User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday August 31, 2009 - 22:44:10 GMT
FX Solutions - www.fxsol.com

Share This Story:
| | Email

Le a Hundred Credit Lines Bloom



 

 


By Joseph Trevisani, Published: 8/31/2009

Have the Chinese engineered a spectacular economic recovery, the envy of the industrial world or has Beijing created a version of the American housing and credit bubble of the past decade? 

The China jury is still out. But despite the evident confidence in the mainland story shown by the commodity and currency markets there are worrying signs that the end of the government stimulus spending will seriously dampen the Chinese economic resurgence.

When the Chinese Government announced their four trillion yuan stimulus package ($585 billion, 14% of GDP) last November the world economy was in the acute phase of the financial crisis. Lehman Brothers had just collapsed and falling equity markets would continue to plummet for another four months. The United States had just elected Barack Obama President but he would not be inaugurated until January 20th and any fiscal rescue package for the US economy would have to wait until the new administration and Congress took office.

With the industrial west in financial crisis and western governments already running large deficits the world looked to China for a possible solution. The Chinese Government could use its large cash reserve to reinvigorate her economy. Chinese consumers might then be willing to substitute their own domestic consumption for the exports that were no longer going to their straitened comrades in America and Europe.

China had all the necessary qualities for a successful stimulus: a huge and urbanizing population, a large hoard of disposable cash and a government both willing and pressured to keep its restive population happy with jobs and products.

Fourth quarter economic growth in China had dipped to 6.1% but it came roaring back to 7.9% in the second quarter. Though just under the semi-official goal of 8% that the Beijing government is said to keep as the lower acceptable limit for economic growth, recovery in such a short space of time was a triumph of central government action. But the particulars of the expansion are less than reassuring. Growth appears to be dependant on continued government spending and some aspects of recent economic developments are sensible of bubbles in the stock and perhaps housing markets.

Long term Chinese economic growth is still largely determined by her exports. If the demand for imported goods in the United States and Europe, the Middle Kingdom’s most important markets, does not resume, will Chinese domestic consumption be sufficient to absorb the products of China’s factories and maintain Chinese employment?

Chinese exports have recovered slightly. In July the trade balance rose to $10.63 billions from June’s $8.34 billions. But this year’s first and second quarter averages, $20.84 billions and $11.62 billions respectively are a far cry from the $38.10 billions and the $27.78 billions of the fourth and third quarters of last year.

Despite the Beijing Government’s public goal of increasing domestic consumption, purchases by Chinese households constitute a similar percentage of the economy as they did five years ago. Non-governmental or private consumption was $1.6 trillions in 2008; by comparison private consumption was $7.4 trillions in the EMU and $10 trillions in the United States. It will be difficult for China to replace western consumption with her own from such a small domestic base. In addition, from a timing vantage private consumption cannot be augmented in the same rapid and ordered fashion that governmental spending can. Not surprisingly the bulk of the Chinese stimulus money has been directed through state organizations and the banks.

Most of the fiscal stimulus to the economy has been provided by loans from the Chinese banking system. New loan commitments have increased by over $1 trillion in the first six months of this year, a 28% rise year over year.

One result of the loan cash disbursement had been a boom in the Shanghai Stock Exchange. From the end of last year until early August the SE Composite rose more than 80%. This rapid price increase raises the possibility that money finding its way into the economy is being used in pursuit of a quick speculative return rather than buying consumer goods or placed as investment in productive assets like factories and stores.

The Shanghai SE Composite has fallen 23% from the August 4th peak, including 2.9% on Friday and 6.7% on Monday. This precipitous fall and the reason for the drop, the news that bank lending had fallen again in August after a steep decline in July, were indications investors are worried that if the available cash dries up the market might have no other support.

The government has supplied subsidies to rural and urban families for the purchase of household electrical goods. But this type of program can only provide a temporary fillip in consumption and a stopgap for the domestic manufacturing sector. When the subsidies expire local demand will tail off because there has been no change in the job outlook for Chinese workers.

Anecdotal evidence from housing markets in various parts of the country also point to the return to home purchase as a speculative investment, as prices in some urban areas have gained substantial amounts since the stimulus cash began flowing. Car sales also have been strong with China recently surpassing the United States as the world’s largest auto market.

There is as yet scant evidence and little historical reason to believe that the Chinese stimulus spending has created the necessary conditions for a permanent expansion of domestic consumption, regardless of the dramatic improvement in official economic statistics.

There are two places for Chinese factories to sell their goods, at home or abroad. Unless there is an unexpected revival of consumer spending in China’s export markets, it is unlikely the stimulus has created enough stable domestic consumption to absorb the production of China’s factories. Without exports Beijing may soon face the need and the dangers of another round of stimulus spending.

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105