BRIC+ News & comments

Discussion in 'Business & Economics' started by Billy T, Aug 10, 2008.

  1. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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  3. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    China is building new high efficiency coal plants at rate of 1 / month and retiring an old one as each comes on line. They get >45% conversion efficiency vs. ~32% for conventional plants as used in US and rest of world. This reduces CO2 release and cost less to operate per KWH generated.

    There is a lot to be said in favor of central direction (rather than years of public hearings) when it comes to the basic infrastructure of a society.
    Probably is large part of why China's GDP is growing at +8% and US is -6% now.

    Last edited by a moderator: May 11, 2009
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  5. 2inquisitive The Devil is in the details Registered Senior Member

    No Billy, China has yet to build a single plant using super-critical or ultra super-critical tech. China's largest power company has approved the purchase of the equipment necessary (mostly from Germany, I think) for the assembly of a single (1) plant. Construction has yet to begin, let alone "1/month".
    None have been built, none have been retired. There is proposed legislation that would require the worst polluting plants to be retired when new higher efficiency plants replace them.
    Most of China's plants built in the last 10 years are low efficiency plants, 26% to 32% efficiency rating. The 'conventional' plants in the US achieve up to 40% efficiency. The US has several very low polluting 'pilot' plants built or under construction already. One is located less than a hundred miles from my home, a fact I informed you about in a post over a year ago. It will burn the high water content 'brown' coal that is very cheap, very plentiful, and has very few other uses.

    Those 'high efficiency' coal plants China is considering still pollute twice as much as the natural gas plants that are popular in the US. By the way, the US has the largest coal reserves in the world and the second largest natural gas reserves in the world, behind Russia.
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  7. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    I was only quoting yesterday's New York Times, but what would they know?

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    In second paragraph they state:
    "China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants, mastering the technology and driving down the cost. ..."

    Paragraph 3, in its entirity is:
    "While the United States is still debating whether to build a more efficient kind of coal-fired power plant that uses extremely hot steam, China has begun building such plants at a rate of one a month."

    What is your reference?
    Last edited by a moderator: May 12, 2009
  8. 2inquisitive The Devil is in the details Registered Senior Member

    'They' was Keith Bradsher, Hong Kong bureau chief for the Asian edition of the Times. He writes newspaper articles, does not seem very knowledgable regarding power plants.

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    In the last two years, China has began building more efficient conventional power plants like most in the US, not those high steam temperature plants. But only about 60% of the new plants are of efficient conventional design. Up until that time, China built mostly low efficiency plants with high pollution outputs. Here are some quotes from your article:
    The US is by far the world's largest energy user, but China is by far the world's largest polluter.
    Billy T again;

    My reference is the same as yours, I just understood it better and picked up on the author's errors. The quote above is an error by the author, who either isn't very intelligent or is intentionally distorting facts to support his bias. Again, no super-critical plants have even began construction. The 'one a month' plants being constructed are conventional plants and only 60% of newly constructed plants are of the more efficient conventional type. Even the picture at the top of the article hyping the super-critical Tianjin plant planned to be built is of a nuclear plant. A shoddy article.
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    “President Lula {Brazil} will sign a "voluminous loan" deal for Petrobras. Lula is making an official trip to China, starting Monday, {18May09} that will involve several trade deals.* … In February, Petrobras and China Development Bank signed a memorandum of understanding for {$10 billion} funding.

    Petrobras Chief Financial Officer Almir Barbassa {and} Chief Executive Jose Sergio Gabrielli {are}expected to accompany Lula on the trip to China. {and many others business leaders} The financing would help underwrite the company's ambitious $174.4 billion investment plan. … Petrobras will furnish Sinopec with between 60,000 and 100,000 barrels of crude a day, starting later this year. The deal with CNPC covers supply of between 40,000 and 60,000 barrels a day. ..."

