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Three From Xi (bonus 4th for CNY)

By |2020-10-28T16:35:01-04:00October 28th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Physical cash vs. bank reserves. Quality growth vs. quantity. Xi Jinping vs. everyone not onboard with Xi Jinping. All three contests are actually very simple and straightforward – once you let go of the strong economy, money printing Federal Reserve nonsense. As to the last of the trio, Emperor Xi has been awfully keen this year to redo government flags.Communists [...]

Xi Has Upped His (Ruthless) Game; Dollar Scarcity, Chinese Economy, and the World Surrounding All of It

By |2020-08-25T19:19:03-04:00August 25th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There’s one key piece of the “petroyuan” story which has gotten lost in the frenzied hype. While many get fixated, and make others fixate, on how RMB-for-oil was going to, or maybe even still will, destroy the dollar there’s been important, legitimate functions for Shanghai’s International Exchange which don’t involve, and never really did, replacing the reserve currency. It’s all [...]

Not This Again: Time For Petroyuan Revisit

By |2020-08-20T19:54:15-04:00August 20th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Does anyone remember the petroyuan? It doesn’t appear so, though not because the thing disappeared rather due to the fact that it didn’t. It was a really big deal for a time, pretty much all of 2018. What it was supposed to have represented was the dollar’s death knell. Guaranteed, one hundred, no, one thousand percent dead. This was widely [...]

How Do You Say (Way) Off-balance Sheet In Chinese?

By |2020-06-24T19:38:33-04:00June 24th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where central banks are concerned, it’s not conspiracy theory so much as the term “off-balance sheet.” There’s a reason Enron kicked off that mass-migration into the footnotes. For monetary officials, there’s the choice to be like Montagu Norman and what he thought of good practice at central banks. Silence.For years, the Chinese have tried it the other way. Big Mama [...]

What’s *Really* Going On In China?

By |2020-04-17T16:29:12-04:00April 17th, 2020|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Questioning the veracity of Chinese estimates (for anything) has always been something of an amateur sport. For a stat like real GDP, everyone “knows” that it is managed. In a complex world where an economic system for a billion and a half is incomprehensibly unpredictable, there’s really no other way to always hit your government’s mark (unless the Chinese are [...]

They Warned Us

By |2018-11-27T16:02:22-05:00November 27th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We can add this to the list of all the things going wrong in October. If it felt like a wave of renewed deflation built up and swept over markets and the global economy, it’s because that’s just what had happened. I don’t think it random coincidence the WTI curve went contango and oil prices globally crashed when they did. [...]

A Clear Anchor

By |2017-09-14T17:37:32-04:00September 14th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

All the way back in January I calculated the total size of China’s 2016 fiscal “stimulus.” Starting in January 2016, authorities conducted what was an enormous spending program. As it had twice before, the government directed increased “investment” from State-owned Enterprises (SOE). By my back-of-the-envelope numbers, the scale of this fiscal side program was about RMB 1.45 trillion, or nearly [...]

Still In So Many Ways 2014

By |2017-04-26T12:31:43-04:00April 26th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What was it that touched off CNY’s devaluation in the first place? When it started, “unexpectedly” of course, it was described as intentional policy designed to thwart speculators betting too heavily on the currency’s continued rise. But the first major move in the chess game between the PBOC and “whatever” it is driving the currency was to widen the daily [...]

Big Difference Mechanical Tightening

By |2017-04-24T18:11:07-04:00April 24th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The mainstream narrative as it relates to Chinese money is “tightening.” Having survived the economic downturn last year, we are to believe that the PBOC is once again on bubble duty. They raised their reverse repo rates, considered to be their policy benchmarks, three times up to mid-March. The central bank also increased the rate on its Medium Term Lending [...]

China And Reserves, A Straightforward Process Unnecessarily Made Into A Riddle

By |2017-03-07T18:01:05-05:00March 7th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]

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