An observation from Asia (copied)
Hi from Bali,
Yesterday afternoon here in Bandung, Java (on business trip outside Bali right now) I happened to walk by a television monitor tuned to CNBC Asia as Ben Bernanke was giving his "threat" speach to China from Europe. Suddenly the speach was cut off, Ben was silenced, and the announcer gave a new flash..."China to raise its reserve requirements...". This clearly "more important" news was described in detail for a few minutes and then we were returned to the usual dull faced Bernanke rambling on. Now to me this was a very important anecdotal moment in economic history.
The central banker of the richest nation on earth was clearly and undeniably upstaged on global television by a news service report of an action taken by another nation's central bank. First it clearly establishes, at least in my mind, who is shaping the economic future of the world and who is not. Secondly, I cannot doubt that the chinese did this intentionally to basically tell the fed chief, "who really gives a da++ what you have to say?" (face is everything to the chinese and Ben got faced yesterday by the chinese); and perhaps most importantly of all a US owned major financial reporting service made a logical decision to cutoff the most important voice in american finance in mid threat, thus making his statement even less relative to global viewers, and establishing that any action by the chinese means more to their global viewers.
Later in the evening, as US residents began to awaken, CNBC made no mention of what had ocurred and tried to hype equally the two events. But for the rest of the world the messages were sent loud and clear. What china says and does will effect your future, what America does will effect mainly Americans for now and their asleep at the moment anyway(speach was delivered around 4am new york time as I recall). An anecdotal event? Perhaps. Nothing at all? Possible. But for precious metals investors who view their investment as the anti-USD trade a likely telling indicator of the future. A currency value is 90% confidence and such events as unfolded yesterday DO NOT breed confidence. As I have been saying here for years do not judge the USD's relative value against the traditional guages such as the eur and the jpy or you are merely comparing the patients in intensive care to each other to see who might die first. Judge this sick patient against the currency of healthy growing economies and you will see that the decline has very very far to go.
Change in history grinds on slowly and imperceptibly for most of us. We often awake one day to find the world a different place, wondering what happened. Yesterday as I watched this I thought about the days when every word that escaped the fed chiefs mouth was studied incessantly. I remembered when the very thickness of his briefcase was studied as an indicator of how this veritable "God" of global finance would act. How far we have fallen to become the second feature in a B movie double bill. How fortunate and how damned we are to live in this time of momentous change... Best to all, Balibob
Sentiment : STRONG BUY
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