Originally Posted by
Mesabah
Central bank intervention has made timing the market Russian roulette, I refuse to play that game. I think on China though, it's about keeping up the velocity of money, full employment seems to be the cover story. Plus, every number that comes out of China is a fabrication, I don't think anyone knows for sure where they stand. However, empty cities everywhere says gigantic bubble economy to me. Furthermore, the cities firing on all cylinders have huge populations living in the sewers. That's the catch 22, because those people can't get out of those sewers, and into those empty cities, until the yuan appreciates. That will end in tears, it always does.
I totally disagree with the notion of the dollar collapsing on China dumping our debt, they don't own enough of it. A currency collapse is a government scam, not a monetary phenomenon as so many try and claim. -My opinion of course.
A friend of mine works for Morgan Stanley and I asked him over the weekend if he thought the VIX (volitility index) would spike up the next few weeks as we enter earnings season. His response was "I have no idea, the markets are 100% rigged."
I would agree after what I've seen the past year. And to your first point, Central Banks are pulling the strings, in my opinion.
I wouldn't worry about China selling their US Dollar portfolio, though. The Yuan is pegged to the dollar and they want it that way. Even US regulators want them to free float their currency. They LOVE the stability that the dollar offers their currency and they don't want to float on the merits and value of the Yuan and the underlying Chinese economy. By virtue of that fact, they have to maintain an inventory of US Debt/Dollars. That is why they own so much of our debt. I don't think it's a threat to our economy.
As far as the reliability of China's numbers....I laugh when the markets move based on Chinese economic data...unless it's because they actually change their interest rate or something significant. Their integrity is questionable at best.
Just my thoughts, I responded to your post because Scambo used the word "tomfoolery" and I don't respond to people who say tomfoolery.