Chefe da Estratégia de Equidade Saxo Bank A tabela em que falei na nossa chamada da manhã. Os analistas que falam sobre a Amazon não estão traduzindo o crescimento da receita em ganhos aparentemente não entendem a contabilidade. Este é essencialmente o ponto que muitos perderam com a Amazon por anos. O EBITDA e outros dados sobre ganhos contabilísticos são falhos, enquanto a Amazon investe uma grande parte do seu fluxo de caixa para o negócio. O fluxo de caixa de 12 meses decorrente das operações aumentou 38 yy no quarto trimestre. A Amazon continua sendo uma das empresas mais interessantes do nosso tempo em compartilhar o mercado de comércio eletrônico e varejo, ao mesmo tempo em que constrói uma das maiores empresas de infraestrutura em nuvem do mundo. Bem dito. As contas da Amazônia devem ser consideradas até agora como uma empresa 3939 de crescimento3939 e não um estabelecimento estável. Incrédulamente. Ele exibe uma estatura contábil semelhante a a. Artigo 4 horas atrás Mercados matutinos: as ações ficam cautelosas à frente do relatório de relatório dos empregados nos EUA. A taxa de curto prazo inesperada e a incerteza sobre as políticas da Trump39 da Saxo Bank pesaram sobre o sentimento na Ásia hoje. O Shanghai Composite perdeu terreno em seu primeiro dia de negociação após o Ano Novo Lunar, enquanto o SampPASX200 fechou também. Visão comercial 5 horas atrás. A teoria econômica sugere que uma nação que experimente um desequilíbrio comercial atinja um ajuste em sua moeda, que acabará por corrigir o desequilíbrio. Evidências empíricas mostraram que esta correção 82168217 geralmente ocorre 18 meses depois que a moeda começa a depreciar. Nesse caso, o déficit de conta corrente astronômica de 650 bilhões de dólares deve ter diminuído 18 meses após o USD começar a depreciar. No entanto, o USD começou uma tendência descendente há vários anos, e o déficit comercial dos EUA não mostrou sinais de estreitamento. Os analistas tentaram explicar esse fenômeno argumentando que os EUA são uma anomalia econômica. Primeiro, uma parcela significativa do comércio dos EUA ocorre entre empresas americanas localizadas em diferentes países. Este tipo de comércio baseia-se em fatores microeconômicos e não condiciona as taxas de câmbio. Em segundo lugar, os consumidores americanos representam o maior mercado do mundo. Assim, as empresas estrangeiras reagiram a uma diminuição do USD, reduzindo seus preços proporcionalmente, de modo a mitigar as mudanças na taxa de câmbio e preservar a participação no mercado. O Wall Street Journal relata: os importadores estão hesitantes em aumentar os preços para compensar a queda do dólar, porque isso provavelmente reduziria a participação no mercado. Isso, por sua vez, curto-circuitos das principais maneiras de uma moeda em queda é suposto reduzir as importações. No início de 19908217, a economia do Japão8217 mergulhou em recessão. Os banqueiros centrais japoneses ficaram estupefatos e desconhecidos sobre como eles poderiam induzir uma recuperação. 10 anos depois, parece que finalmente descobriram a fórmula: uma política monetária solta - e depois alguma. Primeiro, o banco central reduziu as taxas de juros reais, até que eles foram efetivamente negativos. Isso resultou em uma multiplicação da oferta monetária. Em seguida, o banco injetou novas reservas de caixa em bancos insolventes, que sofreram como resultado de empréstimos maciços não pagos provocados pela recessão. Esses bancos, por sua vez, usaram as reservas de caixa para emprestar dinheiro a negócios em dificuldades em um esforço para reviver a economia. Parece que funcionou. Agora, à medida que a economia está crescendo a uma taxa saudável, o Banco Central deve desenrolar lentamente essa política, aumentando as taxas de juros. Isso, no entanto, é mais fácil dizer do que fazer. O Wall Street Journal informa: se o Banco Central acabar com a política de dinheiro fácil muito cedo, isso poderia acabar com o crescimento econômico. Mas manter um crédito super-solto muito longo durante uma recuperação econômica poderia ser como a pulverização de gasolina em um incêndio, causando uma crise de inflação. Há mais de um mês, o blog forex anunciou a forte possibilidade de a França rejeitar a Constituição da UE. Durante o fim de semana, essas preocupações foram confirmadas quando 55 dos eleitores franceses rejeitaram a Constituição, que visava simplificar a estrutura e as operações da UE. Os analistas atribuíram a rejeição da França8217 aos cidadãos 8217 preocupações sobre a economia doméstica e a política de imigração. Embora a rejeição da França8217 não conduza provavelmente à dissolução da UE ou ao fim da moeda comum do euro, isso poderia significar problemas para a área do euro. Os líderes europeus decidiram esperar até que a Holanda e a Grã-Bretanha tenham votado na Carta antes de decidir sobre um novo curso de ação. O New York Times informa: No momento, não há nenhum plano para rever a constituição e colocá-lo antes dos Estados membros novamente. Se os holandeses também rejeitarem a constituição, seria muito mais difícil persuadir o resto dos Estados membros a avançar com qualquer documento para ratificação, particularmente aqueles que planejam fazê-lo por voto popular. A presidência de Alan Greenspan8217s do Federal Reserve Bank termina oficialmente em 31 de janeiro de 2006. O processo de escolha de uma substituição já começou e os investidores já começaram a especular sobre quem (ele) será. Dois favoritos já surgiram, são republicanos proeminentes e serviram no Conselho de Assessores Econômicos (CEA) sob um presidente republicano. Isso não é coincidência, pois o presidente Bush selecionará pessoalmente o novo presidente. O atual corredor da frente é o economista de Harvard, Martin Feldstein. Feldstein tem sido um crítico franco dos déficits orçamentais da atual administração, apelando-os para serem sustentáveis. No entanto, ele abandonou essa posição, possivelmente para curry favor com o presidente Bush. Ben Bernanke está atualmente em segundo lugar para o cargo. Os seus apelos para uma política monetária mais transparente lhe renderam o respeito de muitos economistas e políticos. Relatórios da Semana de Negócios: Sua preferência declarada pela inflação apontando para 8212 ou disparando para um alcance alvo identificável na inflação8230riscos afirmando números difíceis sobre a racionalidade, tornando-se uma escolha arriscada para a Administração. Durante o último mês, alguns meses, o Canadá esteve envolvido em um conflito político com ramificações de grande alcance. O Partido Liberal governante é acusado de aceitar subornos em troca de distribuir contratos lucrativos de publicidade. Embora nenhuma acusação formal tenha sido trazida, muitos políticos pressionaram agressivamente para uma eleição de recall de algum tipo. A ação atingiu um clímax na semana passada, quando se esperava que a Câmara dos Comuns votasse quotno confiança nos liberais. No último minuto, um proeminente conservador comutou festas, e foi recusado com desconfiança uma posição de gabinete. O resultado é que o Partido Liberal permanecerá no poder, mas os conservadores continuam indiferentes ao empurrar para uma mudança de poder. No entanto, essa derrota afetou seriamente sua campanha. O Wall Street Journal relata: Um conservador disse que estava preocupada com a estratégia do Sr. Harper8217 de tentar forçar uma rápida eleição ao aliar o bloco quebequense, que defende a independência da província de Quebec francófona. Como relatei na semana passada, um funcionário de alto escalão no Banco Central da Coreia do Sul, o Banco Central anunciou o fim de sua intervenção de rotina da organização em mercados de divisas. Os comentários do oficial8217s enviaram o dólar, enquanto os investidores temiam uma queda significativa na demanda futura de títulos do Tesouro dos EUA. O Banco Central fez comentários similares no mês passado, apenas para retraí-los mais tarde na semana. Mais uma vez, o Banco Central errou: não vai parar de comprar tesouros dos EUA, em um esforço destinado a evitar que o Won se valorize com muita rapidez. Aparentemente, os comentários do oficial8217s foram discutidos pelo Financial Times, que originalmente relatou o desenvolvimento. Para provar que suas intenções eram genuínas, a Coréia do Sul comprou imediatamente um pacote de notas do Tesouro dos EUA. O anúncio e a negação subsequente não são desenvolvimentos significativos, em si mesmos. O que é mais interessante é a maneira pela qual os comerciantes da moeda responderam às notícias, sem primeiro se deparar com sua autenticidade. Talvez, isso prova que os investidores não estão confiantes sobre o futuro do dólar8217. O Wall Street Journal relata: "Mas além disso, é incomum que o mercado cambial tenha virado, e quão muitos comerciantes estão ansiosos para puxar o desencadeante de qualquer notícia ou conversa de mercado relacionada aos bancos asiáticos centrais e uma reavaliação do yuan chinês. O mercado tornou-se muito sensível a esses temas no momento, disse um diretor da Barclays Capital. Aos 2, a taxa oficial de juros da UE é uma das mais baixas entre os países desenvolvidos. O Banco Central Europeu (BCE) foi convidado a utilizar a política momentânea como forma de impulsionar o crescimento na zona euro em dificuldades. Na verdade, vários membros proeminentes da UE estão pedindo que o BCE abaixe as taxas de juros. O BCE se recusou a considerar isso como uma opção, argumentando que provavelmente causaria mais mal do que bem. O BCE citou grandes disparidades macroeconômicas em toda a UE como uma das principais razões pelas quais não irá ajustar as taxas de juros. O BCE não é capaz de atender às economias individuais das nações 8217, mas deve definir uma política baseada no desempenho da economia agregada da UE. Actualmente, existem diferenças significativas no crescimento e na inflação em toda a UE. A Alemanha, por exemplo, está lutando com um crescimento sem graça e alto desemprego, e é lobby para que as taxas de juros sejam reduzidas. A Espanha, por outro lado, está crescendo em um clipe saudável. As baixas taxas de juros estão aumentando a demanda e os preços para níveis insalubres. Relatórios da Reuters: Mas o que é diferente, e é motivo de preocupação, é que a divergência da taxa de inflação na zona do euro é persistente. O presidente do BCE, Trichet, disse que os governos nacionais poderiam ajudar a reduzir a lacuna através da introdução de reformas estruturais, o que também estimularia o crescimento e criaria empregos. O Brasil aumentou sua taxa de juros para 19,75, que em termos reais, é o mais alto do mundo. O banco do Banco Central do Brasil8217s está determinado a evitar a hiperinflação do início de 19908217, que atingiu o pico em 2500. Ele estabeleceu uma meta de inflação de 5 para o ano, 3 abaixo da taxa atual de 8 e não vai parar em nada para atingir esse objetivo. O Banco Central inclui muitos bens que são regulados pelo governo nos modelos que usa para a inflação de previsões. Esta abordagem é falhada porque o governo não é susceptível de responder às pressões da taxa de juros ao estabelecer preços para certos bens, a saber, utilitários. Além disso, a inflação tornou-se uma profeção auto-realizável, já que os investidores estrangeiros reuniram-se no Brasil em massa, atraídos por taxas de juros altas. O Wall Street Journal informa: vários economistas acham que o Brasil precisa reajustar seus objetivos de inflação e também controlar melhor os gastos do governo. A dívida do Brasil8217 é tão grande que as despesas de juros colocam o país profundamente no vermelho. Na verdade, quando as despesas com juros são tidas em conta, o país corre um déficit de 2,6 do PIB. Em resposta à crescente pressão de seus constituintes, os legisladores americanos estão intimidando a China a reavaliar o Yuan. A China, eles argumentam, está usando sua moeda artificialmente barata para empregos de fabricação 8216steal8217 dos EUA. Eles citam a crescente conta corrente e déficits comerciais para reforçar suas reivindicações. Logicamente, se a China revalorizar sua moeda, os fabricantes americanos se tornarão mais competitivos e não serão forçados