BRIC+ News & comments

[Billy T]

Here is not up to date graph of how China is getting out of US Treasury paper, as I predicted they would 6 or so years ago, as part of the plan to eventually destroy the dollar, if it has not already collapsed, by backing RMB bonds with gold. I.e. they want to reduce the size of their ONE TIME loss on Treasury paper for the EVERY YEAR saving on growing import costs with US & EU in depression and not buying competitors keeping import cost high. Of course the greater benefit is China gets to pay for its imports with printed paper, as US has done for more than two decades.

The other main thing China must do, and is rapidly doing, is to reduce the fraction of its exports going to US & EU as it grows exports to others by ~ 20 + or - 10% each year.
From memory: only 15% of China's exports now go to the US. - China only needs a year or two more before it can tell the US:

Go to Hell. We don't need to sell to you anymore. So we will no longer finance your debts.

 

[ayush001]

But many of the Ms are not really miserable. They just live outside the cash economy or are not with disclosed salaries. Typically the Ms are rural folk who only need cash for flour, cooking oil, second hand clothes, electricity, beer, etc. They grow their own food, coffee, tobacco, etc.

 

[Billy T]

But many of the Ms are not really miserable. They just live outside the cash economy or are not with disclosed salaries. Typically the Ms are rural folk who only need cash for flour, cooking oil, second hand clothes, electricity, beer, etc. They grow their own food, coffee, tobacco, etc.

that is quite true, but not good for the economy. I have lived in Brazil for last 20 years. For first 10, I had a small (~100 acres) cattle farm which I visited for one or two week-ends each month. My very intelligent and honest but poorly educated employee took care of it. He was one like you describe. My local currency salary equal to ~$100/ month allowed him to save money, but got me into trouble with other absentee - land owners as their employees were starting to ask for a high salary like that too. All this is changing thanks to "Bolsa Familia"

BTW he killed a pig when needing more cooking oil and rendered the fat into lard. In the tight knit community of the rural valley, food was shared so little of the meat was sun/salt dried.- Most was eaten in a day or two as no one had a refrigerator. Likewise flour was little used. Manjorka root and potatoes ground into a flour made very good tasting bread or coating for fried fish, etc. The grinding was done with a short vertical log of hard wood that had a cavity* in the top in which item to be ground was placed and pounded with a blunt end post of smaller diameter. Corn meal flour was often used for corn bread. I got a baby lamb but it was confused about its (or my?) identity and butted me hard when nearly full grown. It made a nice feast for me, him and his working neighbors. Me, the "Rich American," even provided the beer.

He smoked, a little too much as that cost nothing. The inner most layers of a corn husk provided the "paper." Once I took him into town to watch a big football game on TV and offered to buy him a pack of "real cigarettes." He had had a few before, so thanked me and said: "They don't taste good." Living outside the "cash economy" is not a bad way to live, especially when, like in Brazil medical services are free to the user, but does hurt the economy.

* Made by many tiny fires, I think, but no evidence of that remained.

Let me use Brazil to numerically illustrate what lifting peasants into the middle class can do for domestic demand; ... About 12 years ago, Brazil began the “Bolsa Familia" program which gave modest (to urbanites) monthly cash grant (on the order of $100 now but less originally) to the rural poor IF they kept their kids in school until age 18. Prior to Bolsa Family most boys and nearly 100% of girls dropped out of school when they could barely read to work at home or in the fields with their father. Bolsa Family has more than paid for itself due to these formerly “outside the cash economy” farmers now buying in their village when the multiplier effect of these purchases shows up in greater taxes from many merchants. The 2nd requirement to collect was that all had to get their free vaccinations. – The saving in state’s medical costs (preventive medicine in a free public medical system) has also paid for the Bolsa Family expenses. Here is the economic result 12 years later:

“…In the next decade demand for energy is expected to increase by around 60 percent in Brazil, fuelled by millions of people spending more on consumer goods for their homes and cars, economic growth continuing to outstrip that seen in developed nations …

A consumer spending boom is expected to see the average number of televisions per home rise from 1.37 to 1.71, the proportion of homes with washing machines increase from 64 to 74 percent and the proportion with air conditioning to rise seven percentage points to 27 percent. …

Production of steel in Brazil could double in the next decade with cement and aluminium also likely to rise almost two-fold. The industrial and transport sectors will account for two thirds of the country's total energy demand in 2020. …

