The Thailand expat forum for Travel, Lifestyle and Fun.

jim1176

That is the problem, short term political leadership costing the working stiff and his family. The only people making money are the smegma who work for the govt and utility co's: cops, electrical co, firemen, teachers. The regular Joe pays taxes to support their extorted salaries and gets squat in return.

britmaveric

World Economy and we all affect one another - no one is immune. Chinese need consumers so regardless what they say they are stuck with the rest of us.

Jesus Jones

Then if that's the case the west has been far to dumb not to realise the implications. Either way England in particular has closed down successful businesses and manufacturing to line the pockets of corporate companies, that can't be denied.

Why do business that are already succesful within their own company and country want just that little bit more for themselves, and sacrifice employment and stability within their own country, that is greed, and now it's bitting back

__________________
Pilger’s law: ‘If it’s been officially denied, then it’s probably true’

The way of life can be free and beautiful, greed has poised men’s souls, has barricaded the world with hate, has goosed stepped us into misery and blood shed. We have developed speed, but we have shut ourselves in. Machinery that gives us abundance has left us in want. Our knowledge has made us cynical, our cleverness hard and unkind. We think too much, and feel to less. More than machinery, we need humanity

panama hat

Greed, you said it . . . has nothing to do with the hypocrisy of China

bkkandrew

^Correct, an inevitable result of a bizarre plan - outsourcing your manufacturing to China, whilst borrowing the money from the Chinese to fund it.

panama hat

The work of only one man

bkkandrew

Main Bank of China in a bit of a bind...
It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.

Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank’s tiny capital base. The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.

Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People’s Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China.

The central bank’s predicament has several repercussions. For one, it makes it less likely that China will allow the yuan to continue rising against the dollar, say central banking experts. This could heighten trade tensions with the United States. The Bush administration and many Democrats in Congress have sought a stronger yuan to reduce the competitiveness of Chinese exports and trim the American trade deficit.

The central bank has been the main advocate within China for a stronger yuan. But it now finds itself increasingly beholden to the finance ministry, which has tended to oppose a stronger yuan. As the yuan slips in value, China’s exports gain an edge over the goods of other countries.

The two bureaucracies have been ferocious rivals. Accepting an injection of capital from the finance ministry could reduce the independence of the central bank, said Eswar S. Prasad, the former division chief for China at the International Monetary Fund.

“Central banks hate doing that because it puts them more under the thumb of the finance ministry,” he said.

Mr. Prasad said that during his trips to Beijing on behalf of the I.M.F., he had repeatedly cautioned China over the enormous scale of its holdings of American bonds, emphasizing that it left China vulnerable to losses from either a strengthening of the yuan or from a rise in American interest rates. When interest rates rise, the prices of bonds fall.

Officials at the central bank declined to comment, while finance ministry officials did not respond to calls or questions via fax seeking comment. Data in a study by the Bank of International Settlements based in Basel, Switzerland, sometimes called the central bank for central banks, shows that many central banks had small capital bases relative to foreign reserves at the end of 2002, though few were as low as the People’s Bank of China.

Given the poor performance of foreign bonds, the Chinese government could decide to shift some of its foreign exchange reserves into global stock markets.

The central bank started making modest purchases of foreign stocks last winter, but has kept almost all of its reserves in bonds, like other central banks.

The finance ministry, however, has pushed for investments in overseas stocks. Last year, it wrested control of the $200 billion China Investment Corporation, which had been bankrolled by the central bank. That corporation’s most publicized move, a $3 billion investment in the Blackstone Group in May of last year, has lost more than 43 percent of its value.

The central bank’s difficulties do not, by themselves, pose a threat to the economy, economists agree. The government has ample resources and is running a budget surplus. Most likely, the finance ministry would simply transfer bonds of other Chinese government agencies to the bank to increase its capital. But even in a country that strongly discourages criticism of its economic policies, hints of dissatisfaction are appearing over China’s foreign investments.

For instance, a Chinese blogger complained last month, “It is as if China has made a gift to the United States Navy of 200 brand new aircraft carriers.”