a terceirizar sua fabricação para a China. Alan Greenspan refutou essa lógica em um discurso que ele entregou na semana passada. O déficit comercial, disse ele, não é provável que melhoremos se a China permitir que o Yuan aprecie. Se alguma coisa, vai piorar. A terceirização da fabricação para a China geralmente envolve compromissos de longo prazo e de longo prazo. Centenas de milhões de dólares são muitas vezes gastos para construir fábricas e treinar novos trabalhadores. Como resultado, as empresas americanas não simplesmente retornarão suas operações aos EUA após uma apreciação no Yuan. Suponha que o Yuan aprecie 40 contra o dólar (improvável) e a fabricação na China tornou-se não econômica. As empresas estrangeiras simplesmente moverão a produção para outras economias em desenvolvimento (asiáticas), onde os custos trabalhistas são marginalmente mais caros do que na China. O resultado é que os empregos americanos que já foram terceirizados provavelmente não retornarão, e é improvável que os déficits gêmeos diminuam em breve. Relatórios da Reuters: Mas Greenspan derramou água fria com a idéia de que uma reavaliação encolherá um déficit bilateral recorde com a China que atingiu 162 bilhões no ano passado. Isso significará que os fornecedores se voltarão para outros países como a Malásia ou a Tailândia para produtos têxteis baratos e outros produtos que a China agora fornece. Mas, essencialmente, o que encontraremos é que estamos importando de uma área diferente, mas vamos importar os mesmos produtos, disse Greenspan. O dólar canadense ou 8216Loonie8217 diminuiu para mínimos de 7 meses contra o dólar dos EUA, devido em grande parte à incerteza política. E alguns analistas acreditam que o pior ainda está por vir. A razão é que a maioria dos negociadores de moeda está avaliando o loonie como se a crise política atual se resolva em breve. Com toda a probabilidade, o atual primeiro-ministro, Paul Martin, será logo impeached. O orçamento do PM8217 está sendo discutido pelo Parlamento canadense se os conservadores estiverem a caminho, o orçamento será rejeitado em breve. Tal evento provavelmente enviaria o loonie em espiral para baixo para novos mínimos. Os analistas também têm o cuidado de notar outros fatores macroeconômicos que podem estar contribuindo para o declínio do loonie8217s. Por exemplo, o recente declínio nos preços das commodities resultou em menores receitas de exportação. Além disso, um diferencial crescente de taxa de juros entre o Canadá e os EUA pode estar levando os investidores avessos ao risco a transferir o capital para os EUA. A imprensa canadense relata: o risco agora é que o mercado está mal preparado para que o governo perca a votação. Mesmo se os comerciantes avessos ao risco viram seus piores medos percebidos e uma eleição federal foi chamada, os especialistas dizem que a volatilidade provavelmente não durará mais de alguns dias. Os comerciantes internacionais perderiam rapidamente o interesse e evitarão comprar ou vender o dólar até o dia da eleição. A China avançou um passo para a revalorização. Em sua última mudança, a China abriu oficialmente um mercado de câmbio, onde o Yuan pode eventualmente negociar contra outras moedas. O sistema eletrônico atualmente permite que oito pares de moedas sejam negociados, nenhum dos quais inclui o Yuan. Alguns analistas questionaram a viabilidade a curto prazo desta troca. Seu sucesso será totalmente condicional à participação de bancos e instituições estrangeiras, argumentam. A mudança ocorreu apenas algumas horas depois que os EUA alertaram a China de que a falha no flutuador do Yuan no prazo de 6 meses poderia resultar em que a China fosse identificada como um manipulador de moeda. Essa distinção teria sérias implicações para o comércio sino-americano. A China insiste que ainda precisa liberalizar alguns se seus controles de capital, bem como avançar para as taxas de juros orientadas pelo mercado, antes que ele possa fazer a mudança. No entanto, este sistema forex eletrônico é um passo na direção certa. Os relatórios do Financial Express: o economista do Shanghai Securities and Futures Institute Jin Dehuan disse que, a longo prazo, o sistema ajudaria a China a encontrar formas mais efetivas de determinar a taxa de câmbio do yuan. Ele oferece um exemplo que os reguladores podem aproveitar antes de quebrar a pegada do dólar de Yuans. O dólar de Hong Kong é semelhante ao yuan chinês, na medida em que ambos estão efetivamente vinculados ao dólar. Muitos especuladores suspeitam de uma relação mais profunda entre as duas moedas e começaram a usar o HKD como veículo para apostar na revalorização de Yuan8217s, porque o HKD é mais conversível do que o Yuan. O influxo maciço de 8216hot money8217 em Hong Kong está diminuindo as taxas de juros e provocando bolhas putativas em vários mercados de ativos. Em um movimento projetado para frustrar os esforços dos especuladores, Hong Kong anunciou que irá flutuar o HKD. Tipo de. Atualmente, o HKD está autorizado a negociar dentro de uma banda apertada, bem como o Yuan. Funcionários bancários de Hong Kong decidiram aumentar o limite superior da banda, deixando a banda baixa fixada. Hong Kong simplesmente quer lembrar aos especuladores que apostar na revalorização do Yuan8217 não é uma coisa certa. No entanto, esse movimento é mais simbólico do que qualquer coisa, pois é improvável que o HKD seja apreciado em relação ao USD. Os relatórios do Financial Times: Embora a mudança re-introduza um elemento de risco de queda8230, essa decisão poderia simplesmente anunciar especulações aumentadas à medida que o mercado testar os limites da nova banda de comércio. Este é um balão de prova. O que está acontecendo em Hong Kong não é separado e distinto do programa Chinas de avançar para uma maior flexibilidade, disse um estrategista sênior em moeda. Em 206 bilhões, as reservas cambiais da Coréia do Sul8217s são atualmente a quarta maior do mundo. No entanto, esta distinção pode ser de curta duração. O Banco da Coréia anunciou hoje que não vai mais intervir nos mercados de forex, o que antes havia feito para evitar que o Won se valorizasse em relação ao USD. Essa inversão na política é sensata, pois seus esforços de intervenção anteriores foram todos em vão. O Won ganhou 17 contra o dólar este ano sozinho. As autoridades bancárias indicaram que a rentabilidade - ou a falta - de suas reservas está por trás da decisão. Quando medido em termos de reservas de divisas denominadas em dólares da Won, South Korea8217s, depreciam-se em valor todos os dias. Alguns analistas reagiram às notícias com sentimentos mistos, temendo que a Coreia do Sul começasse a diversificar suas reservas, após a intervenção prévia. O Financial Times informa: o Sr. Park disse que não previu mudar o mix monetário das reservas, dos quais cerca de dois terços são pensados em ativos denominados em dólares. Em fevereiro, o dólar registrou a maior queda em cinco meses, quando um relatório do Banco da Coréia disse que diversificaria suas reservas cambiais. O USD apreciou mais de 7 contra o euro nos últimos seis meses. Essa inversão da tendência deve ser atribuída ao otimismo americano ou ao pessimismo europeu. Ambos os sentimentos desempenham um papel, argumentam os analistas. A maioria das economistas 8217 previsões para a economia dos EUA são positivas - e isso pode ser um eufemismo. As previsões do PIB real são altas e as previsões de inflação são baixas. A confiança dos consumidores está aumentando na mesma taxa, o desemprego está diminuindo. As perspectivas para a Europa, por outro lado, não são muito boas. Os países desenvolvidos da região continuam a estagnar. O desemprego é alto eo crescimento é baixo. Quando os investidores começaram a comprar milhares de euros em massa há alguns anos atrás, muitos cassandras previram o fim da preeminência econômica americana e o fim subseqüente do USD como a moeda de reserva do mundo. Escusado será dizer que suas previsões não poderiam estar mais erradas. Apesar da reversão recente, muitos investidores continuam a apostar contra o dólar. Warren Buffet não abandonou sua aposta de vários bilhões de dólares contra o USD, mesmo depois de manter 350 milhões de perdas. Ele não está sozinho em sua crença. Os relatórios do Wall Street Journal: alguns pensam que 2005 pode marcar um ano de transição, um em que o euro perde seu papel como a moeda mais alta em relação ao dólar e as moedas asiáticas assumem o papel de liderança quando o dólar recuar novamente, como os céticos do dólar Espero que ele faça. Uma recessão é definida como dois quartos do crescimento negativo do PIB real. Por definição, o Japão experimentou uma recessão prolongada no ano passado. No entanto, o recente lançamento de dados econômicos positivos do primeiro trimestre anunciou o fim do crescimento negativo. A economia do Japão8217 cresceu a uma taxa anualizada de 5,3 no primeiro trimestre, o que representa um aumento significativo nos últimos dois anos. Parece que a recuperação do Japan8217 foi estimulada por uma variedade de fatores. O aumento da renda disponível, aliado ao aumento da confiança do consumidor, provocou um aumento significativo no consumo. Os consumidores japoneses são notoriamente frugais, acumulando renda disponível na expectativa de recessão futura. Essa mudança repentina pode se revelar importante, já que o Japão pode depender de uma demanda interna e não externa como fonte de crescimento futuro. Na verdade, as exportações japonesas realmente começaram a diminuir, em grande parte devido à apreciação do Yen8217s. Relatórios do BNP Paribas: as exportações líquidas contribuíram negativamente para o crescimento do PIB, reduzindo-o em 0,1 pontos percentuais. As exportações reais caíram pela primeira vez em mais de quatro anos, baixando 0,2 qq, enquanto as importações reais subiram apenas 0,5 qq. De acordo com os dados aduaneiros, a queda nominal das exportações ao longo do trimestre resulta principalmente da queda das exportações para a Ásia, que representam cerca de metade das exportações totais japonesas. Como presidente do Banco de Reserva Federal da América8217s, Alan Greenspan é indiscutivelmente o mais importante fabricante de políticas econômicas do mundo. Como resultado, cada discurso que ele dá e cada movimento ele faz seu escrutado por analistas e economistas. Um analista particular, Lawrence Kudlow, da CNBC8217, acredita que Greenspan está equivocada. O raciocínio de Greenspan8217s para elevar as taxas de juros 8 vezes consecutivas é ostensivamente para acompanhar o aumento da inflação, provocado por uma economia em expansão. No entanto, escreve Kudlow, Greenspan pode estar dependendo de indicadores irrelevantes para construir suas previsões de inflação. Os rendimentos das obrigações e os preços das commodities, que geralmente refletem as expectativas de inflação dos investidores8217, estão a cair. As medidas da oferta monetária, que estão economicamente correlacionadas com a inflação, parecem sugerir que a inflação é insignificante. Em vez disso, Greenspan pode estar a prever a política monetária sobre os preços dos ativos. Por exemplo, existem bolhas formando-se em mercados imobiliários regionais, em todo o país. Talvez, Greenspan esteja aumentando as taxas de juros para evitar que essas bolhas se expandam. No entanto, escreve Kudlow, esse raciocínio é falaz: se ele Greenspan está assistindo moradia, ele está olhando o caminho errado. A principal razão por trás do aumento do investimento em habitação é o cheque de vantagens fiscais neste setor desde a conta fiscal de 1997. Com base em impostos, é muito melhor investir em casas do que em ações, pois os lucros de venda em casa são livres de impostos até 500.000. Na semana passada, o dólar canadense começou a cair precipitadamente, atingindo uma baixa de 7 meses. Houve vários fatores que ajudam a explicar a queda súbita. Primeiro, o Parlamento canadense aprovou um projeto de lei que efetivamente questionou a liderança do primeiro-ministro. A lei chega até exigir a demissão do PM8217 (Paul Martin). Na próxima semana, o Parlamento votará na proposta de orçamento federal da Martin8217. Os analistas concordam