Richard Russell in a piece widely available on the net provides this surmise; "Chinese monetary reserves have now climbed over the one trillion dollar mark, 70 percent of which are in dollar securities. The Chinese are watching the dollar decline, and they are watching the bearish background for the dollar -- deficits. A major decline in the dollar would represent a disaster for China, and various Chinese spokesmen have recently "suggested" that China speed up is diversification program. "
In light of the ISM data today the various relationships are perfectly logical; A cheaper dollar make Chinese imports from the US cheaper providing more, not less buying power.
Paulson and Bernanke were over in China recently and Paulson is out posturing about Financial risks. On the one hand Investors must be concerned about what is being said, but on the other hand Mouthpieces of wall street lineage, are eager to facilitate the seperation of shares from them that holds em, ahead of what could be construed as an important buying binge by China to lock in the purchase power for all those dollars.
There are plenty of indications that all conditions are Systemic, all results favor those who understand that Chinas accumulated dollars are no good sitting in a bank, but are much better fueling expansion of capacity or to solve problems created by previous expansion, or to dress or finish whats already been undertaken. Look for the feed back loop to begin asserting itself after the first of the year.
IMO investors are always the target of systemic actions, therefor weighing probable outcomes should be our guide.
Paulson is a Systems guy, his interest, like all political interests are aligned to purpose. In this case, his statements are designed to facilitate uncertainty for the purpose of accumulation ahead of massive spending by the Chinese.
Investors have no friends. (especially as it relates to government mouthpieces tinkering with markets)
Supply is so tight, need so great....the old X Files slogan might best characterize the present when considering system output about intent.
China has many needs, accumulating more dollars in a declining dollar period; isn't one of the best choices they could make...you never know, but its probable that as China readies to host the Olympic games, China needs to buy stuff that finishes; i e will help put on the best face for infrastructure already built, beautiful buildings cast against dirty air....contradict purpose etc etc etc .
I could go on and on here, but time alas; does not permit. |
