patrick.net

Another link:

http://finance.yahoo.com/banking-budgeting/article/112988/investors-bet-yuan-marketwatch?mod=bb-budgeting%20%20%20&sec=topStories&pos=5&asset=&ccode=

I think the yen and Asia currencies will hold or gain against the US dollar (not sayng much, though).

SHANGHAI (MarketWatch) -- China's central bank said Wednesday it will suspend its regular open market operation Thursday, in an apparent response to the tight liquidity conditions in the banking system.

The move came as China's interbank funding rate has risen sharply since Tuesday last week, when the People's Bank of China said it would raise banks' reserve requirement ratio by half a percentage point to address inflation concerns by locking up liquidity in the banking system. The increase, which took effect Monday, was the sixth such hike this year.

The interbank weighted average seven day repo, a benchmark gauge of short-term interbank funding costs, ended at 8.81% Wednesday, the highest rate since October 2007. It has risen 463 basis points in the past six sessions.

http://www.marketwatch.com/story/pboc-to-suspend-market-operations-thursday-2011-06-22

Getting interesting!

Yes, I think this is a big story (China suspending bond offering). Here is more on that topic

http://www.zerohedge.com/article/china-will-suspend-open-market-operations-tomorrow-response-liquidity-freeze

"It is difficult for the central bank to find enough demand for its short-term bill offering amid the severe liquidity squeeze in the money market. If it persisted with the three-month bill offering tomorrow, the yield would jump again, adding pressure to the central bank's operating costs," said a Shanghai-based trader with a local bank."

(Side observation: Note how it appears from the above that in China the BOC central bank issues bonds, rather than having a Treasury Department do it. Or maybe it is that BOC is the only "primary dealer". These technicalities may be significant).

Anyhow, this cannot be good news for China. Is the Great Bubble about to burst?

Interesting times.
He sits on the board of directors of Xiniya Fashions, a Chinese retailer with 1,400 shops. He says Chinese consumers pay up to $25 for polo shirts at Xiniya (pronounced Zenya), well above the $15 the same shirts sell for in the U.S.

Even with rebates that Chinese manufacturers get for exporting, that $25 domestic price makes them less willing to accept the price cuts that used to be a standard part of their business, Mr. McGrath says: "They can make more money by selling it to the Chinese market."

justme says

(Side observation: Note how it appears from the above that in China the BOC central bank issues bonds, rather than having a Treasury Department do it. Or maybe it is that BOC is the only “primary dealer”. These technicalities may be significant).

Anyhow, this cannot be good news for China. Is the Great Bubble about to burst?

Most interesting.

EBGuy says

He sits on the board of directors of Xiniya Fashions, a Chinese retailer with 1,400 shops. He says Chinese consumers pay up to $25 for polo shirts at Xiniya (pronounced Zenya), well above the $15 the same shirts sell for in the U.S.

Interesting indeed. That's like Japanese consumer goods.

As exports falter, construction tapers off, and corruption grows. The face of China we don't get to see much of:
http://www.washingtontimes.com/news/2011/jun/22/inside-china-508460494/
http://www.guardian.co.uk/world/2011/jun/16/china-riots-taizhou
http://www.tibetanreview.net/news.php?&id=9096

http://www.youtube.com/watch?v=ehkFdOzozQ0

How will the recent sell off and bounce affect this?

Allegedly, China government is a bunch of crooks who live by their lies. I will never trust my money with their government or their banks. Fucking 30 years ago, we want to kill them communists pricks, now we want to depend our financial futures on them, what the fuck?!

Never mind that China Govt is a bunch of crooks...can you tell the difference between real Yuan vs fake.

Sep 9, 2009 – Police have seized 684 million yuan of fake banknotes and ... $26m fake banknotes seized in China 3619 suspects arrested for fake notes ...

MarkInSF says

Goal is to diffuse criticism of closed capital markets.

It's a shitty deal. The interest paid is well below their inflation rate. I'll take 1% on my USD thank you very much.

It's still an EXTREMELY closed, controlled economy. Outsiders can't own land, or most stocks or bonds. The only reason China can own so much treasury debt is we let anybody buy it. China does not offer the same openness.

MarkInSF says

Goal is to diffuse criticism of closed capital markets.

It's not as closed as what you might think. There are things they outright block. A foreign company cannot open up and make weapons. But they have no problem with other goods. You don't pay taxes for three years and for awhile you could daisy chain companies to spin off and then end to get six or maybe eight years off of it.

Most do not want to work for Chinese companies they want to work for more western once since they are known for OT, vacation, sick time etc.

In terms of owning stocks and bonds well an argument can be made that even in the west we don't own land since we have to pay taxes on it. Hong kong was just a 99 year lease that ended..the government does not have that much control over things day to day..there's just way too many people and the country is too large to try to police everything.

It's funny because they just caught people in HK smuggling apple products to the mainland..it's on the same level of buying tobacco from reservations in the US.

Actually, I currently have no Chinese yuan myself, just in case anyone was wondering (and haven't for years).

That they are crooked, socialists, fascist slavers is irrelevant.

What you need to know about investing in the Yuan is this:

> M2 money supply rose 13.6 percent from a year earlier, the central bank said.

(assuming you believe them). (and that's a credit crunch in Chinese terms).

http://www.bloomberg.com/news/2014-01-15/china-new-loans-trail-estimates-as-money-supply-growth-slows.html

Thanks for the information above!