Inflation is running at a reported 5.1% in China, a figure most believe is on the low side. Nonetheless, China has been loath to hike rates out of fear of more "hot money" flowing in. Something had to give, and it did. The markets forced China's hand.
Please consider China Increases Rates to Counter Highest Inflation in Two Years
China raised interest rates for the second time since mid-October to counter the fastest inflation in more than two years and more moves may follow.
The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent, effective today, the People’s Bank of China said in a one-sentence statement on its website late yesterday.
Premier Wen Jiabao is seeking to slow gains in property values and consumer prices that are making it harder for families to buy homes and pay for food. Bank lending and a wider-than-forecast November trade surplus have pumped more cash into an economy already awash with money.
China is tightening after a record expansion of credit to counter the effects of the world financial crisis. The broadest measure of money supply, M2, has surged by 55 percent over the past two years and outstanding yuan-denominated loans have climbed 60 percent to 47.4 trillion.
Residence-related costs, including charges for water, electricity and rent, jumped 5.8 percent last month from a year earlier, the most in more than two years, and consumer goods prices rose 5.9 percent, the biggest gain since August 2008, according to statistics bureau data.
Policy makers are concerned that raising interest rates could “encourage hot money inflows,” Paul Cavey, a Hong Kong- based economist at Macquarie Securities Ltd. said. “Raising interest rates has far more implications” than ordering lenders to set aside more of their deposits as reserves, as it may affect the ability of local governments and companies to pay their debts.
State Council researcher Ba Shusong told state television yesterday that the government will step up regulation of capital inflows, without specifying measures that will be taken.
The Ministry of Commerce is stepping up supervision of foreign investment in real estate to crack down on speculation after a 48 percent jump in overseas fund inflows to the industry in the first 11 months of the year, spokesman Yao Jian said on Dec. 15. Policy makers may also allow faster gains in the yuan to help curb inflation from higher prices of imported commodities, according to analysts’ forecasts.
China Overheating
China was number 5 on my list of Ten Economic and Investment Themes for 2011
5. China Overheats, Multiple Rate Hikes Coming
China, everyone's favorite promised land, has a hard landing. China will grow at perhaps 5-6% but that is nowhere near as much as China wants, or the world expects. Tightening in China will crack its property bubble and more importantly pressure commodities. The longer China holds off in tightening, the harder the landing.
Capital Controls Coming
Initially, rate hikes will encourage more "hot money" inflows into China. In hopes of preventing those inflows, China has announced more capital controls. It will be interesting to see precisely what those controls will look like.
Currency Sterilization Needed
One thing China should do is sterilize speculative hot money and balance of trade inflows via domestic government bond issuance, hoping to curb money supply growth.
However, it is not as simple as that, because in a fractional-reserve credit system, a net increase in lending itself increases money supply.
Clearly the Chinese central bank is behind the curve. Will China simply restrict lending? Would it even work?
I do not know about the former, but the latter would eventually force a hard landing if China gets serious enough. Actually, there are so many problems that I think a hard landing is coming regardless, and the longer China dallies, the harder it will be.
In the meantime, these paltry rate hikes by China of .25 points each pale in comparison to increases in reported consumer price increases.
Enormous Property Bubbles Including Vacant Cities
It is not "consumer price inflation" that is the big problem. Asset inflation, especially property speculation is rampant.
In case you missed it please consider The ghost towns of China: Amazing satellite images show cities meant to be home to millions lying deserted
Speculation will continue until China gets serious or until the pool of greater fools buying property at absurd prices dries up.
China’s Army of Graduates Struggles for Jobs
Exacerbating China's myriad of problems, an Army of Graduates Struggles for Jobs
In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.
It is a remarkable achievement, yet for a government fixated on stability such figures are also a cause for concern. The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.
“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability.”
In a kind of cruel reversal, China’s old migrant class — uneducated villagers who flocked to factory towns to make goods for export — are now in high demand, with spot labor shortages and tighter government oversight driving up blue-collar wages.