que uma rejeição do orçamento equivale a um voto de falta de confiança no primeiro-ministro. Uma segunda causa para o declínio no dólar canadense pode, de fato, ser o excesso comercial decrescente do Canadá8217s. À medida que o dólar canadense apreciou, as exportações canadenses tornaram-se menos competitivas. Como resultado, a produção industrial e as exportações diminuíram tanto nos últimos meses. O dólar canadense pode sofrer uma quotcorrectionquot no curto prazo, enquanto os investidores se preparam para a incerteza política e econômica. Relatórios da Bloomberg News: o dólar do Canadá8217 caiu 3,3 por cento desde o dia 7 de abril, quando o juiz John Gomery divulgou as primeiras partes do testemunho de um inquérito que mostrou que os liberais em liberdade receberam pagamentos em troca de contratos de publicidade do governo na província de Quebec. O escândalo levou os conservadores a pedir um voto de não-confiança. No início desta semana, um jornalista de Hong Kong enviou sozinho ondas de choque através dos mercados cambiais. Começou quando o repórter decidiu independentemente construir uma história sobre os efeitos potenciais da revalorização de Yuan8217s. O artigo foi apanhado por um serviço de notícias chinês semi-oficial, que realizou uma breve tradução do artigo antes de publicá-lo. As notícias da Bloomberg e a Reuters notaram imediatamente o artigo, que afirmou que a China estava oficialmente revalorizando o Yuan. Sem oferecer fontes, o artigo afirmou que o Yuan seria autorizado a apreciar em 1 no próximo mês e 6 no final do ano. Dentro de alguns minutos, os comerciantes venderam 2 bilhões de dólares nos mercados de forex, enviando o USD reeling. Os comerciantes arrebataram moedas de outras nações asiáticas em desenvolvimento, com a expectativa de que essas outras nações seguissem a liderança de China8217 e permitissem que suas moedas apreciassem. Depois de alguns telefonemas, no entanto, revelou-se que a história era um produto de tradução imprecisa, e os comerciantes voltaram para o USD. Os relatórios do Wall Street Journal: A história de Bloomberg passou por telas comerciais, assim como os comerciantes de moeda asiáticos estavam terminando o dia e os mercados europeus estavam abrindo. Os comerciantes imediatamente despejaram dólares e compraram qualquer moeda asiática em que pudessem colocar as mãos em 8230. Quando Bloomberg e seu serviço de notícias rival, a Reuters começou a lançar dúvidas sobre o relatório, os comerciantes tentaram rapidamente comprar o dólar. O déficit comercial de abril de EUA foi de 55 bilhões, abaixo do registro de 60 bilhões em março. O desequilíbrio comercial sempre controverso com a China também declinou. Isto é especialmente impressionante, à luz do aumento dos preços do petróleo e das importações relacionadas ao petróleo. Sempre a voz da razão, os economistas pediram aos investidores que procedessem com cautela. Os números mensais são notoriamente voláteis, argumentam. Abril pode representar uma anomalia. Se, no entanto, os valores mensais refletem uma diminuição geral das importações, terá sérias implicações para as previsões de crescimento econômico. Na verdade, muitos economistas já estão revisando suas estimativas para cima, para níveis superiores a 4. De qualquer forma, o Federal Reserve provavelmente continuará a aumentar as taxas de juros, mais certo do que nunca que a economia esteja saudável e se expandindo. Os relatórios do Financial Times: Alan Greenspan, presidente do fed8217 favoreceu a abordagem de gerenciamento de risco, sugere que, no momento, a prioridade também é continuar a aumentar as taxas, para evitar um aumento nas expectativas de inflação, no momento em que o Fed está mais confiante nas perspectivas de crescimento robusto E enfatizou a incerteza na inflação. À medida que os rumores da reavaliação do yuan chinês se intensificam, os investidores têm procurado maneiras de lucrar. Muitos simplesmente compraram quantidades maciças de Yuan, guiados pela crença de que o Yuan apreciará instantaneamente sobre a China8217s, permitindo que flutue. Outros investidores encontraram uma maneira mais criativa de jogar os rumores, investindo em ienes japoneses. Esses investidores especulam que as exportações japonesas tornar-se-ão mais atraentes quando o Yuan pode apreciar. Certamente, a reavaliação chinesa tornará as importações japonesas mais acessíveis aos consumidores chineses. No entanto, os especialistas insistem que esse aumento será insignificante. Muitos investidores também acreditam que produtos chineses mais caros, provocados pela reavaliação de Yuan, também aumentarão as exportações para outros países asiáticos. Embora tal lógica possa ser estendida a outros países com mão-de-obra de baixo custo, não se aplica ao Japão. Os especialistas apontam que o Japão e a China têm economias muito diferentes e não competem nos mesmos mercados. A China é conhecida por seus produtos têxteis e de mão-de-obra intensiva, enquanto o Japão é conhecido por sua tecnologia e produção de máquinas. Relatórios da Reuters: Um representante do JP Morgan Chase Bank disse que as exportações do Japão para a China não cresceram mesmo quando o yuan, juntamente com o dólar, ganhou contra o iene. Ele observou que grande parte das exportações do Japão8217 para a China são peças para produtos que são exportados de novo para mercados como os EUA e a Europa. A demanda global é muito mais importante para determinar a força das exportações do Japão8217, disse ele. O Partido Trabalhista britânico8217s foi reeleito, embora por uma margem estreita. Enquanto ainda são 66 assentos saudáveis, a maioria do partido na maioria dos deputados na Câmara dos Comuns diminuiu grandemente. Esta eleição tem várias implicações importantes para a economia da Grã-Bretanha. Primeiro, a derrota do partido conservador mitiga a probabilidade de haver cortes de impostos e / ou diminuição dos gastos do governo nos próximos anos. Mais importante ainda, a Grã-Bretanha pode agora se tornar mais integrada na União Européia. Tony Blair é notório por seu apoio à UE. Consequentemente, ele provavelmente irá fazer campanha para que a Grã-Bretanha ratifique a Constituição da UE se tal referendo for posto a seu povo. No entanto, isto é condicional à França e aos Países Baixos aprovando pela primeira vez a Constituição, o que de forma alguma é garantida. Se o Reino Unido ratificasse a Constituição da UE, poderia abandonar a libra a favor do euro. No entanto, a maioria restrita do Work8217s sobre os conservadores provavelmente impedirá que isso aconteça. Morgan Stanley relata: Em suma, a redução da maioria trabalhista talvez seja mais provável que a continuidade, ao invés de uma reforma radical, caracterizará a política econômica nos próximos quatro anos. Após a vitória no mês passado, as eleições de 1982, a coalizão de centro-direita da Austrália8217 anunciou cortes de impostos radicais. O governo devolverá um superávit orçamentário de 16 bilhões para cidadãos e empresas nos próximos quatro anos. O objetivo dos cortes de impostos é estimular uma economia que nunca se recuperou completamente da recessão que ocorreu há vários anos. Os economistas prevêem um crescimento real do PIB de 3 este ano, o que parece respeitável até você compará-lo com taxas de 4-5 que a Austrália cresceu pereneamente no final de 19908217s. A maioria dos cortes de impostos assumirá a forma de uma queda no imposto sobre o rendimento das pessoas físicas, embora os aposentados e as empresas também recebam parte do excedente. Os economistas acreditam que os cortes de impostos serão eficazes para estimular a economia. No entanto, nem todos estão satisfeitos. O Financial Times relata: há muito neste orçamento que merece uma marca, mas também é um orçamento de oportunidades perdidas, disse Peter Hendy, da Câmara Australiana de Comércio e Indústria. Citando os milhões de empregos 8216lost8217 para a China, os fabricantes americanos clamaram pelos EUA para pressionar a China a flutuar o Yuan. Os EUA capitularam e concordaram em usar a diplomacia como meio de aplicar essa pressão. Tal caracterizou a abordagem dos EUA por alguns anos. A partir do mês passado, no entanto, parece que os EUA mudaram de tática. Primeiro, o Congresso votou para ameaçar a China com uma tarifa global de 27,5 se o Yuan não pudesse flutuar, embora nenhum cronograma oficial tenha sido incluído na nota. Em seguida, os fabricantes americanos fizeram pressão para que a China fosse rotulada oficialmente como um manipulador de moeda. Além disso, muitos economistas proeminentes e banqueiros centrais falaram em público, pedindo que a China implemente reformas monetárias. Alan Greenspan advertiu sobre o aumento da inflação na China e o aumento dos desequilíbrios comerciais. John Snow, Secretário do Tesouro, afirma que a China possui todos os mecanismos necessários para suportar uma moeda flutuante. Neste ponto, os EUA poderiam legitimamente usar a OMC como um meio de forçar a China a reavaliar com a ameaça de tarifas pesadas sobre todas as importações chinesas. A imprensa canadense reporta: enquanto a administração rejeitou essa abordagem no ano passado em favor do uso de canais diplomáticos, Vargo disse acreditar que os funcionários dos EUA agora favorecem uma linha mais dura. A administração fez uma grande mudança ao dizer que o tempo para a ação da China é agora, disse ele. Last month, the story in Canada was of political fraud. However, the situation has been neutralized, and a recall election is no longer likely. As a result, Canadian investors have turned to economic statistics to shed light on the future direction of the Canadian dollar (loonie). The recent release of Canadian employment statistics underscores the strength of the vigor of the Canadian economy. Nearly 30,000 new jobs were created last month, the most in over six months. However, note analysts, many of these jobs were created in the public sector, and growth in manufacturing jobs is sluggish. The next major event will be the publication of Ontario8217s budget, noteworthy because Ontario is the largest Canadian province. Investors also await the release of new housing starts, and the trade balance with the US, expected to be positive. With the recall election a moot point, currency traders expect the loonie to continue to appreciate against the Dollar. The Canadian Press reports: quotI don8217t want to ignore the political backdrop, but I think a lot of that got factored into the currency in April when the Canadian dollar was the weakest major currency in the world, quot said a senior economist. quotAnd to some extent the currency markets have already moved on and are looking at other things now. quot Various economic statistics indicate the US economy is in a stage of quotcooling off. quot Is this downturn temporary, or it a sign of things to come Some analysts think the economy needs a recession to let the air out of bubbles that have formed in various asset markets. Many investors have already priced slower growth expectations into stock prices, which explains the recent stock market decline. Other analysts think the current down-turn represents an anomaly, and predict a full recovery to be borne out in the next release of economic statistics. They point to slight decline in inventory statistics, which signal an increase in aggregate demand. Consumption will also be buoyed by a recent decline in energy prices, which will trickle down into lower fuel costs. IT and transportation spending have witnessed double digit percentage increases in recent months. Analysts from Morgan Stanley are wary: To be sure, risks abound: A resumption of stronger domestic demand growth is no guarantee that US output will follow some will doubtless spill into imports. And weakness abroad still menaces exports. We think the Eurozone economy is on the brink of recession, with the decline in business confidence raising the risk of a self-fulfilling prophecy. With regard to the Yuan8217s revaluation, it is no longer a question of if - but when. Investors are extremely confident that China will soon revalue, with some predicting it will occur as soon as this summer. Most