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Ex-PBOC Official Wakes Up From The Acid Trip: "U.S. Treasury Market Is A Giant Ponzi Scheme"

Tyler Durden's picture




 

After years of being the primary supplier of funding to the US credit-money shell game, one more ex-PBoC member wakes up from the "great normalization" acid trip, and in a Caixin editorial says what virtually everyone now understands all too well: the Treasury market is one "giant Ponzi scheme." Oh, and it wasn't obvious when China was the biggest holder of debt for years (until the Fed became the biggest monetizer of US Treasuries late in 2010)? Sounds like a rather serious case of buyers remorse is creeping into the buying mindset of America's formerly primary enabler. The $64 trillion question now, as always, is whether China, whose holdings have been flat for a year will follow in Pimco's footsteps and actually commence selling longer-dated paper. If so, and with QE3 now expected to end even if temporarily, the aftermath will not be what Congress wants to see.

From Market Watch:

A former adviser to China's central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group's website. Yu Yongding, a former member of the People's Bank of China monetary-policy committee and now a member of a state-run policy group, said allowing appreciation of the yuan against the U.S. dollar under a free-floating currency regime would have reduced China's need to acquire U.S. Treasuries. He likened the U.S. Treasury market to a "giant Ponzi scheme," arguing that Federal Reserve buying of Treasuries has artificially kept bond prices high, but that they would eventually fall to levels which reflected fundamentals of the U.S. economy.

h/t Tim

 

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Mon, 04/11/2011 - 09:34 | 1157393 Infinite QE
Infinite QE's picture

Dump'em and buy gold!

Mon, 04/11/2011 - 09:34 | 1157396 GOSPLAN HERO
GOSPLAN HERO's picture

Buy more gold and silver!

Mon, 04/11/2011 - 09:37 | 1157397 reader2010
reader2010's picture

That's the price to pay for the participation in the world led by Uncle Sam.

Mon, 04/11/2011 - 10:02 | 1157516 unky
unky's picture

cant Bernanke just give the billions needed to China who in turn buy US treasuries ? This would make it look like china is still buying US debt...

Mon, 04/11/2011 - 10:21 | 1157584 reader2010
reader2010's picture

Nobody can trust the Chinese because they have proven themselves the worst fraudsters in the world.

Mon, 04/11/2011 - 10:36 | 1157667 SheepDog-One
SheepDog-One's picture

Thats like Capn Jack Sparrow calling Blackbeard a damn thief! 

Yea lets debate some more about which outright criminal lying thief thug govt, China or USSA, is the bigger fraudster! LOL!

Mon, 04/11/2011 - 10:24 | 1157597 Urban Redneck
Urban Redneck's picture

If China's Treasury holdings have remained "flat" while their reserves have been steadily increasing, does it really appear that China is still buying US Gov. Debt?

Mon, 04/11/2011 - 10:54 | 1157748 Stuck on Zero
Stuck on Zero's picture

The Fed uses British and Caribbean banking centers to launder bogus bills.  Check it out here:  http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/...

 

Mon, 04/11/2011 - 09:35 | 1157399 slow_roast
slow_roast's picture

Someone needs to print up some money to bribe this guy.

Mon, 04/11/2011 - 09:45 | 1157440 Josh Randall
Josh Randall's picture

+1 Billion -- what the hell it's only paper, "eat all you want - we'll make more" - The Ben Bernank

Mon, 04/11/2011 - 09:57 | 1157492 Popo
Popo's picture

An Ex-PBOC member dissing the US is bad, but frankly it's not that bad.   One would expect that.

What's really jaw-droppingly bad is when a *current* Fed Chief says that the US is "in a death spiral".    Yes, he said "death spiral".  It's the kind of thing that Max Keiser would say, not a f*cking Fed Chief.    Did it make front page news?  

