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China Says It Will Bail Out Insolvent European Countries
As expected, China is the new IMF. No surprise there.
- CHINESE PREMIER WEN TELLS BBC WILL LEND TO EUROPEAN COUNTRIES HAVING TROUBLE BORROWING
All this means is that China will do everything in its power to prevent the ECB from launching an outright unsterilized monetization episode, which will double the amount of importable inflation (plunging EUR) to hit the Chinese domestic economy, and destabilize the already shaky stability, so critical for the Chinese communist party. And since the USD and the CNY are pegged, this has the added benefit of devaluaing the CNY instead even more if not against the USD, then against the CNY, which is now importing European sovereign risk and will continue to do so, until China finds itself in the same lock out as half of Europe currently.
As for the IMF popularity contest, better known as "who is thst most feminine", it has just been relegated into complete historic obscurity and irrelevance. Which is sad because Lagarde may have actually had something worthwhile to contribute. Too bad her organization was just been rendered obsolete.
More empty rhetoric from Wen, courtesy of Reuters:
Chinese Premier Wen Jiabao said on Sunday he had no intention of pursuing a trade surplus and that he wanted balanced, sustainable trade growth for his country.
He was speaking during a tour of MG Motor's Longbridge factory in Birmingham, central England, during a three-day trade and political mission to Britain.
"China has no intention to pursue a trade surplus. What we want is to have balanced and sustainable growth of trade," he told the BBC through an interpreter.
He also said China would lend European countries experiencing trouble borrowing, just as it announced it would do for Hungary earlier this week.
We get it: China will not pursue a trade surplus... It will just happen purely accidentally for the next decade.
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Sun Tsu. Art of conquering nations without firing one bullet. Tyranical enslavement without bloodshed.
You don't need Sun Tzu to know this.
That's what banks do for a living.
Banks are not nation states. They are parasites.
Anything too big too fail is a Sovereign power...
Too big to fail is an artificial American construct to suck the main street dry. That is what parasites do.
It's too big to fail because delusional Americans want to continue to suck on the teat of big government and corporations. They want to maintain a foolish lifestyle of vanity that was never intended to be a way of life: it was designed to be a method to get idiots to give up their lives (time spent on labor) to repay absurd amounts of debt that might never be paid back: it didn't matter to them. The banking cartel creates credit out of nothing and expects people to pay them back, or risk losing the real assets they have.
Banks operating by credits and loans are by their very nature parasitic: they risk nothing, but stand to gain everything.
Soon, you'll need a loan to be approved before you're even allowed to be born into this world. Why should life be free, damnit?
nationstates are defined by arbitrary, imaginary boundaries, rather like an Etch-a-Sketch.
global banking just occasionally gives it all a *shake*
And the conquered nations will welcome them with open arms and then they will realise what they have done only when it is too late to do anything
ROTFL...you china worshippers make me laugh.
China has paper claims and their claim to fame is cheap plastic shit, poisoned dog food, and counterfeit goods because they cannot create a brand of their own.
Even during the laugh-at-Japan phase, Toyota and Honda were known for quality cars and Sony was an up and coming brand. WTF does China have? Shit that falls apart.
They are a thief nation...nevermind they have turned their nation into a toxic waste dump. There's no breathable air nor drinkable water left in the entire country and cancer cases are exploding. THIS is the future? THIS is progress? THIS is the clever strategic leadership of the future?
GTFO here idiots
China now taking over the rest of the world now it has the US's ba"^s in a vise grip
China isn't taking over anything! People are just tired of buying {weekend Barb (eh)`q's}
So is the crisis temporarily over?
euro might rally a couple hundred pips, then inevitable selloff
In a land of the blind 1 eyed man is King
All Hail The Ants
800 million homeless and counting! Uncle Sam? (china style.
DOW +250 on Monday
Desperate men do desperate things. Well you know, thats just great they wanna buy it... cause theres a lot of it that needs to be issued! Idiots. The asians always pay the wrong price. They are obviously in so deep that they are panicing.
I see them c omming to their senses in like 1 year or so but not before they burn through 200-300 billion or maybe up to 500-600 if you factor in all the value depreciation, they should have just bought gold/silver and they would rule the world
Why I am rooting for the 'commies' ? cuz I am tired of the zionists
Between 2 despotic powers vying for the world crown I choose the 1 who's motives are merely domination instead of total annihilation
China is the world's largest gold producer.
