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Thursday's Top 10 with NZ Mint: Is China buying our bonds?; Oyster herpes; Amazing helicopters; Richard Koo's balance sheet recession; Dilbert

Posted in Opinion

Here's my Top 10 links from around the Internet at 10 am  in association with NZ Mint.

I'll pop the extras into the comment stream. See all previous Top 10s here.

I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

Jon Stewart discusses Arnold Schwarzenegger's testicles below. I'm off into the Budget lockup. Out after 2pm.

1. China looking elsewhere - The China Daily reports the Peoples Bank of China has disclosed it has reduced its holdings of US Treasuries for the fifth month in a row to reduce its reliance on American foreign reserves.

It said it was diversifying into other sovereign debt.

I wonder how many of the deluge of New Zealand government bonds issued in the last couple of months have been bought by the Chinese.

Related Topics

Demand for New Zealand bonds has been particularly strong.

Perhaps this is the reason.

The biggest buyer of US Treasury debt cut the amount of its holdings by US$9.2 billion, less than 1 percent of the total it possesses, a month after it had unloaded $600 million worth of the bonds.

Throughout the same period, China bought long-term Japanese treasury bonds worth 234.5 billion yen ($2.9 billion), the biggest purchase of debt China has made within a single month in more than six years.

"The central bank is continuing its strategy of diversifying the $3 trillion it holds in foreign exchange reserves," said Lin Songli, an economist at Guosen Securities Co Ltd.

2. Yuan as global reserve currency? - Reuters reports the European Union President saying China's Yuan will one day be a global reserve currency.

"We live in a multi-polar world and a multi-currency world more and more, and that's the case for the rise of the euro as a reserve currency. The dollar stays as an important currency," Van Rompuy said during a visit to a Shanghai business school.

"But in the upcoming decades, there will be huge changes and in the far future the Chinese currency will play a role," he added. "The Chinese currency will play a major role in world reserves because China is so important in world trade and currency; money follows trade."

For that to happen, however, China would need to make the yuan -- also known as the renminbi, or people's currency -- fully convertible, and the government has given no clear indication of when that might happen.

Beijing has been trying to increase the global clout of its currency by promoting foreign trade settlement in yuan and signing bilateral currency swaps with other countries.

3. Don't worry - Be happy. Do something nice for someone. The Globe and Daily Mail reports on research saying the happiest people are the givers. HT Amanda.

In a study of 700 people, to be published in the spring issue of the Journal of Happiness Studies, participants performed good deeds for another person for less than 15 minutes a day, over the course of a week, either by actually helping them out, or just being supportive. The participants showing compassion still felt the effects six months later – and reported significantly larger increases of self-esteem and happiness than the control group.

“What’s amazing is that the time investment required for these changes to occur is so small,” said Myriam Mongrain, associate psychology professor in the faculty of health. “We’re talking about mere minutes a day.”

4. Oyster Herpes - Sorry couldn't resist. Bloomberg reports a big problem in France.

A deadly virus is stalking France’s coastline, killing at least 60 percent of the young oysters there since 2008. Japan’s earthquake and tsunami may have wiped out the latest rescue plan.

The March 11 natural disasters destroyed the fishing industry inMiyagi prefecture, which produced 80 percent of Japan’s oyster seeds in 2009. That is forcing France to abandon plans to import and breed Miyagi’s Pacific oyster species, and find another solution for diners seeing fewer, and more costly, options.

5. Finally they fess up - Reuters reports on how the European Union has finally started talking about 'restructuring' Greece's debt. It's more extend and pretend.

Europe's top financial officials broke a taboo on Tuesday and acknowledged for the first time that Greece may have to restructure its debts, a move which could stoke Europe's sovereign debt crisis.

Speaking on the sidelines of an EU finance ministers' meeting, Jean-Claude Juncker, chairman of the 17-country Eurogroup, said there was a need to move toward what he called a "soft restructuring" of Greek debt.

Other officials suggested the term implies debtholders agreeing on a voluntary basis to accept later repayment.

6. Couldn't resist the pictures - The Economist reports on a battle between Europe (top pic) and America (bottom pic) to build the world's fastest helicopter.

7. Chardonnay socialist - Slate looks at how the potential head of France's Socialist Party can afford a US$3,000 a night hotel room.