Of course not.  

http://www.theburningplatform.com/?tag=richard-fisher

 

 

Mon, 04/11/2011 - 10:11 | 1157554 A Man without Q...
A Man without Qualities's picture

"Our duty is most distinctly not to monetize - or even be perceived as monetizing - the debt of fiscally imprudent government. Throughout the history of nations, monetizing the budgetary excesses of governments has proven to be a direct path to economic perdition. Having already peeked inside that door, I feel strongly that we must now shut it, lock it and throw away the key. "

Not only was this the most eloquent statement I have heard out of the Fed for a long time, but it is a clear sign that some connected people are beginning to wake up.  Bernanke is not evil or devious, he's just a simple academic who has been used by the likes of Summers, Rubin et al, to advance their grand plan....  but the situation is far too serious to allow this to continue.   

Mon, 04/11/2011 - 10:42 | 1157690 lincolnsteffens
lincolnsteffens's picture

"some connected people are starting to wake up"

Did they wake up or were they allowed to say what they long ago knew? Last week there were several errors on MSM when they were blindsided ( at least the interviewers were blindsided) with a few people telling the truth. Sunday Fareed Zakaria had James Baker on who said for all to hear "the US is bankrupt".

Is this planting seeds of market worries for the retail investor so the banksters can short the hell out of the market, boost their cash profits to plow back in on the long side after a mild down draft? The sell off can't be too severe so retail investors don't get freaked, YET. Then build up confidence as the market goes past current highs, sucking in Mr. & Mrs. retail again before the final death spiral.

Just my simple thoughts.

 

Mon, 04/11/2011 - 11:13 | 1157807 A Man without Q...
A Man without Qualities's picture

I don't think this is anything as minor as manipulating the stock market.  This is the very issue of the solvency of the US government, the integrity of the Treasury market and the future of the global reserve currency.  I know these are the important issues that have been occupying the minds of people like James Baker for a long time, and frankly the equity market is merely a sideshow.  Often the stock market is held at absurd valuations so that the sheeple don't worry too much (case in point the run up to the Lehman collapse).  This crisis goes to the core of the military financial complex and the US's role in global affairs, and these guys don't really worry too much about the middle classes and their 401ks..

Of course, the Chinese economy is a Ponzi scheme to match anything in the US (although they have got their in record time), with their shadowing lending, state owned enterprises, loss making corporations and local government corruption. The US will emerge the winner, if they take the pain now, stop skewing the game to protect those at the very top and reduce the size and control of the big banks.

Mon, 04/11/2011 - 10:35 | 1157651 Urban Redneck
Urban Redneck's picture

Actually it depends on the Ex-PBOC member, more specifically, his age and the individual respect accorded his opinion.  Western financial journalism rarely sees,much less comments on, the distinction, and the ignorant sheep are slaughtered.  In the US though, Volker might be an exception to rule of granting less weight to an official's words once he leaves office, but in his case it would be more a reflection of his specific stature and the current circumstances than a cultural norm.   

Mon, 04/11/2011 - 09:38 | 1157401 victor82
victor82's picture

They say that the truth....hurts.

Mon, 04/11/2011 - 09:38 | 1157403 tek77blu
tek77blu's picture

great interview with peter grandich on this issue and the sad state of financial affairs in the US: http://www.youtube.com/watch?v=4XtH28M3Bbc

Mon, 04/11/2011 - 09:37 | 1157405 snowball777
snowball777's picture

China is working you America...like a Brit po'ten'tatertot on (h)opium.

http://www.youtube.com/watch?v=y1jAByECNc0

Mon, 04/11/2011 - 09:58 | 1157495 serotonindumptruck
serotonindumptruck's picture

Weird. I got a flash of Rudyard Kipling when I read your comment.

Mon, 04/11/2011 - 10:47 | 1157715 snowball777
snowball777's picture

Watch out for those "copybook headings"...don't care to scrub-a-dub the frontal cortex with that drivel.

 

Mon, 04/11/2011 - 09:37 | 1157407 Sudden Debt
Sudden Debt's picture

Just wait untill the first rate hikes happen and the farts turn into a shitstorm...

 

 

Mon, 04/11/2011 - 09:54 | 1157469 willien1derland
willien1derland's picture

SD..Great Insight, however, your delivery was....poetry...were you quoting Dylan Thomas?

Mon, 04/11/2011 - 10:37 | 1157671 SheepDog-One
SheepDog-One's picture

Explosive diahrea FTW.