The principal new hydropower project is the 11,233-MW Belo Monte dam to be built on the River Xingu in the state of Pará in the Amazon, which is due to start generating power in January 2015 with its full potential online by January 2019. It will be capable of supplying enough power to serve 18 million homes housing 60 million people,…

Renewable sources, such as biomass, small-scale hydropower and, principally, wind will see the 9 GW they accounted for last year triple to 27 GW in 2020. This will take their contribution to the country's electricity supply from eight to 16 percent, keeping the overall contribution of renewables to electricity at 83 percent. …
Quotes from: http://www.renewableenergyworld.com/rea/news/article/2011/09/brazil-sets-the-pace-in-clean-energy

Billy T explains “keeping” Although hydro power is rapidly expanding other renewables are expanding even faster so hydro will be only ~75% in 2020 of the 60% greater generation! By some measures, Brazil’s 30 year old hydro plant is still the world’s largest (China’s five year old hydro plant was designed to be slightly bigger by several measures – concrete used etc. But Brazil’s new Belo Monte plant will be third largest in the world with # 4 far behind.) ...

 

[Billy T]

There are now 201 million Brazilians! and like many others, Brazil has a population distribution problem rapidly growing worse as this year only 1.77 kids are born per woman. (That too will grow worse as in 2030 it is projected to be only 1.5 kids per woman.) Here are more projections and data (all in millions of people):

...............14 or less old.........65 or more old...... others
In 2000: ...52.1.....................9.7.......................111.6...... total = 173,448,346 (registered)
In 2013: ...48.5...................14.6.......................137.6...... total = 201,032,714 (registered)
In 2042*...34.7...................42.2.......................151.4...... total = 228,350,924 (PROJECTED)
In 2060: ...28.3...................58.4......................131.4...... total = 218,173,888 (PROJECTED)

* Year of Brazil's peak population. Unfortunately, currently 11.8 million officially live in Sao Paulo, but true number is higher as homeless, etc. are not fully counted and quite a few rural-born migrants to the city were not registered at birth. I think, but have not checked recently, that Sao Paulo is the world's fifth largest city.* It has kilometers of essentially parked cars on the roads during rush hour. I can, on level ground, walk faster for many blocks, before for unknown reasons the road ahead of the cars is nearly open, so they speed up for a few blocks only to creep ahead again for the next five minutes. Subway and common buses are free to those 60 years or more old, but that must soon change. Main trigger for the recent millions demonstrating in dozens of cities was a modest increase in bus fares (now cancelled). I expect the 60 limit will soon changed to 65, or 70, but I will not be effected even if it goes to 75.

Buses have their own lanes, which they share with taxis that have a passenger. They are much faster than private car when there is congested traffic, and widely used. Some on their sides have slogan (translated): "Transport: the citizen's right - the government's duty." It is not rare to see 20 buses, one right after another, with a few cabs in between. Some busses are articulated with three sections. Some use natural gas, others "bio-diesel" but more than half are common diesel still. There are also many electric trollies. Most bus stops are short side lanes to left of the main bus lane so they don't delay each other much. Each bus stop has designated busses using it (Other buses will not stop there, even if a non-blind passenger asks them too.) Thus you may need to walk four or less blocks to get to a bus stop of the bus you want to use. At major stops, an electronic sign tells you the expected wait for busses that stop there. Rarely during business hours is it even five minutes. I have not been "a world traveler" for 25 years, but Sao Paulo's public transport is second to none, of those I have seen but always crowded. (There are special seats on both buses and metro for the old, or disabled and amazingly most leave them vacant or even offer a "white hair" like me one of the regular seats if the special seats are full.)

* It is certainly very diverse and interesting. For example, Sao Paulo has more Japanese than any other city except Tokyo; many living in large district where all signs are in Japanese and many street lights look like paper lanterns! There is racial harmony in Brazil**, but not full economic equality. Public schools are poor, so the middle class sends their kids to private schools and that sends the economic inequality into the next generation. For example nearly 100% of the upper middle class have at least one maid.

** You will be fined for a racial slur / remark and go to jail if a repeat offender.

 

[Billy T]

Chinese Premier Li Keqiang and leaders of ASEAN member countries attended the opening ceremony. A total of 4,600 booths, 1,294 of which are from ASEAN countries, will be open for business at the expo, which is scheduled to run from September 3 to 6.