investors have backed up their predictions with bets in the currency. Non deliverable forward contracts are currently trading at a 6 premium, which reflect investors8217 collective expectation that the Yuan will appreciate by 6 this year. Last quarter alone, 30 billion of speculative capital trickled into China. While some of this money is clearly 8216hot money,8217 most of the investments represent long term commitments in China. In response, China may delay revaluation, so as not to reward all of the speculators, who stand to earn massive capital gains when China revalues. To stem the inflow of speculative capital, China has continued to squash rumors of revaluation. The Financial Times reports: The expectation of this event will keep hot money flowing into China and the longer China delays the exchange rate adjustment, the more hot capital will move into China. Earlier this week, the Federal Reserve raised interest rates for the ninth consecutive time, to a more neutral level of 3. This came as no surprise to analysts, who had already priced this move into most securities. The real shock occurred two hours later, when the Fed issued a statement regarding an omission in its earlier testimony. Apparently, it had forgotten to include its belief that inflation remains 8216well-contained.8217 Many analysts found this omission to be all too coincidental, arguing that the Fed used the omission to draw special attention to inflation. Despite its comments which hinted otherwise, the Fed is still clearly concerned about inflation, and will probably predicate future rate hikes solely on inflation expectations. On the other hand, many investors still believe the Fed is 8216behind the curve,8217 and is not raising rates as a pace which mirrors the growth of the US economy. The Fed is in a bind, as it may try to cool off an economy that just doesn8217t need any help cooling off. Forbes online discusses the implications for currency markets: The dollar initially rose on the rate hike news. But dollar gains were limited by investor frustration that the Fed statement did not provide bolder clues about the central bank8217s intentions for future interest rate increases. quot These currency moves are not huge because we are not seeing a huge change in the language, quot said a senior trader. India8217s central bank recently raised interest rates to 5, in a focused effort to contain inflation. India8217s economy has been nothing short of impressive, and it is expected to grow by 7 this year. This is despite a below-average monsoon season, which is a perennial driver of Indian economic growth. Unfortunately for India, high economic growth has also been accompanied by high inflation, which India is now fighting to reign in. Indian central bankers also commented on the imminent revaluation of the Yuan. India has over 200 Billion in foreign exchange reserves, some of which is held in Chinese Yuan. Nonetheless, India is optimistic, asserting that the revaluation will actually benefit its economy, by making its own exports more competitive with Chinese exports. Reuters reports: quotWe will have a look at it, watch it carefully. Our exposure to the Chinese economy is mainly through trade and there is nothing for us to be concerned about a trade effect, quot Reserve Bank of India (RBI) governor Yaga Venugopal Reddy told reporters. On May 29th, France will vote on the EU constitution. If the people vote 8216no,8217 as most polls currently predict, the EU8217s future will be severely jeopardized. With a sluggish economy and high unemployment, France8217s economy is among the worst in the EU. The French have found scapegoats for their economic malaise in the newest members of the EU, certain central European nations, who are enjoying unparalleled growth. France has accused these nations of stealing valuable capital and jobs, with their high interest rates and low wages. Much of the reason these economies are performing so well however stem from expectations that they will soon be allowed to switch over to the Euro currency. A French rejection of the Constitution will delay this change, as well as many other economic benefits promised to the new members within a few years. The International Herald Tribune reports: Eastern European currencies may look a little rich at present, but valuations are being supported by large capital inflows into the region and the buildup of foreign reserves. A decrease in foreign direct investment would be8230damaging to Eastern Europe8217s capital markets. Central Banks are essentially banking monopolies, and often earn great sums of money. America8217s Federal Reserve Bank earned 23 Billion last year, for example. But what happens when central banks lose money This issue is becoming increasingly pertinent in the context of Asia8217s Central Banks, which continue to build up the foreign exchange reserves in the face of looming capital losses. Many Asian economies have pursued economic policies of export promotion, the success of which is conditional on a cheap, domestic currency. Some nations have explicitly fixed their currencies to the USD other have intervened on a regular basis to prevent their currencies from rising too much. The means to achieving the end of a cheaper currency is to purchase USD, usually in bulk. As a result, Asian Central Banks have collectively amassed 2 trillion worth of USD. If the USD continues to decline in value, Asian Central Banks will sustain massive capital losses. When measured as a percentage of GDP, these losses could reach double digits. For this reason, Asian central banks are sitting tight on their reserves. The Economist reports: There is now no way that Asia8217s central banks can sell their reserves, reinvesting the proceeds in higher-yielding assets, without triggering the very capital losses they would hope to avoid. If they try to rouse these dormant assets, they will empty them of value. If they wish to preserve their worth, they must let them lie. Central Banks are essentially banking monopolies, and often earn great sums of money. America8217s Federal Reserve Bank earned 23 Billion last year, for example. But what happens when central banks lose money This issue is becoming increasingly pertinent in the context of Asia8217s Central Banks, which continue to build up the foreign exchange reserves in the face of looming capital losses. Many Asian economies have pursued economic policies of export promotion, the success of which is conditional on a cheap, domestic currency. Some nations have explicitly fixed their currencies to the USD other have intervened on a regular basis to prevent their currencies from rising too much. The means to achieving the end of a cheaper currency is to purchase USD, usually in bulk. As a result, Asian Central Banks have collectively amassed 2 trillion worth of USD. If the USD continues to decline in value, Asian Central Banks will sustain massive capital losses. When measured as a percentage of GDP, these losses could reach double digits. For this reason, Asian central banks are sitting tight on their reserves. The Economist reports: There is now no way that Asia8217s central banks can sell their reserves, reinvesting the proceeds in higher-yielding assets, without triggering the very capital losses they would hope to avoid. If they try to rouse these dormant assets, they will empty them of value. If they wish to preserve their worth, they must let them lie. Last week, the Yuan briefly traded outside of its prescribed band, breaching 8.27 YuanUSD for the first time in over 10 years. Immediately, traders began to float rumors that China was conducting a quotdry run, quot and would soon allow the Yuan to float. China8217s Central Bank, however, quickly sold USD, and the Yuan returned to its normal level of 8.28, which was set in 1994. China issued an official press release following the event, stating the fluctuation was an anomaly, and revaluation was not 8216imminent.8217 The damage had already been done however, as investors seem more confident than ever that China will soon switch to a floating exchange rate regime. Trading in Yuan futures has reached a feverish pitch. These futures reflect investors8217 future expectations. In this case, the increasing futures prices indicate that traders believe revaluation is still imminent. Most analysts concur, arguing that the revaluation will likely take place before the year ends. The Taipei Times reports: Beijing says it will eventually let the yuan trade freely on world markets, but that doing so immediately would damage the country8217s frail banks and financial industries. J. P. Morgan Chase amp Co predicted China will loosen its decade-old peg to the US dollar next week. Chinese officials recently approved a preliminary list of banks to make the market in currency forwards. Foreign banks, including HSBC and Deutsche Bank AG, were heavily represented, although the Big 5 Chinese Banks were predictably included. The move is a large step forward for China, as currency derivatives experience a surge in popularity. Currency forwards allow traders to essentially bet on the future direction of a currency, by entering into an agreement to buy or sell currency at a fixed exchange rate on a fixed date in the future. Yuan-denominated forwards are especially popular, as traders can speculate if, when, and by how much China will revalue its currency. Dow Jones News reports: Once foreign-exchange fowards trading on the interbank market becomes active, it could affect the yuan spot rate and offshore yuan forwards markets. But it8217s still not clear how much freedom the People8217s Bank of China is likely to give banks in trading fowards. In a recent press release, high-ranking members of China8217s Central Bank claim no further revaluations of the Yuan will take place. This time, they may be serious. In previous reports, officials coyly stated they would revalue, without laying out a timetable for such a revaluation. In this latest report, these same officials downplayed the possibility of further Yuan revaluations, saying the forex markets would determine the future value of the Yuan. They quickly added that any sudden appreciation of the Yuan would be mitigated. While it is possible the officials are still being coy, it seems likely that another revaluation is a distant prospect. The Economic Times reports: 8220This will be decided by the market. The government will not decide the yuan8217s level,8221 Wu Xiaolin, the central bank vice governor said. In a move that was uncharacteristically transparency, China has divulged the composition of the currency basket that is tied to the Yuan. According to senior Chinese officials, the basket is composed of USD, Euros, Japanese Yen, and Korean Won, as well as the currencies of Singapore, Britain, Malaysia, Russia, Australia, Thailand and Canada. While China failed to disclose the exact proportions, it hinted the composition would be trade-weighted, leading economists to speculate the USD would be most important, followed by the Euro and Japanese Yen. The baskets broad make-up will succeed in minimizing the Yuans volatility, for large fluctuations in component currencies will be spread across the entire basket. The Economist reports: Using a weighted average of Chinas trade and FDI, one economist guesses that the dollar has a weight of 43, the yen 18 and the euro 14. This incorporates a higher dollar weight to reflect the importance of Hong Kong and Taiwan. When China revalued the Yuan last month, many Chinese conglomerates incurred massive losses on their foreign exchange holdings, which instantaneously depreciated 2 in real terms. Ping An, a large Chinese insurance company, lost nearly 300 Billion RMB, as the majority of its forex reserves were and still are held in USD. As a result, Ping An recently announced it will begin to diversify its reserves, in anticipation of future revaluations. While Ping Ans decision is insignificant, in and of itself, it seems to be part of a broader trend of forex diversification, among both central banks and multinational firms. When China