount. Sim cards were changed after every call; theproduction team met to discuss plans in locations that had plenty of exits;they all arrived and left from different directions. The Chinese word forWesterner is gwailo, a once derogatory term, which can be translated as ‘ghostman’: Neumann says his mission was to take this phrase literally. It’s hard torender yourself unnoticeable as a Westerner with a camera in China, but he andhis team tried to move through the country like ghosts, as unseen as the peoplethey were searching for. The Chinese authorities, loath to let such storiesout, are also extremely vigilant, and getting people to talk about theirexperiences of having a child stolen is virtually impossible. The air hangsthick with the threat of official reprisals and punishment. One potentialinterviewee whose son was stolen was visited by the secret police the day aftera researcher had been to ask him questions. He backed out, too scared to committo camera what he felt, too frightened to enlist the help of outsiders in sucha close-knit community, where anything unusual gets back to officials – apartfrom, it would seem, the identity of child kidnappers.

The Chens knew the danger, too, but,thirsty for help, they agreed. It’s not that the Chinese government doesn’t reporton child trafficking: there is coverage of rescue successes, or assurances thatthe government is doing all it can to combat the criminals. The stories areoften, however, conspicuously free from statistics or analysis. Save theChildren reports that last year Chinese officials from the Ministry of PublicSecurity put overall trafficking figures (for women and children) at 2,500.This is much lower than NGOs estimate, but it’s all about semantics, of course.International law – the UN’s Palermo Protocol of 2000 – defines trafficking notonly by the use of force or manipulation, but also as ‘the abuse of power or ofa position of vulnerability’. A child is any person under the age of 18. TheChinese government is currently drafting a National Plan of Action againstTrafficking but, as it stands, the Chinese definition is much narrower. Article240 of the Criminal Law of the People’s Republic of China makes illegal theabduction of women and children (men are overlooked) for the purpose ofselling. There is no clause for abduction without being sold – if you are takenaway to be a slave or a sex worker, that doesn’t count. And currently, if youare abducted at 14 in China, you are an adult, and not part of the statistics.

Chen Jie is very much part of the statistics- one stolen child in the mass of 70,000 snatched every year. His little lifehad already been fraught with difficulty. He was born a year after the Chensstarted seeing each other: the One Child Policy stipulates that children cannotbe born without a birth permit, and you cannot have a birth permit if you don’thave a marriage certificate. So Li had him in secret, giving birth in hermother’s pigsty. Li and Lung hid their little boy for a year until they came toa decision that without a birth permit, without an official existence, ChenJie’s life would be nothing. They confessed to the authorities, and wereordered to pay a fine of 8,000 RMB (£520). They only finished paying that debtlast year. Now, the strain of being left without the son for whom theystruggled is palpable. ‘It has been very difficult,’ Li says, via a translator,speaking on a crackling line from their tiny apartment in the migrant workers’ghetto. ‘We quarrel from time to time, but every time we think of our child, weremember we share the same goal. I already feel responsible and guilty. Wedon’t want Chen Jie to come back to a broken family.’

The strength to stay together – likethe rejection of suicide – is fuelled by the need to believe that they aremaintaining a home for their missing boy, having in readiness a place for himto return to, and parents who are loving and at peace. This hope, no matter howtenuous, is some sort of light for the way ahead, even if at times it seemsonly to emphasise the darkening shadows all around. Depression floors them,guilt for letting their families down punctures their faith, and time has notbeen a healer. The detective, while active, is not getting any leads. They are- as the Chinese phrase goes – ‘looking for a needle in an ocean’.