Above just announced the start 10th ASEAN congress. Here is some data, by edit two days later:

Trade is expected to reach $1 trillion in 2020, compared with $400 billion last year, ... Two-way investment will amount to $150 billion from 2013 to 2020, Li said.

By the end of June, China's outbound direct investment in ASEAN nations totaled nearly $30 billion, and direct investment from ASEAN nations flowing into China exceeded $80 billion. Calling China and ASEAN "natural cooperative partners", Li said the two share common goals.

"The major task of China and ASEAN is to develop economies and improve the people's livelihood," he said. At the opening ceremony of the expo, China and ASEAN signed three economic agreements covering ports, technology transfer and an entrepreneur association.

Cooperation with China is of great importance to ASEAN given the volatility in the emerging markets that erupted after the US Federal Reserve started to scale back its massive bond-buying program, said Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation. "I am highly optimistic about the goal of achieving $1 trillion in bilateral trade, because our connection is stronger than ever after a 10-year strategic partnership. I think cooperation on the agricultural front will be essential to boost our economy," he said.

 

[Billy T]

G-20 Weighs Stimulus Exit Risk as BRICS Plan $100 Billion Shield:

BRICS countries said they will create a $100 billion pool of currency reserves to guard against financial shocks. China will contribute $41 billion to the pool, with Russia, India and Brazil each adding $18 billion and South Africa providing $5 billion, according to a statement issued today at the Group of 20 summit in St. Petersburg, Russia.

Chinese Vice Finance Minister Zhu Guangyao said, “Some emerging-market economies are facing difficulties. Capital is flowing out of these countries and their currencies are under pressure of depreciation, and the major direct cause of such a phenomenon is the Fed’s announcement that it may exit its unconventional monetary policy.”

Emerging markets, which helped pull the world out of a recession after the global financial crisis, now face an exodus of cash and sliding currencies in anticipation of the U.S. Federal Reserve’s eventual tapering of its $85 billion in monthly bond purchases in its most recent quantitative easing program.

 

[Billy T]

The trade deficit exists despite the fact that U.S. exports to China were the highest in history. In 2012, the U.S. exported $110.6 billion in goods, an all-time record. Exports in 2011 were only $103.9 billion. However, imports from China also set a record -- $425.6 billion, more than the $399.3 billion imported in 2011.

Note that from the above and the 2nd quote of post 745, the sentence reproduced below, China's exports to ASEAN will be as large as they are to the US in 2013 and significantly greater to ASEAN than to the US in 2014.

"... China's trade with ASEAN " is expected to reach $1 trillion in 2020, compared with $400 billion last year. ..."

In 2012 US China trade, both all time record were 110.6+425.6 = 536.2 billion dollars up from 2011's 103.9+399.3 = 503.2 or 6.5% increase. For the current total bilateral trade to double to 1.072 Trillion at this 6.5% annual rate of increase will take 72/6.5 =11.1 years; But in only 7 the China-ASEAN trade ALONE will be a trillion dollars and ASEAN trade is still only a minor part of China's trade / exports.
I. e. China is making rapid progress toward not needing US as a buyer and the time when it can and will tell US:

Go to Hell. We don´t need to sell to you and will no longer finance your deficits. (Print money as you need it until it is worthless.)

China is buying more than 1000 metric tonnes of gold in 2013 and producing 40% more than world's second largest producer - to back the RMB bonds with gold and wealthy China can pay higher interest than the US can too, so they will be the preferred component of international reserves. China then can pay for its imports with printed paper. Another strong reason why it is to China's economic advantage to take a ONE TIME loss on the dollar reserves it has not been able to spend down completely by paying up front for long term (up to 30 years) delivery contracts for energy, material and food stocks it needs to import is that EVERY YEAR the prices of those imports will be much lower with US and EU in dollar collapsed depression unable to bid prices up.

by edit on 6 Sept13: More news from ASEAN with one day before conference closes (also from China Daily today):
"The third China-Eurasia Expo in Urumqi, capital of the Xinjiang Uygur autonomous region, has helped to seal domestic deals worth 738.7 billion yuan ($121 billion), said Li Jingyuan, Expo secretary-general." Earlier news in post 745. PS here it is called the 3d, not the 10th as three years ago the name changed slightly.

 

[Billy T]

.Brazilian President Dilma Rousseff (left) talks to Indian Prime Minister Manmohan Singh, Russian President Vladimir Putin, Chinese President Xi Jinping and South African President Jacob Zuma as they pose for a picture after a BRICS leaders' meeting at the G20 Summit in St. Petersburg on Thursday. Also important was the BRICS made 100 billion currency stabilization agreement. China supplies 41B others 18B except SA supplies only 5B.

