China raising rates .25%
The market will shudder a little at this news, but it has been anticipated by everyone that China will raise rates. The timing is very interesting, as they did this at Christmas when most people who care are on holiday. (The Canadian market is closed until Wednesday will dampen impact there, though the US is open Monday.)
The Chinese picked today, like releasing news late on a Friday afternoon once the markets have closed before a long weekend, to reduce the impact of their policy on the appreciation of the Yuan. Their economy is booming far more than most realize. The US currency, and that of others swimming in debt, are on a race to devalue, and the Chinese know this and want to slow the rate of rise of the Yuan as much as they can.
But, in the spring the French will lead a meeting to formally discuss replacing the US dollar as the world reserve currency with something like a combination of currencies, IMF drawing rights, and gold. The days of the US dollar reigning supreme, and the free lunch for Americans that this has implied over the past 50 years, are numbered. The US needs low rates to fight deflation and to keep its ridiculous debt levels from spiking to heights like in Greece that make repayment nearly impossible. The money printed and borrowed in the US continues to flood emerging markets thereby making government efforts to hold inflation down very difficult.
Where is there a store of value, other than gold, silver, oil, and other hard assets?
Merry Christmas!