BRIC-A-Brac: China Pivot or Spinning like a Top

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I've always thought of New Normal as a satirical term.

along with the New Economy, the New General Motors, the New US Government, the New head of the ECB, the New President of Russia, the New Zimbabwe Dollar, the New plan to save the Euro and the latest New source of cheap future energy?

[don]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

along with the New Economy, the New General Motors, the New US Government, the New head of the ECB, the New President of Russia, the New Zimbabwe Dollar, the New plan to save the Euro and the latest New source of cheap future energy?

New Normal trumps them all for satirical edge.

[EJ]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

EJ, just as a heads up, I know of 5 creditor committees being formed as I type for sovereign nations in the Caribbean and Central America.

There are some defaults/restructurings coming like Belize is currently undergoing (which by the way no one talks about in the MSM).

I suppose the theory for Central American and Caribbean countries with respect to sovereign debt defaults is "practice makes perfect."

[Polish_Silver]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I thought that originally "BRIC" was just an investment thesis. The four countries were growing fast, and hence were good places to start mutual funds. I never thought it implied the BRIC governments were getting married or something.

The model assumes that US Treasury bills will always be the most liquid asset. This assumption will be tested.

--EJ

If you change "future value" to "nominal value" the pyramid still makes sense. As a 70's person, I have always been nervous about holding cash. For some reason, I don't mind when gold takes a dump relative to $USD.

What would be more liquid than T-bills? Cash? Oil futures?

[bart]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

...

My prediction remains that BRICS is a catchy name, and that's all it's going to be in the long run...

Although I'm not fond of the term BRICs, the potential of a group of "non Western" countries getting together to establish something to offer an alternative on the long term to the IMF/BIS/World Bank and SWIFT is very much non zero in my opinion.

[bart]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

...
Policies referred to collectively as "Financial Repression" are a reaction, a stage in an inexorable process that began with the original sin of the credit bubble of the FIRE Economy. The real question is, What comes next?

In my opinion, flashbacks due to unplanned for/surprising/positive feedback.

[bart]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

...

As a 70's person, I have always been nervous about holding cash. For some reason, I don't mind when gold takes a dump relative to $USD.

What would be more liquid than T-bills? Cash? Oil futures?

It seems like you already answered it yourself. ;-)

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I'd put US containment as the #1 incentive for China and Russia's mutual interests.

Unlike subprime and the USA..."North Korea is contained"

China rebukes North Korea, says no state should sow chaos

Reuters – 13 hrs ago.

BEIJING/SEOUL (Reuters) - China's leaders issued thinly veiled rebukes to North Korea for raising regional tensions, with the president saying no country should throw the world into chaos and the foreign minister warning that Beijing would not allow mischief on its doorstep.

The weekend comments were the strongest yet by China in response to more than a month of North Korean rhetoric that has included threats to launch a nuclear attack on the United States and to wage war with Seoul.

No country "should be allowed to throw a region and even the whole world into chaos for selfish gain", President Xi Jinping told a forum on the southern Chinese island of Hainan. He did not name North Korea but he appeared to refer to Pyongyang.

Former U.S. Ambassador to China Jon Huntsman said Xi's comments were unprecedented.

"It suggests to me, as I've watched the ratcheting up of frustration among Chinese leaders over the last many years, that they've probably hit the 212-degree boiling point as it relates to North Korea," he told CNN on Sunday...

[verdo]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

As a 70's person, I have always been nervous about holding cash. For some reason, I don't mind when gold takes a dump relative to $USD.

What would be more liquid than T-bills? Cash? Oil futures?

I'm not a 70's person, but even I am like this tbh. Btw, if gold becomes a tier one asset for banks, it could definitely challenge T-Bills in a crisis

[dlew22]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I've described Cyprus as a euro debt crisis lab for testing treatments on live humans. Maybe they are trying to send a message, but it's just as likely that they are in their efforts to resolve the crisis behaving as idiotically as they did to get into the mess in the first place.

