Patrick Chovanec submits:Senior officials of China’s central bank, the People’s Bank of China (PBOC), have left a trail of curious statements over the past month that appears to tell an interesting tale.
Brian Rezny submits: After long pressing China to allow their currency to strengthen (because a weak currency gives them an “unfair” trade advantage), the Obama administrations’ wish has been granted…sort of. Speaking Sunday after the G20 summit, President Obama said, “…the renminbi is going to go up and it’s going to go up significantly”. We’ll see. The renminbi (yuan) has been pegged at 6.83 to the dollar since July 2008.
China wrapped up its third plenum earlier this month and announced a string of reforms. Soon after, Zhou Xiaochuan, governor of the People's Bank of China, wrote an article on deepening financial system reforms in a 'Guidance Book' on the third plenum 'decision'.
Let’s wind the clock back to 2008. The world was thought to be ending. Lehman went bust. Markets were plunging. Everyone was scared that growth was over. It was as though the global economy was grinding to a halt. But then China’s stock market bottomed. The Chinese Government announced a massive stimulus plan to turn its economy around. And sure enough the Chinese economy took off again.
Submitted by Matthew Lowenstein va The Diplomat, China’s economy is straining to keep up a semblance of its former growth rate. The surest sign is the way a shadow market in bank paper has evolved to substitute the commodity that China is increasingly running short of: cash.
Gary Dorsch (Global Money Trends) submits: Last year’s parabolic rallies in copper, gold, Brazilian and Russian stocks, and the Australian dollar, are running out of steam. Suddenly, there are eerie reminiscences of scarier days gone-by.
Submitted by Simon Black of Sovereign Man blog, Over the past several decades, people around the world have become so brainwashed that few people really give much thought anymore to the safety of their currency. It’s not something people really understand... there’s apparently some Wizard of Oz type figure at the top of the hill pulling all the levers of the monetary system. And we just trust them to be good guys.