But the supply of those trained in accounting, finance and computer programming now seems limitless, and their value has plunged. Between 2003 and 2009, the average starting salary for migrant laborers grew by nearly 80 percent; during the same period, starting pay for college graduates stayed the same, although their wages actually decreased if inflation is taken into account.
Chinese sociologists have come up with a new term for educated young people who move in search of work like Ms. Liu: the ant tribe. It is a reference to their immense numbers — at least 100,000 in Beijing alone — and to the fact that they often settle into crowded neighborhoods, toiling for wages that would give even low-paid factory workers pause.
“Like ants, they gather in colonies, sometimes underground in basements, and work long and hard,” said Zhou Xiaozheng, a sociology professor at Renmin University in Beijing.
Odds for social unrest will mount if China's growth slows. Yet, because of short-term overheating concerns on top of long-term peak oil issues there is no way China can keep growing at the current pace.
Eight Problems Facing China
- Hot money inflows
- Huge property bubble
- Massive increases in money supply, much of it property speculation and building of unneeded capacity
- Currency manipulation charges from the US and potential trade wars
- Unsterilized trade imbalances fuel inflation
- Slowing Europe
- Dearth of Jobs for new graduates
- Potential social unrest
Case For Hard Landing
Risks are enormously skewed to the downside, so much so that the odds China avoids a hard landing are not good. China is far more exposed to a slowdown in Europe than the US and the popping of China's property bubble will extract a huge toll.
Those plowing into commodities, foreign currencies, and equities (especially foreign equities), fail to consider those risks.
Moreover, given that much of China's growth is overheating and malinvestment, it is not even clear the Renminbi is undervalued.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
According to the affidavit, the investigation included the co-operation of authorities in Canada, France and Germany.
As for code, the LOIC DDoS software believed to be used by Operation Anonymous remain available on the social code site Github and on SourceForge. Thousands of people have downloaded it from those sites. The software allegedly makes it easy for a user to donate their computer's bandwidth to repeatedly messaging a target server until it is rendered inaccessible by other users.
The ephemeral group Anonymous, or Operation Payback, co-ordinated a series of such attacks earlier this month against Paypal, Mastercard, Visa and others. These global leaders in money transfer were criticized for preventing their customers from donating money to the controversial website Wikileaks, despite the site having been convicted of no crimes.
Clearly a sufficient number of people in the FBI believe the denial of service attacks may constitute felony-level damage to computer systems, but others have argued that the campaign falls broadly within the tradition of non-violent civil disobedience and political protest.
FBI Agent Allyn Lynd, whom The Smoking Gun reports signed the affidavit, has been in the technology news media before. He lead a 2009 raid on at least two Texas web hosts over an alleged federal crime concerning unpaid bills to AT&T and Verizon. Those raids disrupted a number of co-located but unrelated businesses, including some that allege the disruption cost them millions of dollars.
In this latest affidavit, Lynd argued again that he may need to disrupt some other servers temporarily in order to achieve his goal of determining which servers were relevant to his investigation. Due to the document's incomplete publication, whether any sense of irony was appreciated is unclear.
No information has been made available to date regarding any FBI or other law enforcement investigation of the denial of service and other technical attacks made against the Wikileaks website.
robert shumake
Social <b>News</b> Site Reddit Reports 200%+ Growth in 2010
Social news site Reddit posted year-end numbers this afternoon including January and December page view stats that climbed from 250 million pageviews to more than 3X that number, ...
<b>News</b> Corp. Online Gaming Head Sean Ryan to Head Facebook's Social <b>...</b>
Sean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
Now Tucker Carlson Says Michael Vick Should Not Be Executed - AOL <b>News</b>
Fox News Host Tucker Carlson says that he. ... NEWS PHOTO GALLERIES. From The Wires � Top News Photos � Celestial Delights � Solar Eclipses � The Bright Side � Good News Now � Extreme Elements � Weather Photos � Their Intelligence ...
robert shumake
Social <b>News</b> Site Reddit Reports 200%+ Growth in 2010
Social news site Reddit posted year-end numbers this afternoon including January and December page view stats that climbed from 250 million pageviews to more than 3X that number, ...