    *The big deal likely to come from this visit, at least as an MOU, is to drop the dollar for Brazil/China trade. Both Argentina and Paraguay already have dropped the dollar for their bi-lateral trade with China, but together they are only a small fraction of Brazil/China trade. China has similar “drop dollar” bi-lateral Asian agreements.** As Brazil/Argentina dropped the dollar for settling their bi-lateral trade about a year ago, a non-dollar trading network is developing. If a country in the developing non-dollar trade network has a chronic trade deficit, it may settle with gold or let the value of its currency fall. – I.e. accept the associated inflation to boost exports.

    Recently China passed the USA as Brazil’s largest trading partner. Currently Brazil imports more from US than it exports to the US. (One of the US’s few positive balances of trade.) Brazil exports a lot of Iron ore and grains to China so to bring the trade with China more nearly to balance, Brazil will probably reduce imports from the US and increase its Chinese imports. In the last week or two, Brazil’s central bank has resumed buying dollars as its value in Real has been dropping and this makes exports to countries that pay in dollars less profitable.

    **China is quite seriously concerned about the value of the dollar now, wanting to switch the world to SDR of the IMF instead etc. American could not buy as much from China last month so China's trade surplus fell to only 13billion dollars. Even if it were all used to buy Treasury bonds, it would not begin to met the US's needs for financing. Like it or not the US has entered the printing press money era, which has no foreseeable end.*** At least one need not worry about deflation as many are now. I probably could safely move the end of my predicted “dollar collapse window” a year closer (to Halloween 2013) but let’s wait and see how the current market Rally and Obama do.

    ***Obama is quite the "spin master." Here is his just released on Bloomberg spin of the fact China will not / can not lend what the US now needs:

    "... President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries. “We can’t keep on just borrowing from China,” Obama said ... “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.” Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. ..."


    No shit Sherlock! If more honestly stated that "will eventually" could be replaced with: "already are"
    Note he did not add:
    "No need to borrow: The FED and Treasury have a big fast printing press."

    I noted this a few months ago in the steepening of the yield curve and last week when it really steepened in one week, I posted data on it here:

    With my comments I was glad my dollars were mainly in TIPs. If interested in TIPs, you should read my reply to nirakar at:

    You may be correct that the NYT article was distorting, but I am not sure your text here is correct. Certainly, China burns more coal than the US does but there is more to GHG pollution than that. US burns more oil as few Chinese own cars or heat home with it.

    Also CO2 is just one component of the GHG pollution and the story is very complex. I have seen recent study that had Brazil doing as much damage as China and the US (Amazon deforestation, and world's largest cattle herd emitting CH4, mainly with cars* less significant.) Few studies include the NOx released by US extensive use of fertilizer (to compensate in corn's case for the shorter growing season in Iowa etc.) As I recall the Nobel Prize winner in this soil chemistry / bacterial area said that the NOx was eight times worse than the CO2 the corn alcohol releases.

    It is all so uncertain that I am sure you can find studies that put either US or China first as polluters. Perhaps even one or two that give that "honor" to Brazil.
    * God knows they do all they can, stalled in Sao Paulo traffic with motors running for hours. I sold mine nearly a year ago as metro and bus in special lanes are much faster and free to old people like me.
    Last edited by a moderator: May 14, 2009
  10. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Up dating first part of post 126 (But see footnotes of 126 as about China and US debt):

    “… Brazilian President Luiz Inacio Lula da Silva leaves this weekend on a trip to Saudi Arabia, China and Turkey designed to boost bilateral trade, …
    So far this year, Brazilian exports to China - mainly iron ore and soya products - grew 65% over the same period in 2008, a jump from $3.4 billion to $ 5.6 billion. {Billy T insert: Chinese government stimulated economy, (infrastructure), is growing again.} Chinese imports, though, have fallen 17% to $4.6 billion from $5.6 billion. … accompanied by 240 Brazilian industrialists, Lula is to promote oil contracts, sales of Brazil's Embraer aircraft, meat exports and biofuel technology for cars.

