ECONOMY: The Trimurti docet
Between Thursday and Friday came a triple green light to mega bubble by the overall Sino-US-Japan Trimurti who is the author. He started
Japanese Central Bank, confirming that it will continue to hold 0.5% of the nominal interest rates of an economy that grows in the meantime of 4% in real terms over the past six months: experiment ever seen in history. Will therefore continue to give loans in yen at no cost to anyone who wants it, and therefore ensure additional prize money on the fact that exchange rate continues to fall.
He continued the head of the U.S. central bank, assuring the world that the bubble burst on mortgages with low quality is not a systemic problem and not create difficulties to the economy, and if so what implies that lower interest rates to show that there are problems, however, provides psychological security to the stock exchanges and the global financial market, the other throwing gasoline on the fire of speculation.
He ended the Central Bank of China giving birth to a mini maneuver so restrictive and so ridiculous that I could not even cause a momentary reaction of fear in the markets, but instead unleashed another blaze euphoric.
In Flash "China mocks" I have already described the measures providing for the facade, just minutes after the news arrived in late morning, which were not taken seriously and in fact the stock exchanges have flown in the afternoon (there is still no confirmation of Asia were already closed, we will have the Monday).
Here, however, I explain more fully why these measures are in front, which actually hold the green light on the great global bubble.
First, despite recent increases in the minimum required reserve ratio for banks (increased from 7.5 a year ago to 11, 5 current), the overnight interbank rate remains firm at 1, 57%. Why? because in the meantime, over the past 12 months, create new reserves have increased by 23% compared to created new quantity of money (M2) increased by 17%. Secondly, the mini
increase in the rate on bank deposits him at 3.06% compared to an official inflation rate of 3%. So why the Chinese guy should find that rate (zero in real terms) tempting in the face of a stock that goes up 150% in a year? and similarly those who get into debt, he must do now to 6.57%, but this can never frighten the real cost of 3.57% in front of the hyperbolic growth of the asset? not to mention that banks can lend to indebted to 1.57 and 6.57: If they can not care about the increase in reserves.
Finally, the exchange rate: anyone who understands that increasing the range of 0.2% revaluation, is to maintain the fixed exchange rate substantially, which means to continue to absorb most of the estimated 20 billion dollars a month coming in coffers of the central bank, which automatically match yaun many new fresh off the press that the same places in the national economy, fueling inflation and asset that goods and services. In short, the choice is clear: China pursues the policy infazionistica (in the name of the people and on the skin of the People).
So if some fear could rein in the bubble (the possibility that the Trimurti decide-at least in some of its component-deflated) now came quite less. The Trimurti
indeed, with the announcements of the last two days, basically explicitly invited to continue to bet on further rises in equities and commodities, of movable and immovable property, preferably in yen financing basis. The tap of the global liquidity from the huge deficit in dollar terms will continue tirelessly to raise the overall level of the tank. The dollar collapse is postponed for the time China and Japan will continue to support the greenback.
It follows that inflation will continue to rise relentlessly, not so much in the form of traditional indexes officers who are fake and tiered incidence of technological artifacts, as in that of the aforementioned assets and - new dangerous - in the form of food inflation. The price of food commodities will in fact be the Achilles' heel, especially the poor and those in Asia in particular.
however, that nothing can disturb the immediate parent of the Bull global credit bubble nor the many daughters (shares, etc.).
Between Thursday and Friday came a triple green light to mega bubble by the overall Sino-US-Japan Trimurti who is the author. He started
Japanese Central Bank, confirming that it will continue to hold 0.5% of the nominal interest rates of an economy that grows in the meantime of 4% in real terms over the past six months: experiment ever seen in history. Will therefore continue to give loans in yen at no cost to anyone who wants it, and therefore ensure additional prize money on the fact that exchange rate continues to fall.
He continued the head of the U.S. central bank, assuring the world that the bubble burst on mortgages with low quality is not a systemic problem and not create difficulties to the economy, and if so what implies that lower interest rates to show that there are problems, however, provides psychological security to the stock exchanges and the global financial market, the other throwing gasoline on the fire of speculation.
He ended the Central Bank of China giving birth to a mini maneuver so restrictive and so ridiculous that I could not even cause a momentary reaction of fear in the markets, but instead unleashed another blaze euphoric.
In Flash "China mocks" I have already described the measures providing for the facade, just minutes after the news arrived in late morning, which were not taken seriously and in fact the stock exchanges have flown in the afternoon (there is still no confirmation of Asia were already closed, we will have the Monday).
Here, however, I explain more fully why these measures are in front, which actually hold the green light on the great global bubble.
First, despite recent increases in the minimum required reserve ratio for banks (increased from 7.5 a year ago to 11, 5 current), the overnight interbank rate remains firm at 1, 57%. Why? because in the meantime, over the past 12 months, create new reserves have increased by 23% compared to created new quantity of money (M2) increased by 17%. Secondly, the mini
increase in the rate on bank deposits him at 3.06% compared to an official inflation rate of 3%. So why the Chinese guy should find that rate (zero in real terms) tempting in the face of a stock that goes up 150% in a year? and similarly those who get into debt, he must do now to 6.57%, but this can never frighten the real cost of 3.57% in front of the hyperbolic growth of the asset? not to mention that banks can lend to indebted to 1.57 and 6.57: If they can not care about the increase in reserves.
Finally, the exchange rate: anyone who understands that increasing the range of 0.2% revaluation, is to maintain the fixed exchange rate substantially, which means to continue to absorb most of the estimated 20 billion dollars a month coming in coffers of the central bank, which automatically match yaun many new fresh off the press that the same places in the national economy, fueling inflation and asset that goods and services. In short, the choice is clear: China pursues the policy infazionistica (in the name of the people and on the skin of the People).
So if some fear could rein in the bubble (the possibility that the Trimurti decide-at least in some of its component-deflated) now came quite less. The Trimurti
indeed, with the announcements of the last two days, basically explicitly invited to continue to bet on further rises in equities and commodities, of movable and immovable property, preferably in yen financing basis. The tap of the global liquidity from the huge deficit in dollar terms will continue tirelessly to raise the overall level of the tank. The dollar collapse is postponed for the time China and Japan will continue to support the greenback.
It follows that inflation will continue to rise relentlessly, not so much in the form of traditional indexes officers who are fake and tiered incidence of technological artifacts, as in that of the aforementioned assets and - new dangerous - in the form of food inflation. The price of food commodities will in fact be the Achilles' heel, especially the poor and those in Asia in particular.
however, that nothing can disturb the immediate parent of the Bull global credit bubble nor the many daughters (shares, etc.).
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