Mon, 04/11/2011 - 09:41 | 1157412 baby_BLYTHE
baby_BLYTHE's picture

We're going into a Depression! It is going to be the worst in history. Be warned; be prepared.

Ben's thesis was dead wrong.

I own Gold + Silver, sleep much better at night

Mon, 04/11/2011 - 09:44 | 1157437 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

BB-you are preaching to the choir.

 

You may really enjoy reading The Automatic Earth blog, btw. Even more depressing than ZH

Mon, 04/11/2011 - 09:50 | 1157456 Ahmeexnal
Ahmeexnal's picture

Are you trying to teach the clown how to laugh??

:D

Mon, 04/11/2011 - 10:10 | 1157547 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Well, she seemed so cheerful already...LOL

Mon, 04/11/2011 - 10:55 | 1157744 lincolnsteffens
lincolnsteffens's picture

What do you mean, "we are going into a depression". We may not technically be in ression or a depression but based on what "adjusted" numbers. My take is we are in a depression and it will deepen making the last Great D look like the previous Mild Depression. If you don't think we are in the earlier stages of a depression it is because you are still earning or have money and your home is paid for.

Mon, 04/11/2011 - 10:59 | 1157757 baby_BLYTHE
baby_BLYTHE's picture

Yes that is exactly what I meant, we are in the early stages but the WORST is yet to come.

Usually I get junked when I sound like a doomer. It seems like everyone has become a bull latley so I like to balance it out.

Mon, 04/11/2011 - 12:20 | 1158028 falak pema
falak pema's picture

Do you sleep better with or without your teddy bear? It may remind you of the Bernanke...

Mon, 04/11/2011 - 09:42 | 1157416 LawsofPhysics
LawsofPhysics's picture

Fucking awesome.  My PMs are shining even brighter.  And for those fucknuts that will go on about "what do you expect people to do, carry massive bags of silver around?"

The answer is; no dumbass, it is about buying power, pure and simple.  Kill all the fiats and you kill the fraud surrounding fiat and its manipulation.  I don't hold PMs so I can use them for daily purchases, I hold them so I can make big moves in real equity and security for myself and my business.  For example, I dumped half my paper gold holdings in November to buy more real estate and arable land.  Both of which are now providing real returns.  Yes the is more fiat, but I am using it to buy more PMs.  Quite simply, since 2006 in terms of investing for my company and myself.  PMs, including copper by the way, have become safer stores of value.  Anyone who lived through the 70's saw this coming.

Mon, 04/11/2011 - 09:50 | 1157462 Ahmeexnal
Ahmeexnal's picture

Real estate goes to near zero just like fiat money does. Remember Weimar.

Mon, 04/11/2011 - 10:00 | 1157503 Janice
Janice's picture

I hope so.  I'd love to buy the house next door for a couple of gold coins.

Mon, 04/11/2011 - 10:07 | 1157535 unky
unky's picture

i d love to buy the girl next door for some silver coins

Mon, 04/11/2011 - 10:46 | 1157700 snowball777
snowball777's picture

the only true sign of currency failure: hookers won't take paper.

Mon, 04/11/2011 - 10:46 | 1157712 RockyRacoon
RockyRacoon's picture

Merely renting is the way to go with that scenario.

Mon, 04/11/2011 - 11:20 | 1157832 LawsofPhysics
LawsofPhysics's picture

Yes, I love collecting rent in this environment.

Mon, 04/11/2011 - 12:45 | 1158113 topcallingtroll
topcallingtroll's picture

I think he meant renting the.girl, or at least subcontracting with the vagina.

Mon, 04/11/2011 - 23:44 | 1160438 RockyRacoon
RockyRacoon's picture

Following threads is tough for some.

Mon, 04/11/2011 - 10:55 | 1157750 lincolnsteffens
lincolnsteffens's picture

I'd love to buy her sister and mother too for a few silver coins a year.

Mon, 04/11/2011 - 10:58 | 1157753 OldPhart
OldPhart's picture

Maintenance costs on that bitch could be a bitch.

