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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (20314)	1/4/2005 3:14:19 AM
From: Rational	Read Replies (1) \| Respond to of 116555

Both Peoples Bank of China and HKMA had invited me in 2003 to speak on exchange rate dynamics and banking policy. SARS prevented me from reaching Beijing. But the talk at KHMA was highly appreciated. This was the gist my talk: There is a trade off between (a) job creation and (b) banking+social instability as excessive fiat money money is created through low yuan value in the private accounts of a few exporters and expatriates. My model predicts that non performing bank loans must be rising exponentially as well as simmering social discontentment; both of these indicators could be measured/surveyed only by Chinese authorities. Chiefs of the HKMA and Peoples Bank of China met (as per South China Morning Post) within weeks of my talk, which I noticed was very persuasive and truthful, especially to the Chinese audience at HKMA. A few weeks thereafter the two CB Chiefs recommended and the Chinese government accepted a proposal to create a NEW bank regulatory authority to monitor non-performing bank assets. Two months later they infused $40 billion to Chinese state banks to replenish capital. Now they have infused another $30 billion. So do not be presumptuous that as a Chinese whatever you say about China is valid and the value that Chinese authorities attribute to policy suggestions of "non-Chinese" is zero.