<b>News</b> Corp. Online Gaming Head Sean Ryan to Head Facebook's Social <b>...</b>
Sean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
Now Tucker Carlson Says Michael Vick Should Not Be Executed - AOL <b>News</b>
Fox News Host Tucker Carlson says that he. ... NEWS PHOTO GALLERIES. From The Wires � Top News Photos � Celestial Delights � Solar Eclipses � The Bright Side � Good News Now � Extreme Elements � Weather Photos � Their Intelligence ...
robert shumake
Inflation is running at a reported 5.1% in China, a figure most believe is on the low side. Nonetheless, China has been loath to hike rates out of fear of more "hot money" flowing in. Something had to give, and it did. The markets forced China's hand.
Please consider China Increases Rates to Counter Highest Inflation in Two Years
China raised interest rates for the second time since mid-October to counter the fastest inflation in more than two years and more moves may follow.
The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent, effective today, the People’s Bank of China said in a one-sentence statement on its website late yesterday.
Premier Wen Jiabao is seeking to slow gains in property values and consumer prices that are making it harder for families to buy homes and pay for food. Bank lending and a wider-than-forecast November trade surplus have pumped more cash into an economy already awash with money.
China is tightening after a record expansion of credit to counter the effects of the world financial crisis. The broadest measure of money supply, M2, has surged by 55 percent over the past two years and outstanding yuan-denominated loans have climbed 60 percent to 47.4 trillion.
Residence-related costs, including charges for water, electricity and rent, jumped 5.8 percent last month from a year earlier, the most in more than two years, and consumer goods prices rose 5.9 percent, the biggest gain since August 2008, according to statistics bureau data.
Policy makers are concerned that raising interest rates could “encourage hot money inflows,” Paul Cavey, a Hong Kong- based economist at Macquarie Securities Ltd. said. “Raising interest rates has far more implications” than ordering lenders to set aside more of their deposits as reserves, as it may affect the ability of local governments and companies to pay their debts.
State Council researcher Ba Shusong told state television yesterday that the government will step up regulation of capital inflows, without specifying measures that will be taken.
The Ministry of Commerce is stepping up supervision of foreign investment in real estate to crack down on speculation after a 48 percent jump in overseas fund inflows to the industry in the first 11 months of the year, spokesman Yao Jian said on Dec. 15. Policy makers may also allow faster gains in the yuan to help curb inflation from higher prices of imported commodities, according to analysts’ forecasts.
China Overheating
China was number 5 on my list of Ten Economic and Investment Themes for 2011
5. China Overheats, Multiple Rate Hikes Coming
China, everyone's favorite promised land, has a hard landing. China will grow at perhaps 5-6% but that is nowhere near as much as China wants, or the world expects. Tightening in China will crack its property bubble and more importantly pressure commodities. The longer China holds off in tightening, the harder the landing.
Capital Controls Coming
Initially, rate hikes will encourage more "hot money" inflows into China. In hopes of preventing those inflows, China has announced more capital controls. It will be interesting to see precisely what those controls will look like.
Currency Sterilization Needed
One thing China should do is sterilize speculative hot money and balance of trade inflows via domestic government bond issuance, hoping to curb money supply growth.
However, it is not as simple as that, because in a fractional-reserve credit system, a net increase in lending itself increases money supply.
Clearly the Chinese central bank is behind the curve. Will China simply restrict lending? Would it even work?
I do not know about the former, but the latter would eventually force a hard landing if China gets serious enough. Actually, there are so many problems that I think a hard landing is coming regardless, and the longer China dallies, the harder it will be.
