This page has been archived and commenting is disabled.
China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings
All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?
From Xinhua:
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.
Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
»
- 129034 reads
- Printer-friendly version
- Send to friend
- advertisements -
There you go thinking like a Westerner. You assume that their intent is to manage inflation and the 2-3 year economic outlook. I said this months ago. The Chinese think in decades. They have positioned themselves perfectly. They have been using fed confetti to purchase land, gold, silver, lumber...you know, real shit. They built whole cities for future population growth. They positioned themselves as the saviors of southern Europe. They have contracts with Russia, Brazil, Iran, Iraq for energy. They can afford to loose 1-2 million peasants.
By dumping the t-bills in the market, they destroy the US economy, meaning US power and influence, without firing a single shot. Hell, they will probably come back and buy more land and resources in the US as an act of charity afterwards.
2T in confetti is cheap to destroy the US. Specially if is 2T of US confetti!
The title of this article is misleanding. Only between 40%- 50% of China's $3 trillion or so foreign reserve is US$ debt!
What Xin Hua news agency is saying is the TOTAL Value of China's foreign reserve is around $3 trillion, NOT the entire $3 trillion are all in US$ debt!!
So what China is going to do is to cut the TOTAL value of China's foreign reserve to $1 trillion or so. That means US$ debt will cut according to the current share, which will be around $400-500 Billion.
At least 10%, maybe more, of the new TOTAL China's foreign reserve is GOLD!
China's estimated (Jan 1 2010) foreign assets vs. Holding of US Financial Assets
source: CFR (PDF)
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/...
- MARCH 31, 2011, 4:07 P.M. ET
Central Banks Broadening Range Of Foreign Reserveshttp://online.wsj.com/article/BT-CO-20110331-716543.html
Where does it say in the title "Treasurys" or "US Debt"... And yes, $500 billion in debt cut is much better than $1 trillion in debt cut.
.........."Cut Two Thirds Of Its $3 Trillion USD Holdings".
Isn't the USD a debt instrument. Hence US Debt?
"interest bearing debt instrument", yes you are correct.
to those positioned with an oversized portfolio of gold, silver, oil, and ag, they should find this prospect doubleplusgood.
Selfishly, I think I can speak for everyone and say "We do." World communism has a way of neutralizing all that unfortunately.
Wonder if Robo is going to rush in to his dealer to sell his silver "position", come Monday. (Or is it Tuesday?).
The US Dollar is toast, shit, asswipe, no bueno.... its over!
Silver, gold and hard assets will be flooded with buyers.
Within 6 months we will be having failed bond auctions.
All of the QE that has gone into the stock market will go into bonds. As the stock market goes down, the push to save for retirement will increase further, the dollar will get support.
In short, the world is NOT COMING TO AN END!!
It is the start of a new beginning.
I am reading Gustav LeBon's book on the psychology of crowds. This ZH phenomenon is is very interesting in that light.
Do you suppose there are "virtual crowds".
I do.
gh
That's interesting, as I have been expecting a dollar rally myself, but only a bounce on a way to an ultimate decline.
You may want to give this a read. http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html
Just read most of your blog there.
Much of it over my head. I am more of a trader, so when I talk of a deflation I am talking of a short term scare. Again.
My tendency to think of a near term deflation is due to the fact that, "the public is usually wrong". My impression is that the public expects inflation. My brother-in-law remarked to me some time back that "we need inflation". He is not a person who is investment/economics inclined. And the inflationist talk seems wild on the gold sites and ZH.
My brother in law probably represents the "popular demand" that you call the political will. However, in the shorter term the Tea Party and the gold/less govt. crowd is also a political fact. The Tea party mentality seems to have gained traction and will precipitate the next deflationary crisis. This make take a couple years or so to play out. In the meantime, the dollar may strengthen, the world economys may be slowed, natural resource prices may decline, etc...
It will probably be that the little gold buyers are flushed out, as usually happens in markets.
I have my physical. Land, silver, water and food. It is the desire to protect my saving/grow my savings that leads me to concentrate shorter term as a trader. For, as they say, in the long run we are all dead.
Good stuff on your site.
gh
I am Tim Geitner- No issues with the USD.
6 months ....
you are an optimist ...
more like start of 3rd quarter
Anyone else think there might be something more to that whole China/Russia new world currency meme that was laughed off a few months ago?
I was telling my Grand Daughters yesterday that War would no longer be fought with Guns, Tanks and Air Craft with Bombs.
That in the future War would be fought with Money, Currency, Oil, Food and Water.
spermatozoids...the ultimate weapon! worse than OGMs...spread a spermatozoid plague in China and the population doubles every nine months...Game over!!
Out of thin air a woman goes pregnant every time she changes her panties.
Wars will be fought with computers.
Yeah and the computers launch nuclear missles...
