Emerging markets crushed by double squeeze in China and America

Short-term borrowing rates in China have soared to record highs as credit seizes up, prompting fears that the country’s liquidity squeeze may be spinning out of control.

The Shibor overnight lending rate in Shanghai spiked violently to 29pc, with wild moves in seven-day and one-month money. The central bank refused to intervene to calm markets, apparently determined to purge excess from the credit system.

bluebottle01:    It will all come out in the wash.   Haircuts all around and then the generation after ourselves (the baby boomers) can set the world on a sustainable path.    We baby boomers have worked hard, inherited money and screwed the world with our greed.    The political participants have been utterly corrupt, bent, greedy and incompetent.    The 50% haircut is the way forward.   Hold hard the ship will be bouncing in stormy waters for awhile.

boomboom: your greed  fair enough- don't think we are all like you!

wantonone: I worked my guts out paying the mortgage and had two kids as a self emloyed carpenter I recon I worked 3 days a week for the mortgage for decades. How  have I screwed the world?

blueprint: OH MY GOD, WE'RE ALL DOOMED, DOOMED, DOOOOOOOOOOOOOOOMED!!!! JUST LIKE THE DOOMED EURO FOR GOD'S SAKE!!!! When I wake up tomorrow after a deep Calvados-induced sleep I expect that there will be nothing more than a smoking M3 deep hole where China used to be.  Or is it M4?  I can never tell. But I digress. To the Anderson shelter, shotgun cocked, tinned sardines at the ready, and my trusty tinfoil helmet wedged firmly on my noggin. Thank Jupiter that I'm the only sane person on this planet full of deluded optimists.

Greenbacker84: Ambrose is a professional bsartist, and has a pretty dedicated fan base. The job of these people is to hide the usury system behind charts, more charts, conjecture, dramatic oratory and spin a web of half truths and disinformation. What they will never do is advocate real, simple solutions. australia4mpe

thebleedinobvious: And all this anarchy is being triggered by something that almost certainly won't happen! The Fed can't 'taper' let alone stop QE without a rise in interest rates that'll be catastrophic to the US economy. Even so, today shows just what a dreamworld we're living in, where Bernanke hints that he just might cut down on the creation of 1,000,000,000,000 fraudulent dollars per year, and the markets nosedive in fear and trembling.

kom: Tomorrow we will see the fat finger of the FED: Ctrl + P lol

max1234: the world runs on financial BULLSHIT. Eventually it hits the fan.

thefront: No country in the history of the world has ever paid it's debts. They will always debase their currencies and inflate it away. Before fiat currencies they would mix in silver , copper into their coinage , now they just print more money. The effect is the same.

Greenbacker84:  The problem is our 'debts' are falsified (to banks) and subjected to interest (by banks). The problem is nations are NOT issuing their own sovereign interest free currencies, but allowing banks to control the process and destroy our purchasing power, and multiply our debts via interest. Fiat has nothing to do with it, thats just another distraction to hide behind USURY. australia4mpe

donkeylogic: the magic tool that China have, is that they can just "allow" a few 10s of millions of people to just go down the toilet - life , including business life, is cheap in China. Along the way, they likely don't care if some large chunks of Western pension investment also get flushed. The issue China cannot fix, even with its muscle, is if global investors, who have flooded them with a tsunami of  dosh… suddenly get very very very nervous and pull all their (our) dosh out.  The great majority of Chinese firms are NOT making iPhones, hi-tech engineering, chemicals and materials… most of this production monster… is things the world is capable of ignoring for 6 months or so.

bill40: donk, A few facts for you me old china as you don't seem to know much about modern China. people protest in China and the pols are terrified of them, life is cheap no more. On the subject of western money, the west put it there, mostly via Hong Kong and as it was never wanted in the first place it won't be missed. As Ambrose finally alludes the currency war is against Hong Kong not the dollar. The authorities will always stimulate when required, they dare not do anything else.

twopence: As I understand it the value of the pound has fallen 30% in real terms. I also see the rate against the Euro as being approx. the same over the last few years, the USD the same. Now Brazil's currency has fallen 15% in a couple of days but no change in  the real world. China is pegged to the dollar, South Africa has lost 15% this week and the roupee is still approx. 80 to the GBP. Same as 5 years ago. No change again! I don't see the devaluation, I don't buy the cause and I certainly don't see the solution that is currently being presented. Whilst we continue to allow the people who benefit from state subsidy to vote for more subsidy the situation will never recover.  A voting system that allows me to vote for 'more cash for me now' has to fail in the long term. You can only vote to be irresponsible if you do not have to pay for it.