If they buy up the gold on the open marketthey exacerbate the imported inflation problem even more, which would lead to more domestic unrest. They don't want to buy for the exact same reason the FED & CFTC will permit/collaborate with the bullion banks to suppress the price of precious metals.
I enjoy ZeroHedge, but it strikes me as too homogenously negative on virtually every news story....isn't China bailing out Europe a GOOD thing....I don't understand why this article is spinning this story so negatively. China is buying low ... perhaps they have enough money to help Europe and help themselves to some cheap assets .. it strikes me as a win-win for everybody.
You don't understand that debts made today will Never be repaid and all it does it to prolong the agony and pull more people under the bus in the end
Exactly. Greece can never pay this debt back. Now lets talk about Portugal, Spain, Italy..... That is the problem.
huahine
it strikes me as a win-win for everybody
More debt for a debt junkie ?. It is a win-win to the extent that the dealer gets paid and the addict gets the hit, but it never is one-time only proposition.
china is bailing out europe
with more fiat dollars..
putting them on economic front street...
they will come home to roost...
inflationary to say the least..
multi bird killing ,stone dollars ...
bunch of penguin pluckers
Madoff Trustee Irving Picard Triples JPMorgan Lawsuit To $19 Billion
http://www.huffingtonpost.com/2011/06/25/madoff-jpmorgan-lawsuit-irving-...
This is the Chinese version of our Marshall Plan, where the biggest industrial power lends to its customers, and promotes trade that benefits both. This model worked for Great Britian for more than a century, for the U.S. for nearly a century, and it will probably work for China for at least half a century.
The... Marshall Plan
re-industrialized Germany; not so much consumer financing.
China to Europe "All your countries are belong to us"
This will be hailed as good and the great Dow Jones Industrial Average will rejoice with a 200+ pt gap up tomorrow.
CNBC will swoon that Europe is solved and that everyone should buy AAPL & NFLX
Correct on the Dow, but please note that Tyler has thoughtfully provided spell check. That's "all your countries are berong to us."
Kids these days;)
arr your countries are berong to us.
Jeez dude, learn to speak chinese proper.
Behind the smokescreen, this is as much about reducing exposure to US government debt as saving Europe. It's hard to know what is the worst investment, though the core Europe economy is definitely in better shape that the US. It makes a lot of sense to increase diversification, especially if you think the Fed is going to be forced to print to infinity owing to the inability of Washington to cut spending without crashing the economy.
So the headlines won't read, China bails out of US debt, but rather China bails out Europe.
the core Europe economy is definitely in better shape that the US.
??? Wow! This is simply not true. Socialism in Europe is more advanced than the US and a much bigger drag on the economy. You cannot even afford to defend yourselves, you still need the US to do it for you.
Why do you use the word, "you"? And who does core Europe need defending from?
As for the economies, compare total deficit, annual budget deficits, employment, quality of education and healthcare, crime, housing and retardation of MSM - core Europe's doing better.
Again, simply not true. Your hellhome of socialist healthcare is inferior. It's near impossible to compare education and crime due to different laws, teachings and statistical gathering - that's all your opinion, nothing more.
retardation of MSM -
What the hell does that mean? Who owns and invented the Internet douchbag? We did!
And who does core Europe need defending from?
From itself of course. You don't know the European history of warfare with itself for the last 2,000 years???
compare total deficit, annual budget deficits
Once again, you overlook the fact that WE are protecting YOU at OUR cost - because you can't afford it.
I rest my case. No more replies you Old Europe crapper.
You go ahead and think that, Bubba. Don't ever go to Europe. I'll tell ya, shopping carts and bums everywhere, trash in the streets--it's worse than the bad parts of LA. Yeah, just stay in the US where everything is better, including privatized medical care. Stay away from Europe, the streets are DANGEROUS!
Europe doesn't have 25% black and hispanic populations.
White and asian US students are among the best in the world. These two groups' demographics indicators are better than those in Europe. Lower crime, better health, etc.
Here's a little secret I'll let you in on concerning asian students, but please don't tell anybody. Shhh...eyes only { [ (They do the work they're assigned) ] } Shhh! Keep it quiet, please...we wouldn't want our white American students to find out the key to asian student success.