The war has already started and has been. You are right. The best thing you can do is to secure a safety net and above all educate oneself and the family.
It's possible, though, that China will fight wars with ground troops. Ground troops made up of their 32,000,000 excess males that are the result of their one-child policy, the preference for male children and the availability of cheap ultrasound and abortion. http://markschinablog.blogspot.com/2009/04/chinas-looming-malefemale-rat...
I think history has shown that excess males are traditionally 'burned off' by expending them in military conflicts. China may forceably take the natural resources they need to continue growing while they ultimately try to achieve the car and consumer culture that the US has been enjoying.
Bone chilling prospects everyone's children.
when in doubt "fortify the Korean Penninsula." At least "the North Korean side." Could be. We have riots in China in addition to the ME as well. Of course North Korea might just attack, too. That would be interesting.
yeah crimius
Australia & New Zealand will be slave farms for the Chinese
whos gonna buy
Sad isn't it. 'Who's gonna buy?' Exactly. That's the level to which our once great country/ideal has sunk.
Look, like it or not. We are done. There is no way back now. Unless all our elected children decide to take the right course, and not get re-elected, that is job one, pension, perks, 1 million dollar expense account, love of the 45 million on food stamps. So that is not going to happen.
There is no Thomas Jefferson out there guys. They honestly think they can bring us back from the brink because we are the USA and we have the reserve currency. Well, they cannot. And Bernank is in that box talked about here.
Until the printing press is taken away from him, no change. We should have taken the depression and its trial and tribulations in 2008. Yes it would have been worse then, much worse, but by now the system would have been cleansed, and we would be starting our way back up. We will pay the piper, just a matter of when. And still, not one of these slime is in a maxmum security prision. But Obama wants the "evil oil speculators shot". What a child he is.
Tang in 2011 with reserves at $3T
and
Tang in 2007 when China held $1.4t in its reserves, Tang had this to say:
It would appear that Tang is more bark than bite.
It would appear that Tang is more bark than bite.
Take a picture of time things have changed for China fiscally.
Maybe it's do or ie time for them.
Not a threat this time.
nice catch anyn
Then what caused the $1T plus Chinese international shopping spree in the intervening years?
Sounds like the Chinese are pushing Timmy to end QE. This is another shot across the bow of the Treasury/Fed juggernaught.
If the rest of the world won't buy our debt we'll have to pony up ourselves. Slow down our consumption, slow our economy, slow down our stock market and live with higher cost of money.
If the rest of the world cuts the cord to the dollar we will have to support our own currency. And we will, out of neccessity.
Like I have said before, this is the outcome that Bernanke wanted. ie, for the Chinese to appreciate their currency, as that will allow the rest of the world to start a general currency appreciation. Not the depreciation of paper that has been happening for 30 years, the result of mercantilist policies of Asia in particular.....
Silver, bitchez???
gh
Consider this : China has been doing mega-deals around the world for resources for years now. Maybe they are just reporting what they have already done. What do you think those contracts were denominated in? USD? Likely they have largely dumped the dollar into resources already. If so, the dollars paid out around the world under these purchase contracts, both up front and over time, will light they hyperinflation holocaust.
The problem with doing deals outside your security perimeter is that possession is 9/10ths of the law.
The empire du jour is currently experiencing some problems with that, I expect that trend to accelerate.
Exactly, let them buy all the land in the US they want. Ask the Japanese how that worked out for them in the 80's.
I think that's what the aircraft carrier is about--not about conquest but defense of resource interests. Of course just one . . so far.
goodbye 'free trade', never wanted to know ya anyways.
China plays the long game kids. "Those who are victorious plan effectively and change decisively. They are like a great river that maintains it's course but adjusts it's flow... They have form but are formless. They are skilled in both planning and adapting and need not fear the result of a thousand battles: For they win in advance, defeating those who have already lost." Sun Tzu
Looking at history it appears the "long game" doesn't really offer much advantage.
There's always ups and downs. China was on top for hundreds of years, then fell behind, and are now rising again. The west is decadent, and with the pathetic breakdown of education and work ethic only in it's early stages of decline.
Scooby Doo says RUH OH!
It's time to pull a "wag the Dog" operation. There will be an emergency session of Congress. Behind closed doors the Treasury Secretary will announce that $5 trillion in counterfeit US treasury bearer bonds plus $1 trillion in forged US C-note has been dumped on the world's markets by Iran and North Korea working together (plus anyone else we don't want). Emergency powers will be declared for the President. Fleets will reposition, submarine launched cruise missiles will be fired and the entire military will be mobilized. Martial law will be declared. Movement across borders suspended. Currency controls established. A new currency will be issued worth ten of the old. Hundreds of thousands of political enemies will be rounded up and thrown in detention camps. Tyler Durden, Mike Rivero, Peter Schiff, Ron Paul, Rand Paul, and Axel Merk are arrested on charges of UnAmerican Activities. A draft is instituted. Social transfer payments are greatly cut back. Gold and Silver are banned from possession. And lastly all ZeroHedge bloggers will be "disappeared." Watch it happen live on the Government Channel.
