Chinese USD Diversification Continues: First Euro Bonds, Now JGBs

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Sun, 05/29/2011 - 21:29 | 1321575 AUD
AUD's picture

China was among the main buyers is only hearsay, I'd say the speculators are buying since they still see Masaaki 'easy' Shirakawa as the chump who will give them their 'profits' risk free.

Sun, 05/29/2011 - 22:50 | 1321709 IdioTsincracY
IdioTsincracY's picture

Exactly right!! The leeches will have their feed anywhere there is a Quantitative weakness.

China, on the other hand, will be compelled to prop up the indebted economies in order not to loose customers, just like a pusher keeping his customers going with the next dose ....

Sun, 05/29/2011 - 22:58 | 1321719 Renfield
Renfield's picture

China, on the other hand, will be compelled to prop up the indebted economies in order not to lose customers...

A plan that worked so well when they were doing this with the US.

Now they have a reeking pile of worthless US debt, and their next step is to pile up another steaming pile of Euro debt...

Logical. Aren't Asians meant to be *good* with numbers?

Sun, 05/29/2011 - 23:06 | 1321734 disabledvet
disabledvet's picture

you forgot "the JGB's."  depending on how the US plays its cards "it could simply default" and "offer Japan the best nuclear experts on the planet."

Sun, 05/29/2011 - 23:31 | 1321772 IdioTsincracY
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I do not think that they are worried about everybody defaulting .... their main goal is raising their standard of living ....

In the end all the doom and gloom will not happen.

Most likely, there will be a global rebalancing ... with a decrease of the standard of living in the western nations, and an increase in the BRICS ones ....

The most 'difficult' part of this will be for the USA to accept the fact that it will lose its first place in many fields ....

as for the rest, we will see if the middle class has the strngth  to demand a reduction in the income disparity between the top 10% ad the rest of the people, to make up for decresing wages, decreasing standard of living, decreasing everything basically, but with increasing costs ....


Sun, 05/29/2011 - 23:40 | 1321786 traderjoe
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Yes, and all of that will happen peacefully... /s

Mon, 05/30/2011 - 12:01 | 1322570 DosZap
DosZap's picture

Most likely, there will be a global rebalancing ... with a decrease of the standard of living in the western nations, and an increase in the BRICS ones ....


Yes sir, and the U.S. is pre-empting the mass exodus already.

Most have noticed a foreskin,and a first born is required now for a new PASSORT.

Sun, 05/29/2011 - 23:51 | 1321804 kito
kito's picture

another one that can't see past his nose. creditors become masters. for china, money lost in the short term is power gained in the long term. just look at greece, the imf will now dictate their domestic policies and own all of their prized possessions. cant wait till maui becomes mao-i

Mon, 05/30/2011 - 00:21 | 1321833 Renfield
Renfield's picture

"creditors become masters. for china, money lost in the short term is power gained in the long term"

Oh, is that right?

"If you owe the [Chinese] $100 that's your problem. If you owe the [Chinese] $100 million, that's [China's] problem."

(With apologies to J. Paul Getty)

I appreciate your admission about the length of your nose ;-) but I'm sure you're a handsome bloke regardless.

Mon, 05/30/2011 - 00:32 | 1321855 Stormdancer
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Does it really matter if, once the reset comes, you own a manufacturing powerhouse capable of producing real goods the world wants and needs?

American manufacturing has been decimated by this dumb like a fox mercantilist gambit and it will take a long hard slog to replace it.  Without it, we have little to trade with the rest of the world once dollar hegemony is broken.

China on the other hand will have a solid foundation from which to launch into the next phase of global trade.  All built with a "dead end" mercantilist strategy.  Dumb like a fox...if they can keep their own imbalance from imploding just a short while longer than the west. 

Even if they implode first, they still have the factories, machine tools, plant and equipment to rebuild with while we're starting from almost from scratch.


They're playing a dangerous game, but then the stakes are quite high.  Some risk is warranted by the potential rewards.  It's interesting that their political and economic interests  are aligned for the moment in the monetary realm.  Purchasing bonds issued by their primary competition for global export business (Germany (EURO), Japan, and Korea) strengthens those currencies, making their exports costlier when compared to Chinese exports whose values are pegged to the dollar.