Part of the Chens’ problem, and theproblem for many parents like them, is that they are up against a highlyorganised criminal network which supplies a seemingly never-ending demand. Addto the mix that the moral code is skewed when it comes to ‘adopting’ (buying)children. If you were caught buying a child in the UK, you would be chargedwith child trafficking. Yet in China – as incongruous as it may seem – while itis illegal to abandon, steal or sell a child, it is not necessarily illegal tobuy one. CCTV, a government-sponsored news outlet, recently reported that:’Under the current law for families that adopt trafficked children, if theyhave not abused the children, and have not obstructed the rescue operations,the law enforcement can choose not to press charges, not to pursue further.Many parents of missing children find that unacceptable.’ Parents of stolenchildren are immediately on the back foot; the law is essentially non-punitive,so child traffickers can justify their actions – they are simply supplying ademand that is not, in itself, a crime. Except, of course, it is. People buyinga child have no guarantee that the child was willingly given up by his parents.And when the motivator for providing that child is money, reassurances mean nothing.A boy can fetch around 10,000 RMB (£650) which is a lot of money for one ‘job’,when you consider that a skilled production worker in China earns £1,200 ayear.

One trafficker explains how he andhis cohorts would identify the suitability of a child through the vulnerabilityof his mother. They would watch, wait, take a note of her routines, and bidetheir time for that moment when she would leave her son unattended. One suchprize, he says, happened when the child was in bed, and the mother nipped out,unaware of watchful eyes. ‘We shoved a hanky into the boy’s mouth to shut himup,’ the trafficker remembers, calmly plotting the strategy as if there wasnothing abnormal in his actions, ‘and we bundled him into a sack.’ Anothertrafficker, who specialises in children, and is happy to appear on camera,says, ‘I think there must be something wrong with treating children as goods,but I can’t figure out what it is.’ He likes to think of himself as an agentfor parents who need to sell their children and a conduit for those who want tobuy one. People do sell their children (if they don’t have a birth permit, orare too poor to raise the child), but it is a murky world where a child becomesa missing piece in the commercial chain.

This particular trafficker admitsthat he used to sell women against their will, luring them first into a falsesense of security by pretending to be a loving boyfriend. And although childrenare now much more lucrative, it is hard to understand why he wouldn’t empathisewith the families left behind: he has witnessed at first hand the devastationhis older son feels since his younger brother went missing. The son, no morethan 13, mourns the loss of a brother. ‘I miss him,’ he says. ‘This year hewould be nine…’ The trafficker’s son tries to articulate, pausing betweenthoughts and memories, shaking his head, and squeezing air out through tinygaps in his mouth – small and potent sounds of regret that cannot be put intowords. The twist, heartbreakingly, is that he later discovered that his ownfather was to blame for the disappearance. ‘My grandmother told me my dad soldmy brother,’ he says. ‘I thought my dad was very bad to do that. I felt verysad. At the time… at the time… I really hated him.’

As soon as the Chens discovered thatChen Jie was missing, they called 110, the emergency services. The policecalled back instantly for details and a description, but didn’t come to theirhome. After a day of frantic searching, aided by neighbours with a car, theChens went to the police station. A mix-up had occurred: because the emergencycall happened late at night, the local police hadn’t been passed the details.Looking around the train station and hotspots of trafficking didn’t turn up anyclues; they interviewed the neighbour, Zhang – nothing. By then, Chen Jie couldhave been halfway across China. Zhang has now moved to Mongolia, allowed tomelt into another crowd in another country. Suspicion fell on anotherneighbour, Kong, for whom Lung used to be an apprentice. The Chens think hecould have been in partnership with Zhang, picking Chen Jie as an easy target.The police questioned him for a whole day, but did not tell the Chens theresult. Desperately, they have asked for Kong to be tested with a lie detector.There is a waiting list though – there are only a few in the whole country -and they don’t know if they can afford it, or if it’s even worth it.