"testing treatments" is what sticks out in my mind. When I see articles like the following I believe in one form or another there will be more theft coming our way. Notice the flashy new marketing term Bail-In.

http://www.bloomberg.com/news/2013-0...-failures.html

http://www.thestar.com/news/canada/2...an_walkom.html

[coolhand]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

There is no unique experience in the BRICS, but the BRICS are large enough together to be able to make something stick. The other organizations are simply too poor and unwieldy to do anything, as the UN has clearly shown.

As for altruism, no one anywhere has said anything about BRiCS doing anything for free. The question is, are there net benefits which can be obtained by BRiCS cooperation? It seems to me there are, but YMMV.

Taking a step back, I think all of this positioning is trying to allocate the most valuable scarce resource (oil) in a more equitable fashion. Peak Cheap Oil + the US FIRE economy being showing to be based on fraud in 2008 = all other nations questioning why the Americans get to print dollars for their oil.

RE: the BRICS - which of these countries do you trust to manage a currency to replace the USD? None. That's why they are all buying gold like crazy, IMO. I think Jim Willie is onto something with his gold-trade currency. The BRICS are moving that way, and the EU marks their gold to market every quarter.

I think in the long run, the rest of the world is asking "Why do the Americans get to consume 20% of the world's oil every day with only 3% of the world's population, when their biggest exports are overrated debt & military violence?"

And the answer is "Because the currency system dictates it."

So the retort must be "Well, if we want to consume more oil, we must change the currency system. But slowly, so we don't become victims of the Americans' military violence." So they are changing it. Ironically, to the most democratic currency available - gold.

And so slowly it changes...the Euro has been being planned since the late 1960's. I don't think the fact that oil & gold prices began to take off in USD once the Euro was successfully implemented is a coincidence...

Here's one last thought that I'd love anyone's feedback on - if you raise the price of gold high enough, you theoretically don't need large sovereign bond markets, beyond what you would need for short term trade...on one hand, that's crazy...on the other hand, I find it fascinating that the chinese appear to be moving so much faster buying gold than building a big yuan-based sovereign debt market....

[ProdigyofZen]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

"testing treatments" is what sticks out in my mind. When I see articles like the following I believe in one form or another there will be more theft coming our way. Notice the flashy new marketing term Bail-In.

http://www.bloomberg.com/news/2013-0...-failures.html

http://www.thestar.com/news/canada/2...an_walkom.html

From my sources in sovereign restructuring they say what happened to Cyprus is a positive for the EU and ECB but they went about it the wrong way.

They are telling me the goal of the ECB is to not put stress on the sovereign and have the banks, creditors and depositors take the losses.

I am not saying this is right just what I am hearing from the guys actually involved with the restructuring committees in the EU.

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

From my sources in sovereign restructuring they say what happened to Cyprus is a positive for the EU and ECB but they went about it the wrong way.

They are telling me the goal of the ECB is to not put stress on the sovereign and have the banks, creditors and depositors take the losses.

I am not saying this is right just what I am hearing from the guys actually involved with the restructuring committees in the EU.

So what would have been the "right way" in their view? (btw, I agree with banks being recapped with equity, bond and un-insured depositors taking the hit in that order...that is the way it should have been right from the onset of the financial crisis)

[ProdigyofZen]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

So what would have been the "right way" in their view? (btw, I agree with banks being recapped with equity, bond and un-insured depositors taking the hit in that order...that is the way it should have been right from the onset of the financial crisis)

I think what they meant was not to do it in the fashion that they did and scare the market. Basically manage the expectations better.

I did not inquire what they think is the right way but could if you wish?

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I think what they meant was not to do it in the fashion that they did and scare the market. Basically manage the expectations better.

I did not inquire what they think is the right way but could if you wish?

It's difficult to understand what the EUrocrats are doing much of the time. Like the Fed they seem to be making it up as they go, instead of a considered, deliberate policy implementation. The comments about Cyprus being "a template", followed 90 minutes later by denials probably did more to harm that ever elusive "confidence" in the banking system than the actual Cyprus bail-in move...