Hard to know what is a worse investment? Well at least the US can print their own ccy to pay bond holders. Greece cannot do that. So you prefer something or nothing?
I am not comparing purely Greek bonds with Treasuries, but the argument that the US can always print to pay its debts which is better than nothing ignores the dilution of one currency versus theoretical haircuts in another. What matters at the end of the day is what I can purchase with my money, so a 30% haircut of one payment versus full payment in another currency that has fallen 30% is the same result.
This feels like a winner.
If I was China, I'd be wanting to unload the US paper- and doing that while buying big hunks of Europe at fire-sale prices and looking like a hero would be just the way to do it. Big question is what they're getting as collateral.
If the Chinese are getting European real-estate or PMs, they are limiting exposure to both debt crises in one fell swoop, as well as gaining footholds for anything from JIT hubs to military bases. Liens on production goods wouldn't be a terrible trade, either.
If I read on more bullshit, beyond diluted piece of breadcrumb information from TPTB about the worlds problems I will Puke! Its the carrot on the string Groundhog Day style. Come on Unite the world, have a positive solution to the "serious problems" (i.e. energy,money,food) and move forward, "Oh whats that", they already do and are just creating desperation and dispare to manipulate and PROFIT from the transitions, "HMMM".
Further proof that the Fed is out of bullets?
Maybe...
If the Eurozone goes down, so may China. Hence, they must bailout.
If the Eurozone goes down, so may China. Hence, they must bailout.
If China is in a mood to buy, I have some fresh cow patties down on Mule Creek that are worth more than all the Greek bonds in Christendom. What's the bid?
The Greeks should beware of gifts from mercantilists.
Desperate men do desperate things. Well you know, thats just great they wanna buy it... cause theres a lot of it that needs to be issued! Idiots. The asians always pay the wrong price. They are obviously in so deep that they are panicing.
And they are fucking liars.
.
Funny how China claims they will help bailout Europe, but never say at what cost. Hell, I would lend Greece money for 30-50% interest, or take over their land if they don't pay with my Army, if I were China too. You can't keep asking for bailouts at terms that do not help you and that is the problem Europe is in right now. Greece and other EURO countries are desperate, which creates manipulative lending, which means further catastrophe. Gee, where have we seen this type of predatory lending before and what did it just cause 2 yrs ago? Greece is better off defaulting over the long term. Anything else is futile.
Entire countries bailing out other countries they are in direct competition with. I guess they better change the Economics textbooks in college, because the old methods cease to exist anymore in fantasy land.
The funny thing is that China probably hopes that Germany will continue to buy Chinese products, but the problem is we are seeing saturation effects already.
At a certain point everybody already has everything he needs in life.
There's no need to buy more and more things that end up owning you instead of the other way round.
I for one don't want to surround myself with ever more plastics.
What's up with Belarus and China's $1 billion liquidity injection?
The US, the EU, Hungary, Belarus.... the point at which the money you lend is derived entirely from money you have already lent but returned (Ponzi scheme) is the point at which the whole thing goes down.
A $6 trillion economy that has lent out more than $6 trillion and now collects from its debtors payment for good and services with money that was lent out in the first place surely cannot stand as a house divided.
You make $1500 and you lend me $1500 and I buy an ounce of gold from you with that $1500. How long can this go on? Ostensibly, until you run out of gold but logically well before this. Like the debt clock someone smarter than me needs to put up a clock that tracks a theoretical thresh hold.
10 things not to do when going back on gold
http://lonerangersilver.wordpress.com/2011/06/24/10-things-not-to-do-whe...
Humpty Dumpty sat on a wall;
Humpty Dumpty had a great fall.
All the King's horses
And all the King's men
Couldn't put Humpty together again!
"Am Brunnen vor dem Tore,
da steht ein Lindenbaum.
Ich träumt in seinem Schatten,
so manchen süßen Traum."
http://www.youtube.com/watch?v=WDqg16P-q-Q&feature=related
Gotta wonder if this will make them excelerate selling their US debt.
Selling? It sounds more like they may be giving it away.
China this, china that.... Can't we focus on what we should do ?