President Xi Jinping, who is there to attend the Group of 20 meeting, witnessed the signing ceremony {for Russian NG to go to China} with his Russian counterpart, Vladimir Putin, after meeting together. The two nations also signed cooperation documents in other fields, including aviation. ...

China and Russia have negotiated gas supplies for more than a decade, with the price being the focus in recent years. Under a memorandum of understanding the two energy giants signed in March, Russia will supply 38 billion cubic meters of gas to China annually from 2018. The volume is expected to increase to 60 billion cubic meters in following years.

"With the eastern pipeline, China can get more diversified sources for gas imports, which will further support China's energy security," Li said. "Russia, on the other hand, is getting a very large energy market with great potential,* which is very important for its economy." Li said the shale gas revolution initiated by the US has greatly changed the global energy market ... "Russia might have made a compromise on the price since it is now more eager to guarantee its energy exports."

China's plan to import gas from Turkmenistan, which was highlighted during Xi's visit earlier this week, also added pressure on Russia, said Li.

In their talks on Thursday, Xi told Putin that in past months, both countries have been implementing more than 50 projects in 16 fields that were set by the two presidents at their meeting in March. Xi said he expects the two sides to speed up cooperation on big strategic projects in fields including energy and aviation and deepen military cooperation to "jointly respond to new threats and challenges". Putin said he is satisfied with the rapid development of cooperation with Beijing.

Chinese Ambassador to Russia Li Hui said before Xi's trip to Russia that China's investment in Russia in the first quarter of this year surged to $2.23 billion from $740 million in ALL of 2012.

I bet most of that 2.23 billion was dollars taken from China's reserves - helping China get ready to kill the dollar with less pain. - See prior post 747 for why and how.

* Here is part of that "great NG potential" (China is already #1 in NG cars and fast expanding their use, in part to slow growing pollution probems):

According to a Citi report, the number of NGVs in China grew by 48% in 2012 to reach 1.48 million vehicles. China could be on a path to become the world's largest NGV market according to Lux Research, a company specializing in research on advanced technologies. Lux predicts China could see annual sales of 540,000 NGVs by 2015; India would sit at second place with about 250,000. {China plans decades ahead and pays up front in full for decades of future imports, in part to lower its holdings of dollars.} Too bad US will not be selling any NG to China for reason explained here: http://www.sciforums.com/showthread...a-pipe-dream&p=3105359&viewfull=1#post3105359 But with no liquefaction cost (pipeline delivery) Russia will hold its market share. Not lose it as even Quatar, world's largest NG producer, soon will to closer LFNGs.

This LFNG, a NG liquefaction plant, is world's largest ever floating objects (0.5Km long) and soon to be moored over NW Australia's large off-shore NG field, but dozens more LFNGs on order or soon to be.

 

[Michael]

Thanks to the US Government's spying IN mainland China (they apparently had a single server running in Beijing) American tech companies are to lose out on hundreds of billions of dollars worth of business in China. The government has already stated they want American hardware out and replaced with Chinese hardware they can be confident the NSA is not using to spy on their Citizens.

 

[Billy T]

Another Chinese conversion of US's paper promises into real assets:

Chinese President Xi Jinping struck a deal with Kazakhstan on Saturday giving China a stake in its giant Kashagan oil project, a highlight of his tour of Central Asia to secure hydrocarbons for the world's largest energy consumer.

The $5 billion (3 billion pounds) deal further increases China's rising clout in post-Soviet Central Asia, once Russia's imperial backyard, and blocks an attempt by global rival India to get a stake in the oilfield, the world's largest oil discovery in five decades.

"The two countries have agreed on China's shareholding in the development of the Kashagan deposit," Xi told a news briefing after talks with Kazakh President Nursultan Nazarbayev. "The two governments hail and support this agreement."

Oil and gas deals, including on building an oil refinery in Kazakhstan, are among 22 agreements worth some $30 billion reached during Xi's visit, Nazarbayev said.

Not a very big deal, more a "foot in the door." About 5 years ago China gave PetroBrass twice as much (10 billion dollars) for delivery of 200,000 barrels of oil (daily average) delivered per day for 20 years. Of course, if this field pans out as many believe, China may get twice the oil for half the price even thought China now owns only 8&1/3 percent of the field.

