Mish's Global Economic Trend Analysis |
- Monetary Smuggling in China Defeats Capital Controls; "Everyone Does It"; Yuan to Replace Dollar as Reserve Currency?
- McCain Heads to Ukraine with Seven Other Senators; Let's Hope They All Stay; Ugly is Beautiful
- High Frequency Bitcoin Trading Coming Your Way; Reflections on "The Right Pedigree", Bitcoin is Here to Stay
Posted: 12 Mar 2014 08:02 PM PDT I remain in "negative awe" of China bulls who think the yuan is going to soon replace the US dollar as the world's reserve currency. As I have pointed out before - China's bond market is nowhere big or liquid enough; China's property bubble is the world's biggest; China's shadow banking system is on the verge of implosion, and Chinese growth is imploding. Readers know full well that I am not prone to US flag-waving. That said, the US has the most open, most free capital markets of any major country. In contrast, China has capital controls reminiscent of two-bit South-American countries (amongst numerous other significant problems). Monetary Smuggling Reuters reports How China's Official Bank Card is Used to Smuggle Money. Growing numbers of Chinese are using the country's state-backed bankcards to illegally spirit billions of dollars abroad, a Reuters examination has found.Yuan to Replace US Dollar as Reserve Currency? With capital controls, political controls, no freedom of press, massive problems in shadow banking, massive problems with housing, entire malls and even cities that are unused, the yuan is nowhere near being able to replace the dollar as the world's reserve currency. China is a decade away at a bare minimum, and that is if everything goes perfect for China (which it won't). Due to lack of political freedom, lack of a liquid bond market, and lack of essential human and property rights, for the yuan to replace the US dollar as world's reserve currency will take decades. Given that a major global currency crisis is highly likely long before that (with numerous possibilities as a result), I suspect it will never happen. Rather some other monetary system will be in place. Bretton Woods is on its last legs. What's next is unknown. It may be gold or crypto-currencies, but it isn't the Yuan. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
McCain Heads to Ukraine with Seven Other Senators; Let's Hope They All Stay; Ugly is Beautiful Posted: 12 Mar 2014 05:26 PM PDT Here's the question of the day: What can senators John McCain (R-Az), Dick Durbin (D-Ill.), John Barrasso (R-Wyo.), John Hoeven (R-N.D.), Ron Johnson (R-Wis.), Chris Murphy (D-Conn.), Jeff Flake (R-Ariz.) and Sheldon Whitehouse (D-R.I.) do for Ukraine? The answer of course is simple: Nothing. So, why is that group of eight senators wasting money going there? The only possible answer is some combination of arrogance, political foolishness, and support for warmongering. McCain Leads Delegation to Ukraine The Hill reports McCain to Lead Delegation to Ukraine. Sen. John McCain (R-Ariz.) and a group of senators are slated to travel to Ukraine on Thursday to show support for the new interim government there.In Favor of McCain's Action If... Actually, I am all in favor of sending McCain, Durbin, and the rest to Ukraine, provided they stay there. I will even do a fundraiser on this blog to pay for it. Should insufficient money come in, I would pay for the tickets myself. Other Comments ZeroHedge commented "It is of course possible the McCain simply doesn't know where Ukraine is to begin with ...And just in case McCain isn't senile enough to provoke the start of another world war, moments ago the Senate Foreign Relations Committee did its best to further antagonize Russia when it approved legislation granting aid to Ukraine and authorizing sanctions on Russia in a 14-3 vote." I am rather certain McCain knew where Ukraine was before this mess started. However, I highly doubt all of the rest of his warmongering consortium did. As for senility, I propose McCain is not senile. Instead, I propose McCain is a war-mongering fool, supportive of provoking WW III at every opportunity, regardless of cost. This may sound like a disagreement with ZH but it's not. The spirit of what ZH reported is nearly perfect: We have no business in Ukraine. Regardless, the useless political grandstanding continues. G7 Warns Russia Over Crimea Occupation In another symbolic but useless action G7 Warns Russia Over Crimea Occupation. The Group of Seven industrialised nations, led by the US, on Wednesday delivered a warning to Russia over its occupation of the Ukrainian region of Crimea, setting the stage for a tense diplomatic stand-off over this weekend's independence referendum in the breakaway-minded province.How Ugly Can it Get? Inquiring minds just may be wondering "How ugly can this get?" That's a good question. I bring it up because Secretary of State John Kerry stated "[This] can get ugly fast if the wrong choices are made, and it can get ugly in multiple directions". Please consider US Warns of Reprisals if Crimea Poll Goes Ahead. The stand-off between Russia and the US over Ukraine reached its gravest point on Wednesday as the US and its allies warned Moscow that proceeding with Sunday's Crimean independence referendum would bring reprisals.Ugly is Beautiful Given that McCain is clearly itching to start WW III, it's safe to point out that for some "ugly is beautiful". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Posted: 12 Mar 2014 10:56 AM PDT Wall Street has officially embraced bitcoin. And why not? Wall Street can scalp fractions of bitcoins just as easily as fractions of pennies. The Wall Street Journal reports Perseus, Atlas Launch Global Bitcoin Trading Platform High-speed telecommunications provider Perseus Telecom and digital currency trading platform Atlas ATS formally launched Wednesday a globally integrated bitcoin exchange system in New York, Hong Kong and Singapore to facilitate trading in the digital currency by high-frequency trading firms and other large financial institutions."Right Pedigree" Sooner or later, where there's money to be scalped, front-run, or otherwise manipulated, Wall Street has the "right pedigree" and is sure to want a part of it. Expect bitcoin futures, options, and options on bitcoin futures to follow. Bitcoin LIeBOR anyone? Why not? Wall Street's embrace of bitcoin likely ensures its survival. No one will want to end a party that Wall Street has embraced. Bitcoin is here to stay. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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