Guys, it really doesn't matter what Chinese or Russian or Martians are doing. The bankers and the Fed are killing us. Chinese may got money to burn and "save" whoever they desire. We American are screwed. The fundamental problems is that we are still being gouged everyday. Market is being manipulated by the big boys and nothing has been done. GS and JPM are getting away with financial murder everyday. What the hell are we going to do about it ?
Who gives a shit about the stupid Chinese spending their toilet paper money. It ain't gonna save our asses. Even if the chinese throw money to us, it will just all be intercepted by the crooks.
You nailed it.
This story turned out to be a non-event.
Euro opened up, trading pretty much flat, now drifting a little lower.
Such a non-event that xCHF crosses gapped down a hundred pips?
S+P 500 to 2000+ tomorrow...
I'm in favor of anything that makes the EU and IMF NWO movement irrelevant.
Because Rockefeller and Kissinger have sinister plans in mind.
Keeping world population under 500 million.
RFID chip implants for everyone.
Great way for China t get get rid of those value losing FRNs they have without anyone freaking out.
Chinese possess a civilization, rather than an armed Wal-Mart now cannibalizing the domestic population. Makes their decisions actually work out, since they hold the interests of their people, and their people's place in the world as part of the proposed solution.
Viciousness in China can't be separated from careful recovery from 100s of years of imperalist domination, and unceasing subversion since 1949.
What's so unimaginable to the fascist loving stock perverts on here is that a ruling class could make a decision in everyone's best interest. Might not work -- given the armed, deliberate sociopathy of the White man, but the Chinese Communist Party is strictly honest enough to create functional plans.
Other than crippled Democrat liberalism since FDR, ain't seen a sincere policy in the USA domestically or elsewhere since. This barbarity's been foisted thanks to decades of terror-tainment and moral subversion through public and private instutions -- hence our angry, misanthropic, God whining population.
More power the Chinese get, the less room the bad Judeo-Europeans will have to fake terror and manipulate finance. Nobody's got any leverage on calling the Chinese unprincipled before you face the last century in the West.
Forgive us for viewing their actions through the prism of our own experience.
Seriously, I hope you're right. If the West can't be the shining city on the hill with only the hope for true prosperity foremost for their people, then at least I hope someone on this sad planet can.
The way it stands now, this sickness in the Western world hasn't much longer to spread its disease. I long for the day...
"They're just misunderstood"? That's all you've got?
They've enslaved their people, are poisoning themselves at an accelerating rate, are committing human rights abuses on millions, and couldn't give a rats as about 999M of their countrymen.
You can be progressive without pretending that the Chinese are anything but an authoritarian nightmare; Tank Man just threw up.
Judging by your careless hyperbole, quoting what is not a quotation, and your bulemic summative argument --- I conclude that your moral degeneration under a lifetime of capitalist propaganda has trained you to defame any mention of the possibility of the existence of principled power.
I was happy to see China release its own US Human Rights Report -- which politely declines mention of financial terrorism -- and am saddened by the spiritual brutalization and incarcelization of the former American slaves.
Progressives limited to anti-communism are covert reactionaries still crippled from McCarthyism.
Chinese US Human Rights Report:
http://news.xinhuanet.com/english2010/china/2011-04/10/c_13822287.htm
I can one-up that link with ease:
http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/
Your reply reveals you've read your refutation, and your competition rhetoric again proves your abject capitalist mentality, thereby re-proving the emptiness of your initial blustering against communism.
Pollution ain't a good thing -- and US-European capital investment projects in a formerly all-impoverished country certainly did take advantage of the lack of environmental legislation.
The ideological point is that echoing NYTimes propaganda, "authoritarian nightmare", as your frame of reference destroys any possibility for your presentation, even if the low-level facts are accurate, to build towards a greater understanding, or, as the Chinese wish, a win-win situation.
Were your first concern the poisoning of the Chinese people, then your first task is to change the predatory US-military-financial empire into a helpful force with free capital loans towards purification, and the ending of imports based on polluting industry.
Unfortunately, unbeknownst to yourself, your genuine concern has been co-opted into a propoganda mechanism.
"Unfortunately, unbeknownst to yourself, your genuine concern has been co-opted into a propoganda mechanism."
Perhaps. I will feel guilty about that later, I am sure.
However, I do have eyes and I do see pictures. In the seventies in the US, we had a crying Indian (now known as a "Native American"...) standing over a creek because someone threw away a cigarette into the stream.