Shit, I better log out. BYE!!!
Too late plocequ1, ZH rapture bitchez! To the land of critical financial mass!
Easter is the day for hearty thought experiments on the hedge.
Answer this. When eating you coco easter bunny did you first bit off the foot, or ear?
I usually start nibbling my bunnies at the ears...
Harumph!
should be an interesting PMs market this week.
For those of you doing the nuanced Game Theory on messages China is sending and all of China's equally self-destructive US debtholder problems, answer me these questions
Why is China building a huge Navy? What have Navies historically been used for? How much coastline do they have to defend and from whom?
And a final one, what would the US response be if China occupied Taiwan tomorrow?
Whatever 'game' they are playing, long or short, might already be over.
Why wouldn't an up and coming country not build a navy if they had ports?
WE did.
It is the only responsible thing to do.
We want everyone poor and servile. That is how the empire thrives.
gh
I assume you are agreeing with me? Welcome to the new Chinese export, fully locked and loaded.
We originally did it for defense. Against the superpowers across the ocean.
gh
We want everyone poor and servile. That is how the empire thrives.
right, that's why the USA rebuilt Japan & Europe after WWII
& Iraq & Afghanistan
you get the picture
or not
China’s holdings of U.S. Treasury securities as of the end of June 2010 was revised higher by $268 billion to $1.12 trillion, the Treasury Department said Monday in a preliminary estimate of foreign portfolio holdings of U.S. securities http://www.marketwatch.com/story/chinas-treasury-holdings-revised-up-by-268-bln-2011-02-28
That was a Feb 28 2011 Marketwatch post. "Change" as per Obamanomics.
USA can be saved if the Mormons really crank up the breeding/believer policy.
Hurry Utah, hurry!
The Mormons are the only large, widely-organized white grassroots organization in America that I know of with a collective vision out past making next month's rent.
I'm saying the Church of the LDS will be a major factor if we see serious social upheaval here.
To those potentially offended by my reference to race - race is a fact and when times get tough them's the way the demographics go. The U.S.A. will socially cordon itself according to its DNA, not the storybook homogeneity that was invented and perpetuated upon us in the 1960s.
Not saying it's right; just saying what is.
You can say what you want about Mormon theology - it's not any more or less bizarre than any other religion out there - but there is a culture there that is designed to last. Preparedness, frugality, self reliance, devotion to family and local community are paramount to the culture. These are a part of the religion, but more importantly those values have been ingrained into the culture.
You want to see what happens to a people without those values and with no sense of community? Think Katrina.
Or with those values and a strong sense of community. Think Waco....
gh
Mormon religion, established by a Master Mason (third degree), and with a noted dependence on anti-depressants - yeah, that's the ticket to a new orderly world. . .
http://www.cbsnews.com/stories/2002/06/03/eveningnews/main510918.shtml
but hey, they're (mostly) white, so it's all good. . .
(ooh the irony, captcha question: (-13 plus ? = 20. . . 33(degree)
I don't believe their membership is mostly white anymore although their leadership is. And you can join also. Just swear you believe in magic.
. . . and will keep the secrets.
Aaaah, ignorance raises its ugly head again. The Mormons do have a very close community and are a good example. They also believe that members should refrain from drinking, smoking and carousing....ooops, there's that magic again.
Vast majority of Americans still believe in fairy tales, tails and dreams of what they think should be instead of what is. We are so freaking doomed.
You mean to tell me Jersey Shore and American idol is not for real? Wow, let me go back to drinking. I guess Macy's is having a sale and you can see the sheeples just maxing out thier CC and the store cards for things they don't need.
Last week has been full moon and the market hasnt moved down?....maybe this week¡¡¡¡¡
Long VIX¡¡¡¡¡¡¡¡
Bernanke will not do QE3, will let the rates go up and then 3-6 months later will lower them and then do QE3 if necessary. The attempt will be to continue the ponzi scheme. The guy isn't an idiot. He knows what he is doing. With the financial collapse, he had no choice to do anything other than what he is doing. He will continue to do what he has to do. The problem is that eventually the dollars collapses and a new reserve currency is picked, probalby a combination of currencies including the dollar, and it may be backed by gold at some percentage. That's what Jim Rickards is saying and he is more experienced than anyone on this board by far. He knows the players and has the connections. That's who I believe. Of course, it all could get out of control, but just like in Texas Hold em, you have to play the percentages and assume that things are going to play out the way the percentages say they are. Black Swans do happen though. Either way gold and silver is right in line with the percentages.
