–The latest money and credit growth figures from China are due out later today. Then, later this week, Australian employment figures will be published. The two are related. As long as China keeps chugging along at near-double digit growth rates, Australian joblessness won’t be a problem, at least not yet.

–In the wider world, Brazil’s finance minister Guido Mantega is making waves again. He was quoted in the Financial Times saying, “This is a currency war that is turning into a trade war.” Brazil’s currency the real has gone up almost 40% against the U.S. dollar in the last two years.

–Normally, strength and soundness in your currency might seem like a good thing. But for an exporter like Brazil, when the real is appreciating against the dollar, and the Chinese Yuan is pegged to the dollar, a stronger currency means less competitive exports. And them is fightin’ words.

–Well, not real fighting. Not yet. But it does raise an interesting question: can China and America continue to force the rest of the world to bear the consequences for the test of wills between the world’s two largest economies?

–It’s like a staring contest, except with currency manipulation. The Bernanke Fed pump and pumps and eases quantitatively, exporting inflation to China. Is Bernanke actually trying to force China to revalue by gunning the dollar as low as he can take it? And if that’ what’s happening, why are gold and silver correcting?

–The year begins with a lot more questions than answers. One thing we know for sure about the dollar is that it’s not the Euro. Europe returns from its leisurely Christmas break to deal with a sovereign debt problem that won’t go away. Bond yields are rising and the cost of borrowing for governments is going up.

From Dan Denning in St Kilda: for The Daily Reckoning Australia