revalued the Yuan by allowing it to appreciate 2 against the USD, experts expected other Asian nations to follow suit. An entire month has passed since the move, however, and the wave of Asian currency revaluations has yet to materialize. Despite promulgating its intentions to allow its national currency to appreciate, Malaysia has actively prevented the ringgit from fluctuating too much. The currencies of India and Thailand have also remained stubbornly locked in pre-revaluation trading levels. Hong Kong authorities have acted similarly, preventing the Hong Kong Dollar from fluctuating outside its tight trading band. Its political and economic relationship with China notwithstanding, Hong Kong has insisted it will not tamper with the HKDs 21-year peg to the USD. The Economist reports: Joseph Yam, head of the Hong Kong Monetary Authority (HKMA), the de facto central bank, said on July 21st, the day China moved, that: No change is needed for the linked exchange-rate system, which has served us well and which we will keep. Hedge funds previously rode the wave of hot money into China, betting that China would further revalue the Yuan in the short-term. According to industry insiders, however, hedge funds may abandon their positions in the Yuan, due to a fundamental lack of profitability. Hedge funds require high returns on their investments, and the 1 interest rates that the Bank of China pays them while they wait for further revaluation has become untenable. It is also becoming more expensive to bet against other Asian currencies, because of higher borrowing costs, which are tied to American interest rates. In short, hedge funds are gradually unraveling their bets on the Yuan western firms because the best are unprofitable, and Asian firms because they simply dont believe further revaluations will take place. In an unusual move, the Central Bank of China has posted an English message on its website: The 2.1 percent adjustment does not mean that the Yuan exchange rate has been appreciated as a first step and that there will be further adjustments. The message was clearly aimed at speculators, who continue to pour hot money into China, in anticipation of future revaluations. Chinas Central Bank has repeatedly tried to stem the inflow of capital, as it must spend billions to sterilize the flows and stabilize the Yuan, without triggering inflation. Despite the warning, and a drop in short term interest rates, speculators remain undeterred. They are not alone, as economists almost universally agree that another revaluation will take place in the near-term. The Tehran Times reports: 8220The two percent revaluation has not relieved, and in fact has only intensified, yuan revaluation speculation,8221 said a senior Chinese academic. 8220What else is the central bank going to say in the face of mounting pressure8221 Since its revaluation, the Chinese Yuan has not fluctuated, leading some traders to joke Yuan should be spelled Yawn. Chinas Central Bank has reinforced this stasis by informing the public it has no intentions to re-adjust the peg in the near-term. Nonetheless, many forex traders are still optimistic that further revaluation(s) will be carried out within the next 12 months, with a consensus expectation of 4-6. Non-deliverable forward contracts indicate an expected 4 appreciation, down from 6.5 last week. In order to discourage traders and speculators from maintaining long positions on the Yuan in anticipation of further revaluation, the Bank of China recently lowered short-term interest rates, meaning it is now more expensive-in real terms-to hold Yuan rather than USD. The Wall Street Journal reports: Others who expect the yuan to appreciate this year cite China8217s large, growing trade surplus with the U. S. and what they say could be renewed political pressure from the U. S. sooner than most expected. As the 2.1 Yuan revaluation sets in, economists and traders alike are stepping back and asking one question: what8217s next The revaluation was surely momentous, but ultimately insignificant. Experts still reckon the Yuan is still undervalued by 20 8211 40. Non-deliverable forward contracts reflect collective expectations for future exchange rates. The 1 year Yuan forward contract is currently trading at 7.54 RMBUSD, indicating investors believe the Yuan will be allowed to appreciate further before year end. As a result, while China undoubtedly hoped the revaluation move would stem the flow of 8216hot money8217 into China, it is likely to have no effect, as risk-averse investors will continue to pour money into Chinese assets and equities, confident they can earn stable returns. The Financial Times reports: A Chinese policy maker said he did not think China would allow dramatic changes in the exchange rate. 8220The principle is stability as well as flexibility,8221 Prof Yu said. 8220We don8217t want to encourage speculative capital inflows.8221 After years of speculation and hearsay, China has finally revalued the Yuan. However, the currency will remain effectively pegged to the USD at a rate of 8.11 RMB USD, up from 8.27 RMB USD, and will be prevented from fluctuating against the USD by more than .3 in either direction. China also announced that in the near-term, it may rotate the peg to a basket of currencies, which would presumably allow the Yuan to appreciate more. As expected, shortly after China revalued, several other Asian countries followed suit. Malaysia was first, announcing a rise in the value of its national currency, the Ringgit. (Your correspondent reported on the possibility of a Malaysia-China dual currency revaluation on July 8th). While the Yuan revaluation was ultimately slight, it could have important implications for other currencies. The Financial Times reports: A senior currencies strategist said This is China trying to walk a very fine line between protecting their economy and responding to political pressures, notably from the US. Because the revaluation is less dramatic and because it is gradual, the market reaction is not as great. A recent string of ugly episodes have pitted the two great economies of America and China against each other. Recently, CNOOC, a Chinese oil company, announced its intentions to acquire Unocal, an American oil Company. After several prominent American politicians publicly stated their opposition to the deal, a high-ranking Chinese General suggested continued American interference in Chinese economic and political issues might warrant the use of nuclear weapons. In addressing the increasingly fragile state of Sino-US relations, President Bush highlighted several sources of economic conflict between the two nations. Topping his list was China8217s currency peg, which he labeled a 8216difficulty.8217 Bush admitted the peg has become a source of tension between the two countries, and he will continue to convince them that it is in their best interest to revalue. The Washington Post reports: quotWe have some difficulties on the trade front with China, and one such difficulty is their currency, quot Bush said at a joint news conference with Australian Prime Minister John Howard. quotAnd we8217ve worked with China to convince them that it makes sense for them to change how they value their currency, quot Bush added. This month, China8217s already massive foreign exchange holdings swelled to a new all-time high of 711 Billion, having increased 100 Billion in the last 6 months alone. At this pace, it will not be long before the 1 trillion level is breached. As 8216hot money8217 continues to flow into China, the government is forced to print Yuan, that will ultimately be exchanged for dollars. In order to prevent an outbreak of inflation and subsequent upward pressure on the Yuan, China8217s Central Bank must issue bonds and remove the new Yuan from circulation. In doing so, the country has built up gigantic holdings of dollars, held mostly in US treasury securities. It seems China will continue to sterilize capital inflows in order to prevent speculators from profiting from the revaluation of the Yuan, which many pundits believe is imminent. It is also worth noting, that as China purchases ever more US treasury securities, the US becomes ever more beholden to the Chinese government to maintain their holdings. The CCP government could do serious harm to the US economy, and to the value of the USD, if it were to ever to sell a significant chunk of the reserves. The China Daily reports: The build-up in reserves increases the pressure on the People8217s Bank of China, the central bank, and its efforts to control monetary supply and inflation, and will fuel an already intense debate about whether Beijing should revalue its currency, the renminbi, now pegged to the US dollar. While many southeast Asian economies explicitly peg their currencies to the USD, it is China that suffers the most scrutiny. This is natural, as China is by far the largest economy in this region, excluding the Asian Tigers and Japan. A new rumor is circulating that that China and Malaysia, another serial currency pegger, may team up and revalue their currencies at the same time. The Malaysian Ringit was initially pegged to the USD following the Southeast Asian economic crisis, and has been held in place since. Malaysian officials have hinted that the country may revalue in response to fundamental indicators, which suggest the currency is grossly undervalued. However, the Malaysian prime Minister insisted while his country and China remain close political allies, no dual currency revaluation agreements are being considered. AFX News Limited reports: Amid intense speculation about a looming adjustment of the ringgit, Abdullah has said in recent weeks that Malaysia will not adjust its currency peg for the time being but is closely watching developments in the financial markets. US Representative John Dingell has introduced a bill that addresses currency manipulation. Specifically, the bill would require any nations that enter into future trade agreements with the US to permit their currencies to float. Currently, a number of countries, mainly in Southeast Asia, either explicitly peg their currencies to the USD or intervene in forex markets to prevent their domestic currencies from significantly fluctuating. Dingell has argued currency manipulation is tantamount to a trade subsidy or tax break, as a nations goods and services are made artificially cheap by an undervalued exchange rate. He cited China and Japan as serial currency manipulators who have hamstrung many American firms. The Detroit Free Press reports: Dingell8217s bill would apply to all countries that trade with the United States by requiring the free trading of currencies as an objective for every new trade agreement. The bill also would require the administration to report on currency manipulations to Congress and seek compensation for harmed industries. Secretary of the Treasury John Snow has renewed his guarantee that China will revalue its currency, going so far as to say it would happen within the next few months. Snow issued the statement to a small group of American politicians, who were drafting a bill that would effectively impose a 27.5 across-the-board tariff on all Chinese imports, provided the Chinese government failed to revalue the Yuan within a reasonable time frame. The Senators who were sponsoring the bill agreed to postpone a vote on it, which was originally scheduled to occur within the next few weeks, in light of Snow8217s commentary. In an unofficial vote, 67 senators approved the bill, indicating it was likely to pass in its official vote. The Senators agreed that it would be better for Sino-US relations if China 8216naturally8217 decided to revalue the Yuan, rather than as a result of foreign pressure. quotThey have convinced us that the likelihood of real progress in China on currency revaluation is very real and could well occur in a very short while, in the next few months, quot Schumer said. quotIf we can get there by accommodation, so much the better. quot Investors and economists have been betting on the Chinese Yuan8217s