"Bernanke will not do QE3, will let the rates go up and then 3-6 months later will lower them and then do QE3 if necessary"
But I thought 99% of the economy was perception ? If the market tanks isn't the confidence shattered. ?
Another question is, who has been naked short selling the VIX ? This may be more manipulated than the metals. No ?
Jim is partly right, but the amount needed by the treasury exceeds the amount generated by the Feds balance sheet which means rates rise fast. If rates exceed that needed to keep the existing Feds asset sheet viable, it becomes impared. The Fed will either have to extend QE beyond what its balance sheet can supply or allow rates to rise and impair what assets it has.
Rickards does not have the answer to the predicament outlined by Reinhart and Rogoff. http://press.princeton.edu/titles/8973.html
Even Central banks can go bankrupt.
Tao400,
I think you may have hit the nail on the head. For a World Currency the Dollar has to be devalued so it becomes equal to all of the other currencys. Just like American wages have to go down to equal the Wages of all other Countries. That is why we are not seeing wage inflation.
China already traded those 2 trillion USTbonds in for real monetary stores of value last 2 years. Gold/silver/coal/iron/copper/rare earths/wheat/rice/all food stuffs/durables; you name it.. This the death nail to the USD end game. If you haven't done what China has done the last years then bendover. You'll be hyper-inflated out of the survival market.
The Chinese are just human, and like most of their species they have not divested out of dollars fast enough to make a difference because they have reluctantly been sterilizing their US trade through purchases of treasuries. The above announcement is a market indication that their Non-US business has reached a level where they can now restructure the sterilization process by decreasing purchase of new treasury debt. All they have to to is let existing treasuries mature and not reinvest as much of proceeds into new treasuries as they have been doing.
If not all, I bet they've dumped the 2/3 they're talking about it. They've been doing huge resource deals around the planet for years now--all bought with USD. What do people think they bought all that stuff with? How can you not see it? It seems easier for people to believe they are trapped creditors -- no, I don't think so. My bet is those dollars have been spent and they will be loose in the world, increasingly. China may still hold lots of UST paper but as it matures, it will not be rolled, rather the money will be paid out for resources they have contracted for.
The Chinese government is heavily tied to the US adminsitration. As long as the US adminsitration continue to 'support' the Communist Party to rule China, The Chinese government won't do anything to hurt the interest of the US.
Think of the the Communist Party of China as the same as the Saudi Royal ruler. This would clear all the smoke.
The Chinese government to dump US treasuries? It's like the Saudis announcing they will use the Euro for oil settlement. How likely will that be?
There are some key distinctions between the Chinese and the Saudis.
The Chinese are primarily motivated by maintaining economic stability domestically. If the Party thinks that in order to maintain Chinese economic stability, that US dollars should be dumped en-masse and US exports written off, then they will do so. The real question is how many other options remain before that Rubicon in reached. The Party needs domestic stability in order to remain in power, there is no strategic plan B.
The Saudis, since before the MENA uprisings, and before 9/11, and since at least the first Gulf War have adopted a line of strategic planning that specifically models in the loss of Saudi Arabia proper. Even the initial planning for a Saudi SPR envisioned it being built outside Saudi Arabia. Domestic stability is a significantly less critical Saudi strategic planning.
Neither the Chinese nor the Saudis needs the US. They both have contingency plans should TSHTF.
you're not as blind as you would lead us to believe, uh, Blind
very nice way to put it in perspective
the Chinese know who built their economy; hint (it wasn't them)
I would expect Bernanke to say something that corrects commodities a bit, something bad about either increasing rates with exit from QE2, or NO QE3, or some other way to save short term silver short owners and the USD from rapid devaluation.
Does he have other options with silver and even gold taking off like rockets? He can not devaluate USD so fast as silver and gold now indicates, the oil suppliers that hold US debt and USD will just curb production in retaliation, as Saudi has already done.
On other hand, he may say something totally irrelevant that will just destroy the USA economy faster along the same path it has taken.
da nuclear option bitchez, just when you thought watching greece trim/slice would be fun...tomorrow will be interesting
I bet there was a reason the spineless Reid is in China to see out the USSA. I bet Nevada now regrets having him reelected.
elections are rigged. hello...
So, the dynamic goes something ilke this?
Bernanke: Break your peg.
Zhou: No, we like it just the way it is.
Bernanke: Break the peg or we inflate!
Zhou:You wouldn't dare. It would crucify your country.
Bernanke: I'm inflating... See!! Told you!
Zhou: Stop! Stop it or we dump the treasuries!
Bernanke: You wouldn't dare. It would crucify your country!
Zhou: I'm dumping... See!! Told you!
Css,
No, the Ruling party of China won't dump the US Treasuries.
