Yen – Currency of choice

Take your  pick – USD or the Japanese Yen.

Kuroda for once decided to do nothing – the markets loved it.

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Whilst we have the U.S Fed worrying about the world – we have every other country in the world worry about themselves.

And may I say rightly so – Japan may be in need of a large quantity of monies to undertake certain repairs – by leaving the policy unchanged they have shown a tad more maturity than the U.S. – Yellen.

Pity Kuroda did not ally himself with Abe baby – Abenomics saviour was Mother Nature.

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One Wicked Witch should stop meddling into currency markets – she knows little of anything – her gambit is like playing whack-a-mole …..

 

 

 

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Hey Germany – It is not a joke…

Regret what has happened in Europe – more so Germany.

You are no longer free – and I cannot see anything changing in the near future.

To think that she now wants to be the next President of the EU.

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The German people are intelligent – do not get me wrong on this – it is the German media who blindly follow the path set.

Each day I read – each day I ask myself why?

I see history repeating – but then again it is like lightening – it never strikes in the same place.

Mark Twain described Jerusalem under Ottoman Muslim rule:

“Rags, wretchedness, poverty and dirt, those signs and symbols that indicate the presence of Moslem rule.”

Yes a good book – a great book in fact.

Pity that people are so ignorant that they ignore history.

 

Edit. Yes a free ebook – public literature.

Capital rush into Asia overdone

Singapore’s monetary easing signaled all is not well in Asia – and now Asian countries are all looking at entering the foray.

From Bloomberg.

“Asia’s Rich Urged to Buy Dollars as Singapore Fuels Easing Bets

Money managers for Asia’s wealthy families are telling clients to buy U.S. dollars as a rally this year in regional currencies begins to sputter.”

The fundamentals were not there Pierre’ – the strengthening of the USD to begin.

Whilst it would have been nice to see Asian countries get a ‘leg-up’ leadership and global trade seriously lacking.

Each country should concentrate on the corruption issue – but alas that will never happen.

 

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Chart courtesy of Bloomberg.

Mind you – it did look good – for a short time.

Japan will be different in their next meeting though – a bit of expenditure to be undertaken on infrastructure – with a lot of easing to continue.

Full report can be read here.

http://www.bloomberg.com/news/articles/2016-04-18/asia-s-rich-urged-to-buy-dollars-as-singapore-fuels-easing-bets

 

The Wicked Witch – A dangerous dingbat

I may be prone to knee jerk reactions – none more so when I see the Wicked Witch’s comments in regard to the economy.

Opened up the Guardian website this morning and saw that she has called for additional spending to combat the looming trade deficits worldwide.

Well why not?

All countries to continue to borrow to spend – yet all countries are mired in debt.

My question to this significant mouthpiece of the ‘Banking Industry’ is why do not Governments just cut spending?

Reduce Government and operate within a budget to maintain a surplus and then repay the debt.

That in itself whilst it is reasonable – does not fit the IMF agenda.

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Ever wonder why the U.S. Fed has not increased rates to normal level?

One can presume that her best friend Pres. Obama has leverage on one Yellen.

If – and when the Fed does increase rates – which they will – then what happens to that capacity to repay the interest on borrowings?

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I doubt La Grande will take that situation into account – when times are tough the IMF is prosperous and lender of last resort.

Then one must follow their ‘la grade’ ideas and instructions or one looses sovereign assets – sold at fire sale value to her best friends.

Tsipras knows all about this – he is still smarting after the neutering.

Full article can be read here.

http://www.theguardian.com/business/2016/apr/17/imf-urges-spending-boost-growth

Also in the Guardian was a report on the Austerity March in London – after 8 years of Carney and Osborne policies the populous are getting vocal – again.

They will just cut the pensions and health services – nothing wrong with that is there…. move on …..

 

 

Singapore in a bind – no growth

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Singapore – the number 2 financial centre of Asia – my thoughts anyway – after Hong Kong – has a problem.

Economic weakness was revealed when the services industry contracted an annualized 3.8 percent in the first quarter from the previous three months – when it grew 7.7 percent.

Manufacturing and construction rebounded strongly in the quarter, expanding 18.2 percent and 10.2 percent respectively.

“The key factors we see here are an absence of a significant pickup in the external front,” Weiwen Ng, an economist with Australia & New Zealand Banking Group Ltd., said by phone from Singapore before the data was released. “The rest of the year will be a function of how the global outlook evolves.”

Singapore basically has confirmed what the IMF warned about this week – namely that in a time of a saturated global debt – growth is absent and the only way to lend it – is to join the global currency devaluation war.

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Chart courtesy of Bloomberg.

This is more a consequence of Adam Smith’s invisible hand at work – through this low interest rate regime – if one looks at all major global banks the profits are drying up.

Expecting the US major banks to be posting huge losses Q1 – as did European Banks Q4 2015.

What is more relevant for Singapore though is the increase in company closures – these are exceeding new companies for the first time since 2009.

Recession on the cards.

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Chart courtesy of Bloomberg.

So now Singapore has entered the currency wars with monetary easing – then who is next?

Everyone is catching the Japanese Disease.

 

 

 

 

China – back to reporting bad trade data

I usually compare trade data from China – but as now in Lombok and rolling electrical outages – decided to give the Chinese export data a weeks leave.

My thanks to Bloomberg’s Tom Orlik which saved me heaps – wherein he notes – China’s March imports from Hong Kong soared an implausible 116% YoY – yes you read that correctly – a large increase.

Clearly disguising capital flows – through Trade ”misinvoicing” –  as a way to hide capital flows remains a factor.

In the past, over-invoicing for exports was used as a way to hide capital inflows.
The latest data show the reverse phenomenon – as represented in the graph compiled by Bloomberg below.

 

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Now that looks ridiculous – yet it is what it is – capital flight from China.

As the Panama Papers revealed – a lot of the politburo have offshore accounts in tax free countries – a lot of capital has been transferred offshore – to acquire assets in other countries.

A global recession will have an impact on these assets – better than a depreciating / deflationary Yuan though.