Otsuka Duojinshi: Your comment is timely and if I might draw some analogies, (thin though they might be) I'd point to the Chicken Littles that said the US 'sequester' would spell doom for its economy. It seems that the US is doing quite what it does - adjusting - and the pols credibility ship took on water; thankfully, very few are touting that meme of six months ago. California is the precise exemplar of those that 'continue to allow the people who benefit from state subsidy to vote for more subsidy' - its unions have the state and its legislatures in a stranglehold, but that 'more cash' is reaching a practical limit and a tipping point is at hand - 'the fail in the long term' is visible on the near term horizon. This credit cycle news is actually good news - excesses in the system will be pruned away and the overcapacity and mal-investment in many manufacturing facility will find a new use and capital will be freed up for higher and better uses. The 'transitory effects' will be just that - transitory, transient - temporary - momentary - ephemeral - passing. Markets abide sooner or later And if that transition deprives a bankster and do-nothing financier of a meal (or a new German car), mores the better.

Greenbacker84:  The credit cycle is a completely artificial fraudulent construct, created by, and manipulated by banks/central banks, who mereley launder and republish our promissory notes, and impose interest which is terminal to any economic cycle. In a true free economy people/commerce would issue their promissory contracts themselves, free of interest, using a common publication platform. There is no need to have banks impose themselves between buyers/sellers pretending to hand our own money back to us with interest. australia4mpe

Otsuka Duojinshi: Public opinion is prone to see in interest nothing but a merely institutional obstacle to the expansion of production. It does not realize that the discount of future goods as against present goods is a necessary and eternal category of human action and cannot be abolished by bank manipulation.  In the eyes of cranks and demagogues, interest is a product of the sinister machinations of rugged exploiters. The age-old disapprobation of interest has been fully revived by modern interventionism.  It clings to the dogma that it is one of the foremost duties of good government to lower the rate of interest as far as possible or to abolish it altogether. All present-day governments are fanatically committed to an easy money policy. The British Government has asserted that credit expansion has performed "the miracle…of turning a stone into bread."  A Chairman of the Federal Reserve Bank of New York has declared that "final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity."  Many governments, universities, and institutes of economic research lavishly subsidize publications whose main purpose is to praise the blessings of unbridled credit expansion and to slander all opponents as ill intentioned advocates of the selfish interests of usurers.

Greenbacker84:  Otsuku, Lots of words, but you cant refute a single point made. Banks DO NOT lend money They launder, and republish our own promissory notes, falsifying debt to themselves and charging interest. The money is backed by our labour and production, not the banks. The interest imposed on our currency/commerce is the very thing causing price inflation and volumetric deflation, multiplying debt until it is unserviceable. IN short, the people, and their commerce and productive ability are the root of all money issued. You claim only cranks can see we are being robbed by usury and fraud, yet a kid with a  bag of marbles can see this is economic musical chairs in which the banks have total control and manipulation of our commerce. Your 'easy money' spiel is trite nonsense. Only the banks/central banks have 'easy money' as they steal our promissory notes and multiply debt via interest. The financial/usury sector gets 'easy money' everyone else is subject to perpetual exploitation and theft. Next you point out a nice soundbite from the snake-pit reserve itself and use that to back up your claims?? If that is the case why does EVERY SINGLE western economy (nay worldwide) have a usury central banking cartel controlling the issuance of currency, at interest? Answers on the back of a postcard please. Finally your last phrase referring to Keynes/Mises controlled debates is also irrelevant. All these economic schools, support BANKS issuing our currency at interest, and governments/people having to 'borrow' at interest. The bankers funded MISES, AND KEYNES. Hegelian dialectic at its best. The whole world is run by and controlled by usury and banks.If you want a real solution, that will eliminate central banking, usury and income tax that would be MPE, not Rockefeller funded usury shills on the take. australia4mpe

Otsuka Duojinshi: You use the phrase 'In a true free economy people/commerce' but there seems to be no allowance for people who are successful in the economy you envision to do nothing more with their profits but convert them into rubies and emeralds and run them through their fingers.  A free economy would allow profits to be re-deployed and an appropriate return charged for the lost opportunity cost commensurate with a market. It would seem that your 'free' economy is 'free' for all but the successful. Kinda like Marxism. Interest free promissory notes? Might as well go straight to medieval specie trading. A modern economy that finances investment, plant and international trade has as prerequisite to its functioning - the modern banking system you hold in such visceral contempt. Your anger is misplaced - it should be directed toward the Socialists, Marxists, Fascists and their fellow travelers that have removed the discipline of the market and perverted the value of the notion of value. Bankers are at the mercy of these bureaucrats and make adjustments accordingly - they are not an evil cabal planning to destroy your life. And to answer your question 'why does EVERY SINGLE western economy (nay worldwide) have a usury central banking cartel controlling the issuance of currency, at interest?' Notwithstanding your 'cartel' straw man, I'd suggest that the reason for this is that western nations prefer to live in something other than a medieval trading system - because EVERY SINGLE economy that doesn't have one resembles something on the order of Bangladesh.