3 dimensional chess...and they're pretty good at it.

Mon, 05/30/2011 - 01:04 | 1321880 Renfield
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Actually I agree that they are in a better position than the 'western' world, due primarily to as you say, their productive manufacturing foundation.

Shifting piles of debt-paper from here to there becomes little more than a game of musical chairs in this competitive devaluation game.

But productivity is always the foundation of a REAL economy, and the country that makes real 'stuff' that people want and use - as opposed to 'services' and FIRE 'industries' - can survive even a global fiat paper implosion. The Chinese also have this reputation for exchanging that debt-paper for real 'stuff' like commodities all over the world, which of course is also good for a real economy, based on productivity. Then they 'win' by making real products that people want and use. It's just a matter of finding the right price (even if that price looks a little 'deflated' after the fiat games are over).

'Stuff' wins over 'services'. If this is what you're saying, then I agree with you.

Mon, 05/30/2011 - 01:49 | 1321924 Stormdancer
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...'Stuff' wins over 'services'.

Yes, that was the gist of my argument.  The Chinese are mathematicallly astute enough to have figured out long ago that a fiat currency based on debt is dependent on continuously increasing debt creation for survival.  Implosion is inevitable.

They've been preparing for the inevitable for twenty years at least.  They've done their best to use the dollar system while it lasted.  They've used it to position themselves to dominate the system that replaces the dollar.

It remains to be seen how successful they'll end up being.  They've paid a very heavy toll environmentally.  But, it does seem that the Chinese have an increasing number of tools, strategies and directions to choose from while the west in general and the US in particular have fewer choices.  They strategize while we can do little more than react to the crisis du jour.

Mon, 05/30/2011 - 01:51 | 1321925 Sock Puppet
Sock Puppet's picture



your analysis makes me quiver.

Mon, 05/30/2011 - 07:40 | 1322124 Crab Cake
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China will be demonized, and their production base destroyed. They, the Chinese, will have to wrest control from the same evil bastards we live under. Make no mistake, the US conglomerate empire is on a direct collision course with China. When the shit gets deep they will be the external go to threat, you watch. The oligarchic globalist corporate structure, paired with the US/NATO complex, does three things exceedingly well.... propaganda, espionage, and bombing shit. China will be easy to destabilize, but impossible to truly defeat. My hypothesis is ww3 and nuclear exchange, if trends stay online, and revolution doesn't take hold first. This will be an interesting decade.

Mon, 05/30/2011 - 10:59 | 1322397 disabledvet
disabledvet's picture

"the only path for a policy that devours itself."

Mon, 05/30/2011 - 12:11 | 1322595 DosZap
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Even if they implode first, they still have the factories, machine tools, plant and equipment to rebuild with while we're starting from almost from scratch.


I still am amazed that people assume, that TPTB,have/want us to Re-Start from scratch.

They  are/have torn us asunder on purpose, and there is no way we're getting up.

They (the NWO) crew will never allow it.

Mon, 05/30/2011 - 13:03 | 1322727 Stormdancer
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Point taken.  I don't believe they'll get everything they want.  There's no assumption on my part that they want anything but total control of a much reduced population.  I just think they'll fall somewhere short of that goal :). 

Mon, 05/30/2011 - 01:37 | 1321916 Mr Lennon Hendrix
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Loans are assets...for some god forsaken reason.

Mon, 05/30/2011 - 10:34 | 1322345 blindfaith
blindfaith's picture

China has always wanted to OWN Japan.  Gee, anyone really think the Chinese are doing to simply to make a few bucks or play nice guys.  The Chinese are far and again smarter that westerners dare to admit or realize.  You don't BUY debt with the idea that it is going to loose value or be diluted....not here in this case.  A default, or such massive un-payable debt will force sovereigns to sell off public assets to them.  Don't forget there is more spit on the streets of Beijing than there are guns in Japan, Portugal, Italy, Greece, and the rest of the 'to much in debt to bail' nations, including us...the USA.

Sun, 05/29/2011 - 21:30 | 1321577 Ahmeexnal
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It only costs 5 yuan to dig an ounce outta the ground!