Race to the bottom? Could this not cause Japan to unload some of its debt to protect what value they have left in their dollar investment?
It's not just an economical issue. Remember Economics was once called Political Economy?
US to Japan: We will continue to support you militarily, look at your neighbour Communist China, they are dangerous. So keep buying our Treasuries.
Japan: Right, sure. We are rich and are willing to pay a defense premium.
LMFAO. China love playin political/economic mind games. Don't ask me what they want to achieve except to pressure the US to quit QE. Can USD go any further down the crapper? Would that affect China's outta control inflation anyway?
Well...hardly a surprise that, one day, China would start dumpin Treasuries. Except to MSM who have been decidedly reluctant to discuss the prospect of the backflow from Japan or the other side of QE and the China 'miracle'.
If US Congress doesn't default on the loans, can only surmise a very short public service employment stint with many elected public service members.
Those who signed the loans and/or passed bills will hold fiduciary responsibility to pay back the unauthorized financial obligation. Let China deal with the individuals who signed the legal & binding contract. This will present a whole new exposure to the level of US Government Enterprise Corruption.
Mr Soros has been quietly pleasuring himself on the toilet. His belief: When you create enough chaos, the peasants will come in swarms under distress. They'll accept any new worldly financial solution as a substitute to poverty.
What Mr. Soros doesn't realise, the party of six is going to undergo tremendous public exposure. The same empty promises, fraud, deception, extortion, and wealth transfer is no different than the current system.
If our US Congress fails, we'll just re-coin our currency. Funny how history repeats. Right Mr. Soros?
The best path now is to lay out the course of events in terms of QE or no QE, examine the consequences, and the path will choose itself.
Closing down QE removes a very significant buyer of burgeoning U.S. debt. China may be saying "if you're asking us if we're buyers, the answer is we're not, at least to the extent we can help it." There may already be negotiations in progress with the Chinese to see if they will serve as buyer before being flipped back to the Fed under some covert QE3, a sort of primary dealer role. Closing QE (and raising taxes, cutting budgets) will also hit the S&P, as well as oil and other risk assets, and even PMs, very hard. End QE and the US economy goes into a tailspin.
Keeping QE means continuing dollar devaluation, and rising risk assets prices, as well as oil, until the price of oil reaches the point at which the economy can no longer function - economy goes into a tailspin, replay of summer 2008, which led to the fall of 2008. . However, if Europe runs into a snag, and there is an genuine banking collapse on the Continent, the dollar may have a rally as they faithful flock to the one true King Dollar for safety. Ditto any emergencies or sudden wars. QE + crisis would keep the game running. Risk assets would go down (but perhaps not PMs due to the "emergency"). But overall, keep QE and the US economy goes into a tailspin due to ever higher oil prices.
Which path will Ben's employers choose? Is there a Door #3?
Bernank in a box
http://www.youtube.com/watch?v=WhwbxEfy7fg
Ned: "Closing QE (and raising taxes, cutting budgets) will also hit the S&P, as well as oil and other risk assets, and even PMs, very hard. End QE and the US economy goes into a tailspin..."
...resulting in our incumbents being expelled from office.
That's why they don't close QE. That's my bet anyway.
Gas is well north of $4.00 out here in No.Cal. and I see no reason it will drop much. The gas price has run what, $.30 in the last month? The econ is crushed already. It's just a long, quiet, slow motion train wreck kind of crush. Risk premium, MENA, oil-producing sovereignties keeping more of it for themselves . . .
How long did prices stay north of $4 in 2008? We are in for a longer spell at +4 this time I reckon. I speculate that the President displayed helplessness with his latest Evil Speculator remarks. I don't think he has the horses to rein this in. Better start cutting the populace some checks, a-la GB II.
" purchasing strategic resources", the KEY statement, nothing else matters in all this bullshit.
Tyler
Please read the email on MIT's top secret financial search engine.
They have secretly invented a financial google with their billion price project.
good timing too, as silver is becoming much more expensive very quickly.
I've always wanted to be a millionaire!!
Now I'm gonna go celebrate that! At McDonalds...
I am waiting for silver crash any day now. In superexponential price growth, price can exceed any number for a zillionth of a second, so 45 47 or 50 is not so easy to predict, but there are more signs of a coming crash:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...
If you read trader blogs, especially comments, here, there is almost 100% uniformity in cries buy physical at any price . Such herding creates a united cluster that permeates all trader community, worldwide. This is the true sign that system has got into critical stage, and must exit it as price in theory may now go to infinity, but in fact, it can not. Such situation is extremely unstable, and in critical phenomena, that is exactly the stage when finite time singularity appears- it is like water when its not water anymore but not ice yet. The outcome ( ice or water) becomes EXTREMELY sensitive to infinitesimal perturbations of external factors ( like temperature) . Even noise in temperature may decide which way system will go.