They are encouraged, however, by asliver of hope: Lung has heard breaking news that a ring of traffickers hasbeen uncovered. The police have rescued around 40 babies, and families will bereunited with their kidnapped children – this is hope, in his eyes. ‘We’re bothvictims of the situation,’ Lung says of himself and his wife, yet they areunwilling to criticise the government’s policies: the police are working ontheir case, Lung says. Li comes on the line to explain that it’s hard for thepolice, too: ‘Police would go and try to investigate but even they get beatenup at remote townships…’ Her equanimity crumbles later in the call, though,as she breaks down, admitting that she’s not sure if she can keep living likethis: the searching, the guilt, the dwindling figure of her husband, who haslost his appetite and is often unwell. Pregnant again, she worries that shewon’t know how to treat her new baby, that it will be unfair to Chen Jie tohave another child. She doesn’t sleep well, she says, dreaming every night ofChen Jie suffering in a poor village. And with a heart wrench Li realises thatshe has never dreamt he was bought by a rich family and living well, despitethe plethora of news stories about children having a ‘better life’ with newparents. But she forces herself to keep going. ‘I always remember what a fathersaid who got his stolen boy back,’ she says. ‘He said as long as you keep yourhope there is a chance; but if you give up hope and stop looking, the child isgone forever.’

Li’s mother, the last to see ChenJie, grief-stricken and carrying her own burden of guilt, often dreams of hermissing grandson, too. The word in Chinese for dreaming and wishing is thesame, and it is no surprise that her daytime longings spill into her night. ‘Ihad a dream that my grandson came back,’ she says. ‘I held him in my arms andhe asked me, “Grandma, are you tired?” I replied that I was not tiredat all when holding my grandson. I was so happy that he finally came back.’ Andthen, with sorrow, back to the terrible reality. ‘Then,’ she says, ‘I woke up.’

Reference:

Clare Dwyer Hogg

The Observer

Bernanke Plots Further Stimulus

Ben Bernanke stumbles from one public relations disaster to another. Fresh off his ludicrous statement to Congressman Ron Paul(left) that gold is not money, he has indicated that he’s ready to buy more of America‘s junk bonds using currency printed from nothing.

Will it help restore America’s “greatness?” Nope. Essentially this is just another tax on the American people achieved by the roundabout method of price inflation. It may push prices of gold and silver through the roof, but it’s not going to change anything about America’s failing economy. In fact, it will make things worse. And perhaps that’s just the point.

It’s seems to us that it’s Bernanke’s job to make things worse. The Anglosphere power elites that apparently run much of the world want to run the rest of it and they are making an aggressive push early in the 21st century. Take a step back and the patterns seem increasingly apparent. A lot of it has to do with austerity.

In Europe, austerity is a big issue. People are very upset about losing pensions and benefits, not to mention that they are facing higher taxes and the prospect of having many resources “privatized.” In America, the push for austerity is being provided via the Tea Party movement – and thus, to some degree, is being inflicted by the electorate itself.

Austerity – which will reduce the resources that people have available to them in the short run – is being accompanied in other parts of the world by food and water scarcity. Large parts of Africa face drought and starvation currently. In China – and throughout the BRICS – price inflation threatens economic stability. China itself is already suffering social insurrection, though few incidents are reported.

full article here at source:http://www.thedailybell.com/2687/Bernanke-Plots-Further-Stimulus.

Comment:

If the Fed does introduce a new stimulus what is this likely
to mean for the dollar? For one thing we should have a dramatic drop in its
value and the Chinese can’t be too happy about this prospect. America must at
some stage address its own debts and if the truth was known Greece would be
bailing out the USA 14.5 Trillion in debts and now another 2.5 Trillion about
to be put on top who are they kidding America is bankrupt and should be in the Junk
members club !

Will China Economy Boom Turn into Doom?

I came across this interesting article on china’s economy

By: Jenson

China’s trade surplus in the first half of this year fell 18.2 percent from a year ago to reach $44.93 billion. During the same period, total foreign trade value topped $1.7 trillion, up 25.8 percent year on year, with exports up 24 percent to reach $874.3 billion and imports surging 27.6 percent to hit $829.37 billion. In June, exports and imports reached $301.69 billion in value, up 18.5 percent year on year. In breakdown, June’s exports hit a record monthly high of $161.98 billion, up 17.9 percent, but the rate of growth decelerated from the 19.4-percent increase in May. Imports reached $139.71 billion, up 19.3 percent. The growth also slowed from the 28.4-percent increase in May.

