Comments on: China’s economy shifts into a higher gear

By: twoyrfixed

twoyrfixed — Thu, 12 Nov 2009 19:54:46 +0000

DBL,
Thanks. Good read. Didn’t realize that the GDP growth was entirely “covered” by a drop in savings! Maybe I’m just a simpleton, but absent some gamechanging event, the USA seems to have gotten itself caught in quite a pickle.

By: dblwyo

dblwyo — Thu, 12 Nov 2009 02:00:54 +0000

Michael Pettis is an ex-hedge manager current Carnegie Fellow and professor at a top Beijing Univ. and follows Chinese econ, policy and finance pretty closely. His series on these topics is as valuable as anything and this recent post puts the key issues in a nutshell:
What rebalancing of Chinese and American consumption?
http://mpettis.com/2009/11/what-rebalancing-of-chinese-and-american-consumption/

By: robert1234

robert1234 — Thu, 12 Nov 2009 01:25:51 +0000

I really do not think America is keeping its currancy weak to pull itself out of depression. If they were, that money would be entering the US economy,, and it isn’t.

I suspect that ther US currancy is being kept weak, because of the carry trade. The Fed keeps interest rates at ZERO, the big money players borrow all the money, and put the cash into the stock market, driving it up humungously ! Later when rates change they will short the market, and we will be back to 6000.

All the while the banks will be refunded… on the backs of the world’s investors.

By: dsobek

dsobek — Wed, 11 Nov 2009 16:08:05 +0000

China is going to keep the renminbi cheap for as long as possible. While everyone concentrates on the dollar weakness, people seem to ignore the renminbi weakness. I think it is becoming obvious that China and the US are keeping their currencies weak to pull themselves out of the recession and it is being done to the detriment of the EU and Japan.