Jim Willie (a notable gold proponent) submits an interesting essay on China's influence in the currency and commodity markets.
Gold bugs say that the price of gold and other commodities has been held down by parties interested in maintaining the credibility of the US dollar. Willie thinks that the entry of a large Chinese sovereign wealth fund may foil such market manipulation in future, especially since the Chinese can back their hedge fund loans with their US Treasury holdings. An attempt to break a Chinese-held commodity position, if successful, could lead to a selloff of Treasuries and so crater the bond market, leading to raised interest rates and/or a drop on the dollar.
Between a rock and a hard place. This is what it is to be a debtor.
Friday, June 19, 2009
Commercial real estate to crash?
Giant retailer Tesco has just sold and leased back 12 stores, netting £430 million (£458m, according to another source). This comes on top of another such move 10 months ago, which brought in another £605 million from 13 properties.
There's various ways you could interpret this - e.g. it could be a way to deflect criticism of Tesco's powerful position in the retail commercial property market, which some say has been used to prevent competitors setting up near their own outlets. But there are cheaper ways to deal with critics.
I think this billion-pound bet may be a straw in the wind - or perhaps an uprooted tree in the mighty gale - portending a significant fall in commercial property values.
There's various ways you could interpret this - e.g. it could be a way to deflect criticism of Tesco's powerful position in the retail commercial property market, which some say has been used to prevent competitors setting up near their own outlets. But there are cheaper ways to deal with critics.
I think this billion-pound bet may be a straw in the wind - or perhaps an uprooted tree in the mighty gale - portending a significant fall in commercial property values.
A fish rots from the head down
A month ago, we learned that Tony Blair's receipts have been "accidentally" shredded, so that we cannot examine his financial behaviour as keenly as his hapless ex-colleagues. Yet Guido's blog shows that the shredding was paid for, receipted and claimed as an expense.
Are there some people who just get away with it, for ever?
Are there some people who just get away with it, for ever?
Tuesday, June 16, 2009
Survival
In a Dublin talk last week, Dmitri Orlov bears out my repeated theme of diversity, dispersion and disconnection - the way in which efficiency and survival are at odds. It's also a theme of James Howard Kunstler. Even Rob Kirby's latest post refers to a "financial ecosystem" and asserts that the concentration of power at the top threatens the structure.
Big changes are on the way. Jesse reports on how the world is weaning itself off the dollar; the Contrarian Investor notes how China is cornering the market in rare minerals vital to modern technology.
There is a power struggle - a host of power struggles - going on. The good news is that life goes on, too. The bad news is that not everybody makes it.
Don't be the doughboy this time.
Big changes are on the way. Jesse reports on how the world is weaning itself off the dollar; the Contrarian Investor notes how China is cornering the market in rare minerals vital to modern technology.
There is a power struggle - a host of power struggles - going on. The good news is that life goes on, too. The bad news is that not everybody makes it.
Don't be the doughboy this time.
Sunday, June 14, 2009
What the blackbird said
Every morning, a blackbird in our neighbourhood starts to sing. It begins with two distinctive melodies, and then (like Eric Clapton in his Cream days) improvises beautiful, complex variations on these themes.
We do the same. We complain of encroachments on our liberty, the debauching of our currency and national wealth, the weakening of the bonds that tie society together, and so on. And we do it many times, passing judgment with our "wise saws and modern instances", like Shakespeare's magistrate.
We're not alone. In a well-worth-reading article today, former Tory minister Neil Hamilton tells it like it is now with our rulers: democracy is dead (not that it was ever much alive). It's especially disturbing that senior politicians will say this now, not just the cranks among the public.
But why are we singing? Simone de Beauvoir said, "Every good book is a cry for help"; who do we hope will make speed to save us? And why does he have a sword and sceptre in his hands? Because to ask for help is to surrender power.
So let us combine against the oppressor. But who will lead us? And how will they mutate as they convert our assent into fresh authority? Is a libertarian party ultimately doomed by its oxymoronic essence?
George Orwell said, 'All historical changes finally boil down to the replacement of one ruling class by another. All talk about democracy, liberty, equality, fraternity, all revolutionary movements, all visions of Utopia, or "the classless society", or "the Kingdom of Heaven on earth", are humbug (not necessarily conscious humbug) covering the ambitions of some new class which is elbowing its way to power ...'
Like charity, liberty, wealth and happiness begin at home. Let us waste no more of our dreaming time on the puppets that wish to master us; in a Berkleian way, they are created and maintained only by our perception. Neither vote nor revolt; ignore. Trying to change society is like sending flowers to a soap opera wedding.
The revolution is personal. How much of your time and money could you save, reorganise, invest to make you and yours happier? "Il faut cultiver notre jardin."
And in our garden, the birds will sing.
We do the same. We complain of encroachments on our liberty, the debauching of our currency and national wealth, the weakening of the bonds that tie society together, and so on. And we do it many times, passing judgment with our "wise saws and modern instances", like Shakespeare's magistrate.
We're not alone. In a well-worth-reading article today, former Tory minister Neil Hamilton tells it like it is now with our rulers: democracy is dead (not that it was ever much alive). It's especially disturbing that senior politicians will say this now, not just the cranks among the public.
But why are we singing? Simone de Beauvoir said, "Every good book is a cry for help"; who do we hope will make speed to save us? And why does he have a sword and sceptre in his hands? Because to ask for help is to surrender power.
So let us combine against the oppressor. But who will lead us? And how will they mutate as they convert our assent into fresh authority? Is a libertarian party ultimately doomed by its oxymoronic essence?
George Orwell said, 'All historical changes finally boil down to the replacement of one ruling class by another. All talk about democracy, liberty, equality, fraternity, all revolutionary movements, all visions of Utopia, or "the classless society", or "the Kingdom of Heaven on earth", are humbug (not necessarily conscious humbug) covering the ambitions of some new class which is elbowing its way to power ...'
Like charity, liberty, wealth and happiness begin at home. Let us waste no more of our dreaming time on the puppets that wish to master us; in a Berkleian way, they are created and maintained only by our perception. Neither vote nor revolt; ignore. Trying to change society is like sending flowers to a soap opera wedding.
The revolution is personal. How much of your time and money could you save, reorganise, invest to make you and yours happier? "Il faut cultiver notre jardin."
And in our garden, the birds will sing.
Giant US slush fund?
Karl Denninger continues to reflect on a story that hasn't had much coverage - two Japanese have been caught in Italy, attempting to smuggle $134 BILLION in bearer bonds. KD thinks it's part of secret additional financing for the US.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.
Good news for the Italians - their law says they'll take 40% of the contraband.
Subscribe to:
Posts (Atom)