The term “China Syndrome” was an idea associated with a nuclear plant meltdown where the reactor core burns not only through the reactor containment vessel, but also all the way to China.
The movie of that name was inspired by a real-life incident involving a near-meltdown at the Three Mile Island nuclear power plant in Pennsylvania.
Although the Chinese economy seems to be bottoming out, systemic risk is getting near contagion levels.
Do you remember when Xi suddenly went to San Fransisco to meet CEOs of US tech companies a few years ago, which was followed by the collapse of the Chinese economy.
This week he's been meeting them again, desperate to get capital flowing into China.
China will further enhance capital account opening, FX official says [Reuters]
Xi Jinping to China’s central bank: restart treasury-bond trade, after 2-decade hiatus [South China Morning Post]
He'd be better off restructuring all the insolvent property developers and the banks that lent to them. Luckily those banks are all owned by the state so it's just another (huge) accounting entry.
China Vanke Profit Tumbles 46%, Vows to Cut Debt By $14 Billion [Bloomberg]
The most troubled developers could face a second round of restructuring [Bloomberg]
The offshore Yuan was on the move lower again this week and it's prompted talk of a devaluation. A lower international Yuan may make China more competitive but a market induced devaluation is a very different thing.
USD / CNH Offshore Yuan Daily
The price of gold in China is markedly higher than elsewhere and has helped fuel a breakout in a commodity that normally likes a lower USD, which isn't the case now.
Gold price in China reaches record highs v[Mining Technology]
Gold / USD Daily
Post PCE data yesterday, which appeared benign but wasn't really, Powell walked back some of the rate cut rhetoric but rate cuts are not about the economy, they're about record US debt and the cost to carry it.
US core inflation picks up in early 2024[LiveWire]
Fed’s Powell Ready to Support Job Market, Even If It Means Lingering Inflation [Bloomberg]
Does that mean they are not fudging the numbers any more ?
US facing Liz Truss-style market shock as debt soars, warns watchdog [FT]
US GDP Q4 2023
US PCE February 2024
Global populations are shrinking fast. Japan started decades ago. Now China. Next Europe.
Meanwhile the United States is importing more people than ever in it's history.
As usual it's all too late. Record debt needs productivity, many more workers and a rapidly growing economy to inflate the debt away.
South Korea firm to pay workers $75,000 bonus per baby to fix falling birth rate [CNBC]
The recent DoJ assault on Apple is reminiscent of the antitrust ruling against Microsoft which was at the top of the dot.com bubble.
Justice Department Sues Apple for Monopolizing Smartphone Markets [Dept of Justice]
The antitrust ruling against Microsoft was the top of the dot-com boom. History could repeat itself with Google [Business Insider]
Apple, Google, Meta targeted in EU's first Digital Markets Act probes [Reuters]
French inflation falls faster than forecast [FT]
Germany Unemployment March 2024
SWIFT planning launch of new central bank digital currency platform in 12-24 months [Reuters]
On The Brink Of A Dramatic Change: The Digitalization Of Money [Zerohedge]
Westpac Consumer Sentiment March 2024
Australia CPI Indicator YoY February 2024
Friday's Nonfarm payrolls will prove a test of the FED. Have they engineered a weak number to give them the excuse to cut rates? Sceptics should look at the (almost) 2 years of revisions to these numbers before discounting the theory.