In the meantime, these paltry rate hikes by China of .25 points each pale in comparison to increases in reported consumer price increases.
Enormous Property Bubbles Including Vacant Cities
It is not "consumer price inflation" that is the big problem. Asset inflation, especially property speculation is rampant.
In case you missed it please consider The ghost towns of China: Amazing satellite images show cities meant to be home to millions lying deserted
Speculation will continue until China gets serious or until the pool of greater fools buying property at absurd prices dries up.
China’s Army of Graduates Struggles for Jobs
Exacerbating China's myriad of problems, an Army of Graduates Struggles for Jobs
In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.
It is a remarkable achievement, yet for a government fixated on stability such figures are also a cause for concern. The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.
“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability.”
In a kind of cruel reversal, China’s old migrant class — uneducated villagers who flocked to factory towns to make goods for export — are now in high demand, with spot labor shortages and tighter government oversight driving up blue-collar wages.
But the supply of those trained in accounting, finance and computer programming now seems limitless, and their value has plunged. Between 2003 and 2009, the average starting salary for migrant laborers grew by nearly 80 percent; during the same period, starting pay for college graduates stayed the same, although their wages actually decreased if inflation is taken into account.
Chinese sociologists have come up with a new term for educated young people who move in search of work like Ms. Liu: the ant tribe. It is a reference to their immense numbers — at least 100,000 in Beijing alone — and to the fact that they often settle into crowded neighborhoods, toiling for wages that would give even low-paid factory workers pause.
“Like ants, they gather in colonies, sometimes underground in basements, and work long and hard,” said Zhou Xiaozheng, a sociology professor at Renmin University in Beijing.
Odds for social unrest will mount if China's growth slows. Yet, because of short-term overheating concerns on top of long-term peak oil issues there is no way China can keep growing at the current pace.
Eight Problems Facing China
- Hot money inflows
- Huge property bubble
- Massive increases in money supply, much of it property speculation and building of unneeded capacity
- Currency manipulation charges from the US and potential trade wars
- Unsterilized trade imbalances fuel inflation
- Slowing Europe
- Dearth of Jobs for new graduates
- Potential social unrest
Case For Hard Landing
Risks are enormously skewed to the downside, so much so that the odds China avoids a hard landing are not good. China is far more exposed to a slowdown in Europe than the US and the popping of China's property bubble will extract a huge toll.
Those plowing into commodities, foreign currencies, and equities (especially foreign equities), fail to consider those risks.
Moreover, given that much of China's growth is overheating and malinvestment, it is not even clear the Renminbi is undervalued.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
According to the affidavit, the investigation included the co-operation of authorities in Canada, France and Germany.
As for code, the LOIC DDoS software believed to be used by Operation Anonymous remain available on the social code site Github and on SourceForge. Thousands of people have downloaded it from those sites. The software allegedly makes it easy for a user to donate their computer's bandwidth to repeatedly messaging a target server until it is rendered inaccessible by other users.
The ephemeral group Anonymous, or Operation Payback, co-ordinated a series of such attacks earlier this month against Paypal, Mastercard, Visa and others. These global leaders in money transfer were criticized for preventing their customers from donating money to the controversial website Wikileaks, despite the site having been convicted of no crimes.
Clearly a sufficient number of people in the FBI believe the denial of service attacks may constitute felony-level damage to computer systems, but others have argued that the campaign falls broadly within the tradition of non-violent civil disobedience and political protest.
FBI Agent Allyn Lynd, whom The Smoking Gun reports signed the affidavit, has been in the technology news media before. He lead a 2009 raid on at least two Texas web hosts over an alleged federal crime concerning unpaid bills to AT&T and Verizon. Those raids disrupted a number of co-located but unrelated businesses, including some that allege the disruption cost them millions of dollars.
In this latest affidavit, Lynd argued again that he may need to disrupt some other servers temporarily in order to achieve his goal of determining which servers were relevant to his investigation. Due to the document's incomplete publication, whether any sense of irony was appreciated is unclear.
