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Roger Bootle Very Bearish - Calls An Ongoing Depression

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Roger Bootle extremely bearish - suggesting the collapse of the carry trade will make this a depression (correct me if I have mis-understood as it is quite technical):

http://www.telegraph.co.uk/finance/comment...-dislodged.html

There is a way out for both China and America. Somehow a bargain needs to be struck which will involve more domestic spending by the Chinese and a stronger currency, traded perhaps for some international swap arrangements for China's dollar hoard and an influential role for China in world forums. Eventually, this could lead to the formation of world money as Keynes suggested in 1944. His suggestion of new global money, named bancor, was rejected by the Americans who wanted to put the dollar in top spot. Funny that.

Keynes' suggestion came after the experience of depression, currency instability and protectionism in the 1930s. It will take an act of great imagination and leadership on the part of the Americans and the Chinese to prevent us going through something similar again.

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Roger Bootle extremely bearish - suggesting the collapse of the carry trade will make this a depression (correct me if I have mis-understood as it is quite technical):

http://www.telegraph.co.uk/finance/comment...-dislodged.html

Says 7% of China's foreign currency reserves are in dollars. Is this a typo? What else would the other 93% be in?

Doesn't sound like much of a problem if its only 7%

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There is a way out for both China and America. Somehow a bargain needs to be struck which will involve more domestic spending by the Chinese and a stronger currency, traded perhaps for some international swap arrangements for China's dollar hoard and an influential role for China in world forums. Eventually, this could lead to the formation of world money as Keynes suggested in 1944. His suggestion of new global money, named bancor, was rejected by the Americans who wanted to put the dollar in top spot. Funny that.

Keynes' suggestion came after the experience of depression, currency instability and protectionism in the 1930s. It will take an act of great imagination and leadership on the part of the Americans and the Chinese to prevent us going through something similar again.

Presumably Roger saw the Medvedev/Coin story.

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Bootle states that China sells renminbi for dollars.

But where do all those renminbi go?

cheap chinese imported goods

ie Homer Simpson uses dollars to get a TV set. The TV set distributor uses these dollars to buy remnibi from the Chines govt, and then uses THAT to import a TV set from China.

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Presumably Roger saw the Medvedev/Coin story.

so doyathink that Roger could be trying to scare the Chinese 'be careful what you wish for' etc, when in reality it is HE that is bricking it, as part of the Anglo-Saxon financial collective?

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so doyathink that Roger could be trying to scare the Chinese 'be careful what you wish for' etc, when in reality it is HE that is bricking it, as part of the Anglo-Saxon financial collective?

I think MK was saying this week that the recent uprising in China was instigated by Anglo Saxon bodies to demonstrate to China that problems can easily arise in their country if China start getting uppity over the dollar.

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cheap chinese imported goods

ie Homer Simpson uses dollars to get a TV set. The TV set distributor uses these dollars to buy remnibi from the Chines govt, and then uses THAT to import a TV set from China.

So the renminbi never leaves China. And Roger's use of "sell renminbi to buy dollars" is typical economist euphemism-speak.

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