It’s still anyone’s guess as to if and when China will allow the Yuan (RMB) to continue appreciating. You can see from the chart below – which shows the trading history for the RMB/USD December 2010 futures contract – that expectations of revaluation have eroded steadily since December 2009. At that time, it was projected that that Yuan would finish 2009 at 6.57 RMB/USD, 4% higher than the current level. Fast forward to the present, and investors now only expect a modest 2% appreciation rise on the year.

What’s behind the change in expectations? The answer is a combination of economics and politics. On the economic side, China’s trade surplus is much smaller than in recent years, as import growth outpaces export growth. “Double-digit annual growth in exports is all but assured in coming months due to a low base of

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This wont stop – all fiat currencies will continue to devalue over time – I had a gentleman ask me a few days ago ‘Yes but why buy gold? It doesnt give you a return?” On the contrary, when measured against USD gold has outperformed every other asset class there is for almost 10 years running. “Competitive Devaluation” will ensure this is a trend that continues. SNB moves to calm Swiss franc appreciation By Peter Garnham The Swiss franc settled back into its recent trading range on Monday after violent price action on Friday that saw it retreat sharply from an 11-month high against the euro on speculation that the Swiss National Bank had intervened in the currency market. But the Swiss franc dropped sharply, pulling back below SFr1.47 against the euro, on talk that the Bank of International Settlements had intervened in the market on ...

The excellent research edifice at the Bank of International Settlements have conjured up one of those papers which needed to be written (by Claudio Borio and Piti Disyatat) on the back of the myriad of different monetary policy responses we have observed in the contex of the economic crisis. The abstract and conclusion look as follows;

(my emphasis throughout)

The recent global financial crisis has led central banks to rely heavily on “unconventional” monetary policies. This alternative approach to policy has generated much discussion and a heated and at times confusing debate. The debate has been complicated by the use of different definitions and conflicting views of the mechanisms at work. This paper sets out a framework for classifying and thinking about such policies, highlighting how they can be viewed within the overall context of monetary policy implementation. The framework clarifies the differences among the various forms of unconventional monetary policy,

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I have a trick question for you, especially if you’re interested in emerging markets: Among the four BRIC countries — Brazil, Russia, India and China — which offers the best stock market performance for American investors? Be careful how you answer, because appearances can be deceiving, especially if you focus strictly on one year. Looking at year-to-date results, for example, it might seem that the answer is Russia. From the close of trading at the end of last year through the closing price this past Friday … FXI, the exchange-traded fund (ETF) tracking China’s blue chips, is up 45.87 percent … PIN, representing India’s major stocks, is up 64.16 percent, and … EWZ, the leading Brazil ETF, is up 104.25 percent. But …...

Fear of depression is sweeping the nation. Millions of Americans are consumed with anxiety, abandoning their old shop-till-they-drop habits, slashing their spending, trying desperately to pinch pennies for the coming hard times. Thousands of bankers are snapping shut their coffers, tightening their lending standards, hunkering down in anticipation of a massive economic downturn. Sophisticated investors also see the handwriting on the wall. They’re pulling out of hedge funds, selling their mutual funds, rushing their money to the safety of Treasury bills. Even the established media, often late to see the dangers, is beginning to speak out more loudly … CNN Money: “The rapid deterioration of labor markets points to a sharp decline in hours worked and output in the fourth quarter. This is likely to lead to a decline ...

Alex’s Notes: Personally, I find it comical that anyone even goes to the DTCC for data anymore. I mean seriously, we are looking to the company responsible to ensure the proper clearing of shares of stock on the US market, who clearly is in cahoots with major brokerages allowing massive naked shorting and letting them get away with it free and clear?

Ya..that makes alot of sense. Fox guarding the henhouse.

The current corruption in the financial centers of the USA is truly despicable.

You want to know how big the credit derivative problem really is? Go research what the Bank of International Settlements (BIS) in Basel Switzerland has to say about it .

Try over $500 TRILLION in notional value.

This beast who lurks in the shadows of the financial world is the boogey man under the bed that no one wants to acknowledge or talk about. But this boogey man is real. And

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As the worst financial crisis in recorded market history rocks Wall Street, millions of investors on Main Street keep asking a single question. When will this end? The market volatility is unprecedented: Where professional traders once ranked a day as “wild” if we witnessed a 300-point swing, in recent months we’ve seen 600- and 700-point swings on a regular basis. On Oct. 9, a Thursday, we rode out a record-setting swing of 1,000 points. That wild backdrop is bad enough. At the same time, however, the major market indices are heading lower – at times with a speed and ferocity never before seen. But the real killer is that there is seemingly nowhere to hide. This is what Wall Street’s Armani Army doesn’t tell you about traditional diversification: It doesn’t work when everything goes down at once. (The one exception is the specialized inverse investment vehicles ...

I once asked my friend – world-famous magician Lance Burton – if he could show me how he did a particular trick. “Can you keep a secret?” he asked. “Of course,” I replied. “So can I,” he said. The point is that the U.S. Federal Reserve, the U.S. Treasury Department and federal regulators are keeping secret the true precariousness of the capital markets credit crisis and the banking system’s close-to-the-precipice predicament. They need to give banks and investment banks room to maneuver their balance sheets by whatever “hocus-pocus accounting” methods they can utilize – without being outright fraudulent.  It’s a matter of putting on a good show to give the banks time to repair their balance sheets and build up capital, however long that takes and with whatever magic can be mustered. No End in Sight Contrary to once-prevalent expectations – including the early prognostications from the ...