    Billy T insert: {Chinese have more disposable income so are eating more meat*. Chinese inspectors are now certifying Brazilian meat packing plants. – Meat should be a growing higher value export for Brazil, and it make more sense to feed the pigs here than ship their food to China. For same transport economy reason, China may build or finance a steel plant here. This will partially remove Australia’s natural advantage of lower ore shipping costs.}

    Saudi Arabia is the biggest market in the Middle East for Brazilian goods. The two countries have annual trade worth $5.5 billion. … Brazil's intent with that country was more strategic than commercial. The final leg in Turkey will see Lula arriving Thursday in Istanbul for a trip to historic sites before going into meetings with Brazilian and Turkish entrepreneurs. …”

    Today’s newspaper states that Saudis have $800 million they want to use to buy farm land in Brazil. Countries and individuals with dollar surpluses are now increasing the FDI so much that Brazil’s central bank has resumed buying dollars to slow the fall in the dollar’s value again. After the crisis began, investors sought the “safety” of US treasury issues and this Brazilian effort to support the dollar was not necessary.
    *Also today's paper said "the deal is finally done" about the merger of two approximatley equal meat processors in Brazil. Neither would accept the others name so the new firm is "Brazil Foods." It instanteously becomes the world's largest exported of processed meat and is now Brazil's third largest export earner (behing Vale and Petrobras). (Soy beans etc. have many different firms exporting.)
    Last edited by a moderator: May 16, 2009
  11. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    China - Condensed for Hsu’s 27May09 Email:
    China's heartland consists of six provinces: Hunan, Hubei, Jianxi, Henan, Anhui and Shanxi, but heartland cities per capita income is 40% below coastal cities like Shanghai and Shenzhen. China's massive $586 billion stimulus will make two new high-speed rail networks to cut transportation time to the heartland from 10 hours to five hours. Local governments are providing special tax breaks and other incentives for businesses setting up shop in central China.

    Many companies have already set up businesses in the heartland, including Foxconn International, world’s largest electronic contract manufacturer, which moved a large part of its manufacturing from Shenzhen to Wuhan, a city of seven million located in central China on the Yangtze River, which makes it a main regional shipping and a land transportation hub. Wuhan has two of the finest universities in China – Wuhan University and Huagang Institute of Technology. Another city to benefit is Chongqing the western center of business and commerce in China. It is focused mainly on domestic consumption for its economic growth.

    Billy T comment: Examples of how China is turning inward for it economic growth as US and EU go broke.

    More on China’s High Efficiency coal power plants. (Form the NYT of Sunday 24May09, I suspect. My local paper’s Monday edition has authorized 6 page translated NYT section, but does not tell dates of original articles, and I will back translate into English so may not be exact original text.)

    Keith Bradsher has two articles; one about the large number (735 according to "AIS live"of Lloyd's Registery) of empty / idle ships waiting in Singapore harbor and the other on China’s progress with high efficiency coal power plants, both with a large photo. The power plant story photo has large bill board with over view of the new plant but it is mounted on a steel skelation of a four story building of a large rectangular building, probably one of the two illustrated in the billboard photo. Billboard photo shows site will have 5 cooling towers, but one is smaller than the other four and may be for air conditioning etc. of the buildings (There are many small ones.) The large building with billboard photo mounted on it is one of two identical ones, which no doubt will house the turbines, as the four main cooling towers are symetrically surounding these two large buildings.

    Again the article states China is achieving construction cost 30% less than in the US “with the construction of many identical {ultra supercritical} power plants at the same time.” The photo is of the one at Tianjin. The text in the billboard photo is: “”Huaneng Greengen Tianjin IGCG Power plant” in smaller scale than the large Chinese characters above this English, which I assume say the same thing. Article also mentions that currently 80% of China’s electric power comes from coal. ( I do not know but think that is approximate the same as in the US.) Article claims the new plants will be 44% efficient (30% greater than the current cola fired plants.) with associated reductions in CO2 relaease.

    Hsu, who does seem to have high connections in China, also has some details (not yet published in Brazil) on the $10b oil loan:
    "Sinopec will {be} paying $10 billion in loans {over 5 years} to Petrobras. Sinopec will receive 150,000 barrels of oil a day through the end of the year and upgrade to 200,000 barrels a day starting in 2010 and lasting through 2019. ..." I.e. it appears China got a fixed price deal (with oil price low)**.