No information has been made available to date regarding any FBI or other law enforcement investigation of the denial of service and other technical attacks made against the Wikileaks website.
robert shumake detroit
robert shumake
Social <b>News</b> Site Reddit Reports 200%+ Growth in 2010
Social news site Reddit posted year-end numbers this afternoon including January and December page view stats that climbed from 250 million pageviews to more than 3X that number, ...
<b>News</b> Corp. Online Gaming Head Sean Ryan to Head Facebook's Social <b>...</b>
Sean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
Now Tucker Carlson Says Michael Vick Should Not Be Executed - AOL <b>News</b>
Fox News Host Tucker Carlson says that he. ... NEWS PHOTO GALLERIES. From The Wires � Top News Photos � Celestial Delights � Solar Eclipses � The Bright Side � Good News Now � Extreme Elements � Weather Photos � Their Intelligence ...
robert shumake
Social <b>News</b> Site Reddit Reports 200%+ Growth in 2010
Social news site Reddit posted year-end numbers this afternoon including January and December page view stats that climbed from 250 million pageviews to more than 3X that number, ...
<b>News</b> Corp. Online Gaming Head Sean Ryan to Head Facebook's Social <b>...</b>
Sean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
Now Tucker Carlson Says Michael Vick Should Not Be Executed - AOL <b>News</b>
Fox News Host Tucker Carlson says that he. ... NEWS PHOTO GALLERIES. From The Wires � Top News Photos � Celestial Delights � Solar Eclipses � The Bright Side � Good News Now � Extreme Elements � Weather Photos � Their Intelligence ...
robert shumake detroit
Making money with a blog can be easier than you think. People can make hundreds, thousands, or even tens of thousands of dollars a year with a good blog. Here are some tips for maintaining one.
First, you have to get a web host. While this is fairly obvious, it's important to note that most of the free blogging sites won't be very conducive to advertising. It's best to buy your own domain name and build your website from there. However, this is very inexpensive, especially for a blog because it doesn't require much server space. Figure around 10 dollars a month. If you have a good blog, the profit will obviously be exponentially enormous.
Figure out how to code HTML. Most of the time, blogging software will cost you money, which will inevitably decrease your profit. HTML is easier than one would think. The best thing you can do is at least give it a shot. There are plenty of manuals on HTML that you can find for free online.
Figure out a good topic. Find something that fits three criteria. First, make sure it's something you're passionate about. This will making writing for it less tedious, and because it's less tedious, you will want to do it more, thus garnering more readers. Second, find something that people want to read. If you're passionate about dissecting small animals, it's going to be hard to build a large subscriber base. Next, and perhaps most importantly if money is your goal, find something that's conducive to advertising. You want something that companies will relate to and want to post their ads for on your blog. The more relevant your ads are, the more clicks you get, and thus, the more money you get.
Once you start posting, keep posting. Even if you have a base of subscribers, blogs can and will die of old age. Nobody wants to constantly visit a blog that takes forever to update. Try to keep your blog updated every day, so subscribers know they have something interesting to look forward to after work. Even better, make multiple posts a day. While it sounds like this could get monotonous, don't worry about it. If you keep the content coming, you'll keep the readers coming. More interesting material means more for people to read, and thus the larger chance that one reader will link his or her friend to your blog.
Connect with your readers. Leave a space open for readers to comment, and when they comment, comment back. Forums are so popular because you have the chance to talk to people and have conversations. Make your comment area seem like a forum. Actively participate in it as much as you write the articles. If readers can talk to you about your writing, they'll keep coming back to respond.
Making money with a blog is a very good idea for those who either want an extra income, or, if they really get a good blog, want one source of valuable income that they can get without leaving their computer chairs.
robert shumake
Social <b>News</b> Site Reddit Reports 200%+ Growth in 2010
Social news site Reddit posted year-end numbers this afternoon including January and December page view stats that climbed from 250 million pageviews to more than 3X that number, ...
