Featured Posts

<< >>

Chinese Fund Managers Sentenced to Death after Cheating Investors out of 1 Billion USD

HANGZHOU – Two brothers and their father were sentenced to death on Monday for cheating 15,000 investors out of over $1.1 billion in east China’s Zhejiang province. Ji Wenhua, president of the Yintai Real Estate and Investment Group, was sentenced to death for the crime

Gold at $7,000 article goes viral in Chinese media

Dan Collins CMR “Gold going to $7,000″, an article today in the Chinese media is going viral and one of the most viewed articles in the financial press. The article references American Jim Rickards and his concept of comparing inflation-adjusted gold prices. Most Chinese economists

Western paper markets manipulate gold prices lower as China takes the real stuff off the market.

It’s not uncommon for the large Wall Street banks to combine in shorting an entire years supply of minded silver in a single day.The same goes for all commodities. Endless paper printing getting funneled to Wall Street has destroyed all real price discovery. Capitalism fails

Chanos is back….This is getting sad

Chanos is back! His short China thesis is very long in the tooth but as it goes with most ego maniacs he cannot accept failure or that fact that he might be wrong. Being wrong on an entire country where you have never visited and

“American Collapse Theory” Gaining Ground in China

Dan Collins CMR When I moved to China back in 1998 I was surprised to learn how highly the Chinese thought of America. Of course China was a much poorer place back then but coming from the Detroit area I couldn’t fathom where was all

China Car Sales Up 22.6% -The Chinese economy is collapsing?

You have to laugh at the whole “China will collapse crowd” on CNBC and even respected sites like Zero Hedge. Personally, I love the Zerohedge stuff. They understand the ponzi-financial fraud-money printing-welfare state economy that now envelops the West. But China is a real economy,

Cloud Computing in China booming as American giants are pushed out

D.Collins CMR China’s cloud computing market is expected to be worth 37.2 billion yuan (US$6 billion) in 2017 as demand for the service grows, the Chinese-language China Securities Journal reported on Friday. Some American tech companies are watching the largest and fastest I.T. market in

Oil rig dispute could see repeat of Sino-Vietnamese War: report

Breaking News today that a Chinese vessel as rammed and sunk a Vietnamese fishing boat. All countries in the South China Sea and East China Sea are using fishing boats in a game of cat-and-mouse to challenge each other on their respective areas. This time

France relents to China, Chinese police to help patrol Paris streets

Scared of losing the Chinese tourist dollar, France has relented to China and will allow Chinese police on the streets of Paris. More signs of the benefits of third-world immigration into the West to the point where cultural breakdown has occurred and law and order

People’s Bank of China will take down global gold price manipulation

Gold has been flowing East for a decade. When the West wakes up to the fact that their gold is gone, they will no longer have sound money with which to back a currency. The world has only been off a gold standard since 1971

China to lower reserve requirement ratio

From the China Daily… BEIJING – China will lower banks’ reserve requirement ratio (RRR) by 0.5 percentage points starting May 18, the country’s central bank announced Saturday. The cut, the second of its kind this year, will drop the RRR for the country’s large financial

Chinese Officials Falsify Data To Mask Slowdown, NYT Says

Is China tweaking its numbers on GDP? Probably. For twenty years Chinese GDP roughy came in right on the governments target. This would be an almost magical performance record considering economists in the West can predict absolutely nothing. For years, China most likely lowered GDP

Japan Learning the Hard Way, Destroying your Currency is Not an Economic Strategy

Japan will learn the hard way that destroying your currency is not an viable economic strategy. Shanghai Daily JAPAN posted a record 1.63 trillion yen (US$17.4 billion) trade deficit in January as rising exports trailed surging imports of crude oil and gas due to rising

American GDP: The Fantastic Fiction of American Economic Strength

American GDP: The Fantastic Fiction of American Economic Strength By Dan Collins Is the U.S. economy still the most powerful in the world? That is what we are told as the United States does have by far the world’s largest Gross Domestic Product (GDP). In

Government tells Huawei that they are not allowed to spy on Americans. Only they can do that.

Youtube, Facebook, and Twitter are all blocked in China. They have algorithms in place to disrupt Google service as well which makes it very annoying even using Google here. You get many dead links when the algo’s are working. Despite blocking American companies in China,

Ruble now ‘excessively’ strong – Russian Finance Minister

Have Russian gold holdings backstopped the currency? Russia has been buying
gold hand over fist. The Rubble has now come back after taking a huge hit
when the Fed and its private member banks took a coordination action against
Russia in order to collapse its currency. (i.e. crash Russia by selling short
Rubble and crashing the oil price on the derivative markets)

Russia has the right idea, turn your paper fiat currency into
gold and real assets. When the paper market derivative bond bubble collapse
the only survivors left will be holding hard assets.

