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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (33014)	12/6/2010 9:29:33 PM
From: John	Read Replies (1) \| Respond to of 71477

Mexifornia's semi-annual collapse scare... losangeles.cbslocal.com Schwarzenegger Proposes $9.9B In Cuts excerpt: Gov. Arnold Schwarzenegger has declared a fiscal emergency and is asking lawmakers to meet in a special session to save the state $9.9 billion over the next two years. Schwarzenegger on Monday unveiled a plan that relies largely on cuts to health care and social services for the poor. About $7.4 billion of his proposal would come from cuts, include reducing cash assistance to needy families by 15.7 percent in April, then eliminating the entire welfare-to-work program in July. He is proposing to eliminate vision coverage and increasing monthly premiums for Healthy Families, a program that provides health coverage for children of low-income families. The governor also is asking the state to limit prescriptions and cap physician visits to 10 a year for Medi-Cal recipients. --- His plan doesn't appear to address the roots of the problem, as usual. This must be bullish. -ng-

To: Giordano Bruno who wrote (33014)	12/7/2010 7:40:56 AM
From: DebtBomb	Read Replies (1) \| Respond to of 71477

LOL. China will hike soon, no doubt about that one.

To: Giordano Bruno who wrote (33014)	12/7/2010 8:31:23 AM
From: DebtBomb	Respond to of 71477

China rate rise talk builds as loans and inflation rise . Investors look at stock information in front of an electronic board at a brokerage house in Taiyuan, Shanxi province July 15, 2010. REUTERS/Stringer On Tuesday December 7, 2010, 12:46 am EST By Zhou Xin and Simon Rabinovitch BEIJING (Reuters) - China is likely to raise interest rates in the coming days in a demonstration of the government's resolve to tame inflation, an official newspaper said on Tuesday. In a banner headline across its front page, the China Securities Journal said this weekend offered a "sensitive window" for a rate rise, which would be the country's second after a surprise increase in October, the central bank's first rate hike since 2007. An increase in rates would also put flesh on the bones of Beijing's announcement late last week that it was switching to a "prudent" monetary policy from the "appropriately loose" stance of the past two years. The report weighed on Asian stock markets in early trade, though the country's main index in Shanghai (^SSEC - News) later pared losses. Chinese asset markets have tumbled in recent weeks as investors have priced in more tightening. The newspaper said the timing was right for a rate rise with official monthly economic indicators, notably the consumer price index (CPI), likely to show an increase in inflationary pressure when released on Monday, December 13. "With reference to the central bank's record of raising interest rates just ahead of the release of CPI, this weekend will provide a window for a possible policy change," the newspaper said, without citing any source. China's CPI in November may have accelerated to a 27-month high of 4.7 percent from a year earlier, according to a Reuters poll, up from a 4.4 percent pace in October. "The general trend of China's monetary policy is appropriate tightening on the basis of the previous extremely loose stance," said Chen Jiagui, a senior government economist. GETTING READY Traders in China's interbank market said big lenders have already prepared enough money for another 50 basis point increase in banks' required reserves, which are already at a record high for big banks. So far, the People's Bank of China has relied primarily on reserve requirements to mop up excess cash in the economy, officially ordering lenders to lock up more of their deposits five times this year. Banks had also been holding back from lending in anticipation of more government moves to curb inflation, driving up short-term money market rates. But these rates tumbled on Tuesday after large banks caved into pressure from smaller institutions which had refused to borrow at the higher rates. But concern over further hot money inflows could make Beijing hesitate before raising interest rates aggressively. Comments from Chairman Ben Bernanke that the Federal Reserve could increase its commitment to buy $600 billion in U.S. government bonds has reinforced fears in Beijing that money printed in the United States will compound the inflationary headache in China. "I don't think China should increase interest rates on a continuous basis," said Chen Kexin, an economist with a government-sponsored market monitoring agency in Beijing. "Such a move will definitely attract hot money inflows. For domestic inflation, it would be adding fuel to the fire," he said. Apart from raising rates, the Chinese government is also likely to force banks to tap the brakes on lending. The Shanghai Securities News reported on Tuesday that banks lent 600 billion yuan ($90 billion) in November, taking total loans for the first 11 months of 2010 to more than the government's full-year target of 7.5 trillion yuan in new loans. CONTROLLABLE INFLATION? China should be able to contain consumer price inflation at 3.3 percent next year, up just a touch from an expected 3.2 percent pace this year, the Chinese Academy of Social Sciences, a top government think tank, forecast on Tuesday. Not all are so sanguine. "China would be doing well if it keeps CPI below 6 percent next year," said Zhang Hanya, a researcher affiliated with the National Development and Reform Commission. China's economic decision makers will meet this weekend to chart the outline for policy next year. Many in the market believe that the conclusion of the December 10-12 Central Economic Work Conference could also present an opportunity for a rate rise. The China Securities Journal has a fairly good track record in predicting policy moves. It reported on November 17 that the central bank would raise interest rates two days later. On the predicted date, it announced an increase in banks' required reserves, not interest rates. finance.yahoo.com