China warns Federal Reserve over ‘printing money’
Quote

China warns Federal Reserve over ‘printing money’
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed’s direct purchase of US Treasury bonds.

By Ambrose Evans-Pritchard
Last Updated: 9:40AM BST 26 May 2009

Richard Fisher, president of the Dallas Federal Reserve Bank, said: “Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature.”

“I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States,” he told the Wall Street Journal.

Related Articles
US bonds sale faces market resistance
Enjoy the rally while it lasts – but expect to take a sucker punch
US backing for world currency stuns markets
From now on, think of the US as a bigger Zimbabwe
Greenspan wealth grows by millions
Trillion dollar gamble on future of GulfHis recent trip to the Far East appears to have been a stark reminder that Asia’s “Confucian” culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.

Mr Fisher, the Fed’s leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.

However, he agreed that the Fed was forced to take emergency action after the financial system “literally fell apart”.

Nor, he added was there much risk of inflation taking off yet. The Dallas Fed uses a “trim mean” method based on 180 prices that excludes extreme moves and is widely admired for accuracy.

“You’ve got some mild deflation here,” he said.

The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of “creative destruction”, has been running a fervent campaign to alert Americans to the “very big hole” in unfunded pension and health-care liabilities built up by a careless political class over the years.

“We at the Dallas Fed believe the total is over $99 trillion,” he said in February.

“This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them,” he said.

His warning comes amid growing fears that America could lose its AAA sovereign rating.

cito solo pezzettini di un interessante articolo di John Mauldin:

“Why are Spanish banks not insolvent? Spanish banks are not marking their real estate loans to market. We’ve often wondered how it is that our thesis for Spanish real estate and industrial collapse has not created more victims. The answer is simple according to an article in Expansion, the Spanish equivalent of the Financial Times, from the 19th of April titled ‘Spanish banks control half of all real estate appraisals.’ You can’t make this stuff up. We haven’t even begun to see the worst in Spain yet.”

European banks are in far worse shape than their US counterparts. That is because they utilize far more leverage, on an average about 30 times leverage. How can that be, in what is supposed to be a conservative industry?

“European banks were only restricted on the basis of risk-weighted assets, unlike the US where it is the total leverage ratio that matters, so most European banks bought assets that were rated by Moody’s and S&P, who couldn’t rate their way out of a paper bag, and for anything that wasn’t highly rated, they bought credit default swaps or guarantees from AIG and MBIA. Because of that European banks were able to lever up a lot more than their US counterparties. Given the much higher leverage levels and general worsening of collateral values, we think that all the shoes in Europe have not dropped.”

Where is the money for the bailouts going to come from? Germany? That will be a tough sell politically in a country that is in a much worse recession than the US. How do you tell your citizens you need to bail out banks in other countries with their tax dollars? Italian and Austrian banks are going to need a lot of capital, more than their governments can pay. It is going to be a very tough problem.

Governments around the world are responding to the global recession by running massive deficits. In addition to the US, the UK, Japan, Russia, Spain, and Ireland are all running deficits of over 10%.

And, as in the case of the US, these are not going to be one-time deficits. The IMF predicts that England will shrink again next year and the recovery in the US will be modest at best. The US economy is expected to grow by 0.2% (far from the optimistic projections of various US government agencies), the 16-nation eurozone will eke out a modest gain of 0.1%, and the Group of Seven (G7) leading industrial economies will, as a whole, only grow by 0.2 percent. They project that Japan’s economy will stagnate next year.

http://www.safehaven.com/article-13407.htm

IMMOBILIARE USA: PREZZI ANCORA IN CALO, -18.70% ME COJONI, è MENO MALE CHE I DATI SONO IN RALLENTAMENTO ! BUFFONI

BANCHE UE: SERVE MAGGIORE RICAPITALIZZAZIONE RISPETTO A QUELLE USA ! è x forza siamo noi europei che abbiamo acquistato la monnezza made america ! la cosa comicaè : almunia dice quello sopra . invece trichet non dice nulla ! meditate gente meditate !

1 – hai visto il video TRENDS?
buttaci un occhio.
Correlazione forte Dollar Index/T bonds e CRB/Equity.

Tutto ciò che conseguenze può avere sull’SP500?