We didn't have small children, covered in black soot with boils on their faces taking a rusted can down to the local water-source, wearing a rag over his nose because the smell of sulphur was so horrific that he could hardly bear it.
Giant difference there, WorkOut. Look at the photos, how 'bout it?
You sho' talkses good, dough. I appreciate that.
:D
I looked through the photographs -- thank you for pointing me to ChinaHush.
If you look through the About page, there is some good discussion of Chinese born Americans and then indoctrinated to despise China.
Rubbing against the grain of the smug rulers -- in the realm where you have most knowledge, and have the ability to change policies -- is the proper mode of struggle.
Of course, the best way to change the system is from the inside out. But...
When In the Course of Human Events...
To be frank, I have no idea where to stand on China. I have heard Americans say they love it; there is no fear of crime and they can make an honest living. The Chinese just released a painter but won't let him use Twitter...A painter? Twitter? For realz?
So, I'm not sure about them myself. I have had extensive dealings with actual and real Chinese people, as I am a student of Chinese Medicine and I found them to be not so bright as others would have us believe but not so dumb that they just fell off the truck.
In short, they're people.
If they are people, then the old mantra would apply to them as well: power corrupts and absolute power corrupts absolutely.
The jury of my mind is still out on whether their government has the best interest of the people in mind, even though it would be in the best interest of the politburo to think that way.
We'll see. It was nice to have a conversation with you.
:D
STFU idiot
Incarceration of former slaves? There are former slaves left alive now?
You're a retard- those blacks incarcerated are there because they committed crimes. Maybe China should take them in if their hearts bleed so much.
Problem with slander is that innocent bystanders might get soured on helpful tones -- which you can live on in bad times. On the other hand, to respond is to legitimate the source -- hence I recommend holding specific phrases at the farthest careful distance.
Yes, friend, Black folk in America are hunted into prisons, and there ain't been nothin' to help redress several hundred years of your father's humiliation and your mother's rape.
Of course dreaming up revenge fantasies for White Greeks is more to the taste of the crowd here, as per WSJ dictates -- hence I thank you for disciplining the nascently critical wealthy back into the dead-end of anti-politics.
WorkOutWellForAll
CHINA- PRINCIPLED POWER ?
You got to get a job at the Comedy Club.
That Adolf Hitler, why he makes the trains run on time...
What a fucking academic idiot thou art.
Are you paid for your propaganda, or are you just an enthusiastic lapdog ?
Best to avoid referring to individual elements of great-emptiness defamation.
Unless we soothe or silence these infuriated -- we cannot grow! Helpful to indirectly acknowledge their presence, and at a high level of abstraction counterpose a helpfulness, accuracy, and solving frame of reference.
Were the comment sincere, then openness to error correction, and therefore cooperation, would remain -- such as my graciousness for the pollution pictures. With an insincere approach, however, we must avoid permitting the connection of abuse-weaponry and principled-speaker.
I fear Mao went wrong inviting Kissinger and Nixon -- that White cunning trumped them too -- just that mixing a modicum of principle with thousands of millions -- it'll end up tipping world history towards survivability.
Unfortunately, I see little the Chinese can or will do to stop the hollowing out of the United States -- if the citizens on their own are abused into too idiotic submission, then what can we do but live safely and conservatively and hope for external support.
Are they paying you $2 per day for your drivel? That would put you in the mainstream of Chinese workers. At least they give you a flat with four other people in one room and you only have to work 14 hours a day 7 days per week--or are you one of the elite party members or the son or daughter of a party member?
Sadly, you won't be able to communicate with the sinophobes on this board in rational conversation. But thank you for trying, pengyou ... You made some good points that were totally missed by them in their mad rush to chant propaganda.
Principled power is an oxymoron at best; go visit Tibet. As for moral degeneration, I'll stack my ethics and morals against yours any day of the week, apologist scum.
How does a second wrong make right with respect to human right abuses again? Logic is more impressive than rhetoric my little mao mao.
Do you think the people leaping out of windows at Foxconn felt "financially terrorized"?
If we had more Latinos and Blacks in the CIA and NSA,
maybe they wouldn't be such sociopathic terrorist organizations.
Because latinos and blacks are more laid back, less nerdy.