    **Assume 200 days in 2009 ==> 30,000,000 = 3E7 barrels. 3650 days with 2E5 barrels = 73E7barrels for total = 0.76E9 barrels or price / barrel is: 10E9/0.74E9 = $13.5/ barrel, but the $10b effective comes in 2.5 years so crudely that is like ~$25/ barrel.

    China is almost stealing the oil! - No wonder it hard to learn this in Brazil, but perhaps they paid big bribes, like dealing with Nigeria?
    Uncle Sam has a long history of raping South America with bribes and gifts of old military supplies for left wing crowd control. He would be proud of China.

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    Last edited by a moderator: May 27, 2009
  12. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    If interested in Brazil and its street urchin to President Lula see:

    A few quotes from it:

    "Bolsa Familia, {cost 0.7% of GDP} pays small cash grants to an estimated 13 million impoverished families. By contrast, the country’s deficit-plagued social security system reaches half that number of people and costs 20 times as much."

    "{Lula's} policies lifted more than 17 million people -- 9 percent of the population -- out of poverty from 2003 to 2007 alone. Lula also leveraged a timely run-up in world commodity prices to accumulate $200 billion in foreign- currency reserves, a decisive factor in Standard & Poor’s decision in May 2008 to grant the country’s debt its first-ever investment-grade rating. Brazilian stocks have surged 352 percent during Lula’s two terms -- 37 percent this year alone as of June 2. ..."

    "In March, the 63-year-old Lula’s approval rating stood at 78 percent, ... That rating was 84 percent until Brazil’s economy, buffeted by the global economic crisis, began to lose steam in the fourth quarter of 2008. "

    I do not think any US president has come to end of two terms with such popularity. Lula has opposed efforts to change the constitution so he could have a third term. He supports Dilima, a lady who was confined and tortured (Electric shocks etc.) by the US supported* military dictatorship. In April Dilima had operation for cancer and now is in chemical therapy with high probably of complete cure. Five minutes after I heard of her cancer, I predicted to wife and others that Lula will be her VP candidate, but no one else has suggested this in the press, yet. As article states, it does not matter who wins, Lula's policy will continue.

    *The current President of Chile is a woman also. Her mother was tortured and her father** died under torture by the US supported dictatorship, which came to power with US supplied arms to destroy the elected government and kill the elected president, Allende, on another 9/11 – probably why that date was chosen for the attack on the US.

    **He was one of the 50,000 killed or “disappeared”*** by US supported dictatorships. The US’s “9/11” cost only 3,000 lives and is not as important in South America as the destruction of democracy in Chile and most of South America. This is all well known in all of South America, which has good reason to still question the US motives here. Cuba is more popular than the US with many. A "Cuban invasion" is hundreds of doctors and medical workers entering your country.

    ***Most were drugged and then were taken in the US supplied helicopters a few miles out to sea and just pushed out.
    Last edited by a moderator: Jun 4, 2009
  13. S.A.M. uniquely dreadful Valued Senior Member

    Is Russia really relevant? Seems to me its more BIC than BRIC.
  14. Carcano Valued Senior Member

    Isnt this a FIRST???

    The IMF selling BONDS backed by its basket of currencies called 'special drawing rights'???

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    In competition with the US treasury bond market?

    We shall see what effect this has on the 30 year yield tomorrow.

    June 10 (Bloomberg) -- Russia and Brazil, seeking to reduce their dependence on the dollar, announced plans to buy $20 billion of bonds from the International Monetary Fund and diversify foreign-currency reserves.

    Russia’s central bank said it may cut investments in U.S. Treasuries, currently valued at as much as $140 billion, a week after China said it may reduce reliance on the dollar and American bonds. Brazil’s Finance Minister Guido Mantega said his country will purchase $10 billion of debt sold by the IMF, China will buy $50 billion and India may announce similar funding.