The same here. System is in critical stage, infinitesimal event which we even may not notice may start the crash. Or move it into ice zone, that is FIX the silver price around some new equilibrium- say 100 USD. I see enough doubts around still and than this need to revaluate USD before Chinese have sold them all that in my analogy silver will return to water stage, for now, at lower price level.
From now on, events and actions go into autopilot. I can not guess them- just follow. But the outcome will be crash as there are too many factors still against silver being 100 USD, not the least the fear of investors from a crash caused by to steep price increase and willingness to take profits and pause a bit. The ones coming in late are usually badly informed small money investors who by at peak, they can not change the underlaying dynamics due to the small volumes they purchase.
That could be enough to debase the bubble.Without any MEGA event to point at.
Not that I'm disagreeing with your basic premise, but 'traders' don't buy physical.
Right. ivars thinks its all about "traders". That's a joke. There are no doubt Western-style "traders" investing in the paper silver market for the purpose of making "profits" measured in fiat currencies. But, there are also many, many people buying silver who will never sell it till the dust settles, years from now. All of ivars comments are basically irrelevant to what is happening. If "traders" cause a "pullback" I'll start buying physical again.
Also, ivars should research the silver movement into China, and put that together with the fact that China produces about 3,000 tons of silver every year. So the imports of 2500 tons, plus the production of 3000 tons, equals about 25% of world production. Then ivars should go to China and travel around looking for silver to buy. There isn't any. But there's lots of gold to buy.
So guess what, ivars? What's it all mean?
nara,
You forgot India....they are doing the same thing.
Silver is beiing bought and sucked up at enormous rates, and at these prices, even record prices.
It's not about anything now except protection, and value.
Holding the real deal. The real world has basically started saying screw paper.
ummmm...it means it's a superexponential time singularity bounded logrithmic multiplexed spam of a blog full of bullshit? Errr...forum I guess...the blog probably comes later in the plan. Except it won't.
sapos, agreed there is a lot of noise, a crescendo in fact; but Americans buying Eagles and nibbling at SLV/AGQ make up a very small % of the market. Very, very small. There is virtually no fund participation - but yes the ones on the Internet are standing out like a sore thumb.
Guesstimating participation based upon reading on the Internet tends to distort proportions, so that a flurry of breathless articles can appear to be a larger Front than it really is. It does it to me, anyway.
Total silver market worldwide was estimated in an article here on ZH at something like 1/19th of gold; and the combined market cap of a few of the mega-caps like XOM and AAPL swamp gold quick.
Who knows who is buying Ag in size; and when they will stop? I'm sitting tight and waiting for $100 an ounce; within three years.
Within 3 years You will for sure get 100USD . I am talking about temporary correction, which may last maximum 1-1,5 years before it reaches todays value .
As US debt is doomed anyway to be crash corrected to approx 1/6 -1/10 of its value when it happens, so is USD value relative to PM doomed.
But I would suggest owning silver, not being long or having ETF stock or whatever. Since once USD nears its true price discovery when the USA will default in stages, there may be all kind of restrictions and even confiscations of PM positions etc, forced closings for some nominal legislative price.
me too, been waiting for an opportunity to load up, last one being in January...
shit, i hope it crashes to 10 bucks an ounce. i would be cleaning out all my bank accounts if it did.
Doom and gloom Chicken Little. You can't eat bucks.
Still selling that silver bubble pitch eh, Ivars? I guess a broken clock is bound to be right twice a day.
Are you spreading the propaganda - debt ceiling hit = default - or buying it ?
The US T takes in a bit over 2T in taxes, fees etc. Interest on the debt, yearly, is about 180B.
Where do you see the default ? Taxes can (atm) easily pay the interest, we can rollover existing debt, and every other function of government would have to take a haircut. Balanced budget, all because they can't issue new debt.
Does anyone see a problem there ? Stop running Timmah's default meme...
Gov Trust Funds are now running at an annual deficit. Federal Pension Funds (because of demographics) will also soon be net sellers if they aren't already. Therefore, the US must actually pay down its debt in order to maintain a constant debt load. Rubin moved US debt to the short end of the curve in order to achieve the 1990's balanced budget gimic, so a rise in interest rates would be catastrophic to the US's ability to roll even its current debt load. So the options are continued QE or meltdown.
Looks like the only silver thats gonna be available come Monday is the silver eagle SilverDoctors is giving away!
http://silverdoctors.blogspot.com/2011/04/know-where-silvers-headed-pred...
The Fucking Econ Bitchezzz should be hung. This guys is a joke
Strip these MOFOs of their PhD's what a fucking waste.
http://www.momoneyblog.com/mini-thoughts-why-lakshman-achuthan-is-wrong/
A shot across the bow. Until China says "when," there's nothing new here; we knew they would get tired of buying the same old green stuff someday.