Mon, 04/11/2011 - 11:17 | 1157827 LawsofPhysics
LawsofPhysics's picture

Precisely, people will still need shelter and still need to eat.  Regardless of who is killing who.  They always have, and always will.

Mon, 04/11/2011 - 09:42 | 1157418 Singh
Singh's picture

US wants China to let the Yuan move freely against the $...but what the QEs stand for....both countries are sailing in the same boat....

Mon, 04/11/2011 - 09:42 | 1157419 MachoMan
MachoMan's picture

OK Mr. Chinaman...  what is it exactly that keeps them in the paper?  Do you really think it's the quality of the paper?  Is that even in the top 3 considerations?  But, I'm sure that illustrious blue water navy will start pushing us around soon...

Mon, 04/11/2011 - 09:47 | 1157442 DosZap
DosZap's picture

Uh, Mr Chong,

YOU know this, so why aren't you cashing out and buying assets of value.

If you know you have /are being screwed, WHY continue to be broke over?.

Fwank Fetish?

Mon, 04/11/2011 - 09:57 | 1157490 Raynja
Raynja's picture

China has wanted to keep the dollar afloat until they are ready to move. This point is coming quickly now. When they make their move it will be an attempt to kill the dollar and take its place. Whether or not a ponzi is screwing you is a matter of perception and position (if you make 20% a year that you don't reinvest, then did you really lose anything after 5 years?)

Mon, 04/11/2011 - 10:40 | 1157684 MachoMan
MachoMan's picture

What good is manufacturing capacity without ingenuity?  What do ghost cities do to faith in the government (who controls the currency)?  Without rudimentary property rights, what organically attracts foreign capital?

China wants to do a lot of shit, but isn't remotely in a position to do it.

Mon, 04/11/2011 - 16:38 | 1158994 SilverBaron
SilverBaron's picture

I think the ghost cities are a form of preparation.  I'll bet the Japanese sure wish they had a couple of ghost cities right now.

Mon, 04/11/2011 - 17:27 | 1159165 MachoMan
MachoMan's picture

Kind of like a bridge to nowhere is preparation for....

I think the answer is that it's the necessary derivative of cheap financing...  nothing more, nothing less...  sometimes easy money finds a good home...  sometimes it just gets burned.

And I don't think the Japanese want any ghost cities...  I think they wish they had the equivalent of Alaska and could repopulate there...  The japanese are going to have plenty of ghost cities shortly if not already.

Mon, 04/11/2011 - 09:43 | 1157430 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Tyler: I real do not appreciate your unwarranted attack on acid, especially when most my trips are more like "They Live".

 

Alright everybody, sing Pink Floyd: C-comf-fortab-l-y numb-b-b....

Mon, 04/11/2011 - 10:58 | 1157759 lincolnsteffens
lincolnsteffens's picture

Oh wow man, he just had a bad trip, man. He's cool now. Far out. Later

Mon, 04/11/2011 - 11:49 | 1157935 DaddyO
DaddyO's picture

 

WADR, Pink Floyd's song is about heroin, not acid, hence the "just a little pin prick" lyric.

DaddyO

Mon, 04/11/2011 - 09:45 | 1157431 jmac2013
jmac2013's picture

How does China's monetary intervention work in practice?  With whom do they trade their Yuan for dollars, western banks?

 

Mon, 04/11/2011 - 09:57 | 1157491 RagnarDanneskjold
RagnarDanneskjold's picture

They trade with the Chinese exporters and citizens who have dollars. They deposit them in the banking system and then the central bank issues swaps yuan for dollars.

Mon, 04/11/2011 - 10:02 | 1157513 jmac2013
jmac2013's picture

Thank you, Ragnar

Seems like a good deal for those citizens and exporters to exchange their dollars for the gradually and maybe someday rapidly appreciating Yuan.

Mon, 04/11/2011 - 11:22 | 1157844 LawsofPhysics
LawsofPhysics's picture

Who (outside of China and the Chinese) is buying and or holding Yuan?  I thought Russia was to a certain extent.  Someone please comment on this and where you can actually hold yuan or set up any sort of carry trade.  Thanks

Mon, 04/11/2011 - 09:46 | 1157438 SwingForce
SwingForce's picture

Why do The Americans give their dollars to China and OPEC? That is the problem.