Greenbacker84:  You still don't get it do you? Or just avoiding the problem? One more time money is never 'lent' by banks mate. You say individuals/commerce issuing their promissory notes (money) free of banker obfuscation and compound interest makes us…poorer??? Are you being paid to parrot this? Interest is an artificial COST on commerce, it multiplies the cost of business, and raises the price of everything in the 'market' getting siphoned off to pretend lenders called 'banks. Industry is forced to increase prices in order to service further compounding (falsified) debt to the bankers. Without usury banking controlling the currency issuance, Debt would be LESS, Profits would be HIGHER, Purchasing power far far higher. We would have no need for income tax whatsoever with MPE. Profits could be invested back into business, commercial expansion, highering employees, or purchasing items/services…NOT paying an irreversible multiplication of falsified debt to the banking system Its quite clear you are not familiar with MPE, and the core obfuscation of banking/usury on our commerce. You mock promissory notes, evading the fact that our ENTIRE money supply consists of laundered promissory notes. Its OUR promise to pay a certain amount of money, backed by our productive capacity. The home seller is paid outright, in full at the start of the exchange. The bank is adding an additional debt to itself, and charging interest, when only principal needs to be retired/paid out of circulation. As for Marxists/socialists/fascists they are ALL puppets of the bankers and money changers. The commies were funded by wall street mate, same for the fascists in Europe, at least at the start. Id say your attacking puppets, straw-men, meaningless ideologues meant to hide the hand that controls the issuance of our currency enslaving us with s usurious currency. Your last paragraph is ridiculous, as if banks are the root of our prosperity. Real commerce, production and services are the bedrock of any economy. Our labour and production. Banks are a parasitical entity laundering our contracts and charging interest increasing debt and cost of commerce. If we persist with usury/central banking the country will start looking a lot more like Bangladesh. australia4mpe

Otsuka Duojinshi: You can dress up Marx's Labor Theory of Value in any kind of clothing you wish. The Mathematically Perfected Economy is just the latest sartorial mambo-jambo to reduce humans to the benign levers of a socialist elite's 5 year math plans. “MPE is basically a set of proven mathematical principles.” If any of the backs of your postcards are devoid of your masturbatory scribbles, please entertain us with even a single proven mathematical principle. Constantly repeating the mantra “Mathematically Perfected Economy” without offering sound logical steps how to implement it doesn't advance debate. And it can't advance because the implementation of MPE would just be a repeat of the USSR. Socialists have a fetishism for stasis.  You witness it in their view of the environment. They have cognition handicaps that render them incapable understanding dynamic systems, and are pathologically averse to things that change for reasons they cannot perceptually grasp, or too fast for each step to be reduced to an interest free 2+2=4. We can just agree to disagree.

Greenbacker84: Your defense of usury and banking really is pathetic to behold. Im a libertarian btw, I voted UKIP in the last election. Banking and usury are not free market or capitalist. Its a state backed private cartel given the power to steal and republish our promissory contracts. I believe in the abolition of income tax, central banking, and have supported the UK Libertarian Party (for what its worth) in the past. If you think individuals and commerce having their right to issue promissory contracts is 'socialism' the bankers have you well and truly lobotomized. BTW the author of MPE Mike Montagne was asked by the Reagan administration to demonstrate the effects of compound interest on any given economy and model the effects. The results are ALWAYS the terminal multiplication of debt, in proportion to a circulation consisting of principal. I'd hardly call Reagan a socialist but carry on in your Rockefeller funded fantasy land. If you actually want to learn the truth on banking the australia4mpe blog is a good place to start. So far you don't have a clue what your on about. PS you will not find a more anti-communist person on this board. Usury central banking is communism/slavery dressed up as mutton. australia4mpe

tigrisofgaul: It's a carefully orchestrated wealth grab. The middle classes the world over will be squeezed for everything they have if these criminals get away with it.

Greenbacker84:  The wealth grab is the monetary system itself that has been imposed on us without consent, built on interest (usury) and the theft of our promissory notes. Banks are faux creditors and have taken the power to issue money by laundering OUR OWN promissory notes, falsifying the debt to themselves and imposing interest in every single loan/mortgage on this planet. The people/companies/states create money by issuing promissory notes, backed by their labour and production (principal alone to be retired). Banks/Central banks impose themselves on the process, steal the notes and republish secondary evidence on their paper, or digitally. This is how the ENTIRE planet has been enslaved to falsified banker debts, compounded by interest that is mathematically impossible to pay off. We either restore the issuing power to the people, free of usury and 3rd party exploitation or meekly remain debt serfs on a banker plantation. Ambrose, the Barclygraph and the host of disinformation artists will never give you real solutions. australia4mpe blog

Burma_Zen: We need faster printing machines. Give the printing contract to News International.