revaluation for several years now. Economists estimate the Yuan is undervalued by 40. Congress has adopted the average of 15 and 40 estimates, in calling for a 27.5 across-the-board tariff on Chinese imports. The Economist8217s Big Mac Index indicates the Yuan is 59 undervalued. Who is correct There are several viable methods economists use to value currencies. First, the theory of Purchasing Power Parity dictates prices in different countries should converge, to offset divergent exchange rates. An application of this theory to China indicates the Yuan is undervalued by 40. Next, a nation8217s 8216fundamental equilibrium exchange rate8217 can be calculated, predicated on current account and trade balances. In this case, while China runs an enormous trade surplus with the US, it runs trade deficits with several other countries. As a result, economists using this method reckon the Yuan is only undervalued by 15-25. Finally, economists constructing estimates base on the 8216behavioral equilibrium exchange rate8217 method use economic indicators, such as inflation and employment statistics, to calculate the fair exchange rate. Such methods produce exchange rates which are only 7 below current rates. As a result, much of the uproar over China8217s refusal to revalue may not be predicated on solid economic logic. The Economist reports: The uncertainty about fair value explains why the IMF and America8217s Treasury prefer to say that the yuan needs to become more flexible than to call for revaluation outright8230calls for a revaluation of 27.5 rest on flimsy foundations. Alan Greenspan, chairman of the Federal Reserve, and John Snow, Secretary of the Treasury, testified before Congress regarding the planned revaluation of the Yuan. Both Greenspan and Snow reiterated their collective belief that China should revalue as soon as possible, in the interest of the global economy. Snow claimed China now has all of the necessary mechanisms and controls in place to support a floating currency. In their testimony, both men also addressed the proposed legislation of high tariffs on all Chinese imports, should China fail to revalue its currency within a designated period of time. They both agreed it was counterproductive to current diplomatic efforts, and will not likely goad China into revaluing any sooner. Reuters reports: quotThe sooner the Chinese, in their own self-interest, move to a more flexible currency regime, perhaps leading other Asian currencies to become more flexible as well, the better for all participants in the global trading system, quot Greenspan said. According to high-ranking CCP officials, China is seriously considering abandoning the Yuan8217s decade-long peg to the dollar. The solution, however, is not likely to please foreign governments, who have been pressuring China to revalue for quite some time. The change would effectively link the Yuan to a basket of currencies, one that includes USD, Euros, Yen, and various other currencies, in a proportion to be determined later. However, it is not clear whether the Yuan would be allowed to appreciate following the switch. China may revalue the Yuan by 3-5, after which the value would be effectively fixed to the basket. The International Herald Tribune reports: Pegging the yuan8217s value to a basket of currencies, and not just the dollar, would make it a little more flexible and less prone to the swoops and swoons of the dollar in recent years. If the dollar fell against the euro, yen or any other currencies in the basket, then the value of the yuan would creep up in dollar terms. Economists seem to agree that the revaluation of the Chinese Yuan is 8216imminent.8217 What they cannot seem to agree on is the nature of revaluation, although a few plausible scenarios seem to have emerged. First, a revaluation may simply entail the widening of the bands that currently constrain the Yuan8217s fluctuation, which would inevitably lead to the currency8217s appreciation. Another option would be to tie the Yuan to a basket of currencies, rather than to the USD by itself. The most drastic move would be for China to engineer a one-time, 30 revaluation of the Yuan, after which the currency would conceivably be permitted to float. However, analysts reckon China is likely to simply 8216drop8217 the Yuan8217s peg by 5-7 against the USD. In this way, China would placate complaining foreigners without rewarding speculators too much. Non-deliverable forward contracts, which reflect investors8217 future expectations for the Yuan, currently support this slight revaluation scenario. The Economist reports: Judging by the shadow yuan, financial markets reflect a sort of average of the divergent views, and are betting on a 6 appreciation within a year. The uncertainties come from the tension between China8217s concern for stability and the risk that a small shift in the yuan would create more problems than it solved. The US continues to pressure to China to revalue the Yuan, but to no avail. Politicians spew protectionist rhetoric and cite the millions of jobs 8216lost8217 to China because of its artificially cheap currency. Not all Americans, however, are pushing for revaluation. One think tank has observed that most of the pressure and propaganda originates from powerful lobbying groups, which represent American businesses losing market share to Chinese firms. Unfortunately, American consumers are not represented by equally powerful lobbying groups, which could potentially extol the virtues of an artificially cheap Yuan, which keeps prices low and inflation in check. Perhaps, after the Yuan is revalued and prices begin to rise (at Wal-Mart), politicians will recognize the fallacies in their politics. The Independence Institute Reports: Government interference in the international marketplace can ultimately lead to a trade war among nations. In the 1930s, the Smoot-Hawley legislation that increased tariffs in the United States was followed by retaliation from other nations. In response to mounting pressure from their constituents, American lawmakers are bullying China into revaluing the Yuan. China, they argue, is using its artificially cheap currency to 8216steal8217 manufacturing jobs from the US. They cite the rising current account and trade deficits to buttress their claims. Logically, if China revalues its currency, American manufacturers will become more competitive and will not be forced to outsource their manufacturing to China. Alan Greenspan refuted such logic in a speech he delivered last week. The trade deficit, he said, us unlikely to improve if China allows the Yuan to appreciate. If anything, it will worsen. The outsourcing of manufacturing to China typically involves large-scale, long-term commitments. Hundreds of millions of dollars are often spent to build plants and train new workers. As a result, American firms will not simply return their operations to the US following an appreciation in the Yuan. Suppose that the Yuan appreciates 40 against the dollar (unlikely) and manufacturing in China became uneconomical. Foreign firms will simply move production to other developing (Asian) economies, where labor costs are marginally more expensive than in China. The upshot is that American jobs which have already been outsourced are unlikely to return, and the twin deficits are unlikely to decline anytime soon. Reuters reports: But Greenspan poured cold water on the idea that a revaluation will shrink a record bilateral deficit with China that hit 162 billion last year. It will mean that suppliers will turn to other countries like Malaysia or Thailand for cheap textiles and other goods that China now supplies. quotSo essentially what we will find is we are importing from a different area but we8217ll be importing the same goods, quot Greenspan said. China has moved one step closer to revaluation. In its latest move, China officially opened a foreign exchange market, where the Yuan may eventually trade against other currencies. The electronic system currently allows eight currency pairs to be traded, none of which include the Yuan. Some analysts have questioned the short term viability of this exchange. Its success will be entirely conditional on the participation of foreign banks and institutions, they argue. The move occurred just hours after the US warned China that failure to float the Yuan within 6 months could result in China being labeled a quotcurrency manipulator. quot Such a distinction would have serious implications for Sino-US trade. China insists that it still needs to liberalize some if its capital controls, as well as move towards market-driven interest rates, before it can make the switch. Nonetheless, this electronic forex system is a step in the right direction. The Financial Express reports: Shanghai Securities and Futures Institute economist Jin Dehuan said in the longer term the system would help China find more effective ways to determine the yuan exchange rate. It offers an example that regulators can draw on before breaking the yuans dollar peg. Earlier this week, a Hong Kong journalist single-handedly sent shock waves through currency markets. It began when the reporter independently decided to construct a story on the potential effects of the Yuan8217s revaluation. The article was picked up by a semi-official Chinese news service, which performed a cursory translation of the article before publishing it. Bloomberg news and Reuters instantly noticed the article, which claimed China was officially revaluing the Yuan. Without offering sources, the article claimed the Yuan would be allowed to appreciate by 1 next month, and 6 by the end of the year. Within a few minutes, traders had sold 2 Billion of USD on forex markets, sending the USD reeling. The traders snatched up currencies of other developing Asian nations, with the expectation that these other nations would follow China8217s lead and allow their currencies to appreciate. After a few phone calls, however, it was revealed that the story was a product of inaccurate translation, and traders poured back into the USD. The Wall Street Journal reports: The Bloomberg story flashed across trading screens just as Asian currency traders were ending their day and European markets were opening. Traders instantly dumped dollars and bought any Asian currency they could lay their hands on8230When Bloomberg and its rival news service Reuters started casting doubt on the report, traders just as quickly tried to buy back the dollar. As rumors of Chinese Yuan revaluation intensify, investors have been searching for ways to profit. Many have simply purchased massive quantities of Yuan, guided by the belief that the Yuan will instantly appreciate upon China8217s allowing it to float. Other investors have found a more creative way to play the rumors, by investing in Japanese Yen. Such investors speculate that Japanese exports will instantly become more attractive when the Yuan is allowed to appreciate. Certainly, Chinese revaluation will make Japanese imports more affordable to Chinese consumers. However, experts insists this increase will be negligible. Many investors also believe that more expensive Chinese products, brought on by Yuan revaluation, will also increase exports for other Asian countries. While such logic can be extended to other countries with low cost labor forces, it does not apply to Japan. Experts point out that Japan and China have vastly different economies, and do not compete in the same markets. China is known for its textiles and labor-intensive wares, while Japan is known for its technology, and machine production. Reuters reports: A Representative for JP Morgan Chase Bank said Japan8217s exports to China did not grow even when the yuan, along with the dollar, gained against the yen. He noted that much of Japan8217s exports to China are parts for products that are then exported again to markets such as the U. S. and Europe. Global demand is far more important in determining the strength of Japan8217s exports, he said. Citing the millions of jobs 8216lost8217 to China, American manufacturers have clamored for the