+1
-
After reading 300 posts +-
Well someone has to say it, if no one else will.
This seems intermediate term bullish for the dollar, since this is a credible threat against further QE which the FED may not ignore.
-
How could anyone disagree with those . . that! I mean that!
Dollar comeback, ok sure, whatever you say.
-
Guess the word "intermediate" was not taught at your High School.
-
But I'm sure you are an expert at CDS, FMOC mechanisms and make your living trading various futures markets.
But I doubt it.
More likely you arrived at this site (a week ago) from some link on a PM / political site and, you fashion your self a new Renaissance man, of the Borgias intelligence and ambition.
-
I think I learned that word in 3rd or 4th grade, so I guess you're right? Wow, you didn't learn that until high school? Public education these days has really fallen off.
Let me guess you fashion yourself and expert at FMOC mechanisms, CDS, and whatever other BS your machine's algo tells you is going to happen. And that mathematically generated market direction you hope comes through on that utterly vapid dollar call you just made makes you an expert on the geopolitical chess game that is playing out.
Well, if you are going to make a call, make a call. 'Intermediate' is sooo sell-side Goldman (i.e. worthless.)
You are right about joining recently. I did so after spending the last couple of years reading posts like yours and feeling compelled to come on here and disabuse the 'expert-esque' BS folks like you speread around.
I still respect your tits though.
" I did so after spending the last couple of years reading posts like yours and feeling compelled to come on here and disabuse the 'expert-esque' BS folks like you [SIC]speread around."
-
I made no predictions and do not consider myself an "expert" of any of the above mentioned. Nor am I an "expert" on geo-political situations as you pretend to be. I do not trade f/x or PMs and would not even know how to quote a CDS.
I do make a living (a good one) as a trader. (usually as a contrarian which is why I always like to look at the other side, even if I believe, as I do, that further devaluation is inevitable.)
There is one other thing I am not, that is, unlike you you, I am not a pretentious cunt, which you are.
-
Dude. I think we are on the same side, weird as that may seem. If the dollar rallies, I will gladly come on here and tip my hat to you (and your tits.) If it doesn't, aren't we all really screwed no matter how many PMs we may have? And you really should trade Silver cause it works (so far.)
(Honestly, I am happy to hear you are not one of the pretentious HFT/hedge fund trader fucks.)
Am I the only one to see the next logical action by our government during the coming dollar crisis will be to seize everyone's PMs and revalue them? Ride it to the top but don't get greedy.
How's that work, exactly? Door-to-door searches? What's the cost in manpower and energy to do that, versus how much gold/silver is collected? Does it seem like it would pay off? What stops people from hiding their precious metals for a while and then just walking them across the border to Mexico or Canada and selling them there? How will they get at mine, presently stored safely out of the country?
So many questions.
"PM confiscation"??: Think not. Dig a hole, bury it, hide your cash and shiny pm stash,... and dont tell anyone.
Yeah right, try come and get it.
They will get it.
Then I insist you take some lead as a souvenir.
Exactly. Force to close positions ar nominal legislative value, approved by Congress.
Perfect storm I must say. I wonder how many Americans are aware of this? Time to go to the store and pcik up lots of alcohol. Wake me up afterthis is blown over.Lost Decade. USa is not Japan, LOL.
http://www.leap2020.eu/GEAB-N-54-is-available-Global-systemic-crisis-Aut...
"Whom the gods would destroy they first make mad", says the ancient Greek proverb. The Washington political scene will increasingly resemble a psychiatric hospital (26) in the coming months, making "the bizarre decision" increasingly likely. If, in order to reassure themselves about the dollar and Treasury bonds, Western experts repeat in turn that the Chinese would be crazy to get rid of these assets which would thus only hasten their fall in value, it’s that they haven’t yet understood that it’s Washington and its political mistakes that can come to the decision that hastens this fall."
Well said and so fitting. We will see how this storm will turn out and who is going to survive.
put that in
your easter basket
and smoke it ...
honorable hedge bytches
Mexico wants to sue U.S. gun makers.
http://www.anonboard.com/bbs/show_topic/401500
All roads leads to the WH and Congress.
Amazing that so many here really believe China could be stupid enough to put their ENTIRE foreign reserve in US$ denomination.
At most, 50% of those $3 Trillion is in US$ debt.
What Xin Hua News Agency said is the total value of China's foreign reserve is $3 trillion US$ worth, NOT entire $3 trillion is in US$ debt!! There is a HUGE difference here!!
And if nothing else, China at least is holding $100 billion worth of Gold in their foreign reserve!
Some ideas on silver crash - or moving into new price territory and new stable gold/silver ratio?