 

[Billy T]

Central banks are not only buying more gold than ever but selling dollar bonds too. That will make it easier for China to kill the dollar when its to China's economic advantage to do that - See more details in post 747.

While the $48 billion drop in foreign central bank holdings at the Fed since a record in June is less than half of the $113 billion in withdrawals from U.S. bond funds in the past three months, they mark a change in trend. Foreign ownership of Treasuries fell 0.6 percent in the first half of 2013, poised for the first full-year decline in data going back to 2000 and a departure from the 10 percent annual gains seen since 2006.

“There is a lack of buyers in the Treasury market,” Ali Jalai, a Singapore-based trader at Scotiabank, a unit of Canada’s Bank of Nova Scotia, said in a telephone interview Sept. 4. “Selling by central banks to back up their currencies exacerbates the situation.”

 

[Billy T]

The Brazilian government’s Jan. 2 trade report may show a surplus of $1.35 billion for December. That would give the nation its worst accumulated annual trade balance in more than a decade as consumer demand stokes imports and slower global markets cut into exports.

-- “Terms of trade weren’t that supportive, and on top of that Brazilians are still consuming a lot, so imports are still relatively strong,” Pedro Tuesta, senior economist for Latin America at 4Cast Ltd., said by phone from Washington. “External demand is still weak, and Brazilian manufacturing exports are not very competitive.”

Brazil exports commodities mainly agricultural ones plus world's purest iron ore (>95% Fe2O3) that compensates for the greater shipping distance to the main Asian growth markets.

The days of always a trade surplus for Brazil, may be numbered. Brazil's middle class it growing both in size and in purchasing power. - Just the opposite of the US's middle class - which is shrinking in size and purchasing power; however, the government is changing taxation policy to get the newly rich members of the middle class to "Buy Brazilian." Read the following:

Brazil will boost levies on withdrawals abroad to restrain a widening current account deficit and prevent a six-percentage point gap in tax levels from reducing the use of credit cards.

The measure takes effect tomorrow and raises the so-called IOF tax on some operations, including the use of debit cards abroad, to the 6.38 percent rate already charged on credit cards, the Finance Ministry said in a statement today. Boosting the rate from the current 0.38 percent also will increase revenue by an estimated 552 million reais ($236 million) a year, according to the statement.

“This measure prevents one payment method from being undermined by others because of the tax structure,” the ministry said on its website.

Brazilians have increased annual spending abroad by almost tenfold in the past decade to more than $23 billion in November, according to central bank data. The government raised the tax on credit cards in March 2011 as consumer spending outside the country helped widen a current account gap that surpassed $80 billion this year for the first time on record.

 

[Billy T]

If you go to: http://www.chinadaily.com.cn/china/2013-06/26/content_16659894.htm you will see many photos of the landing of their space craft with lady below as one of the three who spent two weeks in space. It seems clear from these photo graphs the site was very well known in advance and achieved, as the astronauts do not exit un-aided as US astronauts do. A waiting ground crew opens the hatch from outside and helps the astronauts into chairs, letting them adjust to 1G. See two of many at end of next post.

June16 til 29 of 2012: The fourth manned spacecraft carries Jing Haipeng, Liu Wang and Liu Yang into orbit. Liu Yang is the first Chinese woman in space. The mission conducts an automated docking, and the country's first manual docking with the unmanned Tiangong-1 space module.

JIUQUAN - Thirty-three-year-old spacewoman Wang Yaping will make history -- she will be China's first teacher in space. Wang will teach Chinese primary and middle school students on Earth physics phenomena in a zero-gravity environment. She is preparing for the lecture and expressed full confidence about the upcoming lesson. Meeting the media Monday, she said, "We are all students in facing the vast universe. We are looking forward to joining our young friends to learn and explore the mystical and beautiful universe."

China has world's best primary & middle school education, in Shanghai and is now copying it in all of China.* See:http://www.sciforums.com/showthread...l-Superpower&p=3149408&viewfull=1#post3149408
Teachers are well qualified, well paid, and very respected. I wish her well and pray she escapes the fate of US's first teacher in space.

*See: http://www.chinadaily.com.cn/china/2013-12/31/content_17208205.htm Even some from the US are helping in central China's rural schools:

A 25-year-old foreigner from Chicago teaches an English class at Xincheng primary school,in Zhecheng county, Central China's Henan province on Dec 26, 2013. Kenton，Chinese name Ye Fengguang, has been a volunteer English teacher at two rural schools since October 2013. Need a job? Learn mandarin and China has one waiting for you.