The Russian ruble has strengthened to a point where it is actually too strong, Russian Finance Minister Anton Siluanov said on Friday during a lecture in St. Petersburg.

“What happened was expected: the volume of gold reserves stabilized, then the ruble started stabilizing and has now strengthened. We believe that it has strengthened excessively,” Siluanov said at a lecture in St Petersburg.

On Friday, the ruble gained 1.22 percent against the dollar, trading at 51.37 at 5:00pm in Moscow. After gaining a record 15 percent in the first three months of 2015, the ruble has begun to weaken, which the Central Bank sees as a good sign. The regulator is trying to reverse the gains the currency picked up this year. However, a stronger ruble could pose problems for exporters who benefit from a weaker currency. At stake is also Russia’s project of import substitution; as the ruble gets stronger customers have more purchasing power to buy foreign goods.

The rapid rise has been spurred by higher oil prices as well as more solid internal economic factors in Russia, such as demand for rubles to buy attractive Russian sovereign debt and the ceasefire in Ukraine. It is the world’s best performing currency of 2015 so far, according to Bloomberg.

READ MORE: Rapid rise of the ruble is over – Bank of Russia

In 2014, the currency lost 46 percent of its value, hitting an all-time low of 80 against the US dollar on December 16. The ruble nosedive was in tandem with oil prices, as well as panic that sanctions and low oil prices would negatively affect the Russian economy.

At the same lecture on Friday, the Finance Minister spoke on Russia’s strengthening economic relationship with China, including boosting trade as well as the joint project to develop a route to speed up trade, dubbed the new Silk Road.

Grand Master of International Investing: Mark Mobius

Asian, African nations challenge ‘obsolete’ world order

By Eveline Danubrata and Charlotte Greenfield

JAKARTA (Reuters) – Leaders of Asian and African nations called on Wednesday for a new global order that is open to emerging economic powers and leaves the “obsolete ideas” of Bretton Woods institutions in the past.

Their calls came at the opening of a meeting of Asian and African nations in Jakarta to mark the 60th anniversary of a conference that made a developing-world stand against colonialism and led to the Cold War era’s non-aligned movement.

Among the leaders listening were Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, who were expected to meet on the sidelines of the conference, the latest sign of a thaw in relations between the Asian rivals.

Sino-Japanese ties have chilled in recent years due to feuds over the two neighbors’ wartime past, as well as territorial rows and regional rivalry. Bilateral talks in Jakarta on Wednesday could promote a cautious rapprochement that began when Abe and Xi met at a summit in Beijing late last year.

Abe, in an apparent reference to China’s growing military assertiveness, told the conference that the use of force by the “mightier” should never go unchecked.

The Japanese prime minister also said Japan had pledged, “with feelings of deep remorse over the past war”, to adhere to principles such as refraining from acts of aggression and settling international disputed by peaceful means.

It was not immediately clear if the remarks would satisfy China’s desire for Japan to acknowledge its wartime past, but a Japanese official told Reuters Abe and Xi would meet.

Xi had earlier told the conference that “a new type of international relations” was needed to encourage cooperation between Asian and African nations, and said the developed world had an obligation to support the rest with no political strings attached, the Xinhua news agency said.


Indonesian President Joko Widodo, the conference host, said those who still insisted that global economic problems could only be solved through the World Bank, International Monetary Fund and Asian Development Bank were clinging to “obsolete ideas”.

“There needs to be change,” he said. “It’s imperative that we build a new international economic order that is open to new emerging economic powers.”

The IMF and World Bank were at the center of the post-World War Two monetary order created by the United States and Europe at the Bretton Woods Conference in New Hampshire in 1944.

Widodo made no mention of the China-backed Asian Infrastructure Investment Bank (AIIB) that is seen as a competitor to the Western-dominated World Bank and Asian Development Bank, but Indonesia is one of nearly 60 countries that have offered to be founding members of the AIIB.

The United States and Japan have not thrown their support behind the bank, which is viewed as a threat to U.S. efforts to extend its influence in the Asia-Pacific region and balance China’s growing financial clout.

Zimbabwean President Robert Mugabe told the conference that Asian and African countries “should no longer be consigned to the role of exporters of primary goods and importers of finished goods”.