Continued in my main thread here:

http://teakdoor.com/us-domestic-issu...tml#post793218 (A note of caution for those with deposits in US Banks)

sabang

The World needs a second Reserve currency- this would be good for all, including the USA. It cannot be the Yuan- it is not a freely tradable currency.

That leaves either the Euro or the Yen.

deepee

Sabang,
there is at least one other currency- and that is gold !

lom

^How do one print more gold?

bkkandrew

^I think deepee was referring to the reckless abandonment of gold-backed currencies, noteably by the USD going totally fiat in 1974.

Thormaturge

It is laughable for China to comment on America's current problems.

If China were to become a democracy it would suffer similar problems to Thailand, only worse. With an overwhelming proportion of the country still living a peasant lifestyle the entire country would be run by a peasant-backed government and the industrial base would be bled until the entire country reverted to subsistence living.

When China develops a proper legsal system and a democracy in which everyone is free and has a chance then, and only then, can it seek to criticise the USA.

baldrick

why do you dismiss the "globar" ?

keda

Look no further than the Euro for the de facto second currency, but must confess not looking good for the $ and can't see it improve regardless who slithers in next month.

Rattanaburi

China will soon implement a half-child policy.

The world is rolling down a hill bouncing into rubble along the way.

Thormaturge

Is there some reason why you dismiss the Thai Baht? Surely its current strength makes it a candidate.

robuzo

Anybody around ever look at the charts? The dollar has been steadily advancing against nearly every currency but the yen, which is at a high (yay, I'm paid in yen). The Chinese "abandon" the US? Maybe they'll rearrange the ratios in their secret "basket of currencies" against which they peg the yuan, or maybe not. They own not only nearly a trillion in US debt- not being able to find enough of that to put their US dollar inflows into, they also bought roughly US$400 billion in Fannie and Freddie! Their little vendor-financing scheme is crumbling around them; of course, that's a bit unfair, since it is really Bretton Woods II, the biggest vendor financing scheme ever, that is falling apart. Europe is in chaos, hoping the Russians will bail them out. Funny old world.

Charts: 3-month dollar v Euro- U.S. Dollar to Euro Exchange Rate - Yahoo! Finance

Dollar v British squid: U.S. Dollar to British Pound Exchange Rate - Yahoo! Finance

Check out this blog- a bit technical but here is an especially good recent post: Brad Setser: Follow the Money » Blog Archive » The damage spreads ….

"One friend just read me something which he has received from an fx trader which said that the only things that anyone desires to own are the US dollar,the Japanese Yen, gold, bottled water and bullets”

I might add "tinned sardines and camp stove fuel" to that, but otherwise sounds like a plan.Best explanation of what's going on that I've heard so far- "You’re in a room with 100 people, and 20 of those people have a deadly disease that is spread by touch. You have no idea who the 20 are, so your strategy is “touch no one”. The banks have no idea who is toxic and who is not, so lending has frozen." Not only that, but they might be toxic themselves and not know it. Can't trust anybody!

panama hat

If Jet is in the room you have a sure fix on one of them . . .


Owning so much debt is a false positive for China - it sounds scary, but what can they really do with it? Call it in? Hardly likely.

The USD will regain its position as the 'reigning' world currency, I have no doubt . . . with the Thai Baht running a close second . . .


I am joking on one of these points.

deepee

Interestingly the Thai Baht does seem to be holding it's own despite other more respected currencies getting a good old flogging at present.
Maybe some of this talk about Thailand looming as the financial hub of S.E.A does have some merit.
Hey, just struck me we could soon be asking" hows it going in HOSEA these days?" rather than the good old LOS .

Thormaturge

I needed a good laugh.

I saw a young schoolboy trying to solve a Rubik's cube recently and his approach reminded me of Thai financial management.

After a while none of the sides showed any material difference from when he began, except the mix of colours had admittedly changed. Then I realised the problem, he wasn't stopping to figure anything out, he was just twiddling the squares about in the hope the sides would all match up.

Best analogy I have ever seen for Thai management skills.