    The IMF’s board may consider in late June or July a proposal for the Washington-based lender to issue bonds, the fund’s spokeswoman Conny Lotze said today. The IMF probably will sell the bonds only to member states and central banks.

    The debt will pay a yield similar to U.S. Treasuries and will be denominated in the fund’s basket of currencies, known as Special Drawing Rights, Mantega said at a press conference in Brasilia. The IMF calculates the value of SDRs daily, with 44 percent weighted towards the dollar, 34 percent to the euro and the remainder split between the yen and the pound, according to its Web site.

    Brazil’s central bank will decide which assets to sell from its reserve portfolio to free up the funds needed to purchase the IMF securities, Mantega said. Brazil’s reserves totaled $204.6 billion as of June 8, according to data compiled by Bloomberg.
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Brazil cut its basics interest rate 1% yesterday (11June09) and now has the third highest real rate in the world (4.9%) after Hungary with 5.9% and China with 6.9%
    Brazil's central bankd did this because inflation is slightly below it goal and the economy decreased by 0.8% in 1Q09. When China and Vale agree on iron ore price that will easily turn to growth again. (China wants a 40% cut in price and Vale is offering 30% cut, like it got in contracts with steel makers in Japan and in Europe.) Car sales in May 2009 were three times greater than in dismal December 2008, etc.

    Here are the 7 remaining in the top 10: Tailand, 4.7 / Argentina, 4.5 / Turkey, 3.8 / Poland, 3.3 / Protugual, 1.5 / Belgium, 1.4 / Taiwan, 1.3%

    If you skip the next 25 (12 are low positive, 2 with zero and 11 with negative real rates) here are the five with the most negative real rates:
    Malasia -1.0
    Chile -1.7
    England -1.8
    Venesuala -4.9
    India -5.0
    Hey SAM India is last among 50! For "small fee" I will open bank account for you in Brazil. (No wonder my ICICI bank stock has more than doubled in last few months - too bad it took such a hit earlier.)

    Not really in the BRIC class yet, but on its way, the USA's private wealth is declining* (totals, mainly home values, stocks and other financial assets) at the end of the quarters in trillions of dollars:

    1Q08 had 60.151
    2Q08 had 59.327
    3Q08 had 56.583
    4Q08 had 51.706
    1Q09 had 50.376
    Note that is change of ~20% drop in the last 12 months. Joe American is broke and even if now saving 5% of income losing ground in the net equity game.

    I do not see the "green shoot" so many do. It is more like falling from an airplane with no parachute. Yes, the rate of fall stabalizes when you reach terminal velocity, but you are still going down. Thus, I see no reason to modify my long standing prediction that US and EU will be in deep depression before Halloween 2014.

    Just remember, if this is prediction is correct that the prediction was based on what GWB had accomplished when he still had three years left as POTUS - Obama is doing more that I thought possible to make me wrong so don't blame him if I am not. GWB and "trickle down" Republicans plus Greenspan and "don't regulate us bankers" get full credit, not "Keyensian pilot" Obama trying to pull the plane out of its steep dive without tearing the wings off. (The FED and Treasury will do that when they try to recover, with high interest rates, the printing press money they pumped out.)

    *Not sure of original source. US data by Janaina Lage of NYC as given credit in portuguese translation of my local paper. They usually steal from good sources. Quite probably this was a NYTimes article of a few days ago. I am too lazy to search.
    Last edited by a moderator: Jun 13, 2009
  16. Carcano Valued Senior Member

    Billy...please list 3 positive things Obama has done.

