The Blog that follows Global Economics, Finance and the Laws and Regulations that govern global markets. By Zach Bell
Monday, March 29, 2010
Hu Stern to be Gaoled for 10 years
Friday, March 26, 2010
The Global Financial Housing Crisis
Monday, March 22, 2010
Stern Hu v The Peoples Republic of China
Wednesday, March 17, 2010
Monday, March 15, 2010
THE TEN SECOND NEWS – MINUS THE BULL SHIT.- 16 March, 2010
WORLD EVENTS
US HEALTH CARE BILL PASSES CONGRESS: Obama's 2,700 page healthcare bill finally passed US Congress and it will offer 30 million more Americans with health insurance than are insured today. The Federal Government will immediately sponsor 5 Billion dollars in healthcare insurance.
RIOTS IN THAILAND: Thousands of supporters of Thai Premier Shinawatra protest in Bangkok demanding the Thai government to step down. Riot police and soldiers were deployed outside government offices. The Thai Prime Minister rejects protesters demands for his resignation.
FRANCES ECONOMIC ADVICE TO GERMANY: Frances Finance Minister Chritine Largarde has warned Germany that its trade surpluses are unsustainable because they are built upon low labour costs.
THE CHINESE YUAN: Chinese Premier Wen Jiabao claims that the “The Chinese Yuan is not undervalued”. He further said that “if you restrict trade with China, you are hurting your own countries’ firms”.
THE ARMS BUILD UP IN SOUTH EAST ASIA: China’s increased power has caused its neighbours to increase their spending on defence.
US - ISRAEL RELATIONS AT LOWEST POINT SINCE 1975: US ties with Israel have sunk to 35 year low, over Israel's announcement to settle a further 1,600 homes for Jewish Israelis in East Jerusalem.
INDIA'S INFLATION HITS 9.9%: India's inflation hits 9.9% in February, driven by inflation in food prices, adding to pressure on policymakers to continue unwinding stimulus measures.
Is China as BIG as it claims?
No one disputes the premise that China is the Worlds fastest emerging Economic Super Power. But who questions the Chinese Governments data? How can we just blindly trust all the economic data that comes out of China? China may be embracing Capitalism but it is certainly not transparent and this will definitely limit its future successes.
All outsiders solely rely upon the data released by the Chinese Communist Party and it is a real concern that all the Bankers and Economists who are investing in the region cannot trust the data that they rely upon to make their financial decisions.
A recent example of the deceptions coming out of China is the increase in housing prices over the last year. The Chinese Statistics Bureau put the rise in housing prices at 1.5% in the last 12 months, whereas the Chinese Real Estate Association put the figure at 22%. If this discrepancy doesn’t sound alarm bells for investors, how about the grossly undervalued Yuan and China's alleged 2.7% rate of inflation.
Foreigners understand one stereotypically Chinese feature and that is the fine art of 'saving face'. 'Saving Face' is considered by some as socially acceptable conduct that allows people to lie if that lie protects them from the dishonour of the unfavourable truth. So there is nothing to stop China from only releasing its 'good news' and sweeping all its 'bad news' under the carpet. The problem is that one day all this compounded bad news, which gets swept under China's enormous carpet will leak, undoubtedly causing economic Armageddon.