Three Ring Currency Circus: China, Japan and the US

elephants

So China’s gonna zig while Japan zags and the US, umm, lags.

As I documented in my earlier post (that I wrote at 4:30 in the morning while Sweet Pea was spitting up formula on my Ralph Lauren comforter), Japan is bent on weakening the Yen in an effort to recharge its export industry.  China, on the other hand, is beginning a tightening program to chill out the real estate speculators and curb inflation.

From the New York Times:

China’s central bank raised a key interest rate slightly on Thursday for the first time in nearly five months, in what economists interpreted as the beginning of a broader move to tighten monetary policy and forestall inflation.

As any economist will tell you, China is the world heavyweight champ when it comes to currency market manipulation intervention.  Through a process of issuing large amounts of renminbi to buy US dollars/ bonds, then issuing central bank bills to claw some of the excess renminbi back, China is able to keep their currency weak which stokes the competitiveness of its exports and preserves jobs.

My message here is a simple one:  We are watching the greatest three ring circus in experimental economics history.

In the left ring, Japan is in Yen debasement mode under the stewardship of their 6th Finance Minister in less than 2 years.  In the right ring, China is now attempting to cool off their wildly successful stimulus program with a tightening cycle.  And not to be left out, in center stage, Bearded Ben is trapped between a not-quite-so-successful monetary stimulus plan and a mongoloid recovery that has only triumphed thus far in the juicing up of commodities, stocks and junk bonds.

Central bankers as ringleader, metals and energy prices as the strong man, China as barely-tamed lion, Japanese stuffed in the clown car and the US taxpayer as the guy who cleans up after the elephants.

Ladies and gentlemen, please refrain from flash photography during the performance.

Read also:

Japan’s New Kamikaze Central Banker (TRB)

Chinese Decision on Rates Seen as ‘Turning Point’ (NYT)

What's been said:

Discussions found on the web
  1. price comparison website development commented on Sep 20

    price comparison website development

    […]please check out the sites we stick to, which includes this 1, as it represents our picks through the web[…]

  2. خرید vpn پر سرعت commented on Sep 20

    vpn ایفون

    Pretty! This has been a genuinely wonderful report. Many thanks for offering this data.

  3. خرید vpn commented on Sep 21

    vpn ایفون

    Each and every right after in a even although we opt for weblogs that we study. Shown underneath are the most present world wide web sites that we opt for

  4. سرویس vpn commented on Sep 21

    vpn ایفون

    below you will arrive across the link to some internet-sites that we consider it is ideal to check out

  5. land for sale in lekki phase 1 commented on Sep 21

    land for sale in lekki phase 1

    […]Here is a great Weblog You might Come across Exciting that we Encourage You[…]

  6. خرید next vpn commented on Sep 22

    vpn ایفون

    here are some back links to world wide web web pages that we url to given that we really feel they’re genuinely worth browsing

  7. خرید وی پی ان پر سرعت commented on Sep 22

    vpn ایفون

    I’m truly making the most of the style and structure of your site. It’s a very simple on the eyes which helps make it significantly far more pleasant for me to come listed here and check out far more typically. Did you employ the service of out a devel…

  8. سرویس وی پی ان commented on Sep 23

    vpn ایفون

    though internet sites we backlink to below are considerably not relevant to ours, we really feel they are truly genuinely worth a go by means of, so have a search

  9. Armani parfum commented on Sep 23

    Armani parfum

    […]please stop by the web sites we comply with, like this one, because it represents our picks from the web[…]