Sun, 05/29/2011 - 22:53 | 1321716 JW n FL
JW n FL's picture

you can NOT eat 5 Yaun!

Sun, 05/29/2011 - 23:00 | 1321727 Orly
Orly's picture

I did that once...but I was hungry ten minutes later.


Sun, 05/29/2011 - 21:27 | 1321578 High Plains Drifter
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12 square miles of brand new empty buildings. another masterpiece brought to you by the chinese.........

Sun, 05/29/2011 - 21:35 | 1321586 HamyWanger
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Yes, because it never happened, and couldn't happen in the US. Ah, these rednecks... 

Sun, 05/29/2011 - 23:53 | 1321812 meizu
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All brand new buildings are empty, hundreds of millions chinese are still living in old crumbling buildings, these new buildings will be needed when old ones are torn down

Mon, 05/30/2011 - 00:10 | 1321821 High Plains Drifter
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well i guess they want to create a chinese middle class in order to be able to afford this type of housing etc. but how can they do this?  i mean why did all of these manufacturers move their factories there for in the first place?  cheap wages and no benefits , right?  chinese middle class?  oh will continue to be like it always has been, the rich and the poor , just like it will be here very soon.

Mon, 05/30/2011 - 01:52 | 1321930 Sock Puppet
Sock Puppet's picture

Look deeper my friend.  The Chinese are planning for future war or calamity, earthquakes, etc.  Their goals are two fold, create jobs and prevent social unrest.  Look at Japan no housing for displaced Fukishma residents.  China will not have that problem.

Mon, 05/30/2011 - 08:45 | 1322183 High Plains Drifter
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i don't think there is any benevolent ideas in the chinese government about its peoples. to them, as it is here, they are merely cattle to be used. now sure, they have more cattle than we do and with their abortion programs in place, they have had some success in stopping or at least attempting to halt their run away population explosion. but the chinese oligarchs in my opinion, the same ones who own this property(probably)since in any communist system there are those who are in control and there are those who are poor, that these men build this stuff because they have to build in order to increase their profits. there seems to be no big plan afoot about all of this. heck , it has been shown on this blog, how the chinese are now tearing down perfectly good buildings and highways so they can build other stuff. it makes no sense. but to them it is like you have said, however, that their peasants need work, or unlike us, they will riot and matter of fact , have rioted many times.  i think they are building to build.  to the chinese , this is like war is to us. if they stop building the entire facade known as the chinese economy would collapse, since this building expansion is a big part of it, and for the united states, we must fight to survive, or at least this out of control government does, because the day war stops and peace comes, the so-called peace dividend, shall we say, is the day this thing called fiat, will die. but war to us, is, at this point, merely a extension of the time of our economic death for any fiat regime that has ever existed only lasted not more than 100 years. that would put its final death in the year 2013 since it started in 1913. ah yes, that good old number 13 again........

Mon, 05/30/2011 - 14:13 | 1322857 meizu
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In china old home prices are inflating along with new home prices, more and more chinese living in old homes are selling their old crumbling homes and buy up new homes.

Mon, 05/30/2011 - 12:17 | 1322613 DosZap
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I hope they were intelligent enough to use some other countries sheetrock.

Mon, 05/30/2011 - 01:38 | 1321917 Mr Lennon Hendrix
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When the Japanese realize they are living in a high radiation zone, they will move there.

Mon, 05/30/2011 - 08:47 | 1322186 High Plains Drifter
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japanese mongolians?  genghis would turn over in his grave......when i saw this article , i thought the same thing may have to happen..... 100 million japanese leaving their island for a new home.......

Mon, 05/30/2011 - 11:02 | 1322404 disabledvet
disabledvet's picture

my guess is "the number is around 30" (million).  there is only one nation on earth capable of accepting that level of humanity.

Mon, 05/30/2011 - 12:19 | 1322619 DosZap
DosZap's picture

The US could easily..........

Mon, 05/30/2011 - 14:12 | 1322848 BattlegroundEur...
BattlegroundEurope2011's picture

Austrailia ;)

Mon, 05/30/2011 - 06:27 | 1322089 schizo321437
schizo321437's picture

A city with no people?