    Not 'talked about' but actually DONE???
  17. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    (1) Inspired the youth and generally been able to get most to see “green shoots” instead of the facts. - Sort of a combination of JFK and FDR ("What can you do for your country" + "Only thing to fear is fear") Consumer confidence is up. (Despite ugly facts like: rising number of unemployed, nearly 2 years of unsold homes at the current selling rate, rising long term (mortgage) interest rates with ARMs starting to reset soon, falling home prices, rapidly increasely debt, worsening trade balance, more important factories closing, Joe American saving instead of spending, "paper money" production stressing the printing press capacity, increased protectionism but now done via local subsidies and tax relief instead of tarrifs, and a few other negative items)

    (2) Greatly improve US foreign policy in that now allies are more willing to participate and criticize less and Foes are more willing to consider negotiations than only destruction. - For example, in Iran the "let's be more reasonable, negotiate solutions" leaders at least were a serious challenge to the hard liners for the first time in the elections with votes now being counted. Part of this changing POV in the Muslim world is due to things he said about Israel needing to stop expansion of the settlements etc. It remains to see if he uses pressure to achieve that starting point to a two state solution. The fact that “our side” not only won in Lebanon, but that Iran supported Hezbollah accepted the results is also probably a direct result of Obama’s well-timed speech in Egypt.

    (3) Restored a gutted SEC* and now is making rules for the bankers and others who made this economic mess and / or at least enforcing existing regulatory laws, instead of ignoring them. Also he is trying to restore the spending in the economy to replace the lack of consumer buying (70% of US economy was consumer based but Joe American is now trying to save or reduce debts, not buying) I.e. Obama is following Keynesian ideas, giving tax relief to the mass, not the very rich, who did not spend their windfall in the US but used it to built the factories in China that are too modern for US's older ones to compete with, even if wages were the same.

    I admit that in his less than 200 days, he mainly has been talking, “pep talks" to the public and cajoling congress for more efficient car laws and green energy systems funds, lower cost medical care systems, etc. Talk and thereby lead is about all the constitution lets him do alone. He must ask Congress for money and changes in the laws. He has shaken up the state department and awakened the SEC. He has added "lets win the hearts and minds" to the bombs used in Pakistan and Afghanistan efforts - seen there is no "miltary only" victory. - That he can do alone, and has.

    *Some of the con-men crooks are now in jail or defending themselves in courts and others have closed up shop and fled the country.
    Last edited by a moderator: Jun 13, 2009
  18. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    "... The dollar declined against a majority of the most-traded currencies as Brazil and Russia joined China in saying they would shift some $70 billion of reserves from U.S. Treasuries into multicurrency bonds. The drop in the U.S. currency was the third weekly slump in four against the euro as concern increased that record debt sales and deficits will erode the value of the dollar. ..."


    However, from the same source, a different POV:

    "... “The choice of a reserve currency is not made by central bankers; it chooses itself,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, in an interview on Bloomberg Television. “That is a function of the fact that the U.S. economy is the biggest economy in the world, the deepest, most liquid capital markets and for that reason, there is no alternative to that currency at this stage.” ..."
    Last edited by a moderator: Jun 13, 2009
  19. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    China (released today 16June09):

    "Residents of the North China region including Beijing have started to use the clean and economic hydro power from the Central China Power Grid for the first time. This indicates that Beijing residents have started to use the hydro power generated by the Three Gorges hydroelectric station.

    Since the Central China Power Grid has plentiful hydroelectric resources and the North China Power Grid has abundant thermal power resources, State Grid has officially proposed the mode of mutual power transmission between north and south. During low water season, power will be transmitted "from north to south," meaning the power will be transmitted from the North China Power Grid to the Central China Power Grid; During high water period or flood season, power will be transmitted "from south to north." ..." {It is a "super high voltage line" but I do not know the voltage or if it is DC or AC. (DC can move more power)}


    Also the 48 inch oil pipeline from Russia's oil fields was only a few days from the Russian / Chinese bourder a couple of weeks ago. China will not complete its extention to terminals in China for about a year more.
  20. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Russia & China“… The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar… “We agreed to take further steps in this direction, including, perhaps, by adjusting contracts and laws that already exist,” Russian President Dmitry Medvedev told reporters…today after talks with his Chinese counterpart Hu Jintao.

    Russia, the world’s biggest energy supplier, wants to start selling oil to China in rubles…oil exports to China over the next 20 years will surpass $100 billion.* Brazil, Russia, India and China agreed yesterday to push for more clout in global financial institutions …including the creation of alternatives to the U.S. dollar as a reserve currency.

