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PBoC Replaces SNB In FX Manipulation Department
RanSquawk report that according to "well-placed sources in Beijing" China is now buying EUR above 1.20 to stabilize the currency in advance of a G20 meeting later in June, per a previous agreement with the G20 members. This surely explains why the euro magically got vacuumed up by 60 pips in a manner of seconds as soon as a breach of 1.20 was imminent. Alas, as we pointed out previously, the half life of central bank interventions is now laughable: at some point interventions using fiat methods will have no impact whatsoever. On the other hand, all those who are short the market, and thus the euro, and in the process are facing the Fed, the ECB, the SNB (or not so much anymore), and now the PBoC, now have a whole new appreciation of the word "Sparta"
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Eventually china will have to drop the peg down on the Yuan to a lower rate to keep the game going a little longer. Decoupling is a lie, always was a lie so someone could sell books.
Decoupling is a lie ? China has all those US dollars that YOU say will only go up in value because YOU think there will be no inflation.
Well, decoupling is not a lie, just in the way that people describe decoupling... you are watching Europe decouple right now and fall right into the Med one by one. Eventually, same thing will occur in Asia, will probably start with Japan and they one of the world's largest holders of US debt SO FUCKING WHAT, Europe if considered one Union is 3rd... so what. Japan will decouple and fall into the Pacific followed by the rest of Asia in due time.
You have no understanding of the system, as you can see by Europe those selling the decoupling lie are getting shown the door with their investors.
Let me see you believe the Moon is made out of cheese too?
This is like having a discussion about whether the Moon is made out of cheese... well, it's a fact Europe is collapsing.
Can't you just respond once without resorting to insults. And last I checked Europe is still there, it hasn't fallen into the Med. That's the problem with all your posts. Financial crisis - YES, humanity vanishing from the face of the planet - NO.
Get a grip.
Better yet, get a plan.
"And last I checked Europe is still there, it hasn't fallen into the Med. That's the problem with all your posts. Financial crisis - YES, humanity vanishing from the face of the planet"
So, you don't understand the system so you start hairs spliting contest over words of English. The European financial system is toast and is falling into the Med, if you don't understand that good luck with your Greek bonds.
"Better yet, get a plan."
I am not a delusional rat like yourself, I don't sugar coat anything because I am not your mommy and daddy. You want someone to lie to you, well go talk to the rest of the lemmings, they'll tell you all kind of lies.
I bet I would be your best buddy if I told you, you looked like Brad Pitt. I bet you would eat that lie up. You want lies, hey fine by me, go find someone to tell them to you.
Been hearing how wrong I was for years, told everyone how this would pan out, I am not proud of being right, I hate it, I wish humans would choose a different choice, but just like you the rest want lies. Am I smart, heck no, I have a couple brain cells in my head that work that is about it, I stopped listening to the lies and the sales pitches... you didn't.
The people selling the "helicopters are coming" are the same ones that sold the "houses go up forever" crowd.
Valentine...is that you?
Okay, I've been as polite as I can be with you. I've had enough of reading your insults.
I'll be brief: GO FUCK YOURSELF.
(It sounds like your "no way out, no plan, no hope" mentality is fast leading you to an act of committing mass suicide with your family. To each his own, I have other plans.)
I will start calling you Brad Pitt so I can be your friend or would your prefer George Clooney?
Why would we need to commit mass suicide, it's all you nuts we have to worry about.
"I have other plans."
"Everyone has a plan until they get hit" -Mike Tyson
Mike Tyson one the dumbest SOBs on the planet figured out what you never have.
Rather than all this name calling it would be more productive to refer to the works of Joseph Tainter and his book The Collapse of Complex Civilizations. The marginal cost of civilization has been growing exponentially as can be seen by our energy consumption, collapse in species biodiversity, rapid population growth, reduction in arable land, fresh water supply strains etc. While the marginal benefit has been declining, think of the costs of debt servicing, of maintaining 2-3 million different functions in society, the social isolation that many people feel. All symptoms of a dying system.