Sounds like Utopia.

Sun, 05/29/2011 - 21:35 | 1321585 BillyBoy22
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Can someone explain to me what China's endgoal is?  If the euro in general and portugal in particular are about to tank, then what use is it to buy loads of g-bonds from the ecb and portugese banks?


Sorry for noob question.

Sun, 05/29/2011 - 21:34 | 1321591 HamyWanger
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Profiting from high yields, maintaining their exports and being able to kill the entire West in one shot when they decide to. 

Sun, 05/29/2011 - 21:37 | 1321601 BillyBoy22
BillyBoy22's picture

"Kill the entire west" as in a massive bond sale/dump right?

Sun, 05/29/2011 - 21:39 | 1321603 RockyRacoon
RockyRacoon's picture

You do make occasional sense, like now.

Better watch out, folks may start to take you seriously.

Sun, 05/29/2011 - 22:25 | 1321673 cowdiddly
cowdiddly's picture

Thats what I thought, First post he ever wrote worth reading. There is hope.

Sun, 05/29/2011 - 22:29 | 1321686 seek
seek's picture

There's always been hope, he's breaking out character right now. The crazy posts from him are all parody. He's one of us, with a twisted, satirical sense of humor that not everyone gets.

Sun, 05/29/2011 - 22:42 | 1321704 Derpin USA
Derpin USA's picture

I have noticed this too. It's an amazing troll.

Mon, 05/30/2011 - 01:54 | 1321935 Sock Puppet
Sock Puppet's picture

All I can say is Hammy inspired my creation.

Sun, 05/29/2011 - 21:59 | 1321639 Manthong
Manthong's picture

Don't forget control as many hard/strategic commodities as possible.

Mon, 05/30/2011 - 12:20 | 1322627 DosZap
DosZap's picture

Oh, they do, and are.

They are buying, have bought farmland globally, and mines, you name it.

All the raw materials needed to RULE the world.

With USD Bingo bucks.

Now, who's the FOOL?.

Sun, 05/29/2011 - 22:52 | 1321712 CompassionateFascist
CompassionateFascist's picture

5+ unjunks for the Wanger. Well said.

Mon, 05/30/2011 - 00:30 | 1321853 High Plains Drifter
High Plains Drifter's picture

the same masonic goy network runs china just like it runs almost all, if not all countries in this world now. since that is the truth, then china does not make any unilateral moves unless its heirarchy puppets are given the go ahead to do such. anyone that thinks china is on some quest to feed their nationalistic hopes is dreaming. there is no such thing as nationalism when you have a internationalist infiltration of all goy governments via the masonic networks.

all of these masonic networks in all of the countries of the world, feed back to one place and one source. all leaders in government who are masons cannot be trusted and are most probably traitors. when you see their lips move and as they speak and you watch them move their arms and legs, just remmeber they are puppets on the strings, being manipulated by the hidden hand on the stage of life......this has gone on now for 3000 years. they are pushing hard now for one world government. they are close now. such is life in the 21st century.

Mon, 05/30/2011 - 03:07 | 1321981 old naughty
old naughty's picture

In-deed, they do, HPD. And you are wise.

China, after all is on the 33 parallel.

Planning and executing according to the agenda. Veep will visit China soon, to be followed by 5G-designate to reciprocate.

In the meantime, keep the merry-go-around turning.

Sun, 05/29/2011 - 22:02 | 1321640 YHC-FTSE
YHC-FTSE's picture

Not a bad question at all. It's merely the extension of the economic cooperation the countries in the EU and China have been developing for decades. I remember going to China in the 90's and seeing VW cars rolling around all over the place. A favour for their favourite customer. 


If you think that China's end-goal is global economic domination, the imposition of their culture, the enslavement of the human race through ideology, and debt, then I'm going to guess that you're American, and you're projecting your own deeds and desires on to China. I reckon the end-game of the Chinese is the same as everyone else: Survive, live well, and get out of poverty while everyone else seem to do the opposite. Clever chaps those Chinese. They were sea-faring merchants when most of Europe lived in caves, and they are still merchants at heart. 

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