CHINA AND JAPAN - The two nations said they will consult “very closely” on the
issue after Christine Lagarde, head of the IMF, asked members to commit as much
as $500bn extra to the Washington-based global lender for possible bailouts.
Jun Azumi, the Japanese finance minister, said the pair would look at further
funding to strengthen the IMF's financial base, following talks with his Chinese
counterpart Xie Xuren in Toyko. “Rather than make decisions independently,
we’ve agreed to consult each other very closely,” he said. “Although a critical
moment of the European issue has gone, we can never be optimistic.” The IMF
wants to ramp up its ability to attack Europe's debt crisis. The issue of
increasing its firepower is expected to be top of the agenda at a meeting of
finance ministers from the Group of 20 nations on April 20. “It’s important for
Japan to check China’s intention on this, while China probably wants to increase
its political influence if it puts up money,” Tomoko Fujii, a senior foreign
exchange strategist at Bank of America Merrill Lynch, told Bloomberg. China
would press on just fine. It would take a big hit for a while but would manage
to navigate the obstacle just fine. It would just have to reorient its growth
strategy away from exporting to a domestic focus, which is something it has been
doing, though way too slowly. A collapse of its huge export market would mean it
has to alter its model immediately, which it would do. One great advantage they
have is that as a dictatorship they can make big decisions instantly and do
whatever it takes to make it happen. And you can bet the people would pull
together and absorb whatever shock the change meant for them on a personal
level; because deep down they know they are on the right path to economic
hegemony and they trust their government to keep doing the right thing as they
clearly have done so far. And if India was a dictatorship rather than a
democracy then it would also be much further ahead than it is now. Democracies
are obviously great, but are not the best form for building up a country
economically and doing it quickly, as every man and their dog wants things their
way rather than for the good of the country in the long term. Westerners trot
out all the negatives and pronounce the collapse of China all the time. Although
the points raised are valid they don't materially alter the trajectory of China.
Ageing demographic, loss of export market, trade war, environmental destruction,
etc, all valid points, but all not a big enough issue to stop 1.4 billion people
retaking the economic crown they held for most centuries preceding the
industrial revolution, when population size suddenly became less relevant.
Access Investments-Building Awareness - European Union-ROMANIA
Sunday, April 8, 2012
CHINA AND JAPAN - The two nations said they will consult “very closely” on the
issue after Christine Lagarde, head of the IMF, asked members to commit as much
as $500bn extra to the Washington-based global lender for possible bailouts.
Jun Azumi, the Japanese finance minister, said the pair would look at further
funding to strengthen the IMF's financial base, following talks with his Chinese
counterpart Xie Xuren in Toyko. “Rather than make decisions independently,
we’ve agreed to consult each other very closely,” he said. “Although a critical
moment of the European issue has gone, we can never be optimistic.” The IMF
wants to ramp up its ability to attack Europe's debt crisis. The issue of
increasing its firepower is expected to be top of the agenda at a meeting of
finance ministers from the Group of 20 nations on April 20. “It’s important for
Japan to check China’s intention on this, while China probably wants to increase
its political influence if it puts up money,” Tomoko Fujii, a senior foreign
exchange strategist at Bank of America Merrill Lynch, told Bloomberg. China
would press on just fine. It would take a big hit for a while but would manage
to navigate the obstacle just fine. It would just have to reorient its growth
strategy away from exporting to a domestic focus, which is something it has been
doing, though way too slowly. A collapse of its huge export market would mean it
has to alter its model immediately, which it would do. One great advantage they
have is that as a dictatorship they can make big decisions instantly and do
whatever it takes to make it happen. And you can bet the people would pull
together and absorb whatever shock the change meant for them on a personal
level; because deep down they know they are on the right path to economic
hegemony and they trust their government to keep doing the right thing as they
clearly have done so far. And if India was a dictatorship rather than a
democracy then it would also be much further ahead than it is now. Democracies
are obviously great, but are not the best form for building up a country
economically and doing it quickly, as every man and their dog wants things their
way rather than for the good of the country in the long term. Westerners trot
out all the negatives and pronounce the collapse of China all the time. Although
the points raised are valid they don't materially alter the trajectory of China.
Ageing demographic, loss of export market, trade war, environmental destruction,
etc, all valid points, but all not a big enough issue to stop 1.4 billion people
retaking the economic crown they held for most centuries preceding the
industrial revolution, when population size suddenly became less relevant.
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4 comments:
Some people should take note of the person who was once described by a Russian communist spy as the worlds greatest capitalist, namely Henry Ford senior. His advice to up and coming industrialists and capitalists was. "Your greatest market is your home market, therefore you must pay the workforce enough to buy back the end product".
Alas those sound words have been drowned out by uncontrolled greed in the endless pursuit of higher profits by people who never produce a thing.
It would also be of interest to know just how much of our borrowed money Britain pours down the I.M.F. toilet for E.U. back door bail-outs.
If China doesn't bail out western economies then who are they going to sell their products to? They could of course create a home market with a potential of 1.3 billion customers. But before they could do that they would have to put up wages to enable them to buy back the end product. But that would mean less profits.
It seems that this was the way of thinking that caused our industry to be shipped abroad in the first place. Now the chickens are coming home to roost.
That will drive their value down and the Dollar up. Bond Yields will go up in proportion and therefore, Interest Rates. Rising interest rates will cause a flood of cash to leave the Stock Markets to create the domino effect.
As Stock prices tumble in the sell-off, Stop losses will be triggered to exacerbate the Crash.
Rising US Dollar and falling Stock markets cause a lack of demand for commodities. Their value will drop causing the Dollar to rise further. Falling commodities, falling markets rising Dollar, equals deflation. And just think of all that QE money that has been handed out! All wasted, as its sole purpose, to prevent deflation will have failed. Catastrophically.
When will these people ever learn that your cannot borrow your way out of debt and you can't borrow your way out of a recession. Logic tells you that but you were not listening. You never do.
This makes sense, of course. But only to the IMF. Japan is the most indebted country in the world and they are going to provide more money to bail out indebted Europe? That can only mean that they will be selling some of their T Bonds.
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