basically, real int. rates are still likely to be very variable across the cycle in the emerging world, with a high risk of a period of over ivnestment and then of under-investment …

When you speak off-the-record to think-tank or government types, there is a real sense of unease. People still repeat the mantra — it’s pork, not money — but it seems to me that they are doing it with less conviction. The problem, as you knew I would say, is that none of the measures used so far to address monetary expansion are likely to work until they fix the capital flow imbalance, which at root is a currency problem.

I wonder hold long they can hold out?
The export competitiveness that the peg gives them is creating a pressure point.
They can let the air out gradually (float or pseudo float like China) or risk a more damaging and unpredictable blowout.
The rush to get out of the dollar is not making it easier for them.
The commodities rises flowing through to foods like tempeh and pork are creating domestic tension.
They are wedging themselves with price controls, pinning their hopes on a commodities downturn sooner than they can realistically expect.
The commodities have their fund money floor -for now.

India and China really have very different economies. A lot of the increase in savings was due to large amounts of savings in the state owned enterprises, and that resulted from the specific incentives that those enterprises are subject to.

Pressure is building in Japan for official intervention to cap the surging yen before it triggers a sharp industrial slowdown and tips the country back into slump.

Foreign hedge funds that borrowed at near zero-rates in Tokyo to chase higher yields abroad are scrambling to unwind “carry trade” positions, estimated at $1.4 trillion in its varied forms.

David Woo, currency chief at Barclays Capital, said: “I don’t think we are yet at the point where the Bank of Japan is once again going to intervene by buying US Treasuries, but there is no question that people are worried. If the dollar gets to 100 yen, it could happen.”

The major Asian powers are increasingly irked by what they see as America’s beggar-thy-neighbour policy of dollar devaluation, which effectively steals growth from other countries. The question is when and exactly how they will react.

Often forgotten, Japan is still the biggest creditor nation by far, with net overseas assets of $3,000 billion. The last time Japan acted was during the deflation scare from 2003-2004, when it purchased $250bn of US Treasuries over a fifteen month period.

Spot Oil rises to record $104
http://biz.yahoo.com/ap/080305/oil_prices.html

New Record Low Vs. Euro for the Dollar
http://biz.yahoo.com/ap/080305/dollar.html

Spot Gold at $991 per ounce, edges closer to $1,000
http://money.cnn.com/2008/03/05/markets/gold/index.htm?postversion=2008030512

“…basically, if you print money like the Fed or other central banks do, the value of money - of paper money - goes down and then it’s reflected in an increase in the value of assets such as gold that cannot be multiplied at the same rate. I mean someone could say, “oh, the gold price has gone up a lot since 2001.” I can turn around and say: “No, the gold price is the same. It’s the dollar the dollar that has collapsed against the price of gold.” And why did the dollar collapse against the price of gold. You call up Mr. Greenspan and Mr. Bernanke and you ask them about it. Of course, they will never give an answer. Each time Ron Paul asks them a sensible question they just evade the question and they move on to something else because, as I explained, they are a bunch of liars. And actually, if there was a court for honest money, both Mr. Greenspan and Mr. Bernanke should be hanged…” http://www.financialsense.com/transcriptions/2008/0112.html