The Game Being Played; A New Year Surprise?

The picture is of The Shirt of Nessus 1942-1944, by Hackney-born Stanley William Hayter. It doesn't make me think of Anthony and Cleopatra so much as of Ariel;

While you here do snoring lie,
Open-eyed conspiracy
His time doth take.
If of life you keep a care,
Shake off slumber, and beware:
Awake, awake

I've been going on for ages how swiftly the consequences of profligacy and misgovernment will fall when they fall on Britain and the United States. The people's republic of China seems to have got there before me, unsurprisingly.

The Asia Times is claiming that the Chinese Government is moving out of long dollar bonds into shorter ones.

There are three explanations (and remember it is New Year in Asia at the weekend, but the governments there are still working busily away);

1) That the Chinese know the trouble the United States is in, and are beginning not to worry about their overall exposure because they have translated enough of their money into commodities and hard investments. This policy is clear, hard and long-planned.

2) That the Chinese know that a eurobond is being plotted or in the final stages of discussion, following the Sydney symposium and before tomorrow's china-euro meeting in Sydney, and that they are preparing their reserves. Possibly, because of connections to the Greek or German governments, they believe that this is so, though I doubt the former since they turned down Greece when it mistakenly claimed to have received Chinese backing prematurely. There's some bad blood there, I think, but the Chinese won't let that get in the way of business.

3) That the next phase of the renmimbi float, of China's currency (following assessment of the success and stability of the limited Hong Kong float of renmimbi assets) is on the cards.

Something is up. The Chinese sovereign wealth fund, worth $300 billion, moved a further $156 million into gold at the start of this (AD) year. That's prudent, but in connection with the other moves, a fellow ought to wonder if it doesn't seem pre-emptively defensive.

Two things bother me. It is in Germany's interest, as an exporting country, to let the euro down a bit, and, secondly, the Russians have a critical $17 billion bond issue of their own coming up and would not take kindly to the air being sucked out by the EU powers. If the Germans allow either of these things to restrain them from a Euro rescue (and Angie is not only extremely smart, but very cautious too), God knows what will happen.

Hmmmmmm. A three-pipe problem Watson. What if they all know something about Iran that bloggers don't?

In any event, the pace of the world's shift is quickening. For two hundred and fifty years, the west and specifically Europe has been living off the seizure of Asia's assets. A comparable shift back may be underway, and not in what the economists would call the non-pareto mutual win of globalisation 1.0. It's more than that.

Ah, well. Here's a diversion whilst you are thinking


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