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China Raises Interest Rates Amid Inflation Fight

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Bernanke could probably finish them off with another burst of QE.

At some point the Communist govt. will start taking it out on someone else and then it's game over for them.

But hey, thanks for all the cheap sh1te fellas!

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But the difference is in China haven't the proles been given big wage increases?

No prole wage inflation here, which means we can just be vigilant and keep interest rates low.

Bernanke will also be raising a glass to this news.

Edited by interestrateripoff

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But the difference in China haven't the proles been given big wage increases?

Nope, watching last nights HK version of 60 minutes, the wages have actually gone down. Foxconn for example said higher wages*

*If they meet new impossible to hit productivity rates. As said it's not the NOW wages that count it is the wage arbitrage they use when they take it home to their villages. It might be a tad screwed because China is moving a lot of its stuff inland. The high speed rail links and massive massive slow container trainlines criss crossing China are a sign of this.

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Nope, watching last nights HK version of 60 minutes, the wages have actually gone down. Foxconn for example said higher wages*

*If they meet new impossible to hit productivity rates. As said it's not the NOW wages that count it is the wage arbitrage they use when they take it home to their villages. It might be a tad screwed because China is moving a lot of its stuff inland. The high speed rail links and massive massive slow container trainlines criss crossing China are a sign of this.

http://blogs.forbes.com/russellflannery/2011/03/18/china-faces-years-of-double-digit-wage-increases-currency-appreciation/

Misinformation in the press then? Claims of double digit wage increases.

So hard to know what's accurate and what isn't in the press.

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http://articles.sfgate.com/2011-03-06/business/28661792_1_prices-and-inflation-chongqing-china

All 31 Chinese provinces and regions are likely to boost their minimum wages in 2011 for the second consecutive year, according to Credit Suisse Group.

.....

Li Wei, an economist at Standard Chartered in Shanghai, says China may have already hit the Lewis point. If the country "continues to grow 9 percent to 10 percent per year, there will be a wage spiral" that pushes up prices and sends bond yields higher around the world, Li says. China's own inflation is gathering momentum, with inflation running higher than the official 2011 target of 4 percent in each of the past four months, according to the National Bureau of Statistics of China.

Wages are going up even without the government's prodding. The development of China's west has turned interior cities such as Chongqing into production centers that compete for labor with coastal factories.

As I noted the press is full of stories that wages are going up in China. Misinformation?

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http://hesperian.typepad.com/weblog/2010/06/worker-suicides-focus-attention-on-electronics-factories-.html

Workers at Foxconn face grueling work conditions: excessive forced overtime, extremely low pay, unattainable productivity targets, and a harsh and isolating management system –workers on the shop floor are not even allowed to speak to each other during their 12-14 hour work day! More than 300,000 workers live inside the factory walls, their lives completely controlled by Foxconn.

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As I noted the press is full of stories that wages are going up in China. Misinformation?

Can't say as it is hard to find out what is real and what is not.... but anecdotal I know several people in China (not ESL types local people) who are experiencing a stagflagation effect as in the UK. Static incomes but increasing cost of living.

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http://www.chinalawblog.com/2011/03/chinas_wage_increases_slowing_just_a_bit.html

Tom Orlick of the Wall Street Journal has an article entitled, "Exporters' Gain Is Workers' Loss in China's Labor," focusing on China wage rates. Though wages are definitely still rising, they are rising at 9% to 15%, not the 20% to 30% many had predicted. Orlick describes these lower than expected wage increases as "a short-term blessing and a long-term curse:

For now, it means a smaller contribution to inflationary pressure and contains costs for exporters, already facing a squeeze from yuan appreciation and pricey raw materials. Textile producers are absorbing a 150% rise in cotton prices over a year.

Longer term, exporters' gains are workers' losses. Tepid wage increases will do little to put more money in workers' pockets or fulfill Beijing's aim of rebalancing from foreign to domestic demand.

http://cnbusinessnews.com/wage-hike-in-firms-likely-to-hit-8-4-in-2011-report/

China’s average salary level is expected to increase by 8.4 percent in 2011, the highest increase since 2008, the Fortune Weekly reported Friday, citing a report conducted by 51job, a Nasdaq-listed human resource solutions provider in China.

According to the report, the nation’s salary level has risen 7.9 percent in 2010.

The energy industry topped the salary-increase list last year, with an 8.9 percent year-on-year hike. The No 2 and No 3 chemical and financial industries have also seen an 8.7- and 8.4-percent growth, it said.

http://www.creditwritedowns.com/2011/05/china-rebalancing-through-wage-increases.html

Is China currently rebalancing? The currency has been appreciating, the PBoC has hiked interest rates four times, and wages have been surging. Because of all of this I am often asked if China has finally begun the long-waited rebalancing process and whether we have yet seen an improvement in the underlying economy caused by a rising consumption share.

Those who were hoping the answer was yes will have been disappointed by the release Thursday of the World Bank’s China Quarterly Update – April 2011. Here is their summary:

China’s economic growth has remained resilient as the macro stance moved towards normalization. Both fiscal and monetary policy contributed to the normalization. Consumption growth slowed in early 2011. But overall domestic demand held up well, supported by still strong investment growth. Real estate investment has so far remained robust to measures to contain housing prices—a policy focus. Reducing inflation is the other policy priority, after inflation rose to 5.4%, largely on higher food prices.

I'll have a look to see if I can find anything to support the idea wages in China are stagnant or falling.

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bankers....you just gotta luv'em.

two causes of inflation...shortages....yeah right, and bank credit....which at some time wont have enough readies to be paid or borrowed...a new banking crisis is born.

Edited by Bloo Loo

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The hike in deposit rates will help to reduce losses suffered by families that keep money in the bank, though the new level still is below inflation. Analysts say the gap has prompted some savers to divert money into speculating in real estate and stocks, fueling fears of a price boom and bust.

You can do that if your country isn't run by puppet politicians on the strings (and future payroll) of bankers.

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http://www.tradingeconomics.com/china/unemployment-rate

The urban unemployment rate in China was last reported at 4.1 percent in the first quarter of 2011. From 2002 until 2010, China's Unemployment Rate averaged 4.15 percent reaching an historical high of 4.30 percent in December of 2003 and a record low of 3.90 percent in September of 2002. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised and those serving in the military. This page includes: China Unemployment Rate chart, historical data and news.

Nearly 10 years worth of data here.

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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