Thoughts on Markets

Monday, June 21, 2010

China Allows Renminbi to float almost - BYD Company - Fortuna Silver

Gold and silver are performing quite well. It is difficult to tell if the boyz are active or not. Both are up from the week before last.































The big news over the week end from The Daily Pfennig:

"Well things heated up in the currencies this weekend... Yes, while everyone was wiping the milk from their mouths from their cereal they ate for breakfast on Saturday morning, the Chinese made a BIG announcement... Rather than tell you in my own words... Here is the official statement from the People's Bank of China (PBOC)...

"In view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the People's Bank of China has decided to proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility." (they say RMB for renminbi)

So... After many months of having the renminbi pegged to the dollar, although it was not an official peg, it was a de-facto hedge, the PBOC will resume the ascent of the renminbi VS the dollar that took place for 3 years after the "official peg" was dropped in July of 2005... But, the financial meltdown of August 2008, put a governor on the renminbi that has now been removed, per the statement from the PBOC.

The PBOC also said that the "new currency regime" would be to value the renminbi VS a basket of currencies (that's how they did it 2005-2008), but this time they mentioned that they would allow the markets some say in the movement of the currency. Now... Please pay attention to what I'm about to say... There are a lot of people that believe that this will mean a HUGE ONE-WAY Street for renminbi VS the dollar... I'm not one of those! While I think at the moment renminbi should move higher VS the dollar, there's not "guarantee" that it will always move higher VS the dollar! The renminbi is now "Flexible"!

So... How did the Asian and European markets react to the news when they opened overnight and this morning? Well... They like it! Especially the Aussie & New Zealand dollars..."

This is not nearly as exciting as the markets seem to think. Remember, the Chinese are in comparatively good economic condition and will change only when it suits them and serves their purposes. One of the big reasons they are doing well and will continue to do so is that they have a virtually totalitarian country and can react more quickly than we can. Also, theirs is more of a capitalistic economy than is ours. Ours is moving rapidly toward communism as God continues to send the prophet of the financial crisis upon us to remind us to turn back to Him. Else, He will destroy what is left of America.

From LewRockwell.com

Ron Paul in conversation with Lew Rockwell

You can hear it HERE

From  isopress.metapress.com:


Therapeutic Opportunities for Caffeine in Alzheimer's Disease and Other Neurodegenerative Disorders

This may be worth a read and study. I have no insight on it at all. Check it out HERE.


The following two graphs are interesting for us. I particularly like the rebounding action of FVITF.

 

































Miners from Scottrade.com:




Currencies from Kitco.com:








Some Prices: BYDDF 8.10; FVITF 2.26; TBT 39.47; TLT 96.62: GDXJ 30.304; Gold off 0.60 to 1255.90; Silver off 0.10 to 19.27; DOW up 116.31 to 10566.8.

Best to each, Doug

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