I am sure Felix Rodriguez would back you up on that.
/"
Let me get this straight. US Treasuries are considered too big of a risk by the Chinese and yet European debt are something they deam worthy. Sounds like alot of nonsense talk which is typical of the Chinese.
If you had such a fantastic gain on your Treasuries, to the point that yields had been driven down to obscene lows, you might also be inclined to take profits.
The Treasury rally is by far one of the most amazing feats in world financial history, those with huge gains like the Chinese are bound to start taking profits and buying something else that pays a better interest rate.
Good reason.
after my very nice gains, I of course have a stop loss in place. But I am also aware that the big boys still repo 105 and have to be careful at the end of the month as we may see good gains for a bit as this trade can unwind and we could see a return in stocks for a bit. also been lawyering in some tbt on the bottom of the trend line and selling at the top. we have a descending traingle pattern which of course may on not play out.
I agree ... but was rather referring to newly issued debt. The Chinese hold the cards as the QE2 program ends I think. When this program ends who will step in to buy our debt if it is not China. An even larger question is at what price will this debt find an equilibrium. I'm one that believes the market is overly optomistic about the end of QE2 and believe there will be major stock market disruptions.
No, not nonsense when you consider that the Fed surpassed China as the biggest holder of Treasury debt. If China and OPEC go Euro, its the end of the petrodollar. The Anglo-Americans will then be swapping worthless paper in some dimension that has no link with real world economics. Only the House of Saud remains...
http://www.zerohedge.com/article/iea-opec-nash-equilibrium-collapses-197...
Best scenario for US is to mark their gold reserves to market, stop the paper ponzi schemes at LBMA and COMEX, and join the rest of the world before they are left behind.
UFester
You actually think that European sovreign debt is worth the risk? Quite frankly US Treasuries are not great but they look like gold compared to Ireland, Greece, Portugal, Spain, etc ... as well as their banks and quite frankly their economies. They are in runoff mode now and we will be if the debt ceiling is continually raised.
True, PIIGS are bad. The better looking horse in the glue factory is the US at the moment. But perceptions are misleading, no? Should the US lose the petrodollar and oil exporters demand another currency to swap oil for gold, the view would change overnight. Even a basket including the $ and other paper currencies would devastate the US. The only reason to hold US paper in reserve is to buy oil in the global market. Should that trade end, the PIIGS would find something in common with California, Illinois and Michigan, no?
This is about trading value for value (oil for gold), nothing more. When the oil fields run out, what will the exporting countries have...paper promises? That paper is dependent on future production in a modern economy based on oil! So I ask again...when the oil fields run out, what will the exporting countries have? Paper promises that will not be paid because they can't be paid. Oil is the real currency in the global marketplace, and that currency is looking for a real wealth reserve...oil is looking for gold! The paper exchange medium that facilitates "oil to gold" wins, the debts of a trading bloc's member states notwithstanding.
What we are witnessing today is the death of a global currency! Today are the effects of what occurred 40 years ago, when the gold-dollar was replaced with the petrodollar. It's amazing that the debt financing of the dollar as world currency lasted this long, no? The US is now caught in a positive feedback loop. The backing of the $ is economic productivity (taxes), the backing of the economy is $-cheap oil. As global economic output contracts, the $ price of oil goes up, and...drumroll please...the global economy contracts again! Rinse and repeat.
Value for value, OIL is looking for GOLD.
UFester
Nice post--makes sense on an intuitive level. Oil looking for gold. However, if the fields are running dry, won't that just up the cost of oil and eventually lead to better use of the little oil that remains? We are still profiligate with oil as an energy source, thus all of our use of energy has to become much more rational and therefore expensive. It is not a question of replacing oil with alternative sources--that seems to be a fantasy--or trying to be green. It is a question of making better use of the oil that remains.
In a way, it is good that nuclear energy is having such bad press. However, between private cost-cutting and public coverups, perhaps nuclear should not have a future. Nuclear is, however, the only viable alternative to oil--as opposed to wind, solar, etc. So right now, we should be serious about making better use of the oil that remains. Europe seems to be further along in that direction than the US.