Mon, 04/11/2011 - 09:48 | 1157457 DosZap
DosZap's picture

Because your Government destroyed our manufacturing base, and your Government will not allow use of our known deposits.

We are our own worst enemy.

Well the Marxists in power are anyway.

Mon, 04/11/2011 - 10:05 | 1157519 Catullus
Catullus's picture

Why not? There's an unlimited supply of dollars and a limited supply of everything else. Question is: why go the Chinese put up with this?

Mon, 04/11/2011 - 09:48 | 1157450 qmhedging
qmhedging's picture

Everybody knows.Too lazy to say it.

Mon, 04/11/2011 - 09:49 | 1157453 Miss Expectations
Miss Expectations's picture

That's it!  I want a tee shirt that says "Giant Ponzi Scheme" in Chinese.

Mon, 04/11/2011 - 10:02 | 1157512 willien1derland
willien1derland's picture

ME --> Great idea - would be awesome if the t-shirt also Made in America

Mon, 04/11/2011 - 11:23 | 1157846 LawsofPhysics
LawsofPhysics's picture

Flash of genius, alas, just a flash and then the idea was outsourced to a Chinese company.

Mon, 04/11/2011 - 09:50 | 1157463 Manthong
Manthong's picture

Aw c'mon, they were a part of the scheme all along.

Buying our debt gave them influence and access all the way back to the former ambassador to China's reign (Bush 41).

Without playing along, they would never have gotten nuke secrets, spy satellite secrets, industrial secrets, market access and all kinds of influence.

Even if we defaulted they got more than their money's worth.

 

Mon, 04/11/2011 - 10:03 | 1157518 Janice
Janice's picture

And don't forget the top-rated box office movies the day prior to US release.

Mon, 04/11/2011 - 10:21 | 1157594 Ruffcut
Ruffcut's picture

Don't forget showing them how to set up a ponzi equities market, in which you take your own peoples money away.

By the people, against the people.

Mon, 04/11/2011 - 10:53 | 1157741 DUNTHAT
DUNTHAT's picture

Most importantly, they were allowed to suppress their currency with full approval of FED and Govt., regardless of how loudly they protested.

Mon, 04/11/2011 - 10:55 | 1157742 DUNTHAT
DUNTHAT's picture

Most importantly, they were allowed to suppress their currency with full approval of FED and Govt., regardless of how loudly they protested.

Mon, 04/11/2011 - 11:20 | 1157841 Manthong
Manthong's picture

They did a good fake when their US surrogates, Indonesian bag-men and Bhuddist monks bought them their first US president.

Mon, 04/11/2011 - 12:36 | 1158083 topcallingtroll
topcallingtroll's picture

Clinton was the first black chinese president?

Mon, 04/11/2011 - 09:52 | 1157464 Manthong
Manthong's picture

Aw c'mon, they were a part of the scheme all along.

Buying our debt gave them influence and access all the way back to the former ambassador to China's reign (Bush 41).

Without playing along, they would never have gotten nuke secrets, spy satellite secrets, industrial secrets, market access and all kinds of influence.

Even if we defaulted they got more than their money's worth.

 

Mon, 04/11/2011 - 10:06 | 1157525 Janice
Janice's picture

And don't forget the top-rated box office movies the day prior to US release.

Mon, 04/11/2011 - 09:54 | 1157470 williambanzai7
williambanzai7's picture

Mon, 04/11/2011 - 10:03 | 1157505 willien1derland
willien1derland's picture

WB7, you have snatched marble from hand...YOU are now Master...

Mon, 04/11/2011 - 10:01 | 1157510 DoctoRx
DoctoRx's picture

That's a quote from James Joyce.

Mon, 04/11/2011 - 10:27 | 1157613 Trillax
Trillax's picture

Morning nasal coffee projectile session via ZH complete.  Thanks Banzai ;)

Mon, 04/11/2011 - 09:53 | 1157476 SWRichmond
SWRichmond's picture

...Federal Reserve buying of Treasuries has artificially kept bond prices high, but that they would eventually fall to levels which reflected fundamentals of the U.S. economy.