What Mako is saying is that the credit systems fuel the complexity and thus wealth we see all around us. Gold won't help you much if you want to get insulin for your diabetes, or if you need complex surgery or quite possibly replacements for your car parts as the global supply chains required to keep our everyday lifestyles going disappear.
Whether it's deflation (My opinion) or hyperinflation, the system will collapse as well as purchasing power will collapse. And there are no mitigating factors to prevent collapse as compared to previous credit collapses when 50-70% of the popn. was involved in agriculture and people were used to hardship and suffering. How'd you think the Miley Cyrus generation is going to cope?
Great book.
I am sick of both
"Whether it's deflation (My opinion) or hyperinflation, the system will collapse as well as purchasing power will collapse..."
could be next year or 20+ years from now is yet to be determined
China doesn't have a lot of dollars, China has a lot of dollar denominated assets. Big difference there folks. So if they want to dump some, they're going to vacuum up even more dollars from the insufficient supply.
China doesn't have a lot of dollars, China has a lot of dollar denominated assets. Big difference there folks. So if they want to dump some, they're going to vacuum up even more dollars from the insufficient supply.
You come here and denigrate the human race, and members
of the site, claim to know the problem.
Then pin your hopes on the same human race to
fix the problem. Thus washing your hands of any responsibility,
all the while offering no solution at all, and think whomever reads
your posts must fall in line with your opinion or be labeled
and idiot.
And then, expect respect.
Really?
"Threats will not make us function; fear is not our incentive. It is not death that we wish to avoid, but life that we wish to live."
"Thus washing your hands of any responsibility,"
It took billions and billions of responsible parties to get this going, never once said I did not contribute. Whether you directly or indirectly contributed at this point is mostly irrelevant, the balloon payment from hell is coming in the mail.
"all the while offering no solution at all"
There is no solution, there is choice, what you will be witnessing over the rest of your life is the solution to the equation you and billions others have selected for use. You do have choices, you just don't have unlimited choices, actually your choices are very limited but you do have them.
"and idiot"
Einstein said insanity is doing the same thing over and over expecting a different result, I just say idiot. Use any word you wish it stil boils down to the same thing.
"And then, expect respect."
I expect to see a bunch of you guys hacking and clubing one another, great fireworks this time, should be entertaining and sad at the same time.
what the fuck was that ?
Truth hurts eh ? you didn't address any of my arguments
All you have are arguments.
Yeah, go tell China to go mass sell those US Treasuries, let me know what China looks like soon after. I sure would like to know who they would sell them too.
:)
You are in for a rude awakening if you think the world is flooded with dollars.
Not made of cheese?
First they say there's no credit fairy, now no cheese?
What the fuck, life's not worth living without cheese.
Agree! Decoupling has been refuted about 17 times so far in this crisis. Every time it looks like BRICs decoupling, Emergings decoupling, China, Australia, Europe, US ...we've been through every version of decoupling.
The reason why there's no decoupling is the huge, tangled web that binds ALL major financial institutions worldwide AND tangled sovereigns.
Everybody's broke AND everyone owes everyone else. Everyone's in the same quicksand
i don't get it.
what if Pboc SNB and the Fed have more money than hedge funds. won't they succeed? if hedge funds anticipate this, won't they stop shorting the euro and then the euro goes back up?
It's the bazooka all over again and has been for the last month.
The simple fact is the world is suffering from a lack of dollars in the system.
Holy fuck..... So if China has all these US dollars and they revalue the RMB, at the point that the credit and stock markets crash, will the USD in your mind not be worth around 250 on the DYX ?
If so then China could revalue at par and the China would be rich. Gold would be $90 an oz, oil would 50 cents a barrel.
"the China would be rich"
Keep dreaming my friend, China would instantly implode. WTF do you think Japan has been fighting for 20 years? They are fighting and delaying the implosion, it's going to happen, there was no avoiding it once they started down this path.
IF YOU ARE LONG DEFLATION YOU ARE LONG USD. DO YOU UNDERSTAND THAT ?
USD are a portion of the US financial credit system, you have no idea what you are talking about.
The wheels on the bus go around and around until the wheels fall off.