You base a large part of your argument on a likely move from the petrodollar. A move from the petrodollar would be the last move a sheikh would make. The so-called "war on terror" is nothing but an excuse to have multiple carrier battle groups, armor, and troops within striking distance of any sheikh who thinks of turning off the dollar denominated spigot. They are but floating reminders to the house of Saud of just who is sexing who. When that oil ends, the need for the petrodollar ends and they'll be left to fend for themselves. If she were left to the hand of her Wahhabi citizens, the pampered princes would all fly to Europe with their gold. The ensuing civil war would be to decide who has control over their two city-shrines...without the oil, they'll return to their 13th century roots.
Actually, it's not a likely move in the future...it already happend in the past. In 1997 the LBMA went public for the first time on the paper gold trades (signal). They were 10:1 paper to physical per annum in 1997. Then the 1999 Washington Agreement on Gold published that CB gold leases would stop. Basically declaring that the CBs no longer backed the BBs. THE gold lenders of last resort said "no mas" to the paper. This coincided with the 1999 official Euro release (no coincidence). Enter ETFs to divert the West's paper wealth from cashing out in physical...paper for paper yet again! 2010 COMEX is now 100:1 paper to physical with cash settlement as the norm!
The "war on terror" serves TWO goals. 1) yes, "an excuse to have multiple carrier battle groups, armor, and troops within striking distance of any sheikh who thinks of turning off the dollar denominated spigot." 2) Psyops on the American public to take away what little freedoms and liberties are left (Patriot Act, Homeland Security, TSA agents fondling 6 yr olds at the airport, etc).
The "Wahhabi citizens" are rioting b/c of imported dollar food inflation caused by the Bernanke put, no? "The pampered princes would all fly to Europe with their gold"...probably. "Without the oil, they'll return to their 13th century roots"...yes, and so will we.
UFester
Rockefeller & Kissinger stick together like ash & sulphur.
No chance of a rally in SPY tomorrow with gold trading under $1,500 and silver under $34
I think the Chinese should have waited until Greece unravelled. In this crazy world no good deed goes unpunished, and as seen on the posts here, they are going to get blamed for any -ve events and ignored for any +ve consequences of their intervention. If they had waited, they could have played the knight in shining armour when the opportunity arose. They might be economically savvy, but their achilles heel is public relations and razzmatazz bullshit which the West excels at. They really ought to think about employing Saatchi an Saatchi if they want to be a 1st world power.
May I be the first to say: http://www.youtube.com/watch?v=RN2920X9Ow4
forget it...chinese sovereign sells EUR all week. ZH china is bluffing the weak (europe)
talk is cheeep. and, as we see from many posts, here, quite effective, too!
Sabbath Bloody Fucking BLACK SABBATH http://www.youtube.com/watch?v=ReuBms-qZQk
China is already engaged in Europe more than most people think. Especially in Italy which is their entrance door to Europe. The port of Naples which is in the hands of the Mafia is the entrance for all kind of goods from China, be it faked luxury goods or fishng rods. Chinese business men and very honorable Italian business men from Italy working hand in hand with the blessing of Berlusconi. But the interesting thing is, that the Chinese invest in Italy buying small and medium sized factories and sell these goods around the world with the label "made in Italy". Chinese tourist are visiting in steadily growing numbers Italy. Just like the Americans in earlier decades. But now you rarely see an American tourist in Italy nor a Brit. It became to expensive for them. There is no doubt the Chinese like Italy and my impression as a German is they fit very well together. Both are very clever trade and business nations. I think the same can be said about Greece. But even in Poland the Chinese are active. They got the contract for completing the last 50 km of the "autobahn" Berlin-Warzaw. However this time they failed. The contract was removed because they were far behind schedule and the Poles want to have it done till next year for the start of the European Soccer Championship which takes place in Poland and Ukraine simultaniosly. The Chinese are in very good terms with the Europeans. Everybody here in Germany knows that our present and future jobs depend mainly on China. The demand from there is ever increasing and getting broader and broader.
And it is for sure wise for the Chinese to sell some of the Treasuries and buy European debt. Just to diversify the risk and at the same time to stabilize Europe which is at present fundamentally a more stable market than the US market. In case the US currency is collapsing the Chinese exporters need Europe even more than now.
