CHINA : EXPECT THINGS TO GET WORSE BEFORE THEY GET BETTER

 UPDATE; 25th August 13.30 GMT:

BBC REPORT :

The People’s Bank of China cut its main interest rate by 0.25 percentage points to 4.6% after two days of stock market turmoil.

It is the fifth interest rate cut since November and will take effect on Wednesday.

The move has boosted European share prices further, with the FTSE 100 in London jumping 3.3% after the China move.

In Germany, the Dax was up by 4.4% and in Paris, the Cac was ahead by 4.6%.

 

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Blog Posting 10.30 a.m. 25th August 2014:

 In a comment Pressure Mounts on China to Act Scott Minerd, Glocal CIO Guggenheum Partners writes:

“…the PBoC will soon be forced to reduce bank reserve requirements while allowing for a more rapid devaluation of the RMB. Time is not on the side of Chinese policymakers. Given the severity of the current domestic slowdown, pressure is mounting for more radical policy action.

“Expect to see further downward pressure on commodity prices, global equities, and U.S. Treasury yields. The first sign that we are approaching a bottom for all three will be when China caves and allows the RMB to adjust to a more appropriate level, which could mean another 25–30 percent decline in the value of the RMB against the U.S. dollar.

“Things will get worse before they get better, and investors around the world are demonstrating appropriate concern. Unfortunately, relief is nowhere in sight.”

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Goldwatcher comment:

Gold is likely to be back on the agenda of investors “demonstrating appropriate concern” over adverse developments and uncertainties.

This website if not advisory.  Please read our Disclaimer On Investment Advice

For information on Goldwatcher Analysis and Events please e-mail

             thegoldwatcher@icloud.com

 

                TWITTER : @JohnKatzGoldwatcher