 

[Billy T]

From recent survey on the views of China's Gen Y:

The most important thing is, I don't want to live under the wings of my grandfather or my family all my life. "I want to have my own business, using all I learned at school and devoting all my passion to it," she said. "In some important respects, the findings show that China is a very different place than the United Kingdom or other Western countries, said James Cullens, group human resources director of Hays.

"Young people have different values, as you might expect in a very different culture stretching back for thousands of years. "Yet in other ways, young people appear the same everywhere in the world," Cullens said. Although young Chinese people are eager to earn money, they have a deeply rooted respect for learning — far stronger than in other countries surveyed.

When asked what they wanted most from their careers, 55 percent rated acquiring knowledge and expertise as a priority — far higher than in other countries. Young Chinese also value opportunities for training and development and ongoing study opportunities, seeing these as routes to a successful career. Organizations able to offer such opportunities, coupled with clear personal development strategies, are likely to have the edge as attractive employers in the eyes of many talented and ambitious young Chinese people, the survey found.

Another finding of the survey was that Generation Y Chinese, while keen to make money and enjoy a successful career, also crave recognition for their achievements. Asked how they would define career success, creating personal wealth came out on top, but it was closely followed by the wish to gain public and professional recognition.

 

[Billy T]

180,000 cubic meters of ice in 750,000 sq meter park put up by 10,000 workers in 15 days! First was in 1963. This 50th anniversary version is, like others for last two decades, a "must see" to believe. Even better see Bloomberg's video of it: http://www.bloomberg.com/video/magi...ights-up-in-china-4oDSmcQVQRGWrtkthc4TJA.html
First below is an overview of ice sculptures at the Harbin Ice and Snow Sculpture Festival in the northern city of Harbin, Heilongjiang province China January 5, 2014.

 

[Billy T]

A few years ago, it was illegal for Chinese to hoard gold, but now that is encouraged by new gold bank accounts. I.e. give Y yuan to bank and get account credited with G grams of gold. (You can't later ask for the gold but can get its then current value in Yuan and have gotten no interest. They help with inflation - remove circulating Yuan)

China has granted licenses to import gold to two foreign banks for the first time, sources said, as moves to open the world's biggest physical bullion market gather pace. Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations. ... ANZ and HSBC were awarded import licenses late last year, two sources with direct knowledge of the matter told Reuters.

Other trading sources said China Everbright Bank has also received approval to join the nine local banks already allowed to ship gold into China. Beijing strictly controls how much the banks import through a quota system. .... "China is actually increasing its transparency. I think there will possibly be further access to other banks as well," said Cameron Alexander, manager of Asian precious metals demand at metals consultancy GFMS, which is owned by Thomson Reuters.

China faced a supply crunch early in 2013 when a sharp plunge in gold prices released pent up demand that eroded inventories at banks and jewelry sellers. Premiums in China tend to be higher as supply is tighter than other parts of Asia due to the quota system and the limited number of import licenses. ... They rose to a record high of $30/oz in April-May last year.

China imported 1,060 tons of gold from Hong Kong in the first 11 months of 2013. Beijing does not release gold trade data, so numbers from Hong Kong - the main conduit for gold - provide the best estimate on imports.

A large volume of gold is smuggled into China too - The Chinese know that if government knows of their gold, it is at risk of confiscation still, (as US did in 1932 @ $35/oz) so they mainly bury it instead of use the newly legal gold bank accounts. True total imports of gold into China probably total more than twice that coming via Hong Kong.

 

[Billy T]

A gathering storm to sink all western ships in 2014?

The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.

The Turkish lira plunged to a record and South Africa’s rand fell yesterday to a level weaker than 11 per dollar for the first time since 2008. Argentine policy makers devalued the peso by reducing support in the foreign-exchange market, allowing the currency to drop the most in 12 years to an unprecedented low.

Investors are losing confidence in some of the biggest developing nations, ... “The current environment is potentially very toxic for emerging markets,” Eamon Aghdasi, a strategist at Societe Generale SA ... “You have two very troubling things: uncertainty about the Fed policy, combined with concerns about growth, particularly in China."

The declines were part of a broader slide in global markets today, with stocks in Asia, Europe and the U.S. tumbling. Yields on 10-year German bunds slipped to an 11-week low, while the yen, considered by investors as a haven, rose versus all 16 major counterparts tracked by Bloomberg.