He called it a “role that has historically been assigned to us by the colonial powers and starting from the days of colonialism”.

Indonesia invited heads of state and government from 109 Asian and African countries, but according to a conference official, 21 leaders turned up, which commentators have said shows the group is no longer relevant.

The world order has changed dramatically since nearly 30 heads of state gathered in 1955 in the Indonesian town of Bandung to discuss security and economic development away from global powers embroiled in the Cold War.

Together they accounted for less than a quarter of global economic output at that time, but today they contribute to more than half of the world economy. Many of the Bandung countries, such as China and India, are now themselves at top tables like the Group of 20 and wield significant economic power.

Widodo said the group may be meeting in a changed world but still needed to stand together against the domination of “a certain group of countries” to avoid unfairness and global imbalances.

(Writing by John Chalmers; Additional reporting by Kanupriya Kapoor and Nicholas Owen; Editing by Raju Gopalakrishnan and Alex Richardson)

Rising profile of renminbi brings dilemma for Beijing

Now that the China-led Asian Infrastructure Investment Bank is set to launch, the issue of whether the renminbi should be included in the currency basket on which the value of the International Monetary Fund’s special drawing rights (SDR) is based is again being discussed.

The issue was first raised in March 2009 when Zhou Xiaochuan, governor of China’s central bank, released a statement in which he called for replacing the US dollar as the dominant world currency and creating an international reserve currency that is delinked from individual nations and can remain stable in the long run.

Beijing then launched a series of measures to internationalize the renminbi in the hope of popularizing its use in world trade and financial markets, upgrading the currency’s international status, and having it included in the reserves of other countries and by the IMF in its SDR basket.

According to statistics from the Society for Worldwide Interbank Financial Telecommuncation (SWIFT), global renminbi payments accounted for more than 2% of the total for the first time in 2014 to reach 2.17%, moving it into the top five world payment currencies after the US dollar, euro, British pound and Japanese yen.

This compared with yuan global payments accounting for only 0.25% of the total and ranking 20th just two years ago.

But such rapid progress has not been enough for the currency to be included in the SDR basket. Though it meets one requirement for SDR basket consideration — as a currency widely used in international trade — it does not meet the requirement of being freely used, especially in national financial accounts, because capital movements and exchange rates still are subject to the screening and approval of the Chinese authorities.

Furthermore, a major decision in the IMF requires more than 85% support from members, but the United States has virtual veto power because of its 16.7% voting share. Therefore, a more important consideration in whether the yuan can be included in the SDR basket will be engaging with the United States and even cutting deals as necessary.

Beyond those external factors, China will also have to push for comprehensive financial reforms if it intends to truly internationalize the yuan, chief among them being lifting controls over interest rates, limiting intervention in foreign exchange markets, expanding the flotation range of exchange rates and further easing controls on capital movements.

But Beijing has also realized that the internationalization of its currency is a double-edged sword because it will increase the volatility of domestic financial markets, especially when it eases its capital controls.

In other words, market forces will be stronger, and whether the Chinese government is prepared to deal with the consequences and whether its financial institutions can withstand the negative impact is yet far from certain.

People’s Bank of China may have tripled holdings of Gold bullion

The People’s Bank of China may have tripled holdings of bullion since it last updated them in April 2009, to 3,510 metric tons, says Bloomberg Intelligence, based on trade data, domestic output and China Gold Association figures. A stockpile that big would be second only to the 8,133.5 tons in the U.S.

“If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies,” Bart Melek, head of commodity strategy at TD Securities, said by phone from Toronto. Gold is “certainly viewed as a viable store of value for an up-and-coming global power,” he said.

China may be preparing to update its disclosed holdings because policy makers are pressing to add the yuan to the International Monetary Fund’s currency basket, known as the Special Drawing Right, which includes the dollar, euro, yen and British pound. The tally may come before the IMF’s meetings on the SDR next month or in October, Nomura Holdings Inc. said in an April 8 report.


Want someone beaten up? In China, there’s an app for that

Hiring people to beat people up is actually old school in China.
With little legal regress small businessmen often resort to
hiring thugs into scare tactics to get people to pay their debts.
When service is poor or the buyer as cashflow problems the trouble

The first time they will send 3 people collect the debt. The next time,
if you have not paid, its 6 people. After that, you will get at least
12 and the riot will start at your business.

I was once confronted by this when a guy brought in 6 thugs. They told me
next time would be 12. I told them flat out, you can bring 12. We have
500 in the plant here, you tell me who will win?