When the USD goes they all go. There is no decoupling, never was, the only decoupling you are going to see is all the countries continue to decouple into the nearest sea.
Go ahead buy some Greek bonds, so French bonds, or some Japanese bonds... take your pick. Let me know how that works out for you.
Absolutely Brilliant!!!
OMFG...we are all saved.
Print an Infinite Number of Dollars and It is All Better!
<Facepalm> Why didn't the world see this before?
Mako for UberFuhrer!
and all this time I thought it was a Value problem and it turns out to have been a Supply problem. I am such a fool.
Some of the smart folks here with the graphs and numbers and all that sort of non-talky stuff that makes our eyes glaze over are indeed saying there is a dollar liquidity crisis in Europe, and that this crisis is part of why the Fed opened "swap lines". I don't know for the life of me whether that resembles printing money or increasing one of the various Mx measures, but apparently they think they need to do this to avoid some worse outcome. Like a chain reaction of private bank insolvencies right underneath an obviously grave sovereign debt situation, all of that on top of poor economics prospects and deathbed demographics and commies ready to shut the whole place down over a little haircut on their lavish conditions.
read up about george soros and the BOE. its been done before, it will be done again.
Endless shorting is permitted.
And besides, the Central Banksters will need to unload what they bought at some point. Who's going to buy and at what price? If you guess no one unless it's really cheap give yourself a gold star.
I recall stories of dumping milk and letting wheat rot in the Depression; maybe something like that? Destroy the damn things. BURN THEM! Keynesian Arglebargle!!!!
I think that day may be today, the eur/usd has given back over half of the move already. It really, really, really wants to close below 1.20 today
It seems the shorts are going for 1.18 and below- success for shorts is below 1.18 - Who knows maybe China was caught long being the chf/ecb were pumping at 1.211 before - There was a rumor here before which stated the chinese werent accepting the euro as payment for goods .... with these kind of swings who in their right mind would?
I could understand telling export companies to no longer sign contracts denominated in Euros. But if I were China I would still defend the Euro in the short term while existing contracts played out.
Well the shelf life of these interventions sure aren't lasting as long as they used to. It is like watching a great tennis match.
So China is proping up the Euro so their exports don't get hammered ?
if you read China buying something, chances are China is selling it. So, if the rumor says China is buying Euro, chances are china is selling it. Euro is now past the point of no return.
And do it using USD, which has the benefit of not only defending their exports to the Eurozone, but also the US by pricing consumers out of EU goods. The fact that they get to push some of that US sovereign risk off onto someone else is and not have to be so conspicuously inconspicuous about propping up our Treasury market. Intentional or not, you can bitch about GS shorting companies into a Vegas-Style slot machine jackpot CDS payout, central banks make that look like shooting craps behind the Korean-owned corner market. We're at a point now where it's literally an issue of systematic capacity and who's going to be left holding the bag.
Edit: doesn't Iran use EUR to settle their oil contracts? There you go...and it looks like they've been active the past couple of days as well...wouldn't be surprised if that had something to do w/ it as well...
Mostly rhetoric. China is aware where the Euro is going and is only attempting to stablize the Euro so they can slowly sell and add more dollars. Since they are chock full of dollars they can now bring the dollar up benefitting them and selling the dollar a few years from now into massive strength while finally unburdening themselves from the U.S. dollar before the spotlight turns to our debt.
While this occurs China will add more gold and strike a blow at the U.S. reserve status by moving to a partially metal backed Yuan. Game over and not a weapon had to be fired. This nation better begin to get it's fiscal health in order. A China that actually produces products the world purchases + gold backed currency = dollar death blow. Sprinkling fairy dust on our people only works for so long and all these interventions and desperate actions only compound the final events impact and Lehman 2008 will seem like a day at Disney.
Let me also add that the global economy and stock indexes are now so reliant upon bailouts, liquidity, positive propaganda, relatively stable political news, stimulus, 0% interest rates and zero responsibility that when the eventual turn comes because it is inevitable it will be the most breathtaking move down many have ever seen.