<b>News</b> Corp. Online Gaming Head Sean Ryan to Head Facebook's Social <b>...</b>
Sean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
Now Tucker Carlson Says Michael Vick Should Not Be Executed - AOL <b>News</b>
Fox News Host Tucker Carlson says that he. ... NEWS PHOTO GALLERIES. From The Wires � Top News Photos � Celestial Delights � Solar Eclipses � The Bright Side � Good News Now � Extreme Elements � Weather Photos � Their Intelligence ...
robert shumake
robert shumake
Inflation is running at a reported 5.1% in China, a figure most believe is on the low side. Nonetheless, China has been loath to hike rates out of fear of more "hot money" flowing in. Something had to give, and it did. The markets forced China's hand.
Please consider China Increases Rates to Counter Highest Inflation in Two Years
China raised interest rates for the second time since mid-October to counter the fastest inflation in more than two years and more moves may follow.
The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent, effective today, the People’s Bank of China said in a one-sentence statement on its website late yesterday.
Premier Wen Jiabao is seeking to slow gains in property values and consumer prices that are making it harder for families to buy homes and pay for food. Bank lending and a wider-than-forecast November trade surplus have pumped more cash into an economy already awash with money.
China is tightening after a record expansion of credit to counter the effects of the world financial crisis. The broadest measure of money supply, M2, has surged by 55 percent over the past two years and outstanding yuan-denominated loans have climbed 60 percent to 47.4 trillion.
Residence-related costs, including charges for water, electricity and rent, jumped 5.8 percent last month from a year earlier, the most in more than two years, and consumer goods prices rose 5.9 percent, the biggest gain since August 2008, according to statistics bureau data.
Policy makers are concerned that raising interest rates could “encourage hot money inflows,” Paul Cavey, a Hong Kong- based economist at Macquarie Securities Ltd. said. “Raising interest rates has far more implications” than ordering lenders to set aside more of their deposits as reserves, as it may affect the ability of local governments and companies to pay their debts.
State Council researcher Ba Shusong told state television yesterday that the government will step up regulation of capital inflows, without specifying measures that will be taken.
The Ministry of Commerce is stepping up supervision of foreign investment in real estate to crack down on speculation after a 48 percent jump in overseas fund inflows to the industry in the first 11 months of the year, spokesman Yao Jian said on Dec. 15. Policy makers may also allow faster gains in the yuan to help curb inflation from higher prices of imported commodities, according to analysts’ forecasts.
China Overheating
China was number 5 on my list of Ten Economic and Investment Themes for 2011
5. China Overheats, Multiple Rate Hikes Coming
China, everyone's favorite promised land, has a hard landing. China will grow at perhaps 5-6% but that is nowhere near as much as China wants, or the world expects. Tightening in China will crack its property bubble and more importantly pressure commodities. The longer China holds off in tightening, the harder the landing.
Capital Controls Coming
Initially, rate hikes will encourage more "hot money" inflows into China. In hopes of preventing those inflows, China has announced more capital controls. It will be interesting to see precisely what those controls will look like.
Currency Sterilization Needed
One thing China should do is sterilize speculative hot money and balance of trade inflows via domestic government bond issuance, hoping to curb money supply growth.
However, it is not as simple as that, because in a fractional-reserve credit system, a net increase in lending itself increases money supply.
Clearly the Chinese central bank is behind the curve. Will China simply restrict lending? Would it even work?
I do not know about the former, but the latter would eventually force a hard landing if China gets serious enough. Actually, there are so many problems that I think a hard landing is coming regardless, and the longer China dallies, the harder it will be.
In the meantime, these paltry rate hikes by China of .25 points each pale in comparison to increases in reported consumer price increases.
Enormous Property Bubbles Including Vacant Cities
It is not "consumer price inflation" that is the big problem. Asset inflation, especially property speculation is rampant.
