“Greece’s banks have lost 72 billion euros in deposits since the start of 2010, or about 30 percent, according to data compiled by Thomson Reuters. Five of Greece’s top banks saw 37 billion euros taken out last year, including 12 billion from EFG Eurobank (EFGr.AT) and 8-9 billion apiece at National Bank of Greece (NBGr.AT), Piraeus (BOPr.AT) and Alpha Bank (ACBr.AT).”
Greece’s Best Option is Orderly Default?… Nouriel Roubini writes
It is time to recognize that Greece is not just suffering
from a liquidity crisis but it is also facing an insolvency crisis..
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Guest host Betty Liu of Bloomberg Television, Nouriel Roubini of New York University and Richard McGregor of the Financial Times on the China currency debate.
. . . .
“Nouriel Roubini says that the unemployment problems of America are not to be blamed on the trade or on China : …the unemployment rate is nine percent including discouraged workers and partially employed workers 16.5 percent including people in jail is 20 percent among young and minorities it is close to thirty percent , half of the unemployed are long term unemployed , but a very little fraction of this problem has to do with China and exchange rate it has to do with the policy that led to the house boom and the housing bust about the fact that we are not invested in productivity and long term economic growth , so blame it on the Chinese does not make sense , of course in a situation where you have high unemployment rates you have social and political malaise people blame globalization people blame trade people blame China but the fundamental problems of the US are much deeper much structured” [Via: nourielroubini.blogspot.com]
Lost in the worry over Greek debt defaults, China Daily reports on a default story of more significance. Please consider Local governments run up huge debts, risk defaulting. Local governments had an overall debt of 10.7 trillion yuan ($1.65 trillion) by the end of 2010, said China’s top auditor on Monday in a report to the National People’s Congress. Source>>>>
Xia Bin, an academic adviser to the People’s Bank of China, warned that the U.S. currency would continue to weaken. “The U.S. dollar will be in the depreciation trend in the long term,” he said.
It is true that we have a credit bubble in China. They also have a huge stimulus package. However, you have to put in in perspective compared to the United States. China has a debt load of 50% of GDP, and in the US it is 600% GDP. The Chinese use their credit to build things. They have built exports and infrastructure. The United States has used their credit for consumption.
The Federal Reserve maintains that there has been no inflation in the US. Their policies encourage consumption in the US, and it has created bubbles all over the world. Sometimes even if you are right, it can take 6 months to 3 years or longer for that prediction to come true. There is a high likelihood that China implodes at some point, and that will have an impact on the rest of the emerging world.
China’s currency should continue to appreciate against the US dollar due to the relative strength of China’s economy.
As China’s economy transforms from an export to a consumer oriented economy, a stronger yuan should help check Chinese inflation.
China’s global economic presence and massive levels of global trade should afford it a greater role in the international finance system.
The US would likely prefer a stronger yuan vs the dollar, as a weak yuan could be deflationary for the US economy (and likely inflationary for the Chinese economy).