As far as the fate of the Euro is concerned many things are very unclear. But one thing appears sure to me. Germany will not go away from the Euro, why should they. So the Euro is at least backed by the German economy plus, Netherlands, Austria, and maybe the one or other smaller country. And Germany is by far the biggest chunk of the eurozone. As far I remember when the Euro was introduced more than 50% of the total of coins and banknotes were produced in Germany for the locals. This may not be an clear indicator but it can say something about the economic proportions in Europe. A Euro is still a Euro and it is the preferred currency to store value in all Central European countries, Russia, the Balkan, Turkey, Morocco. The break away of the so called PIGS countries would be the worst case for the Euro in my opinion. But it would not ne the end of the Euro.
The ECB is more or less powerless and toothless. It is limited in its actions unlike the Fed. The one and only task of the ECB is the money stability. To maintain the buying power of the Euro. This is the heritage from the old German Bundesbank. And the ECB is located in Frankfurt next to the Bundesbank. If one wants to try to change the statutes of the ECB he has to modify the German constitution first. This is a very high hurdle. Of course nobody can look into the future but in my opinion the Euro as a currency is not in danger at present. I see no fundamental problems as long as the statute of the ECB stays as it is now. Its the souvereign debts but not the Euro!
Greece for sure will default because its just to much debt for such a small country. So this will happen in one way or another one day in the future. Countries and banks are endangered but as long as the German economy is at least halfway properly functioning the Euro will stay. And in the moment Germany is close to have full employment and is already attracting workers from Central European countries in growing numbers again.Plus the Chinese and the Russians are protecting the Euro. So things look not to bad for the Euro in the moment.
Thanks for the on-the-ground report.
:D
ES getting destroyed, only one hour of trading in Asia so far.
Bonds look like they are skying to the moon.
They have been buying euro assets since Bernank started printing, a deal was even struck with Sarko and Merkel last year when PIIGS disease was first diagnosed as terminal for chinese PPT actions (aka support of euro) - no WTO and no human rights talk in exchange for the chinese PPT. That did not cure the patient far from it; either this is empty talk while they quietly sell what they have bought for several years, or it's another politician's ill-timed gaffe; the market will take this as chance to make some good money.
Whew! We are now all saved by the tit of China.
On a lighter note: a person walks into a bathroom a Canadian and walks out as an American - what is he called while in the bathroom?
Ur-a-pee'n
So what will happen when China has a credit event, or does everyone think that's impossible?
How about in 10 years or so when the people want a real democracy? That should be interesting.
There are still millions and millions of Chinese poorer than the poorest of Appalachia or our native American reservations.
I'm just saying, they will overplay their hand eventually.
Here is what Premier Wen said .. which sound like less than a "bail out" -
Premier Wen Jiabao said China will keep investing in Europe’s sovereign bond market, providing a vote of confidence in the region roiled by the debt crisis.
“China has actually increased the purchase of government bonds of some European countries, and we haven’t cut back on our euro holdings,” Wen told the British Broadcasting Corp. yesterday in an interview. “I think these show our confidence in the economies of Europe and the euro-zone.”
http://www.bloomberg.com/news/2011-06-26/wen-says-china-is-a-long-term-i...
Germany is happy to have PIIGs crises because the uncertainty keeps the Euro low and they can continue to export trillions. China wants the crisis ended so the Euro rises and they will be able to sell trillions into the Euro zone. The United States like the crises because it takes the heat off their own failed policies. Expect this drama to continue for years to come.
We are only in the economic warfare stage of this world war,wait until the total war starts with the big dogs china and russia. I hope you got yourself a gun because we're going to madmax beyond thunderdome people... enjoy it while it lasts. Btw kimber firearms are no joke!
Maybe China will bail out JP Morgan's naked short silver position too?
who jumped the shark first on bailouts - China or France?
we are only in the economic warfare stage just wait until we hit the total war phase. Mad max beyond thunder dome dayz. Better get yourself a kimber firearm fast cause time is running our.
Logically, I can't comprehend this. WHY? Why would China do this? What do they hope to gain by bailing out Europe? Are they planning to enslave the world? Are they complicit in a plan to bring a World Government with them in the driver's seat? Are they trying to collapse the West in its own quagmire of debt? Are they hoping to enslave the West to serve them to pay all that debt?
And what will be the consequences of a default? How would China extract its pound of flesh?
What are they hoping to accomplish here? I can't comprehend it!