Billy T inserts this graph to show that the price of gold, the historic safe haven, rose at more than a $2/day rate for last 30 days!

Big Banks are telling YOU to sell gold. "Its going below $1100/ oz," but are accumulating tons for their own accounts!

Currencies of commodity-exporting countries that depend on Chinese demand sank, with the rand plunging 0.9 percent, following yesterday’s 1.1 percent decline. Brazil’s real fell 0.1 percent while Chile’s peso sank 0.3 percent after decreasing 1.2 percent yesterday. Argentina’s peso fell 12 percent yesterday, marking its biggest decline since a devaluation in 2002. It sank an additional 1.5 percent today to 8.0014 per dollar. ... The peso traded at around 13 per dollar in the black market yesterday.

The Turkish central bank’s first unscheduled intervention in more than two years wasn’t enough to stop the lira from setting a record low today. Investors are speculating the central bank’s efforts to prop up the lira by burning through foreign-exchange reserves will prove futile without raising interest rates. Turkey’s central bank refrained from raising benchmark rates this week, fueling concern that it will be difficult to finance current-account deficits. The lira plunged to a record 2.336 per dollar and also declined to an all-time intraday low of 3.2069 per euro. Turkey holds about $33 billion in foreign reserves, excluding deposits from commercial banks, only enough to cover 1 1/2 months of imports, according to Citigroup Inc. “It’s a bad storm,” Neil Azous, the founder of Rareview Macro LLC, a Stamford, Connecticut-based advisory and research firm, said. “Their net foreign-exchange reserves are dwindling pretty fast. They’re definitely in the danger zone.

China is struggling to contain $4.8 trillion in shadow-banking debt, raising concern about the growth outlook for a country that buys everything from Chile’s copper to Brazil’s iron ore. A corruption investigation is embroiling Turkish Prime Minister Recep Tayyip Erdogan’s cabinet, while deadly protests in Ukraine and Thailand are eroding confidence in the political stability of developing nations. {Billy T inserts: Not to mention approval of US congress recently was only 13% - an all time low.}

Ukraine’s hryvnia has slumped as Parliament planned to hold an emergency session after anti-government protests led to fatalities this week. The currency fell as low as 8.48 per dollar, the weakest since 2009, before reversing losses to gain 0.1 to 8.435 per dollar. South Africa’s rand tumbled as much as 1.8 percent to 11.1949 per dollar today on concern a strike at the world’s biggest platinum mines would dent the country’s exports. ... “In an environment of rising U.S. rates, the market is quickly finding out who has been swimming naked,” Dirk Willer, a Latin America strategist at Citigroup, the second-largest currency trader, wrote in a client note. ...

 

[Billy T]

180,000 cubic meters of ice in 750,000 sq meter park put up by 10,000 workers in 15 days!...

See the fantastic result, in three photos in post 755. Here is part of how it was done:

Its cold in NE China - that is lake ice cut by >100, now beat up chain saws.

 

[Billy T]

China has become the world’s biggest market for red wine consumption, overtaking France and Italy where the quantity imbibed has been falling.

China also sells more cars than any other nation (4 for every 3 sold in US in 2013) and was first nation to sell more than 20 million in one year. Most drinkers + most inexperienced drivers = a solution to their pollution problem?

 

[Billy T]

Union under "One China, Two systems" again?

Beijing respects the social system adopted by Taiwan and is ready to have "equal" talks, Party chief Xi Jinping said on Tuesday as he mapped out his detailed cross-Straits policies for the first time. Nothing can cut the bond between the mainland and Taiwan, and "we have patience and also confidence" to resolve problems with cross-Straits ties, Xi, general secretary of the Communist Party of China Central Committee, told Kuomintang Honorary Chairman Lien Chan in Beijing. ...
Experts said the mainland's top leader sent a clear signal to Taiwan that Beijing would like to provide enough room for peaceful consultations and development across the Straits by facing up to reality and being open. ...

Cross-Straits relations have improved significantly since Lien's ice-breaking visit to the mainland in 2005 — which ended a 56-year deadlock — and Taiwan leader Ma Ying-jeou's taking office in 2008. But that development mainly focuses on the economic sector, with the mainland being Taiwan's largest trading partner. "As for the chronic political differences between the mainland and Taiwan, we are willing to conduct equal consultations with Taiwan under the one-China framework, and make reasonable arrangements," Xi said.