Sunday, May 08, 2011

Not Taiwan

So, I'm drinking some yellow bellies and the wife is transfixed by the credits of Bourne Identity.

She demands I find the song played during the credits. Child's play for any non-senior citizen, but she is impressed. (Google search is indistinguishable from magic for her.)

Extreme ways. Moby. Ennnnh, sounded better with the credit rolling.

Anyways, bored, I plugged in Taiwan on's MP3 website to see what would come up. Surprisingly, many bands use the words Taiwan, but have nothing to do with Taiwan.

Tex Taiwan - actually a Belgian industrial band or something. That's confusing.
Maiden Taiwan - ha ha, weird rap not from Taiwan.
Taiwan Typhoon - punk rock.

Anyways, I am forming a new band called Anglo-Japan. We sing in Swahili and are based in Brazil. Yes, we are all pretentious now.

My God, page 4 of the search result calls up:

Everyone Eats Taiwan Rice I think you use this one casually, acting as if you have no idea how dumb this song sounds. "What? Honey, don't you like Taiwan and Taiwan rice?"

Music you figure would have been suited to Taiwanese conscripts fighting for Japan in WW II in Pacific: Kiwi & the Papaya Mangoes...

Taiwan Ko-Ro seems nice...might even buy that.

If there was a Taiwanese version of Hawaii 5-O... this would be the theme song.

There are a bazillion more songs, from techno to jazz, but I will leave you with a nice song in old-school Mandarin exhorting Taiwan's economy to take off...

Wednesday, May 04, 2011

Awesome Review of China's Problems

Very clear and concise in explaining a lot of the problems facing China.


The need to allow Chinese capital outflows unfettered by foreign exchange controls is growing more intense with each passing month. During the first quarter, China's foreign exchange reserves grew by another $197 billion, pushing total reserve holdings over $3 trillion. Because China was unable to sterilize the positive impact of money inflows (that is, neutralize their impact) on the growth of its money supply, inflation has accelerated while economic growth has remained at a level high enough to be generating more inflation. China's reported inflation on consumer goods rose to a 5.4 percent year-over-year rate in March, an acceleration from 4.9 percent in February. This is the highest inflation rate since July 2008 and is substantially above the level of 3-4 percent that China says it desires.

Think about that. They have $3 Trillion in reserves and are socking away $197 billion a quarter. They stopped buying so many US Treasuries to sterilize this, so their currency should appreciate.

The article also has an excellent explanation for the crazy real estate prices in China (and Japan, and Taiwan for that matter.) They happen when the government does not allow people to invest anywhere except domestically.

On a more fundamental level, China is tracking what one might call the Asian "work, save, and invest" model that proved so unsuccessful for Japan after its economic boom period in the 1970s and 1980s. During those decades, its financial sector failed to develop, and Japanese citizens were discouraged from investing abroad. Inside Japan, investment-allocation decisions were made largely by government agencies that recycled household savings deposited in Japan's Postal Saving System and its sheltered banks. As a result, Japan's financial sector developed far more slowly than its production sector. Saving was very high, as in China today, so there was a huge supply of funds for the government to allocate inside Japan. The government agencies favored investment in Japanese manufacturing facilities, especially those in the export sector.

As Japanese citizens grew wealthier, by the 1980s they looked for ways to store and enhance the wealth they were accumulating as a result of their hard work. They invested in the Japanese stock market and even more vigorously in Japanese real estate. In the late 1980s, the Japanese real estate bubble grew so large that the emperor's palace in central Tokyo was said to be worth more than the state of California. Of course, the bubble burst a year later, and Japan entered a lost decade that included wealth losses equal to nearly three years of national income followed by persistent deflation and generally stagnant growth.

Not only that, but the average person cannot afford a home in China. This is a problem in Japan, in Taiwan, and now in China. These countries all pursued very similar policies.

Tuesday, May 03, 2011

China Currency

"So far, there has been no announced change in China’s currency policy. But the People’s Bank of China allowed the currency to rise more quickly in April than previous months, and on Friday set its target level for the yuan at 6.49 — the lowest since the early 1990s."

Well, its been trading at 6.53 for a long much lower is 6.49 in percentage terms?

Less than 1% different. Yawn. Major currencies are swings around like a bunch of drunks playing crack the whip, and the RMB just slowly, ever so slowly appreciates.

But there is a glimmer of light at the end of my speculative tunnel...

'Meanwhile, officials from the People’s Bank of China have begun speaking in public about using the exchange rate as a way to control inflation — an approach that top Chinese officials have in the past tried to minimize. Monetary policy committee member Xia Bin said in a news Web site interview that rising prices might require a “one-off” jump in the value of the renminbi as well as “long-run, gradual appreciation.”

It is “a must,” he said, “unless we don’t want the economy growing ... and don’t want internationalization.”'

Dude, did I just see an actual monetary official say they may need a "one-off" AND gradual appreciation? SWEET.

I guess I need to apply this to Taiwan a bit...if the RMB appreciates, most likely the NTD will match it. Good news for teachers sending money back home and people who buy imported beer. Potentially bad for exporters.