Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news China's economy is still running too hot as newly minted US cash floods into the world's fastest growing region.
China's annual inflation rate hit 4.4% in October, above economists' forecasts for a 4% rate and up from 3.6% in September. China is seeing an influx of cash from the weaker US economy as investors hunt outside the United States for higher returns.
Meanwhile, China's factory output remained strong. China is having to tighten its lending requirements to try to stop its economy from overheating. China is blaming America for exporting inflation, while America is blaming China for keeping its currency too low. This is at the heart of a heated debate at the G20 summit of world leaders currently happening in Seoul.
Across the Tasman, Australia's unemployment rate rose surprisingly to 5.4% in October from 5% in September, causing some to doubt the likelihood of a December rate hike by the Reserve Bank of Australia. This boosted the New Zealand dollar vs the Australian dollar to 78.3Ac from 77.8Ac.
In Europe, concerns are growing about the Irish sovereign debt situation, where many fear Ireland's government will not be able to pay its bills from the middle of next year. It is expected now to have to ask for a bailout from its partners in Europe. Irish government bond yields blew out to record highs as investors worried about the government's finances. It is running a government deficit of more than 13% of GDP and has had to repeatedly bail out its banks.
Finally, the G20 meeting has dissolved into disputes between America and China about the global Currency Wars. China is blaming America for printing too much money and not fixing its own problems, while America is blaming China for keeping its currency too low and running up record trade surpluses.
A G20 communique is expected to be released later today, but most expect it to be toothless and fail to resolve the currency impasse.
US President Barack Obama and Chinese Premier Hu Jintao met for more than an hour last night and emerged without agreement.
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12 Comments
Inflation in the US already starting to move?
http://www.cnbc.com/id/40135092
Thing is its the wrong trype of inflation for Bernanke - he wants to inflate asset prices - noteably the housing market, and could not give a damn about the prices ordinary Joes pay for their food etc
Correct. The problem for Bernancke is Main Street and Joe Public and the Consumer will stay missing-in-action until the Fed reflates the "price" of housing back to pre-crisis levels. The collateral damage or road-kill if you will are the poor victims who have been whip-sawed out of their homes, are now broke, and will never be able to get back in. They bought at the top, got kicked out at the bottom, and now watch in horror as the Fed reflates.
Not a hope in hell of a global currency !
You're dreaming , buddy . Well , a nightmare really . Look at Greece , they can't devalue as they deperately need to 'cos they're tied to the Euro . But it suits the Germans nicely !
Want that for the whole world ? ............. Behave !
I don't know how you would arrive at a value for a global currency , and who would regulate it, how would it be traded, who would print it , and most important how would it be backed ? By gold?
Who would own the responsibility for it? The world Bank ?
Recently Robert Mugabe said the World Bank should be "democratized .... like the United Nations " , which means he thinks every tin-pot dictatorship should have a vote in how its run, and how they get funded .
I agree with Gummy Bear Hero, I don't see it ever happening
Hmmm when Chinese buyers are prepared to pay these sorts of prices @ art auctions is it a sign that the country is close to over heating?
http://www.bloomberg.com/news/2010-11-11/asian-buyer-battle-pushes-chin…
Recall the ridiculous art auction prices in the West in the run up to the 2008 crash..........
With regards to Ireland , a Euro sovereign debt default will make Lehman Brothers look like a Sunday School picnic .
It will probably never happen .
And , whats more, the Irish should just allow their badly run banks to collapse , just like any other badly run business faces collapse.
Talking of the Irish problem!... .. http://www.irishtimes.com/newspaper/frontpage/2010/1112/1224283151994.html
"GERMAN CHANCELLOR Angela Merkel is refusing to back down from her push to force private investors to share the burden of the euro debt crisis, which helped send Irish borrowing costs to record levels.
Speaking in Seoul, where she is attending the G20 summit, Dr Merkel acknowledged her demands have upset the markets but insisted it was unfair for taxpayers to be saddled alone with the cost of sovereign rescues. “Let me put it simply: in this regard there may be a contradiction between the interests of the financial world and the interests of the political world,” Dr Merkel said.
Here's a special for Goofy and the pretender:
http://www.dailymail.co.uk/debate/article-1328960/Finding-way-benefits-trap.html?ito=feeds-newsxml
Here's what the world is reading about us:
"The New Zealand dollar is set for its steepest weekly decline in three months on speculation a kiwifruit disease will hurt the country’s exports".
"New Zealand’s currency has fallen 1.2 percent against the U.S. dollar since the world’s third-largest kiwifruit producer said on Nov. 8 a vine disease was discovered in a North Island orchard.
Country’s officials said three kiwifruit orchards have been confirmed with a bacterial vine disease and six sites have been quarantined. A total of 116 orchards have sent in reports of symptoms of the disease and Ministry of Agriculture officials are investigating 80 of these sites, Zespri, the nation’s largest kiwifruit seller, said in an e-mailed statement."
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