On the other end of the spectrum we have the citizens. The angry, poor, thieved and jobless citizens who are only becoming more aware of the myths and they are headed on a collision course. This is one elaborate musical chairs game I would not even wanna witness let alone participate. Eventually we can move to a World War as the battle for resources and buyers of products become scarce. First we have financial war and then conventional war. All these global idiots cannot spin these plates cohesively forever. When the pack is broken it cannibalization time.
Being the only store open in the land of the austere doesn't sound like an enviable position to me...better than being the austere themselves, but only marginally so.
The citizens will get what they deserve for propping up the communists with so much Wal-Mart merchandise with their HELOCs.
What is the default rate of HELOCs now? Are we in the beginning stages of this? A swift move down in home prices I forsee putting homebuyers from the late 80's and early 90's underwater if the refinanced. They were correct and subprime was nothing but it was an example of how overleveraged credit was in the global system so as this begins to take hold of previously healthy homes not only do we have credit vapoirzed but we have an entirely new generation losing their credit worthiness.
Then we have student loans which are a time bomb and no jobs to service that debt.
i have $200,000+ in medical school loans and i have absoluely no intention of paying them back. i figure, ill pay the minimum and wait out the collapse of the treasury market, at which point my debt will be "restructured" aka erased. medical school was the best education money can buy, and it will end up costing me nothing. god bless america.
And who can blame you. Just apply mark to market adjustments and you to can pretend there is no debt. People are just now beginning to take personal bailouts and it will only increase. The rules cannot only be extended to a select few.
You should put that on your resume when you try to get a job. Then you can work with like minded folk.
ive got a job, and a very good one at that. if the govt is going to absolve the debt of a bunch of bankers who contribute nothing to society, why should it not also absolve mine? at least i contribute. if you need a broken bone fixed, ive got you. get off your high horse and see the forest for the trees. govt action creates incentives; i am merely reacting to those incentives. personal responsibility no longer has anything to do with it.
+60,000. This is the amount of debt I will leave undergrad with and I have the same intentions as you. Matter of fact, I have even used some of this to buy new trading computer/monitors/hardware and increase my futures account. Might even be able to pay the debt straight up when I graduate in 2011 (not that I have any intention of paying more than the minimum).
I see three big problems HELOCs:
a) people don't understand that they are recourse loans (at least in CA) which can de-collateralize and follow these schmucks around even after they're evicted.
b) they're variable rate lines
c) they're 'icebergs' in that it isn't always clear how much of the line was drawn
The erosion of the American middle-class was mostly hidden by the credit bubble and will now be made painfully clear...and that's not even the people who most deserve an anal rape:
http://bit.ly/dpozNL
Irvine's extreme HELOC abuseNot to be outdone by irresponsible loan owners from other parts, Irvine residents routinely spent their homes. Today's featured property is one of many.
+10- hey tyler we need a flag as "kick ass" button
"Since they are chock full of dollars they can now bring the dollar up benefitting them and selling the dollar a few years from now into massive strength while finally unburdening themselves from the U.S. dollar before the spotlight turns to our debt."
This global Ponzi game of rearrange the deck chairs doesn't have a few years left in it. The Chinese are trapped just like everyone else, and they are going to have their faces ripped off when the "flight to safety" gets exposed in a hairpin quicker than you can blink moment. IMO.
Good post. Keep'em coming.
And that is what makes their actions so frightening. They finally unmasked the root of the problems..miles and miles of credit which at 12:00 always turns into a pumpkin in the form of debt. Yet they embarked on a mission of attempting to reflate everything and they through accounting rules out the window and responsibility followed in the hope that we would stabilize and homes would return to their previous value.
See that is why they are so foolish. If it was proven by the free market that those home prices were false and have been false for more than a decade and reliant upon unchecked credit well than how could attempting to restore home prices to their previous value have any economic benefit? Especially when it is contingent on undertaking never before seen debt burdens. So now with QE, record low rates, extended jobless benefits, increase in government jobs and tax credits we are still seeing home prices fall..well when I say they must be shitting their pants I am not kidding.