China’s new bank lending shrank in May and money supply grew at the slowest pace since 2008, signifying the effects of the country’s tightening measures are paying off. New bank lending, an important indicator of the monetary policy, tumbled to 551.6 billion yuan ($84.86 billion) in May from April’s 739.6 billion yuan. The figure was also 100.5 billion yuan less than that of last May. Yuan-denominated loans outstanding at the end of May were 50.77 trillion yuan, 17.1 percent higher than a year ago. By the end of May, the broad money supply (M2), which covers cash in circulation and all deposits, hit 76.34 trillion yuan, up 15.1 percent year-on-year.

The rise of M2, following an increase of 15.3 percent in April, was the the slowest growth since November of 2008. May was the third consecutive month that the country registered slower M2 growth. The narrow measure of money supply, cash in circulation plus current corporate deposits, rose 12.7 percent from a year earlier to 26.93 trillion yuan. The increase was 17.2 percentage points lower than the same period of last year.

 

Read full article at source:http://www.marketoracle.co.uk/Article29172.html

Moody’s Report Blasts China Solvency

Economy of the People's Republic of China

Image via Wikipedia

Wednesday, July 06, 2011 –
 by Staff Report

Here comes Moody’s with a blockbuster which may put China’s “White Knight” status, at least as far as Europe is concerned, in grave danger. In a report just released, the rating agency not only warns that China’s debt problem is “bigger than stated” (i.e., China is hiding a ton of ugly stuff off the books), but goes ahead to quantify it: “Of the RMB 10.7 trillion (about $1.6 trillion) of local government debt examined by the Chinese audit agency, RMB 8.5 trillion ($1.3 trillion) was funded by banks. However, Moody’s has identified another potential RMB 3.5 trillion ($540 billion) of such loans that the Chinese auditors did not discuss in their report….we find that the Chinese audit agency could be understating banks’ exposures to local governments by as much as RMB 3.5 trillion.” – ZeroHedge

Dominant Social Theme: China has done a splendid job of turning a communist system into a free-market one. Its prosperity is a result. Just look at the numbers.

Free-Market Analysis: Tyler Durden at the popular ZeroHedge website just came out with an article regarding the untrustworthiness of China’s financial numbers (see excerpt above). It’s taken from a Moody’s release that has found nearly US$1.5 trillion of Chinese loans may be under water. This corresponds to what we’ve been reporting (with increasing urgency) over the past two years. You can see our most recent article here, The Coming Chinese Depression. Below is an excerpt from what we wrote:

Of course, the success in our view has been initiated by printing fiat dollars – money from nothing. It is the same “success” that the Western central banks had prior to 2008 and look at how that ended. One cannot grow an economy year after year at nine percent per quarter and expect anything at the end of it but an inflationary depression. Chinese economic statistics are a case of “garbage in and garbage out.” And Western power elites must be quite aware of what is going to happen in China eventually. In our view it is a kind journalistic criminality that the mainstream media does not do more to alert the West about what is in store. When the Chinese economy crashes, the rest of the world will not be immune.

full article here : http://www.thedailybell.com/2621/Moodys-Report-Blasts-China-Solvency

Comment:

This is a can of worms that nobody wants to even consider and I expect will disappear
from the media headlines very quickly. In any case what exactly can anybody do
about this? The Chinese authorities are not going to open up their book to any one,
least of all an American controlled ratings agency who has been bought off from
telling the truth about the American debts. They can’t deal with the hopeless
debts of the US what chance have they with china?.The Us should have a rating
of junk status and instead they have AAA!   

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