US productivity rises; China devalues; EU and Greece cement deal; AU confidence falls; Singapore growth sags; UST 10yr yield 2.13%; oil lower; NZ$1 = 65.3 US¢, TWI-5 = 70.1

Is inflation realistically still a concern to central banks anywhere?
Most countries would surely welcome some healthy inflation led by demand.

A dose of realism on the US economy:
http://www.cnbc.com/2015/08/11/this-is-more-damagingthan-the-great-rece…

'' Over the past year, productivity has increased just 0.3 percent and a mere 0.5 percent over the past five years, during which the economy has struggled to escape the clutches of the financial crisis and the recession that supposedly ended in mid-2009.

The result has been growth in job creation but little corresponding rise in wages and, subsequently, living standards. It's essentially been the economy's dirty little secret even as Wall Street forecasters continue to project breakout growth that never seems to come.

"This topic is still getting almost no attention—particularly among presidential candidates—but there is a case to be made that the stagnation in productivity has been more damaging to the real living standards of Americans than the Great Recession,"

"And the gold price is higher however on all this uncertainty, but only marginally up at US$1,110/oz."

Actually gold was up about $40/oz late yesterday in NZD's. And if you look at the graph in the link below, I wouldn't say gold is marginally up in USD's, I would say it has had a significant bounce: http://www.sharpspixley.com/live-prices/gold/

Perfect storm of opportunity

New Zealand obviously did not want to only rely on China, but was in an incredible position at the moment.

"The centre of the world’s economy is moving in our direction. The demand for our commodity goods is growing. Technology’s arrived – it’s actually bringing us closer to the rest of the world," Makhlouf said.

“If you actually look at it like that, there’s almost what I’d describe as a ‘perfect storm of opportunity’ for us, and the big challenge is how do we seize it, and the risk is that we fail to," he said.

Treasury was watching what was happening to inflation in China, as well as watching to what was happening to house prices. The issue worried Treasury.

"There’s a big issue in China whether actually the housing market’s completely unstable. Anything that’s potentially going to damage Chinese growth, as our second-biggest trading partner, could have a big impact on us," Makhlouf said.

"On the other hand, I’d just observe that in China, there’s not a lot of leverage [in the property market]. So it’s not the typical consumer debt-fuelled scenario that a lot of the Western world’s gone through, but we have to keep an eye on China,” he said.

"The long and short of it is we’ve got to keep an eye on China, and understand it, and understand the opportunity, but also understand the risks there so we can better manage them.”

Over to you, Gab, give us the plan for managing these risks now.

http://www.interest.co.nz/news/54094/makhlouf-says-21st-century-will-be…

The China devaluation is their same old game, trying to gain manufacturing jobs at the expense, mostly, of the USA. And the timing is set to get a multiplier when, they think, the Fed Reserve raises rate there next month.