So now that the free cash does not work they resorted to lies in order to convince people to spend but they have no money. The healthiest thing for this economy would have been to let the banks collapse upon themselves and if the Federal Reserve truly wanted to become the lender of last resort they could have just lent out directly to the American public and still protected all banks insurance upto the 250k, the rest could have moved into Treasuries for protection and home prices could have crashed but the economy would have reordered itself and moved away from services based jobs that have little economic value from a sustainabilty perspective. Certainly not sustainable in a ponzi.
Instead we now have the same problems, exponential debt, more unemployed and ZERO regulation to prevent this credit retardation from every occuring again..instead we ensured the poison will be more toxic.
But hey..a few thousand financial workers and the elite of the world were able to continue to pay themselves obscene amounts of money because we changed every single rule. Now we are seeing the scariest example of diminishing returns imaginable. All that money taken from an already poor tax payer and for what? You wanna save the economy? stop price fixing which can never work and lets all buy ourselves a 3BR home that they claim is worth 330k for 125k. That will give you a V shaped recovery and while we are at it let Americans learn to save the fruits of their labor for a decent return as opposed to getting punished for not buying Call of Duty and Abercrombie pants.
While we are at it send the jobs back this side of the Atlantic and Pacific and lets start making some good ole' American products.
John McCloy
**** I agree on every fucking point. Folks now listen to me, a few are still dipshits and just want their bubblevision an beer...tha rest are pissed...TPTB are gonna rely on continued brainwashing, but there is a sense afoot in tha masses that somefuckingthing is wrong.
The stimulus et. al. is designed to buy time so the elite can get repositioned before the inevitable crash. They know they can't stop it. But if it had happened suddenly, they would be hurt by it. Dragging it out protects those at the top.
Looks like that crank is already fading. Pretty soon they will leave themselves impotent.
Tyler, this whole god-forsaken thing is laughable.
Ohhhhh the irony...
http://www.youtube.com/watch?v=VIB2F0NP3AU&playnext_from=TL&videos=glc46k6RK8I&feature=sub
yarrrr it's drivin me nuts! BTW, I junked you. Stay on topic.
Sparta fighting the Persians ? More like europe fighting against Genghis Khan's Mongolian horde. If history is guide, it would be bloody but the intruders would eventually retreat on their own.
Chinese exporters are asking to settle in U.S. dollars or RMB with European customers.
http://in.reuters.com/article/idINIndia-49041720100604
PBOC is buying euros. Remind me again happens to your currency versus the U.S. dollar if you load up on a third currency that is plunging against USD?
Central banks cannot control the market for long. The propping up of the euro only ensures that the dollar rally will be even greater than expected. The euro will be lucky to bottom at parity at this rate.
In other words, the PBoC has succeeded in placing a cap over the leak, but the Euro is still gushing... Errrr, I think I'm getting confused...
+10 - this comment was awesome (and funny!)
Ah, I couldn't figure out why the VIX is so anemic this morning.
China's desire for stability how has global reach.
yes, its laughable....but, look at JPM save itself by crucifying the silver market! a major world currency is dying in front of our eyes....
and gold and silver are declining!
now that is power, that is JPM......and its shows us all how impotent, how corrupt our regulators are...
unfortunately, it also shows the entire world as well.
the days of free, fair and transparent markets in the US are really dead and gone....we're a third world economy now.
When the SHTF the corrupt regulators, JPM and the metal manipulators will among those dragged out onto the streets to have a neck stretching exercise by an angry mob with pitchforks and torches.
LOL, good one G7. "Mickey, meet China. China, meet Mickey...oh I see you've already met."
Cue The Sorcerer's Apprentice (the good one)...now China, you see these buckets over here? OK....see you in a few....
10 points McCloy..
A simple rule with China, The Politburo always does the oppoite of what it claims in public, can be easily verified by going back in histroy - last 40 years.
No wonder Hank Paulson had such an hankering for China-Goldman ties.. GS-China- built on same values - groundup
Well it looks like we might find out how serious PBoC is about the 1.20 threshhold shortly.
... about to find out if they are still there .... 1.2025 again
Dont trust confusing rumor, where is CFTC investigating unit, watch porn via wifi? In Ben I trust.
