China post trade deficit; Japan lends to China - Printable Version
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China post trade deficit; Japan lends to China - AmericanDogMan - 03-14-2012 08:54 AM
Quick thoughts please opine;
OK first a few days ago China posts a trade deficit with a clear slow down present. And at that time I believed China's slow down meant they had one of two choices
1)that China has to increase consumption in their own country which in turn means that America being financed in part by China is almost over.
2)Or worse yet China will devalue their currency even more and the U.S. dollar will strengthen effectively raising the amount of debt we owe to China.
Bottomline: This means that even China's banking system is under stress, even more considering China's housing bubble. Get ready for a rollercoaster, they are not going to be able to play with America anymore. And precious metals will skyrocket as the race to the currency bottom continues
Full story at: http://www.washingtonpost.com/business/e...story.html
OK I said all of that to say when I read yesterday that Japan decides to lend to China outright. I think I got a clear signal that:
Option 1) China will increase consumption
Japan the second largest foreign holder of US debt; buys 65 billion yuan of debt (equivalent to $10 billion of treasury notes).
This is important because it signals China consumption level and currency to rise in value. Japan is the first now the EU and then the US to follow in officially giving China the major nod as an official international currency; and probably the world's next reserve currency.
Bottomline US dollar recent strength is in peril; keep stacking.
Please let me know if you think my analysis is off!
What say you.? Is this important at all?
RE: China post trade deficit; Japan lends to China - ramblerboy368 - 03-14-2012 09:37 AM
(03-14-2012 08:54 AM)AmericanDogMan Wrote: Quick thoughts please opine;
THis is a ponzi scheme ready to burst. Just watch out until Japanese rates go up. Japanese Debt/GDP ratio is over 230%.