US to pressure China to float the Yuan. The US capitulated, and agreed to use diplomacy as a means of applying such pressure. Such has characterized the US approach for a couple years. Beginning last month however, it seems the US has changed tactics. First, Congress voted to threaten China with a 27.5 across-the-board tariff if the Yuan was not permitted to float, although no official timetable was included in the bill. Next, American manufacturers lobbied for China to be officially labeled a quotcurrency manipulator. quot Moreover, many prominent economists and central bankers have spoken publicly, urging China to implement currency reforms. Alan Greenspan warned of rising inflation in China and widening trade imbalances. John Snow, Secretary of the Treasury, claims China has all of the necessary mechanisms in place to support a floating currency. At this point, the US could rightfully use the WTO as a means of forcing China into revaluing with the threat of heavy tariffs on all Chinese imports. The Canadian Press reports: While the administration rejected that approach last year in favor of using diplomatic channels, Vargo said he believed U. S. officials now favor a tougher line. quotThe administration has made a major shift by saying the time for China to act is now, quot he said. With regard to the Yuan8217s revaluation, it is no longer a question of if - but when. Investors are extremely confident that China will soon revalue, with some predicting it will occur as soon as this summer. Most investors have backed up their predictions with bets in the currency. Non deliverable forward contracts are currently trading at a 6 premium, which reflect investors8217 collective expectation that the Yuan will appreciate by 6 this year. Last quarter alone, 30 billion of speculative capital trickled into China. While some of this money is clearly 8216hot money,8217 most of the investments represent long term commitments in China. In response, China may delay revaluation, so as not to reward all of the speculators, who stand to earn massive capital gains when China revalues. To stem the inflow of speculative capital, China has continued to squash rumors of revaluation. The Financial Times reports: The expectation of this event will keep hot money flowing into China and the longer China delays the exchange rate adjustment, the more hot capital will move into China. Last week, the Yuan briefly traded outside of its prescribed band, breaching 8.27 YuanUSD for the first time in over 10 years. Immediately, traders began to float rumors that China was conducting a quotdry run, quot and would soon allow the Yuan to float. China8217s Central Bank, however, quickly sold USD, and the Yuan returned to its normal level of 8.28, which was set in 1994. China issued an official press release following the event, stating the fluctuation was an anomaly, and revaluation was not 8216imminent.8217 The damage had already been done however, as investors seem more confident than ever that China will soon switch to a floating exchange rate regime. Trading in Yuan futures has reached a feverish pitch. These futures reflect investors8217 future expectations. In this case, the increasing futures prices indicate that traders believe revaluation is still imminent. Most analysts concur, arguing that the revaluation will likely take place before the year ends. The Taipei Times reports: Beijing says it will eventually let the yuan trade freely on world markets, but that doing so immediately would damage the country8217s frail banks and financial industries. J. P. Morgan Chase amp Co predicted China will loosen its decade-old peg to the US dollar next week. Jeffrey Frankel, a professor of economics at Harvard University, believes the laws of economics Will eventually force the Yuan to rise against the dollar, in real terms at least. China8217s economy is growing exponentially, and the Chinese government seems either unwilling or unable to cool it off. As the demand for Chinese goods continues to skyrocket, so too must prices. According to Frankel, the extent of the rise will be such that in a decade, the Chinese Yuan will be fairly valued against the USD, in real terms. While nominally, one USD would be worth 8.28 Yuan, the inflated costs of Chinese goods would ensure equilibrium. Such a situation would be disastrous for China, however. It would be in China8217s best interest to slowly appreciate the Yuan against the Dollar, through the use of a crawling peg exchange rate regime. If China waits to long, warns Frankel, the results could be catastrophic. Reuters reports: quotThe alternative of waiting for a time of balance-of-payments deficit often turns out to mean exiting the peg under strong downward speculative pressure, with the result that confidence is undermined and the national balance sheet is weak, quot Frankel says. It is clear that American lawmakers are frustrated with the growing trade imbalance, and many feel the Chinese currency peg is to blame. Accordingly, lawmakers have requested the peg be officially labeled an unfair trade practice, under US trade law. The Bush administration has 45 days to respond to the petition. If it votes affirmatively, the US could rightfully impose trade sanctions or import tariffs on Chinese imports. However, this seems unlikely, as the Bush administration has previously rejected two similar petitions. It seems the administration is pursuing more diplomatic means in trying to coerce China into undoing the peg. However, congressmen have warned that another rejection could force them to use legislation to put pressure on China. Reuters reports: U. S. manufacturers blame China8217s long-held policy of tying its currency to the dollar for much of the U. S. trade deficit with China, which hit a record 162 billion last year. They argue the currency peg makes U. S. imports more expensive and Chinese exports cheaper, giving Chinese companies an unfair price advantage of 25 percent to 40 percent. According to a top Treasury department official, China is fully able to float the Yuan. Recent improvements and reforms have left China with the mechanisms and structures needed to float its currency. It has taken steps to liberalize its current account, so as to allow the outflow of USD. It has appointed several prominent international banks to serve as market-makers in the new foreign exchange market. The Chinese government has even dispatched top officials to the Chicago mercantile exchange, which will likely serve as a model for China. Yuan-denominated currency derivatives, such as swaps, futures, and options are already extremely popular. At this point, they serve as a mere hedge against revaluation. In the future, however, they may take on a more important role, as the Yuan will surely become one of the most frequently traded currencies in the world. The only thing that is preventing China from floating the Yuan tomorrow is China, itself. The Chinese government has used a cheap Yuan for over a decade to buttress its policy of export promotion, and is understandably nervous about the impact a revalued Yuan will have on its economy. The US Senate voted by nearly a 2-1 margin in favor of threatening China with tariffs, if it does not soon allow the Yuan to float. The proposition is extremely vague, and does not include a timetable for reforms, nor does it lay out a test to determine if the reforms have taken place. Rather it calls for a 27.5 across-the-board tariff on all Chinese imports. Massive factory closings and layoffs in American manufacturing sectors have led politicians to embrace a limited form of protectionism. With the recent elimination of quotas on Chinese textile imports, American textile production will probably soon fade into insignificance. Congressman are searching for any means possible to make American exports more attractive, and China8217s exchange rate regime represents an easy target. China has two definitive options: it can embrace reform or accept tariffs on exports to America. Either way, Chinese imports may soon become more expensive. The Christian Science Monitor reports: Letting the yuan quotfloatquot in global currency markets, however, would help level the competitive playing field between Chinese and American companies. But China refuses to do that, claiming that parts of its economy, such as banks, are still too weak to bear the pressure of global competition that a floating yuan would bring. China is slowly moving toward revaluation of the Chinese Yuan. The currency, which is currently fixed to the USD and trades within a narrow band, may soon be allowed to fluctuate freely. China8217s Central Bank recently approved 7 (foreign) banks as market makers in the new exchange rate system. The banks will be permitted to make the market in a dozen or so of the most popular currency pairs (i. e. USDEuro, USDYen, etc.). Eventually, these banks will be permitted to make the market in Chinese Yuan. Economists and nation-states continue to urge China towards reforming its exchange rate regime, sooner rather than later. The Economist reports: How much these moves will accelerate currency reform is uncertain. In a recent interview with the People8217s Daily, the party mouthpiece, Zhou Xiaochuan, the central bank governor, said that the priority was to improve its exchange-rate mechanism, not simply to revalue. A new study by the IMF calls China foolish for liberalizing its capital controls before adjusting its exchange rate regime. The study criticized China for recently allowing capital to enter and exit the country more freely than before. Chinese banking officials believe looser controls on capital inflow and outflow are a prerequisite to a floating exchange rate, but experts argue that this theory is fallacious. In reality, the ability for foreign and domestic firms to exchange Yuan for foreign currency - and vice versa - may exert extreme pressure on the Yuan, to the point of instability. Currently, all international capital movement must be approved by Chinese government officials, so that the central bank can offset changes with commensurate changes in forex reserves. After China opened its borders to foreign capital to boost economic growth, the demand for Yuan soared. In order to maintain the fixed exchange rate with the USD, the central bank was forced to purchase massive blocks of USD, which now total over 600 Billion. China tried to offset these inflows by allowing select Chinese companies to invest abroad, but this only triggered more foreign investment in China. The Economist reports: The combination of fixed exchange rates and open capital accounts has caused financial crises in many emerging economies, especially when financial systems are fragile. China would therefore be wise to move cautiously in liberalising its capital account, but should move more rapidly towards greater exchange-rate flexibility. American manufacturers and labor unions are fed up with the Chinese government8217s stubborn refusal to revalue the Yuan, which may be undervalued by as much as 40. Manufacturers are declaring bankruptcy in droves, unable to compete with their Chinese counterparts, who have the advantage of being able to sell their goods for artificially low prices. This has caused the US trade deficit with China to balloon to 150 Billion. In addition, as many as 3 million manufacturing jobs have been directly lost to China, as firms outsource most of their production to a region where wages are lower. Many American firms have tried to lobby the US government to pressure the Chinese, but to no avail. Apparently, the current administration is afraid of the impact this applied pressure would have on diplomatic relations. There are alternatives, however, as the Miami Herald reports: Various bills in Congress seek to address the issue. One would require negotiations with China and, if the currency isn8217t re-valued, tariffs of 27.5 percent on Chinese goods to make up for the price difference. The China Currency Coalition, a group that includes more than 30 business and labor unions, plans to push for additional legislation