Yes, I certainly was - some of my shorter term indicators were verging on a reversal of this weeks action, so I hunkered down and waited, but alas, it proved not to be. Maybe next week....maybe not
regards
Xerof
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Yes, I certainly was - some of my shorter term indicators were verging on a reversal of this weeks action, so I hunkered down and waited, but alas, it proved not to be. Maybe next week....maybe not
regards
Xerof
auckland trading was a little black this morning.
No such problems here.......trading as usual in full sun and 21 C [8D]
http://www.sunshinecoast.au.nu/image...MooBeach01.JPG
arco
the sunshine coast huh
well yeh would be nice this time of year.... my folks live over there ... I'll be visting them for Xmas - prolly be too hot for me then tho.
Yep Peat - its a wonderful spot to escape the NZ winter.
Havin fun here with my golfing buddies............
http://img.photobucket.com/albums/v5...Kangaroos1.jpg
arco - basking in 23 C
lol arco..... dont let one of those roos run away with your ball in its pouch!
got an email article today from stratfor.com re china , unfortunately cant link to the article on da web coz its premium (i.e requires money) tho they do send out emails containing some of their articles for free. I fully recommend joining for as much of their free stuff (and more if you have the cash) as you can get if you have any interest in geopolitical analysis. I assure you its top notch stuff
so I will quote a few paragraphs for your delight and delectation
[quote]quote:The Chinese government is continuing efforts to cope with its runaway economy. The People's Bank of China has raised interest rates. Banks have been told to curb lending. The government has said that it will implement procedures to rein in foreign acquisitions at low prices -- or, in other words, to block fire-sales of Chinese companies. As a recent headline in the Japan Times put it, "China's Monetary Surge Dooms Its Boom."
A lot of things have gone into dooming China's boom, and the money surge is one of the more immediate problems. However, as we have argued (and this article should be read in the context of past analyses), the end of the Chinese boom was inevitable. The issue now is how all of this will play out in China and in the world.
What must be understood is that China now is moving from an economic problem to a socio-political one. The financial problem is a symptom; the fundamental problem is that tremendous irrationality has been built into the Chinese economy. Enterprises that are not economically viable continue to function through infusions of cash. Some of the cash comes from borrowing, some by exporting at economically unsustainable prices. The result is a squandering of resources. The reasons that this continues have nothing to do with economic rationalism and everything to do with political and social reality.
If interest rates were to rise and lending were to become disciplined, many of China's enterprises would fail. This would bring several consequences.
First, and most important, it would result in a massive increase in unemployment. At this point, the irrationality has been going on for years. It is not only state-owned enterprises that are economically unsustainable; many newer enterprises, including those in which Western companies have invested, are not succeeding
...............
China's Likely Path
Asia has been here before. Japan encountered this problem around 1990, and East and Southeast Asia encountered it in 1997. Roughly three models for dealing with the problem exist:
Japan model: Use reserves and formal and informal measures to avoid actions that would trigger massive bankruptcies and unemployment. Accept economic stagnation for the better part of a generation.
South Korea model: Move rapidly to restructure the economy, using economic and political means. Control social unrest with security measures. Move out of the problem in a matter of years.
Indonesia model: Lacking resources to manage the crisis, suffer both financial dysfunction and political strife among the elite and between regions.
Japan was able to do what it did because it is a highly disciplined, cohesive society, in which shared pain is viewed as preferable to social dislocation. South Korea was able to do what it did because the magnitude of its crisis was relatively less than Japan's, and because the state had the means for suppressing unhappiness. Indonesia failed to do what it needed to do because it lacked resources and political power.
..............
As for the effects on the international economy, there has been a great deal of discussion about China's ownership of U.S. Treasury instruments and the consequences if that money were withdrawn in a crisis. In fact, this is the last thing that is going to happen. If China has a massive financial crisis, no one -- including the Chinese government -- is going to
Hi Peat
Interesting - thanks.
How do you find this site helps with your trading decisions?
Regards - arco
you always ask hard questions arco!
in general it wouldnt help trading except perhaps broaden a fundamentals type understanding I suppose, but since you and I tend to trade technically it would just be classed as peripheral knowledge I guess.
I enjoy their analysis simply for its quality really, but the reason I posted this particular one was because it analyses how an economy might escape a boom/bust crisis and because it argues that money actually flows INTO the US when these crises have occurred in the past. And it debunks the notion that China will withdraw its US investment if and when a crisis occurs.
I have noticed that your 3 recent posted graphs all predict USD strength. This goes against most of the other analyses I've been reading eg Jyske and of course the general feeling that USD must weaken considerably in an effort to redress global economic imbalances. I'm thinking thats very contrarian of you ;+) (which of course ties in with your old signature)
Here's a nice one which is in line with the Arco moneymaking machines perspectives.....but look at the bigger picture for later in the hunting season........
http://www.e-wavecharts.com/usd_may2006.htm
Xerof