By Alhambra Investment Partners
China remains an export economy no matter how hard they try to convince the world they are moving otherwise. The idea of creating internal “demand” as a means to extricate marginal changes from everybody else is undoubtedly a good idea, even a noble one, but the reality of China as it exists top-down isn’t conducive for such a transformation. Further, that just isn’t realistic under the global conditions that have persisted since the Great Recession was declared over.
In that respect, there isn’t much to separate what is occurring now from the Great Recession itself. Certainly there exist positive numbers in economic accounts where deeply negative numbers predominated during the “event”, but the major factors that inaugurated the dislocation remain especially unsolved and more often than not misunderstood. China’s predicament falls into that category.
Continue reading Reality on China, Finally
By Steve Saville
Total guesswork regarding China’s gold holdings
Last year I noticed an article by Alasdair Macleod containing an estimate that China (meaning: China’s government) had accumulated 25,000 tonnes of gold between 1983 and 2002. I would say that this estimate was based on rank speculation, but that would be doing an injustice to rank speculation. It is more like total guesswork. It is largely based on assumptions that are either obviously wrong or that have no supporting evidence. I bring this up now because it looks like the 25,000-tonne figure that was plucked out of the air by Mr. Macleod last year is on its way to becoming an accepted fact in some quarters. For example, it forms the basis of a new estimate that China’s government now has 30,000 tonnes of gold.
Continue reading China’s Gold Holdings
By Alhambra Investment Partners
China Steering Away From or Back Toward Bubbles?
The confusing nature of the PBOC’s actions in the past year or so has led now to publications of theories over a potential power struggle at the central bank. While finally acknowledging that last year was all about “targeted” approaches to monetary “guiding” economic reality, this year is about to explode in personnel changes and therefore, supposedly, a reactionary course to more familiar “flooding” of broad-based approaches. Curiously, unlike last year, there is no contention about the state of China’s economy as it is now-universally accepted as foundering badly.
The last two “rate cuts”, including the one just conducted this weekend, are being listed under that paradigm, though I don’t know how there is any way to reconcile them without including currency moves. The PBOC may have reduced its benchmark rates, but has simultaneously also moved to a higher fix on the currency. The latter is far more important and is perfectly within the “reform” paradigm as such a move is most likely (nobody will ever know for sure) aimed at speculative “dollar” financing of all China’s problems – bubbles.
Continue reading China Steering Back Toward Bubbles?
Rummaging for financial news and analysis from around the Web…
- Gold-CCI & GDX and Gold CoT Improving, But… –NFTRH [biiwii comment: hey look, a fledgling rally appears to be getting started, but with PDAC next week the gold bug dream machine could get a bump up again and the sailing beyond the near-term is not yet indicated to be ‘all clear’]
- Healthcare/Biotech Names Still Dominating –B.I.G. [biiwii comment: don’t I know it… did some profit taking last week but also a little replanting within the Bio’s. The weekly BTK chart has been bullish and until that changes, it’s on a trend]
- Periphery Fragility List –Credit Bubble Bulletin [biiwii comment: i just found doug noland again, so CBB will be back either in ‘around the web’ format or directly published]
 Might as well add in some of our own $.02 on the yield curve, S&P 500 and gold… Risk ‘ON’ –NFTRH
Guest Post by David Stockman & Stealthflation
Commodity Prices Are Cliff-Diving Due To The Fracturing Monetary Supernova—The Case Of Iron Ore
Crude oil is not the only commodity that is crashing. Iron ore is on a similar trajectory and for a common reason. Namely, the two-decade-long economic boom fueled by the money printing rampage of the world’s central banks is beginning to cool rapidly. What the old-time Austrians called “malinvestment” and what Warren Buffet once referred to as the “naked swimmers” exposed by a receding tide is now becoming all too apparent.
This cooling phase is graphically evident in the cliff-diving movement of most industrial commodities. But it is important to recognize that these are not indicative of some timeless and repetitive cycle—–or an example merely of the old adage that high prices are their own best cure.
Instead, today’s plunging commodity prices represent something new under the sun. That is, they are the product of a fracturing monetary supernova that was a unique and never before experienced aberration caused by the 1990s rise, and then the subsequent lunatic expansion after the 2008 crisis, of a cancerous regime of Keynesian central banking.
Continue reading Commodity Cliff Dive…