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.
Late into Friday's major market selloff, a completely unfounded rumor emerged out of nowhere, seeking to rekindle the BTFD spirits, that with central bank intervention from both the BOJ and ECB already priced in, and with the Fed still in taper mode (if not for much longer should the S&P dump accelerate), that the last central-planner wildcard, China, would join the fray and a major monetary gusher would come out of Beijing over the weekend to halt the slide.
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.
It appears there is another nation on planet Earth that is becoming isolated. One by one, Russia and China appear to be finding allies willing to 'de-dollarize'; and the latest to join this trend is serial-defaulter Argentina.
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.
Call it “globalisation 2.0″. China’s integration into the global economy is now a 35-year-old story, dating back to the free market reforms of Deng Xiaoping.
For both China and the West, the consequences have been transformational, and for the West at least, not obviously in a particularly good way. Many jobs have been lost to the cheap labour of the East.
While US central bankers shudder at the idea of admitting their could be a bubble in real estate or stocks (unless its obvious in hindsight); and England's Bank of England explains 'if there is a bubble, it's not their fault, but there isn't so there'; it appears the Chinese are more comfortable with the truth.
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.