China Ad Nauseous….
If one has read my blog – they will understand my position – nothing has changed – it is not dissimilar to attending an Italian opera in Rome and knowing sweet F.A. of the Italian language or the story.
When one gives you an English translation – even to the point when the fat lady sings – then you should enjoy all of the entertainment….am I right?
No – apparently not.
The Chinese stock market crash of over 60 percent is just that – a crash – on global exchanges we have seen a correction.
Now anything that rises that bloody fast must have consequences.
It is not blood and guts in the global markets – except for commodities.
Yes commodity prices have crashed (over several months) and about time that the impact was felt by these listed commodity companies – anyone that lost money is an absolute tool – they deserve their losses – for the simple fact that the stock prices were not a true reflection of value.
Anyway – we will have a dead cat bounce – as the popularity of buy the fucking dip continues.
I warned of the importance of the initial China Yuan devaluation and testing the waters… So yes they have now done it again.
*PBOC WEAKENS YUAN FIXING BY 0.2%, MOST SINCE AUG. 13
*CHINA SETS YUAN REFERENCE RATE AT 6.3987 AGAINST U.S. DOLLAR
This is to be expected as they have entered the useless loop of a pegged currency to USD.
The PBoC has also lowered the one-year lending rate to 4.6%, and the one-year deposit rate to 1.75%.
The Reserve Requirement Ratio has been dropped – this governs how much money banks can lend – therefore more debt available- to fund existing debt no doubt.
This is all limited to China. If the global markets adjusted to the drop in commodity prices then all would be sweet – instead everybody ignores the bloody obvious.
So China is now attempting to control a sinking ship – but they cannot control the one item that is causing them immense pain – the world reserve currency.
As I said before – script written – so sit back with some popcorn and watch history unfold.
Oh – if you think I am kidding – guess what – Krugman the Nobel peace prize economist thinks that debt is good – wonder if the PBoC thought of Krugman when they lowered the Reserve Requirement Ratio?
My thoughts – he is a twat.
Yes manageable debt is good – what Krugman suggested for Japan (which Abenomics is following) and in this article is pure nonsense….mind you he is quoting other ‘cough cough splutter splutter’ economists as well.
And I have emailed some people – explaining why Yellen will increase interest rates – it is simple:-
1. This stock market ruckus is designed to put the fear of God into large investors – the major investors in the stock markets including Swiss National Bank – which is holding nearly 10 percent of AAPL.
2. Force these people back into their sphere of influence – sovereign bond markets – currencies.
3. This will then allow retail investors to acquire shares at reasonable prices – and yes I think that AAPL is a good buy at this price – but I won’t be buying until the second drop.
4. Yellen is more concerned with the domestic US situation – keen to make amends for the stupidity of two prior Fed Reserve incompetent idiots – in so doing she will raise rates on the basis of the retail investors gunning the U.S. markets and the need of the Fed Reserve to get interest rates to a reasonable level – reload their guns.
5. This will increase rates around the globe – forcing USD loans held by heavily indebted countries to feel the impact and sovereigns / countries defaulting – that will be the start of the contagion…….my bet the UK….more so now with a correction in the FTSE.
And gold – well my 3rd post On this blog had a few predictions – gold turned on that day – but it has not reached past lows so I am sitting pat.
Oil – well read the post …