on the issue. Since the year 2000, daily trading (buying or selling) of Chinese Yuan has increased over 500. This spike in volume can be attributed to two closely related factors. First, as China becomes more prominent in the global economy, foreign currency must be exchanged for Yuan in order to complete transactions in which one of the parties is Chinese. Second, speculators have been buying up large quantities of Yuan, anticipating a near-term appreciation. Contrary to popular belief, the Yuan is allowed to fluctuate on a daily basis. However, this fluctuation is tightly controlled within a band set by the Chinese Central Bank, and is thus rendered irrelevant. Many investors believe the Central Bank will soon expand the band, leading to the Yuan8217s eventual appreciation against the Dollar. Forward-rate agreements, which allow investors to exchange dollars for yuan at a fixed date in the future, reflect investor expectations of future exchange rates. In this case, the price of the forwards indicate that investors expect the yuan to appreciate against the dollar within the next couple of years. China8217s Central Bank announced today that it will maintain interest rates at current levels, despite foreign pressure to raise them. In the past 9 years, China8217s Central Bank has only raised interest rates one time. China8217s economy is unusual in that it requires an extraordinary amount of investment (40 of GDP) to continue expanding. As a result, the central bank must maintain cheap and easy access to capital. For many years, Chinese interest rates have been kept below the rate of inflation, allowing investors and entrepreneurs to borrow at negative rates, in real terms. China refuses to capitulate to international pressure, and adjust its exchange rate regime to a floating system. CNN reports: quotWe are gradually moving toward allowing the market to determine the yuan8217s exchange rate. But there8217s no timetable for that to happen, quot the news agency quoted Guo a senior Chinese official as saying. China8217s enormous capital account surplus is growing ever-wider as speculation is fueling capital inflow and convertibility restrictions simultaneously limit capital outflow. The exchange of Chinese Yuan for foreign currency is heavily regulated, and in practice, usually forbidden. In attempt to narrow the surplus, China8217s Central Bank has pledge to loosen restrictions on capital outflow. Now, businesses and consumers will be able to exchange their Yuan for foreign currency, on a limited basis of course. For example, Chinese insurance companies will be allowed to invest overseas, and keep proceeds earned from such investments - in dollars. This concession was made in response to rising foreign pressure to revalue its domestic currency. China continues to maintain such a revaluation will occur, but offers no timetable. Reuter8217s reports: Analysts say the remarks show that Beijing is reluctant to revalue, or adjust the yuan8217s value, fearing that heated speculation may pose a greater danger if it rushes into change. The top policy priority is to relieve pressure on the yuan while developing a market infrastructure to help create conditions to let the yuan eventually move more freely. China8217s foreign reserves soared to a record 609.9 billion dollars in 2004 from 403.3 billion dollars in 2003 on the back of strong fund inflows and an quotAndy Hagans-sizedquot trade surplus. Channelnewsasia reports: The mainland holds the world8217s second highest foreign currency reserves after Japan, which in December hit a record 844.54 billion dollars. The sharp rise in China8217s 2004 reserves highlights the seriousness of the speculation on the currency, Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, was quoted as saying by the newspaper. Galderma. PACERrsquos National Bullying Prevention Center and BTProject Hit Musicians Release Powerful, New Song to Discourage Bullying and Inspire Teen Positivity Online Say Something Kind on Social Media to Download BTProject Song ldquoIrsquom Goodrdquo for Free Click to Tweet Your Support of BTProject Galderma, the makers of Epiduo reg (adapalenebenzoyl peroxide) Gel 0.12.5, today announced the release of ldquoIrsquom Good, rdquo a powerful, user-generated song created for the Band Together to Banish Bullying (BTProject) campaign. This unique, upbeat song was directly inspired by teens who shared their own experiences with bullying and messages of hope via the BTProject YouTube channel. In collaboration with PACERrsquos National Bullying Prevention Center, ldquoIrsquom Goodrdquo was produced and co-written by Grammy-nominated music producer Clinton Sparks, along with popular alternative band The Mowglirsquos (ldquoSan Franciscordquo) and country singer Kylie Morgan (ldquoPhoebe (It Matters What We Do)). BTProject provided teens with a new platform to speak out against bullying and share their personal stories. Hundreds of teens submitted heart-rending stories, pictures, videos and poems that Sparks, The Mowglirsquos and Morgan used to inspire the melody and lyrics for ldquoIrsquom Good, rdquo which was fittingly recorded in the same legendary studio as the moving 1985 single, ldquoWe Are the World. rdquo Continuing this historic message of hope and awareness, and just in time for Octoberrsquos National Bullying Prevention Month, BTProject is making ldquoIrsquom Goodrdquo available for download free-of-charge for those who go to the BTProject YouTube channel and say something kind about someone else via Twitter. ldquoAlong with my fellow BTProject partners, Irsquom humbled and excited to deliver the message of self-confidence in this new song, and am grateful to the many teens who were willing to bare their souls to us to help inspire it, rdquo commented multi-platinum, Grammy-nominated producersongwriter Clinton Sparks. ldquoWe are confident these teen warriors will continue to help in the fight against bullying, and use this song as a celebration of individuality by spreading positivity online. rdquo Despite the focus on bullying prevention in the media, schools and homes, it is still on the rise 1 with 77 percent of students admitting to being affected by bullying. 1 In fact, cyberbullying has also been increasing, and 42 percent of kids reported having been bullied online. 1 ldquoGalderma knows that teenagers have the power to make a difference in the world, and we continue to prioritize bullying prevention efforts that provide these young adults with opportunities to empower themselves and others, rdquo said Stuart Raetzman, Chief Executive Officer of Galderma Laboratories, L. P. and Vice President North America. ldquoWe are proud to support the Band Together to Banish Bullying program in partnership with PACER and our talented musical partners, and are truly moved by the BTProject stories and social support shared from around the country. rdquo ldquoWhen people from different walks of life unite their voices for good, they have an undeniable power to create social change, rdquo said Julie Hertzog, Director of PACERrsquos National Bullying Prevention Center. ldquoWe are hopeful that social initiatives like the BTProject will continue to build the acceptance that allows kids to celebrate their individuality, and ultimately prevent bullying ndash both online and in person. rdquo About Band Together to Banish Bullying Band Together to Banish Bullying (BTProject) empowers teens and young adults to use their voices online to spread positivity and turn their personal experiences into a musical rallying cry against bullying. The program, sponsored by Galderma, the makers of Epiduo Gel, unites a select group of partners who are committed to speaking out against bullying. These include PACERrsquos National Bullying Prevention Center hit recording-artists The Mowglirsquos and Kylie Morgan and music producer, Clinton Sparks. BTProject encouraged individuals who have been affected by bullying, or want to speak out against it, to collaborate with musical artists by submitting inspirational content in the form of videos, pictures, poems or short stories. The submitted content was transformed by the program artists into the exclusive, powerful song ldquoIrsquom Goodrdquo ndash now available for download free-of-charge for those who go to the BTProject YouTube channel and say something kind about someone else via Twitter. About the Artists Clinton Sparks is a Grammy-nominated producer (Production - Lady Gaga, Born This Way) and songwriter who has collaborated with notable artists including Beyonceacute, Pharrell, P. Diddy, Fall Out Boy and many more. He uses music as a way to express himself and his individuality. Kylie Morgan was voted one of the Country Music Associationrsquos ldquoWho New to Watchrdquo a few years back. She co-wrote and performed the impacting song ldquoPhoebe (It Matters What We Do), in honor of teenager Phoebe Prince who took her life in 2009 because of bullying. Kylie Morgan has also been a national spokesperson for PACER and their ldquoTeens Against Bullyingrdquo initiative for the past three years. The Mowglis are an American, alternative rock band from Southern California. Their Billboard Top 10 song ldquoSan Franciscordquo was a staple on the radio last year. The band was created with an intention to help change the world for the greater good by spreading a message of joy and love that is embedded in their music. About PACERrsquos National Bullying Prevention Center Founded in 2006, PACERrsquos National Bullying Prevention Center actively leads social change so that bullying is no longer considered an accepted childhood rite of passage. PACER provides innovative resources for students, parents, educators and others, and recognizes bullying as a serious community issue that impacts education, physical and emotional health, and the safety and well-being of students. For more information, visit PACER. orgbullying. Important Safety Information Indication . EPIDUO reg (adapalene and benzoyl peroxide) Gel, 0.12.5 is indicated for the topical treatment of acne vulgaris in patients 9 years of age and older. Adverse Events . In controlled clinical studies, the most commonly reported adverse events (ge1) in patients treated with EPIDUO reg Gel were dry skin, contact dermatitis, application site burning, application site irritation and skin irritation. WarningsPrecautions . Patients taking EPIDUO reg Gel should avoid exposure to sunlight and sunlamps and wear sunscreen when sun exposure cannot be avoided. Erythema, scaling, dryness, stinging burning, irritant and allergic contact dermatitis may occur with use of EPIDUO reg Gel and may necessitate discontinuation. You are encouraged to report negative side effects of prescription drugs to the FDA. Visit fda. govmedwatch or call 1-800-FDA-1088. A global company exclusively dedicated to dermatology Galderma is a global company founded in 1981 committed to delivering innovative medical solutions to meet the dermatological needs of people throughout their lifetime while serving healthcare professionals around the world. The company has 34 wholly-owned affiliates with a worldwide network of distributors and more than 5,000 employees. Galdermarsquos extensive product portfolio is available in 80 countries and treats a range of dermatological conditions including: acne, rosacea, onychomycosis, psoriasis amp steroid-responsive dermatoses, pigmentary disorders, skin cancer and medical solutions for skin senescence. With approximately 19 of revenues invested each year to discover and develop new products and access innovative technologies, the company is one of the worldrsquos leading investors in dermatology RampD. Five state-of-the-art RampD centers and five manufacturing sites are dedicated to providing a wide range of innovative medical solutions which meet the highest standards of safety and efficacy. For more information, please visit: GaldermaUSA. 1. BullyingStatistics. org. Bullying Statistics. Accessed at: bullyingstatistics. orgcontentbullying-statistics. html on May 22, 2013.
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