In case you missed it please consider The ghost towns of China: Amazing satellite images show cities meant to be home to millions lying deserted
Speculation will continue until China gets serious or until the pool of greater fools buying property at absurd prices dries up.
China’s Army of Graduates Struggles for Jobs
Exacerbating China's myriad of problems, an Army of Graduates Struggles for Jobs
In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced 830,000 graduates a year. Last May, that number was more than six million and rising.
It is a remarkable achievement, yet for a government fixated on stability such figures are also a cause for concern. The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.
“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability.”
In a kind of cruel reversal, China’s old migrant class — uneducated villagers who flocked to factory towns to make goods for export — are now in high demand, with spot labor shortages and tighter government oversight driving up blue-collar wages.
But the supply of those trained in accounting, finance and computer programming now seems limitless, and their value has plunged. Between 2003 and 2009, the average starting salary for migrant laborers grew by nearly 80 percent; during the same period, starting pay for college graduates stayed the same, although their wages actually decreased if inflation is taken into account.
Chinese sociologists have come up with a new term for educated young people who move in search of work like Ms. Liu: the ant tribe. It is a reference to their immense numbers — at least 100,000 in Beijing alone — and to the fact that they often settle into crowded neighborhoods, toiling for wages that would give even low-paid factory workers pause.
“Like ants, they gather in colonies, sometimes underground in basements, and work long and hard,” said Zhou Xiaozheng, a sociology professor at Renmin University in Beijing.
Odds for social unrest will mount if China's growth slows. Yet, because of short-term overheating concerns on top of long-term peak oil issues there is no way China can keep growing at the current pace.
Eight Problems Facing China
- Hot money inflows
- Huge property bubble
- Massive increases in money supply, much of it property speculation and building of unneeded capacity
- Currency manipulation charges from the US and potential trade wars
- Unsterilized trade imbalances fuel inflation
- Slowing Europe
- Dearth of Jobs for new graduates
- Potential social unrest
Case For Hard Landing
Risks are enormously skewed to the downside, so much so that the odds China avoids a hard landing are not good. China is far more exposed to a slowdown in Europe than the US and the popping of China's property bubble will extract a huge toll.
Those plowing into commodities, foreign currencies, and equities (especially foreign equities), fail to consider those risks.
Moreover, given that much of China's growth is overheating and malinvestment, it is not even clear the Renminbi is undervalued.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
According to the affidavit, the investigation included the co-operation of authorities in Canada, France and Germany.
As for code, the LOIC DDoS software believed to be used by Operation Anonymous remain available on the social code site Github and on SourceForge. Thousands of people have downloaded it from those sites. The software allegedly makes it easy for a user to donate their computer's bandwidth to repeatedly messaging a target server until it is rendered inaccessible by other users.
The ephemeral group Anonymous, or Operation Payback, co-ordinated a series of such attacks earlier this month against Paypal, Mastercard, Visa and others. These global leaders in money transfer were criticized for preventing their customers from donating money to the controversial website Wikileaks, despite the site having been convicted of no crimes.
Clearly a sufficient number of people in the FBI believe the denial of service attacks may constitute felony-level damage to computer systems, but others have argued that the campaign falls broadly within the tradition of non-violent civil disobedience and political protest.
FBI Agent Allyn Lynd, whom The Smoking Gun reports signed the affidavit, has been in the technology news media before. He lead a 2009 raid on at least two Texas web hosts over an alleged federal crime concerning unpaid bills to AT&T and Verizon. Those raids disrupted a number of co-located but unrelated businesses, including some that allege the disruption cost them millions of dollars.
In this latest affidavit, Lynd argued again that he may need to disrupt some other servers temporarily in order to achieve his goal of determining which servers were relevant to his investigation. Due to the document's incomplete publication, whether any sense of irony was appreciated is unclear.
No information has been made available to date regarding any FBI or other law enforcement investigation of the denial of service and other technical attacks made against the Wikileaks website.
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