Spain Suffering from Withdrawals; China’s Commodity Appetite Changing; Credit Card Usage Rising in China

April 10, 2012

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"Paper money is the dry rot, which silently and unseen consumes the beams and joists which support the house and its floors." ~ George Bankroft

US:

Long term stock – bond correlation. it changes. ~ historysquared

Central Banking:

“Our economy is still far from fully recovered,” Bernanke said. “The heavy human and economic costs of the crisis underscore the importance of taking all necessary steps to avoid a repeat of the events of the past few years.” ~ AJC.

  • It certainly sounds like QE3 is on the table. I disagree completely that the election will dissuade Bernanke from embarking on stimulus this fall; in fact, if he wants to keep his job, and you know he does, then this fall is the best time to implement it.
  • If the market falls 20%, he’ll be hitting his “spray market buy” hotkey as fast as he can, regardless of the time of year. Bernanke believes in printing like the Pope believes in God.

World:

Chris Martenson and Mish on the Global Economy Mish

  • An injection of over $1 trillion was only able to stabilize rates for about 4 months
  • Civil unrest simmers, while political backlash against the ruling parties is making it harder for coalitions to form to get real changes made

These Charts Point to Trouble for Australia ~ HistorySquared

Hong Kong real estate prices up 70% from 2009-11, HK Financial Secretary concerned about "the risk of a price bubble” ~  bloomberg. Too late.

China:

Taste for commodities changing

image

Chinese banks issued 268 million credit cards as of Sept. 30, up 20 percent from a year earlier ~ bloomberg. This will end badly. Can you imagine a western company attempting to collect in China? 

Prices of foreign brands made in China are 51 percent higher in China than in the US China Daily that central planning brilliance. it’s great if you’re a politician, or connected to one, not so great if you’re anyone else.

 

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