2010-09-28

Ambrose Evans-Pritchard on China and the Fed

Some interesting items from the pessimist at the Telegraph.

Little warning flags from China

“The indicator – which tends to anticipate China’s overall import growth quite accurately by about two months – has been decelerating for five consecutive months, from close to 60pc (y-on-y) in March to just 8.8pc in August. The product mix shows a sharp decline in China’s orders for electronics and IT products as well as other light manufacturing items such as precision instruments, clocks, and watches,” he said.

Separately, Melissa Kidd from Lombard Street Research has sent a note suggesting that world steel production over the three months to August has been falling at rates comparable to the onset of the Great Recession.

The drops are 7pc global, 9pc in the US, and 13pc in Germany and China. The fall in China is actually faster than it was in late 2008.

China’s young officers and the 1930s syndrome
“China’s military spending is growing so fast that it has overtaken strategy,” said Professor Huang Jing from the Lee Kwan Yew School of Public Policy in Singapore. (He kindly let me quote his remarks.)

“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. They are thinking what they can do, not what they should do. This is very dangerous.

“They are on a collision course with a US-dominated system”.

Shut Down the Fed (Part II)
So all those hillsmen in Idaho, with their Colt 45s and boxes of krugerrands, who sent furious emails to the Telegraph accusing me of defending a hyperinflating establishment cabal were right all along. The Fed is indeed out of control.

On that score, here's ZeroHedge today looking at the buying of TIPS (inflation-protected securities) by the Fed itself.

POMO Begins As Brian Sack Kindly Asks Primary Dealers To Buy AAPL, AMZN, BIDU And NFLX

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