When they are not busy trying to run down whistle blowers they are busy trying to pull down gold and silver, the banks were too busy doing other stuff.
Give it a few minutes. The computers have to sync. The Dow will see a 300 point gain. What ever it takes to save the market will be done until it can't be don't anymore. Wake me up when the market goes into code red mode. In the mean time I'm going to take a nap.
The Rise of The Machines!
Soon all govs will be obligated to network their printing presses and Fx trading bots. First step toward the apocalypse of global totalitarianism. After that you won't be able to say that Euro is weak
Feels good. Almost blowjob good.
1.20 beaking down...
1.1991
...and there it is
"I'm giving her all I've got captain."
Hey Ben, if your PC is locked up, hit Ctrl-Alt-Delete and then use Task Manager to shut down your browser with all those Tube8.com tabs open.
Look out below this Obelisk is coming down and there's nothing that will stop it.
Wait. I thought the stock market was ready to "rock and roll."
This is still going!
http://www.zerohedge.com/article/bps-attempt-lmrp-installation-process#new
Uh oh.
The current rumour is that Larry Silverstein was just seen walking by the Fx desks at the PBoC and mumbling "Pull it..."!
No FASB exists! It's all mark to fantasy! Everything is marked to whatever illusion the goon gangster banksters Houdini's say it is!! Soon it all dissapears as any illusion when the truth becomes self evident; all cash is trash!! When illusion meets reality!!!
On the weekly chart, the measured move calls for somewhere around 1.16 or lower.
Fighting in the shade indeed.
You've been in the pipeline , filling in time
Provided with toys, and Scouting for Boys....
1.2005
Haha-incredible amount of resistance at ~1.20000 level. Anyone think it'll crack it today? It sunk to 1.20002 a few minutes ago as far as I can see.
Edit: as a note, those were bid prices.
I'm with Turd.
gracias
I don't think it matters much if it cracks today or not. It needs to capitulate. that means a very large move down and come back up. DXY doesn't appear to be exhausting. the weekly target is around 1.16. we can move a little by little, but that doesn't change the trend. that's just my 2c.
Check out the sci-fi dominatrix outfit on one of anchors of "The Call" on CNBC right now. Sorry, don't know her name.
Dow Jones 10k hat on!!!!!
Who wants to take bets on when ZH crashes?
Poll: What does BS Bernanke care more about?
a) Equities
b) The Dollar
c) Oil prices
d) None of the above, he cares most about dressing up as Lauren Bacall for Barny Frank's entertainment
Crashes is a crude term; no disrespect Marla.....
Whoever said within the half hour was correct. You win a new car! A new, stinkin', worthless, hunk of metal to drive you to and from your stupid suburban home!
there she goes
Just saw a 1.1990 print.
Sorry to interrupt, but President Obama has a second mouth emerging...check out this photo from Bloomberg:
http://preview.bloomberg.com/news/2010-06-03/bp-oil-spill-failures-may-t...
That's his, "Try to act like you know what you're doing, Barry" face.
b) Dollar, baby
Mike Pettis on PBoC Reserves
http://mpettis.com/2010/02/what-the-pboc-cannot-do-with-its-reserves/
Here he explains the net effect of RMB revaluation, which is the inevitable effect of selling treasuries.
Wealth is transferred within China
But that doesn’t mean nothing at all happened. Although the Chinese overall balance sheet is probably a little better off with the revaluation, within China there are a whole set of winners and losers. Which is which depends on the structure of individual balance sheets. Basically everyone who is net long dollars against the RMB loses in an appreciation, and everyone who is net short dollars against the RMB wins.
Who loses? Of course the PBoC is a big loser. It has a hugely mismatched balance sheet in which it is long nearly $3 trillion (if everything were correctly counted), funded by an equivalent amount of RMB obligations.
Exporters and their employees, too, are naturally long dollars and so they would lose. They are long dollars because more of the net value of their current and future production less current and future costs is denominated in dollars (they are “sticky” to dollar prices) – for example labor costs, land, and almost all other inputs except imported components are valued in RMB, whereas most revenues are valued in dollars.
Chinese companies with more assets abroad then foreign debt might also lose. