Glen Downs with a report from China!
Glen Downs took some time int he middle of the night in China to chat with us about what he is seeing and hearing from the Chinese people. What a great day to have Glen join us right after the Chinese devalue its currency vs. the US dollar.
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Glen Downs – reporting the beat on the street in China. I love it!
« Notes From Underground: Santelli Exchange–Yuan falls after Chinese intervention
Notes From Underground: The Chinese Send a Message
There is much to talk about after the Chinese sent a shot across the bow of the U.S.S. Financial Complacency. If we glance at the currency charts of various global currencies versus the Chinese YUAN it is easy to see what the authorities setting policy in Beijing are so very concerned about. The YUAN may be very stable against the U.S. dollar but in terms of Brazilian real, Turkish lira, Mexican peso, Aussie dollar, euro, British pound, Japanese yen and Korean won, the YUAN has undergone a MASSIVE appreciation during the last three years. While the Chinese were announcing their intentions to attempt a pivot to a more domestic-consumption economy, a strong YUAN favored a structural change of such magnitude.
Professor Michael Pettis has long argued that an increase in domestic consumption in an economy with large trade and current account surpluses needs a strong currency as currency strength makes imports cheaper, which enhances the wealth of the middle class consumers. DOES LAST NIGHT’S MOVE SIGNAL THAT THE CHINESE POLICY MAKERS HAVE BECOME CONCERNED THAT DOMESTIC CONSUMPTION WILL BE UNABLE TO ABSORB THE CAPACITY CREATED BY PREVIOUS MASSIVE CAPITAL INVESTMENT? This is the critical question for the global economy for if the Chinese are threatening to ramp up its exports to prevent a domestic slowdown then DEFLATION will have a new source of energy as Chinese exports seek to compete in all markets. Yes, last night’s move in the YUAN was a mere 2%, but it is a warning to world economy that the Chinese will not play the fool at the global financial “poker table.” If the deck is fixed the Chinese are demanding a reshuffle with new cards.
One day doth not a trend make but it is important to pay close attention to sustained fallout from the Chinese action. What will the response be from other members of the global financial community and will Madame Lagarde be in favor of the Chinese action? The IMF has warned the FED not to prematurely raise rates as it could upset the fragile state of the emerging economies. If the FED retreats from the “hawkish” statements of Atlanta Fed President Dennis Lockhart, then IMF Director Lagarde will probably see the Chinese action in a positive light.
That was why it was a @5, not a 5% devaluation.
@5 should be 2%
My left hand does not know what my right hand is doing sometimes!
Silver being dumped in Hong Kong at this moment!
Back up now.
NO, WAIT……………the worm has turned………..UP …….
BIGGER STORY……GOLD UP……………clawing it’s way up…..CLAW DAWG.
Rick Rule:
Any time I can have the opportunity to hear directly from somebody that has boots on the ground in a foreign land I am interested. Mr. Downs is well spoken. Enjoyed the interview.
A voice in the wilderness ! Mast see ! https://www.youtube.com/watch?v=pZvAvNJL-gE
THANKS BOOTS…………..
I think Glen……………should go out in the street with a 10 oz bar of silver, and 10 candy bars……..and see if the attitude is different between Americans and Chinese.
…………………………………..jmo………………CCF
Ha ha. That wouldn’t work. People there have less trust to vendors there. Glen should go to CaiShiKou Shopping Center. It is the largest gold PM shop in Beijing.
You are probably right, Lawrence. I think there have been many scams of gold plated tungsten passing off as bullion from China.
Don’t know that. I heard that It happened in London and Hong Kong. As I know of the source was not from China. It is hard to make Tungsten bar or coin in small size. Tungsten is extremely hard to melt and shape.
It would be made by some kind of powder metallurgy / sintering route, I guess.
But there are fake silver coins from China.
MOSTLY Morgan dollars from what I heard…………
the grading services picked it up real quick and alerted collector in their newsletters, that was several years ago.
That is one of the reasons to only BUY GRADED COINS ……
I used to feel much more comfortable with the graded coins or graded baseball cards for that matter, as it had a determined quality verified, and it was easier for price discovery (and carried a premium as such).
STOCKHOLDERS OF PM…………..BILL HOLTER has prepared a letter , that one can send to the mining companies Board of Directors , in an attempt…….to end the NAKED SHORTS AT COMEX, by withholding inventories or product from the market. ………..see letter at jdsmineset
For Those With Ears To Listen…
Another good one read from B.Holter:
” I believe China asked for inclusion in the SDR basket while believing it would not happen. They have already set up trade banks, credit facilities, currency swaps and even clearing systems not to mention wooing new trade partners. Their rebuke however should not be taken lightly. Even if China did not expect to be included, their public rebuke now gives them a public reason to do what is good for China. China can no longer be blamed for anything they do in their own self interest. This would include moving away from trade in dollars and also changing partners. It would also include the massive sale of U.S. Treasuries and dollars themselves. I would not be shocked to hear of oil, China, Saudi Arabia and “renminbi settlement” all in the same sentence shortly! ”
COULD you post the LETTER…………..THANKS………the claw
thanks for posting the EARS……………
the PICTURE SAYS IT ALL…………………..
Yup. The Unitet Nations of debt.
“United” nations of Debt. It’s weird that spell check didn’t catch that.
UNITET – Teacher Training Project – Nigeria
Who knew – Unitet is a school….
silver looks good.
DITTO
Next move from China ???
“The thrust of the article is that China, at some point, will have to revalue gold in China; which means, in other words, that China will decide to devalue the Yuan against gold.”
http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=266
Severe side affect of devaluation includes capital flight. It is proven by Japan and Europe. They may close capital flow temporarily and try again. The intention of raising the stock market value is one measure to stop capital flight. It has backfired.
REAL ESTATE ……..in USA ….AND CANADA going to take a hit………
Hard to say, if capital flies out, the run away guys will buy real estate not stocks in US/Canada. Native Chinese like real estate but don’t trust stock gambling house. The anti corruption for the last two years has severely damaged the luxury market and suppressed the GDP, which is a concern.
If , they stop it from getting out………then , the market might get soft……..
Yes
It is encouraging to see Glen set foot on the place he is talking about. The way to know China is to visit it. It is thousand times better than speculating with prejudice. I just hope you can share more later on.