Fundamentals?  What the hell are they?

Mon, 04/11/2011 - 10:00 | 1157501 willien1derland
willien1derland's picture

SWR you remember..those text books & professors who taught that junk never told us that there would be a day when 'leaders' would act do reckless - What would Adam Smith Do?

Mon, 04/11/2011 - 09:54 | 1157478 Fix It Again Timmy
Fix It Again Timmy's picture

Q.E. = Quintessentially Erroneous...

Mon, 04/11/2011 - 09:57 | 1157481 baconator3000
baconator3000's picture

Your gold and Silver is worthless when the authorities confiscate it or outlaw it. It will be like 1930, people will hide it. You wont live like a king in your bunker, you will be arrested or shot for being greedy. Whats that bar of silver/round of going to get you? Hell most of you fatasses dont even have a way to melt it into usable form.

 

Get things you can use. Food. .223 and Wisdom. Organize.

Mon, 04/11/2011 - 10:21 | 1157593 TBT or not TBT
TBT or not TBT's picture

.308 is better.

Mon, 04/11/2011 - 09:58 | 1157489 HomoHominiLupus
HomoHominiLupus's picture

Time for the Chinese to familiarize themselves with Caveat Emptor...

Mon, 04/11/2011 - 09:57 | 1157494 willien1derland
willien1derland's picture

I pose an analogy...If the PBoC is a manufacturing company & one of its largest, if not THE largest customer goes bankrupt doesn't that leave PBoC with an great deal of EXCESS CAPACITY? Deflation where is THY STING - Mutual Assured Destruction Slappy - China is inextricably absorbed into the Ponzi - US detonates - China explodes just like the IMF, World Bank, EU & any of the other contestants...thanks for playing & Johnny tell them what they just won...

Mon, 04/11/2011 - 10:05 | 1157520 reader2010
reader2010's picture

And the Peak Oil doesn't help either.

Mon, 04/11/2011 - 10:11 | 1157543 tmosley
tmosley's picture

Sure, but it is a lot cheaper to shut down some production than to keep producing things for your deadbeat client who keeps demanding more and more credit, but has never actually paid you.

Mon, 04/11/2011 - 10:52 | 1157739 snowball777
snowball777's picture

23% to the USA...the rest is domestic and other nation's (EU)...bad, but not as bad when you consider they have all the factories and a good chunk of know-how (and will get more now that Japan can't keep everything important on the island).

China will explode anyway, under internal pressure from RE and false growth.

Mon, 04/11/2011 - 10:03 | 1157508 Fix It Again Timmy
Fix It Again Timmy's picture

Like we would ever meekly hand over our PM's to Mr. Government man, besides they'll have more on their hands then going from house to house looking for shiny metals...

Mon, 04/11/2011 - 10:05 | 1157527 baconator3000
baconator3000's picture

your stupid metal is worthless buried. You still have to exchange it for FRN jew confetti

Mon, 04/11/2011 - 10:14 | 1157566 A Man without Q...
A Man without Qualities's picture

Ok, you've had your say, now fuck off....

Mon, 04/11/2011 - 10:02 | 1157511 RemiG2010
RemiG2010's picture

Everything that's PONZI, is so trendy nowadays!

Mon, 04/11/2011 - 10:04 | 1157514 Widowmaker
Widowmaker's picture

There is no other species on the planet that "buys and sells."

That should signal the obvious that money itself is a fabrication of imagination, and "ponzi."

Freedom is free, free markets are anything but.

Marginalize money and you strike at the heart of power.

Mon, 04/11/2011 - 10:06 | 1157530 zaknick
zaknick's picture

Can't wait to see you eat that massive shit-burger coming down the pike. I'm extremely interested in watching entitlements which feed millions today pulled....oh the riots!

Can't wait, bitchez!

Mon, 04/11/2011 - 12:31 | 1158069 topcallingtroll
topcallingtroll's picture

People need to learn how to feed themselves. We didnt have entitlements in the late 19th century and we had some pretty good economic growth.

Let the riots happen. We need to cull a few of the stupider ones anyway.