They didn’t come back.

Want China Times
An app in China has become a platform for people to hire thugs to beat someone up, reports the Kunming-based Yunnan Information News.

Didi Da Ren, or Didi Hit People, was initially a satirical fabrication by a Chinese online talk show in February as a parody of people’s anger concerning unethical and uncivilized behavior.

Perhaps inevitably, the joke has become reality. An Android phone user surnamed Zhang told the Yunnan newspaper that he found the app on April 16 and almost succeeded in hiring a thug through it. Zhang posted a request through the app which was answered by someone willing to beat someone for money. The individual’s phone number was sent to Zhang’s smartphone via the app.

The paper’s reporters found the app was available on Android app stores and other third-party app stores including 360, Wandoujia and Xiaomi. The webpage of 360’s app store showed it had been downloaded over 40,000 times while Wandoujia recorded 8,800 downloads.

The reporters found the app’s users need to register their real name, user name, password and phone number to post a hiring ad. Users are required to describe the type of heavy they are looking for and state how much they are willing to pay — which must be more than one yuan (US$0.16).


These factors are fueling liquidity in China housing

China Lowers RR requirement

China’s central bank announced it was lowering the amount of cash that all financial institutions need to reserve starting on Monday.

The move will release liquidity of at least 1.2 trillion yuan ($197 billion) to support economic growth.

It is the second reserve requirement ratio cut in three months. The 1 percentage point drop was the largest since November 2008.

An extra 1 percentage point cut in the ratio will be given to commercial banks for agricultural services and an additional reduction of 2 percentage points to the Agricultural Development Bank of China, the People’s Bank of China said.

It will further lower the ratio by 0.5 percentage points for eligible banks that lend a certain amount of money to agricultural borrowers or to small and micro businesses.

This change is expected to lift the stock market on Monday after the benchmark index hit a seven-year high last week, said Zong Liang, an economist at Bank of China International.

Lu Zhengwei, chief economist at Industrial Bank, commented that the cut was “inevitable” but “a little bit late”, as the funds outstanding for foreign exchange have continued to drop since April last year, which means market liquidity has actually tightened.

Cutting the reserve requirement ratio is more effective in reducing loan costs for industrial companies than decreasing the benchmark interest rate, Lu said.

Commercial banks’ lending costs for new loans are higher than industrial profit in recent months, according to economists, especially in March when the growth in industrial output declined to a post-crisis low of 5.6 percent, down from 6.8 percent in the first two months of the year and from 7.9 percent in December.

Canada becomes global center for Yuan clearing

Private and public sector leaders from across Canada and Asia will meet at the Pacific Finance Summit to create a blueprint for Canada to capitalize on its new status as clearing hub for China’s currency.

Convention Centre. It is co-hosted by AdvantageBC and the Province of British Columbia.
Participants of the summit will look at how Canadian and Chinese companies will gain competitive advantages by settling accounts between Canadian dollars and renminbi, or yuan, which is expected to become the world’s third major trading currency within the next five years.
According to Colin Hansen, CEO of AdvantageBC, Canada’s status as a renminbi hub is “a unique opportunity, which will make [Canada’s] importers and exporters more competitive and extend out trade reach across the Americas.”

The Peoples Bank of China designated Canada as China’s first renminbi settlement hub in the North American continent on Nov 9. The Industrial and Commercial Bank of China (ICBC) branch in Canada is the official clearing bank.

“The new currency exchange system will mean that Canadian companies will now be able to efficiently conduct transactions in real time between Canadian dollars and Chinese renminbi,”

Canada is also the seventh country in the world to be allocated a renminbi Qualified Foreign Institutional Investor quota by China, which will allow companies in Canada to use renminbi to invest directly with China’s capital markets.


Meanwhile….In America

meanwhile in amerika

Marc Faber: The Chinese Will Not Print Money

AIIB to challenge global financial order

China to push for the Yuan to become cleaning currency for the AIIB

Want China Times
The Chinese government will push for the yuan to become one of the denominations and settlement currencies for the China-led Asian Infrastructure Investment Bank (AIIB), reports Hong Kong’s South China Morning Post.

Beijing will also call for the AIIB and the Silk Road Fund to establish special currency funds and issue yuan-denominated loans, said the sources.

If the AIIB founding members cannot agree on a basket of currencies, China will allow the AIIB and Silk Road Fund to use the US dollar as a currency of settlement. It will, however, encourage the use of the renminbi as the organizations mature, said sources.

