Yuan & Dollar
A recent article I recommend you read and think hard about is titled ‘Higher Yuan Wonâ€™t Fix China – U.S. Gap’ – reading time 3 minutes, thinking time longer. The article, published by the Wall Street Journal, discusses a report from the Federal Reserve Bank of Dallas. That report apparently says that after 2005 Chinese “State-owned corporations exited from industries with low profit margins, such as textiles” and now dominate the finance, energy, telecommunications, transportation and real estate industries. The article also refers to China’s “most recent 5 year plan”.
If you read these e-mails regularly, you will recall that they often reference my views as to the different ideologies between emerging and developing economies. Imagine a developed country today with a five year plan. Our governments in the United States and Canada (perhaps the U.S. in these economic times more so) seem to be primarily focused on what is going to happen in the next week, month, or quarter.
This article takes a position that debates and ‘positions taken’ over exchange rates have only “short-term effects on import prices and the current account”, and that “outside pressure to appreciate the yuan could increase China’s resistance to reforming exchange rate policy and finacial markets”.
I suggest you read the article, and concurrently think about the success or lack thereof of President Obama’s attempts to influence the Egypt situation.
Two Currency Areas
A recent article titled ‘A Tale of Two Currency Areas’ – reading time 2 minutes – discusses the U.S. and the EuroZone as “free-trade” areas and suggest America “faces no existential risk for its currency”. As I read this article, the point its author makes is that a person who lives in California and loses their job can simply move to Utah and find one if one is available. A person who lives in France who loses their job can’t simply ‘pick up house’, move to Austria, and find a job there – or at least can’t do it so easily.
The important point I think the article entirely fails to address is that there is one other important ‘root difference’ between America and the EuroZone. Currently at least, the U.S. dollar is the world reserve currency. Accordingly, America is still the biggest bully in the fiat currency ‘school playground’.
I suggest you read the article, think about the ‘world currency differentiation’, and think about the effect it would have on America if its currency was replaced as the ‘world reserve fiat currency’.
I think the link to the article ‘Check Out This Awesome Phone Concept From China’ video – viewing and listening time 3.5 minutes – leads one to a great deal of very interesting information on China. The following PowerPoint Presentations follow the article and are sequential. I recommend you take the time to review them:
- Here’s 17 Facts About China That Will Blow Your Mind (19 slides) – reading time 4 minutes;
- 10 US States That Will Get Murdered If China Slows Its Imports (11 slides) – reading time 3 minutes;
- Why China Is A Debt-Burdened Builder Of Bridges To Nowhere (36 slides) – reading time 6 minutes;
- Here Are The 10 Chinese Brands Set To Take Over US Households by 2020 (11 slides) – reading time 4 minutes;
- The Wild, Wild East: 12 Snapshots Into China’s Roller Coaster IPO Market (13 slides) – reading time 4 minutes; and,
Dig Deeper: How key 2010 China IPOs have performed (7 slides) – reading time 3 minutes.
Additions to Stock Research Portal’s Company Universe
Today we added the following Companies to our Company Universe:
CB Gold Inc. (TSXV:CBJ). We currently categorize CB Gold Inc. as a gold explorer operating principally in South America (Colombia). CB Gold Inc.’s current market capitalization is approximately Cdn$154 million. Review research data on CB Gold Inc.
EMED Mining Public Limited (TSX:EMD). We currently categorize EMED Mining Public Limited as a base metals explorer (copper, gold) operating principally in Europe (Slovakia, Spain). EMED Mining Public Limited’s current market capitalization is approximately Cdn$176 million. Review research data on EMED Mining Public Limited.
Manitok Energy Inc. (TSXV:MEI). We currently categorize Manitok Energy Inc. as an oil & gas explorer and producer operating principally in the Canada (Alberta). Manitok Energy Inc.’s current market capitalization is approximately Cdn$59 million. Review research data on Manitok Energy Inc.
Insider Trading Highlights
The following table summarizes the companies in Stock Research Portal’s Company Universe for who our system last Friday reported insiders who filed reports indicating they had acquired shares through ‘purchase’ transactions. You can research each of these companies by clicking on the company name in the table.
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