The parasites are so stupid they burn down their own neighborhoods. Let the ghettos burn.

Mon, 04/11/2011 - 10:16 | 1157572 Strategery
Strategery's picture

This is an informed site, but the general public doesn't have a clue. I don't know how many educated people I have talked to who believe the Fed IS the government. The best part of this game is that it is so complicated that the average person on the street cannot begin to even understand. This site and others like it would be a threat to the IF mainstream America could be educated. What's the first thing Ron Paul could do to help people understand? Easy. Pass legislation that strips the century old misrepresentation: they can no longer call themselves The Federal Reserve! When people hear that the Private Bankers Reserve is playing footsie, they will start the slow process of understanding.

Mon, 04/11/2011 - 10:18 | 1157577 savagegoose
savagegoose's picture

hey china would love to buy real assets, but everytime they want to buy australian mine,s they get told, " sorry national interest ." and refused the sale.

same as one of the biggest oil companies  i recall, " sowwy we no likey  fowein owners."

Mon, 04/11/2011 - 10:40 | 1157683 Urban Redneck
Urban Redneck's picture

And the same brilliant politicians allow off take contracts denominated in USD- saves the Chinese from actually having to invest in overvalued Australian real estate.

Mon, 04/11/2011 - 15:20 | 1158633 zerozulu
zerozulu's picture

They will love to buy US highways for their USD, and I am afraid they will. We will end up paying to use them.

Mon, 04/11/2011 - 10:26 | 1157612 mendigo
mendigo's picture

they were buying massive amounts of treasuries (supporting the dollar), now we are buying a massive amount of treasuries and they don't like it

they thought they were raping us. turns out we liked it

this will not end with some rightous display of fiscal discipline - its about getting while the getting is good. the man who controls the presses cannot default - we will receive what we asked for - we will all be rich (in dollars)

Mon, 04/11/2011 - 10:33 | 1157652 AldousHuxley
AldousHuxley's picture

Most economical growth is a ponzi scheme. It seems to work as long as there is a higher bidding buyer. Just don't be the last one holding the bag.

Mon, 04/11/2011 - 11:13 | 1157806 DavidC
DavidC's picture

"...they would eventually fall to levels which reflected fundamentals of the U.S. economy".

Zero?

DavidC

Mon, 04/11/2011 - 11:39 | 1157895 jmc8888
jmc8888's picture

Well, you see, since our dear fascist leaders of repub, dem, and tea bankster fame will cut to the bone for fraud, this will give them the leeway to fool the markets for one more round as they use said blood money to legitimize QE3.

Pucker up seniors, this fascist cut is for you. Next up, every other service the gov't provides under the guise of 'getting our fiscal house in order'...to pay off fraud, for QE4, 5, and beyond.  Or else such printing will lead to hyperinflation, and what the idiots don't understand is, it will anyways.

Glass-Steagall, or suck the banksters cock some more.  Must taste good or else people wouldn't be doing it. 

 

Mon, 04/11/2011 - 12:48 | 1158127 topcallingtroll
topcallingtroll's picture

I am afraid it is more complicated than that. Suck cock or suck ass.

Mon, 04/11/2011 - 11:56 | 1157960 AldousHuxley
AldousHuxley's picture

If US dollar is a ponzi scheme, then what does that say of Chinese officials buying into it? SUCKERS?

Mon, 04/11/2011 - 12:05 | 1157988 tmosley
tmosley's picture

That depends on who is found to be stuck with them when the music stops playing.

Mon, 04/11/2011 - 13:17 | 1158248 gall batter
gall batter's picture

good article about the global meltdown: http://www.thiscantbehappening.net/node/550

Mon, 04/11/2011 - 15:07 | 1158570 AldoHux_IV
AldoHux_IV's picture

Having a one superpower system has failed. It seems though the financial elitards are trying to replace one for another now-- not going to end well.

By the way, this whole global economic system is a ponzi scheme.

Mon, 04/11/2011 - 15:40 | 1158714 Tail Dogging The Wag
Tail Dogging The Wag's picture

We're at Peak Ink, folks!

Crush the banks, buy physical gold and silver.

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luckly123's picture

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