The US$40 billion Silk Road Fund aims to provide investment in infrastructure projects and businesses from Asian to European countries.

China’s state-owned Outlook magazine recently said in an article titled The Five Key Questions Facing the AIIB that the organization has three options for its currency of settlement — the US dollar, the renminbi or an AIIB currency basket.

Of the three options, the US dollar would be the most cost-efficient and convenient while the yuan the most expensive and least convenient, the article said, adding that a currency basket would be the most attractive option given that it is more resilient to market changes.

China should strive to establish the yuan as the currency for denomination and settlement, said Hong Hao, the chief economist and managing director or research at Bocom International. If the US dollar is used, China’s bid for the yuan to become a global currency and its challenge to the hegemony of the US dollar would be weakened, said Hong.

Hu Yifan, the chief economist with Haitong Securities International, said a consensus on the currency basket would be hard to reach. Despite long-term negotiations, the Asian Development Bank has not come to an agreement on its own currency basket.

Hu believes that the AIIB could use the US dollar as a currency of settlement in the beginning but should gradually turn to a mix of the renminbi and the US dollar.

China has outbuilt U.S. in Submarines 8 to 1 in the last decade

According to the U.S. Naval Warfare Center, since 2015, China has outbuild
the U.S. in Submarines by 8 to 1.

The new diesel Yuan class ships are quieter than the American nuclear
submarines and better suited for warfare in the Pacific.

China will have more warships in the Pacific than the U.S. by 2020.


Portugal Debt costs go negative


A-share rally could last longer than expected

Want China Times
The current stock rally in China is likely to last longer than expected, despite deflationary pressure reflected by recent economic data and looming concerns about a weak global economy, according to the Beijing-based Economic Observer.

Institutional investors held a cautious or even pessimistic view on the outlook of the A-share market when shares prices underwent corrections in January and February, the newspaper said.

At that time, the concerns came from China’s slower economic growth, which was expected to increase risks surrounding the government and corporate debts, leading to a possible credit crisis, according to the report.

The paper pointed out however that while China may have the highest corporate debt-to-growth domestic product ratio, over 130%, a large part of the borrowing was made by state-owned enterprises, which is backed by the government.

Regarding the producer price index (PPI), which declined for the third year in a row in 2014, and the consumer price index (CPI) lower than the government target, the newspaper said past bull markets in China usually started when the PPI and CPI were at low levels. There has been no example of bull markets peaking before the PPI rebound in the 25-year history of China’s stock market, the report added.

Beijing is expected to continue proactive and easing fiscal and monetary policies, given the deflationary pressure reflected by the CPI data and the weak global economy, according to the paper. The government will only begin tightening policies when the PPI begins to rise and show that the economy has stabilized, and this is unlikely to take place this year, the article said.

The current stock rally has been built on individual investors’ increasing their holdings of equities after they saw returns on assets, namely real estate, begin to decline, the newspaper said. Equities currently account for less than 4% of the assets owned by Chinese households in term of market value, while the percentage of real estate stands at 65%, the newspaper said.

Moreover, not everyone can afford to buy real estate, but even migrant workers have money to invest in stocks, according to the newspaper.

The Economic Observer reported that 90% of the stock transactions were conducted by retail investors between January and February and that 60% of them only had a junior high school education. In March alone, China saw over 4 million new stock accounts, the newspaper noted.

Wider access to the internet is likely to lead to more people in China becoming stock investors and this could make a peak of the bull market come later than most people expect, according to the report.

Space X rocket bursts into flames

China offered Japan No. 2 post at new AIIB bank- offer declined

Nikkei Asian Review
TOKYO — China offered Japan the post of the top-ranking vice president at the planned Asian Infrastructure Investment Bank. Japan did not accept the offer, and instead toed the U.S. line, according to informed sources.

It was a girl-Chaos breaks out at ECB

ECB authorities have responded to the chaos caused by a protest at the
ECB declaring …”It was a girl.” (See first picture attached)

Some are not happy with 50% youth unemployment and printing money for
banks. Gosh….lighten up will ya.


A protester jumps on the table in front of the European Central Bank President Draghi during a news conference in Frankfurt



Here’s why the China story remains ‘exciting’

Keep in mind, China is not growing as fast now on a percentage basis
as in the past. Growth rates have gone from 12% down to 6-7%.
However, China is now a $10 trillion dollar economy. That means in
terms of GDP even at 6-7% China is adding a new Turkey or a new
Switzerland every year into the global economy.