Sunday, May 10, 2009
Chancellor forced to reassure senior figures from the Chinese government about Britain's creditworth
Telegraph: Money printing starting to work, says Bank of England
The Chancellor will today be forced to reassure senior figures from the Chinese government about Britain's creditworthiness. The ministers, who are on an economic delegation to the UK, have expressed their concern that quantitative easing, alongside large levels of western public debt, will destabilise the world economy. Given that China is one of the biggest consumers of government debt from both the US and the UK, there are fears that the country may turn a cold shoulder on British debt in the future.
Posted by devo @ 10:25 PM (1376 views) Add Comment
25 Comments
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1. quiet guy said...
So China is expressing "concern" about us printing money. This is like a bad dream except that it's for real. What will happen when we stop QE? Or for that matter, dare we stop QE?
Great posting devo.
2. general congreve said...
So Chinese delegation, what do you reckon then? Gordon? Or Gold?
3. devo said...
Neither Gordon, nor Gold.
4. devo said...
If I was a gambling man, I'd go long on water, wheat and oil.
5. crunchy said...
4. devo
I think most here are still waiting for oil to go below $35. lol. next week will be interesting.
6. amjidk said...
10% of the cash in Oil & Gold, looking to buy a house with the rest before inflation kicks in..... (probably in around 18 months)
7. devo said...
Crunchy, I suspect 'most here' are completely bemused by the mindset of those both 'above' and 'below' us.
In the short term, the price of oil, DJIA etc. etc. will be exactly what Goldman Sachs wants it to be.
I myself am long on life - a gamble in itself, I suppose.
8. crunchy said...
usd/jpy weakness may also make my week!
Oh the gamblers life.
9. crunchy said...
7. devo
Just missed you. Too right! Long on life? with you on that one Sir.
10. devo said...
From the forum:
I think these are interesting times. It seems to me that our establishment is in danger of falling apart - you only have to look at the current expenses scandals - they would never have been aired even a few years ago.
I'm not sure it needs active demos - it just needs people to collectively decide to ignore their rules. This happened in Russia after the fall of communism - the police gave up because everyone just ignored them.
Ultimately the Government, parliament, the BBC, the mainstream newspapers are just running out of credibility. It's a paradigm shift.
To something better or worse? We shall see.
11. uncle tom said...
Think of QE as financial heroin, or crack cocaine. The nation's economy will quickly become hopelessly addicted.
The cold turkey later will be worse than facing the music now..
12. crunchy said...
You can't stop the Pusher Man.
Don't get high on your own supply!
13. general congreve said...
Devo @4 - "If I was a gambling man, I'd go long on water, wheat and oil."
True, very true, but priced in what? I've never seen anyone buying anything with a pocket full of water, wheat or oil. Not that I think we'll be using gold coins either, but gold has the necessary properties of real money (a form of universal exchange that can't be quickly or easily debased) to back a paper/digital currency that will make a trader's/shopper's life a bit more convenient than it would be in a water/wheat/oil barter-based economy. That is why the future is golden.
14. devo said...
We are already in the cold turkey phase, uncle tom. QE is the methadone.
15. crunchy said...
Green taxes are making so much more sense to me.
Now I get it!
16. devo said...
13. general congreve
Good point well made, but how can gold become a common currency again?
17. devo said...
general congreve
Re-read your post, ignore previous comment.
18. crunchy said...
Can one cheat with gold?
19. crunchy said...
Silence is golden. Goodnight!
20. devo said...
18. crunchy said ...Can one cheat with gold?
Of course!
So a gold-backed paper/digital currency wouldn't work in The Age of Mistrust.
Back to the drawing board.
21. general congreve said...
Devo @ 16/17
It doesn't even need to become a common currency. As sterling/dollar become ever more debased and valueless there will be a rush into gold to protect wealth (we've seen nothing so far) resulting in bubble in the gold price. If you're invested, ker-ching!!! Before the bubble blows just trade out of it into whatever currency is strongest at the time, Euro, Ozzy or CAD dollar perhaps, we will see.
22. devo said...
"Before the bubble blows just trade out of it into whatever currency is strongest at the time, Euro, Ozzy or CAD dollar perhaps, we will see"
We're at different places, you and I.
I forsee complete chaos. Hope I'm wrong.
23. general congreve said...
DEvo @ 22
You are probably right, so better to be holding gold/silver than any form of paper in that case IMO. Either way, if you're hedged in gold/silver I don't think you can go far wrong, considering the range of possible outcomes on the horizon.
24. General Congreve said...
Crunchy @18
Of course purveyors of gold-backed currencies can cheat. That's why the US went off the gold-standard, because de Gaulle was calling them on the dollar by asking for gold delivery as promised to pay on the dollar bill at the time. The US had been busy with the printing press and knew they couldn't meet gold payment obligations, so they changed the rules and the dollar fully entered the age of fiat which is coming to end for it, right.. about... now...
However, a gold-backed currency that can be cheated is preferable over a pie in the sky non-backed currency that definitely is being cheated like f4ck right now for all to see in plain sight. Which would most people/countries prefer?
25. mander said...
Chinese latest move into buying metals getting rid of some of the dollar reserves is exactly what they are going to do in the future so again they are wining. There has been no success so far with regards to getting the Renminbi stronger and I am worried about inflation coming soon.