Thursday, January 22, 2009


Every now and then I like drama. This is one of those times. There's no need to panic though. CMCTABIFA is just my way of saying that Currency Manipulation Conspiracy Theories Are Back In Fashion Again.

UPDATE 2-China's yuan "manipulation" an issue -Geithner

There is already unhappiness in the U.S. Congress with China's perceived manipulation of its yuan currency, which critics argue is a major contributor to global trade imbalances.

The value of their paper currency vs. the value of our paper currency is "perceived" to be manipulated. Yeah, that's it. I'm sure of it. It doesn't even matter if it is actually being manipulated. All that matters is that it is perceived to be.

Don't believe me? I admire your skepticism!

May 11, 2006

Treasury Report on China Currency Policy Angers U.S. Lawmakers

The Treasury, which has repeatedly said it wants China to loosen its grip over the value of the yuan, chose yesterday to avoid a direct confrontation. While China hasn't made enough progress, it isn't deliberately seeking an unfair trade advantage with its currency policies, the Treasury said in its semiannual report on the practices of U.S. trade partners.

What? Where does their trade advantage come from then? Please don't tell me that they have a billion low paid workers willing to do our jobs cheaper than we will and that we have actively encouraged the behavior by outsourcing our jobs to them. That's just crazy talk.

Preeg estimates that the value of the yuan, a denomination of the renminbi, is being deliberately held at 40 percent less than its fair market value against the dollar, giving Chinese goods a competitive advantage.

If the Yuan was so undervalued, too bad we didn't just pay our workers in Chinese currency. It would be like getting a 40% bonus. While we were at it, we should have all learned Chinese, learned to enjoy rice, started riding bicycles to work, and learned to accept a much lower standard of living in this modern highly competitive global economy. Just think how much better off we would have been.

November 11, 2004

China ends 'bicycle kingdom' as embracing cars

The reasoning behind doing away with registration, which is expected to occur nationwide, is that the bike has been downgraded from one of the most significant family purchases some 20 years ago to a cheap machine used mainly by the poor.

One has to wonder if China's recent stock market activity hasn't changed the situation somewhat (see below). Perhaps the cheap machine used mainly by the poor will make a serious comeback.

Despite this, it is not yet final curtains for the two-wheeler, the authorities insist.

For once, I was finally in complete agreement with the authorities. We couldn't all drive cars. Somebody is going to need to ride bicycles. It was either us or them.

January 2, 2009

Bicycle makes a comeback in China, for fashion, health

Along with the cycling fashion, there is a boom in bicycle sales, especially in sales of up-market bicycles.

"Two years ago, we sold about 70 bikes at best in a month, but now over 100 per month," says Xu Quansong, a salesman at a franchised mountain bike store near the West Lake in Hangzhou.

The bicycle is making a comeback thanks to fashion and health. It has absolutely nothing to do with their massive stock market collapse. Wink wink, nudge nudge.

January 22, 2009
More pain seen for China stocks before recovery

SHANGHAI (Reuters) - China's stock market, the worst performer of the world's major markets last year, faces more bad news from grim corporate earnings in the coming months, but signs are pointing toward a recovery starting in the second quarter.

What points to a recovery? Good old American non-currency manipulation know how. That's what.

The Chinese central bank is now pumping hundreds of billions of yuan into the banking system every month, in large part by virtually halting its bill issuance in its open market operations and letting redemptions of maturing bills automatically inject funds into the market.

You don't believe that this is good old American know how? Seriously?

Analysts advise overweighting infrastructure stocks, such as railways and expressways, due to the government's economic stimulus policies. Refineries' earnings prospects will be boosted by lower crude prices and government fuel price reforms.

They warn that weakening demand would particularly hit auto, airlines and commodity stocks such as non-ferrous metals.

What more proof would you need? That is EXACTLY what OUR analysts are advising US to do!


Anonymous said...

About China acknowledging social unrest.

Comments to the story are interesting.

Stagflationary Mark said...


Thanks for the link! You are so right that the comments are interesting, even within the story.

Some have lost farmland. Now they have lost jobs. They could be desperate.

Never before in global history have we allowed this many productivity miracles to eliminate this many jobs (automation).

Never before in global history have we had so many people who need jobs (population growth).

Never before in global history has global war not been an option. Think about it. We cannot go to war with China and they cannot go to war with us. There is just no arguing with a nuclear weapon.

How could that possible end well? How can it end? War is what usually does that. Behold the globalization train wreck. I am with Volcker of the past.

"Altogether, the circumstances seem as dangerous and intractable as I can remember."

We all like the term "other people's money" as a heckle of what got us into this problem. If you can't figure out how to manage your money, then let someone else do it for you. That sure didn't work.

We're now supposed to believe in "other people's solutions".

I certainly can't figure out any solutions for getting us out of this mess. I sure as heck don't think our government is up to the task.

I want Obama to succeed as president. There is absolutely no doubt in my mind about that.

Unfortunately, I fear that people now have tremendous faith and epxectations that he can and will.

Anonymous said...

Unfortunately, I fear that people now have tremendous faith and epxectations that he can and will.

Do you mean that instead of taking responsibility for their past mistakes and putting into practice discipline and principles for a better future, people are going to rely on Obama to fix their mistakes and magically make their future bright?

I certainly can't figure out any solutions for getting us out of this mess.

I don't think we're going to get out of it. I'm trying to prepare myself and my family for that fact. I believe in God. On a spiritual level this mess could be just what the doctor ordered, although I dread it.

I sure as heck don't think our government is up to the task.

No, can't be. To do what is needed is to risk losing the next election. There is no political alternative to the Keynesian solution.

Turning to the other side of the globe in the UK:

Stagflationary Mark said...


Spain is even more of a train wreck in my opinion, although I must admit it is a tight race.

Britain and Spain Show More Signs of a Slowdown

“The big worry is confidence,” said Gerard Lyons, chief economist at Standard Chartered in London. “A lot of bad news has yet to hit the economy, so the question is what will happen to confidence when more jobs are lost and more firms go bust.”

I wonder if Madoff's biggest worry was confidence. One can't run a "con" game without it.