    Total trade between the neighboring countries reached a record $56.8 billion last year, according to the Kremlin. After today’s Moscow meeting, Russia and China signed an agreement worth $3 billion to cooperate in trade and investment in areas including light industries, high technology and energy.

    Dollar bonds sold by China earned 11.4 percent in the past year, more than double the 4.6 percent for debt in Yuan, JPMorgan Chase & Co. indexes show. …”


    Billy T explains last paragraph meaning and implications:
    Bonds issued by China, which pay at maturity a fixed number of dollars in the future are worth less than half as much as the Chinese bonds that promise to pay in Yuan! I.e. A high interest rate means bond is being sold for a low price.

    This reflects the fact that everyone knows: (1) that China has been buying up dollars to keep the value of the Yuan artificially low (that helps China export) (2) and most expect that China will greatly reduce this support for the dollar (let the Yuan rise in value) as exports are already a decreasing part of China’s GDP and US must and is importing less from China as Joe American is broke and trying to pay off his debts – only buying at Wal-Mart’s sales now, when he really needs the items.

    In last Month China was slighlty a net seller of US bonds. - If this continues, the FED will need to finance US's increasing debt (and the even more rapidlay growing interest on it as interest rates rise) via the jointly owned (FEd & Treasury) money printing presses. All as I predicted nearly 4 years ago.

    The dollar has been getting weaker for a few years and will continue to do so, but most expect that the Yuan is a strong currency and soon will be getting much stronger.
    *The 48 inch diameter pipeline from Russia's oil and gas fields reached the Chinese border last week. China's internal extension will be completed in about a year more. It may not be a cold day in Hell for some time, but I am not so sure about Europe in winter.
    Last edited by a moderator: Jun 17, 2009
  21. Carcano Valued Senior Member

    All he can do is talk yes...but even in this area he hasnt said much.

    I listened to his speech today on regulating the financial sector and it was woefully inadequate. He didnt even identify the Fed as the prime mover of the massive debt bubble with its historic low rates starting circa 2003.

    In fact he's going to give the Federal Reserve even more power!!!

    How about some concrete numbers Mr. President...a minimum of 3% overnight funds rate, and a leverage ratio of 10 to 1 max. for commercial banks???
    Last edited: Jun 17, 2009
  22. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    It is too late for me to edit post 134 with more details on point 3 of it and the footnote, showing that Obama's SEC and FBI are now awake and going after the cooks, which GWB's SEC and FBI turned a blind eye towards (even when provided with 23 well documented pieces of evidence that Madoff was running a Ponzi scheme.)

    Stanford has now been areasted (but 8 billion of investor's money is still gone) along with three others who helped him bilk old ladies etc. of their life savings for years under GWB's sleeping SEC with unusually high interest paying CDs issured by his off shore bank. (Like Madof, an obvious Ponzi scheme to any non-sleeping SEC.)

    read details at:
  23. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

    Overview of the BRICs at end of 2008:
    .....................................Brazil / India / China / Russia
    Population(in millions): 191.8 / 1,190 / 1,327 / 142.0
    GDP (in USD trillions): ....1.6 ..... 1.2 ...... 4.4 ....... 1.7
    % of global exports: ........1.2 ..... 1.1 ...... 8.9 ....... 2.9
    % of global imports: ....... 1.1 ..... 1.8 ...... 6.9 ....... 1.8
    US Treasury bonds: /// 126 /// ?? /// 763.6 /// 137 (billions)

    I was very surprized to see that Brazil's GDP is 1/3 larger than India's (1.6 vs. 1.2) and nearly as big as Russia's 1.7 trillion, which is highly concentrated on energy and lags only Russia on a per capita basis. Brazil is much healthier than Russia, with a diverse set of exports, cars, buses, planes, energy, food stocks, minerals etc.
    Not to mention good looking babes (world's top paid models)

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    Last edited by a moderator: Jun 20, 2009

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