The press also revealed that Strauss-Kahn and his wife, Anne Sinclair, a prominent television personality, wealthy in her own right, travel between a $4 million home in Georgetown, two multimillion-dollar apartments in Paris, and a holiday riad in Marrakech. "It tends to prove that the IMF's managing director…has, to some extent, lost contact with 'real life,' " France Soir wrote, "By blindness, by remoteness, by intoxication?"

The broader charge that IMF and World Bank executives live too well on generous expense accounts while aiding—and sometimes imposing austerity on—some of the world's poorest and most distressed economies is not new. Last year, for instance, the two institutions came under fire for giving employees generous pay raises. "We greatly value the hard work and expertise of bank staff," a spokesman for Britain's Department for International Development told the Washington Post.

8. Balance sheet recession - Richard Koo from Nomura gives more detail here about the developed world's balance sheet recession and why the money printing is not working. HT Houses and Holes at MacroBusiness.

9. Spanish protest - CNN reports on how protestors in Spain are gathering for massive protests around regional elections. The jobless rate is 21%.

"The economy and unemployment are key to the protest because that binds all of us together," said Jon Aguirre Such, a spokesman for the Real Democracy Now, one of many groups convening the demonstrations.

"In this crisis, while some have gotten rich, most people have less income," Aguirre said.

10. Couldn't resist - Jon Stewart does Anie.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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10 Comments

The idea that the Chinese RMB

The idea that the Chinese RMB will be a reserve currency anytime soon is a bit overblown. First the RMB isn’t a very liquid currency worldwide. It’s very difficult to exchange RMB at your local FX quickie mart. There is not enough RMB in the world, so even modest investments would have a large impact on the world FX rates. Also, China has a severe problem with counterfeiting (no pun intended). I feel there is much better chance that the RMB will be a reserve proxy currency via the Hong Kong Dollar (HKD). It is much more liquid currency and accepted anywhere in the world. There is a larger volume of HKD, making a much more stable currency to place large quantities of investment grade paper.  Lastly, it’s much harder to counterfeit the HKD. Making it the idea candidate for Reserve currency status in the asian arena and the Eruo will pick up the slack in the West. There will be three currencies for the foreseeable future till a clear winner emerges.

re #4: this is a bit of a

re #4: this is a bit of a worldwide problem - hit NZ in November 2010, UK July 2010, San Antonio Bay, Texas 2009 etc

http://www.1xx.co.nz/1XXNews/NewsArchive/tabid/108/articleID/8151/cat/1/...

Meebee we should cobble

Meebee we should cobble together some  French herpes oysters , typhoid kiwifruit , and exploding Chinese watermelons ........ make up a food gift basket , and send it to those chardonnay socialists at the IMF .

Now there's a thought

Now there's a thought Gummy...................:-)

4.  problem is if as ships

4.  problem is if as ships pass the french coast bound for NZ and fill their bilge tanks....they then empty them here and oops we have herpes....

regards

"voluntary"

"voluntary" restructuring.......looooove it.........I wonder if that includes all the EU banks...ie is it a level playing field? bet not.....

regards

You may recall when these

You may recall when these Bonds were snapped up ,  I asked on this site who was buying all the New Zeland new debt paper that was being issued . No one had any clear answers   Its quite likely it was the Chinese

LinkedIn is to debut on the

LinkedIn is to debut on the NYSE tonight . The IPO raised $US 4.3 billion , with the shares successfully pitched at $US 45 apiece . This is a big improvement on the company's initial target of $ 32-35 / share .

....... Last year the company had revenue of $US 243 million , and a net profit of $ 3.4 million .

Currently 102 million people have set up LinkedIn profiles , and that number increases by an additional million each week .

........This will be the biggest internet IPO since Google listed .

[ Goldmoney Sacks netted a cool $US 39 million from their stake of 871 840 LinkedIn shares ]

NZ moves to quarantine

NZ moves to quarantine negative gearing.

"When it comes to recent banking/housing policy, our Kiwi cousins across the pond have it all over us Aussies."

Sound like us? 

 

CO, im up about 2 hours north

CO, im up about 2 hours north of San Francisco. A farm for sale down the road, 1500 acres of which 300 is under centre pivot irrigation,they want 1 mil US$. I have a meeting with the local Rabo guy next week, we have had snow on the hills which is still there and a heap of rain to go with it.

 

Could Greece be the next Lehman Brothers? Yes – and potentially even worse

 

http://www.guardian.co.uk/commentisfree/2011/may/17/greece-debt-crisis-lehman-brothers