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=160#p31956
Ivars, I get it!.....you are trying to sell saposjoint.net content.
USDollar reserve out; the dollar obliteration inevitable. New World Currency. Dollar had to go in a global new world order.. Just accumulate whatever gold/silver is left for the late comers who thought the dollar was king; until it wasn't...
China began selling US government debt in October 2008 during the "flight to safety".
This announcement is an indication that they are finished selling.
+ 3 trillion and the dollar will begin to rally. It's so obvious all market indicators point to this.
George Soros openly discusses New World Order, SDR’s, Dollar Decline, World Currency
Go back and see what has been done and said all along.
http://worldcurrencyguide.com/george-soros-openly-discusses-new-world-or...
Soros never saw the need to hide what he's doing. The politicians and media are bought and paid for. The education system has been rendered neuter in its utter failure to teach people how to think, only what to think. And no new ideas are brooked in that mode. That sheeply wool is about ripe for shearing.
China has quite a few problems of its own.. Ghost Cities to nowhere, Worlds largest empty mall, Property Bubble bursting, Double digit Inflation,fraud in Chinese stocks and ipo's, growing social unrest... on and on.
posted in wrong thread.
China may simply be following PIMCO & Gross. Betting now is the time to sell, while expecting BONDS to begin to lose their value over time from here. Fair enough guess, when looking at total FED DEBT.
This becomes 2 Trillion that now gets SOLD, & Who is BUYING that $2T?
Who is betting against PIMCO, Gross, & China?
Anyone willing to GUESS?
Very simply answer really.
Oh, by the way, What is M2 right now?
It will be interesting who accepts China's USD holdings as payment for asset accumulation and who doesn't. Many people think the European periphery is a primary spot, but that didn't work out so well for Greece & Portugal before now. I would look more in the Middle East to South East Asia as a broad destination and focus of Chinese interest and the primary commodities producers. And, of course, relocating some of the more essential Japanese industrial capacity to the mainland, or Singapore, if Japanese energy production precludes normalization of industrial production in Q3, Q4 and perhaps beyond. Additionally China will now move aggressively in tandem with its asset accumulation program to add stratification within its workforce by expanding the technical skill sets and the income earning capacity of its labor pool and the expertise of its organic industrial productive capacity.
Old news from Tuesday reverse Psy-Ops for the upcoming dollar rally.
Ayn want's to know who is Tyler Durden?
we all are.
'td' is actually a script that posts a vast majority of these comments in a rapid-fire, almost sequential, semi-relevant manner.
China's estimated (Jan 1 2010) foreign assets vs. Holding of US Financial Assets
source: CFR (PDF)
and from the WSJ
MARCH 31, 2011, 4:07 P.M. ET
Central Banks Broadening Range Of Foreign Reserveshttp://online.wsj.com/article/BT-CO-20110331-716543.html
and
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/...
Spidey-sense tingling Something is wrong. Why oh why would they pre-announce the sale of $2T in treasuries? Are they already short treasuries? Is it payback time - forcing higher interest rates on the US for exporting all of this back-breaking inflation into China? There's something under the water.
You mean aside from a large percentage of US mortgages?
China is an economic noob. The path to prosperity is not to choke off your customers.
Attention People of China:
It's time to take Hu Jintao for a temporary walk behind the woodshed and replace the economic noobs running the country.
The economic noobs are named Barry & Timmy.
Over 400 posts and nobody on this site is sniffing this out properly (in my opinion). China will absolutely sell their treasuries, and they will do it to destroy their financial enemy. America has been China's financial enemy for decades, and they bought US TBs as a weapon of mass financial destruction....a weapon they are now preparing to use.
"When we hang the Americans, they will have sold us the rope" ...Mao Zedong
Why do you guys think they have worked so diligently at perfecting missiles to shoot down military satellites and destroy ACs???? China is now untouchable by the U.S. from a conventional military standpoint, so they are free to unleash their financial weapon.
So long America....couldn't have happened to a nicer country! You know what they say, "Live by the financial sword....yadda..yadda..yadda".
On a more positive note, Easter is a great day to renew a relationship with God and start praying.....I advise you to do so.
T.E.I.N. everyone!
P.S. A rising tide does not raise all boats....poor people can't afford boats!!!
"China will absolutely sell their treasuries, and they will do it to destroy their financial enemy."
They could have used that weapon much more effectively in 2008, and everybody knew it at that time, most certainly the Chinese. So your premise has a problem.
+1. they are not our friends.
While many think it will be suicide for them, they might feel that the US is going to default and think they'll be properly hedged via commodities.
Nice Easter message as well. We will need God's help to get out of this mess.
+1. they are not our friends
Exactly, contrary to what Barama and the globalists believe. No we can't "all just along". Even within the borders of the great melting pot USA people segregate themselves and always will.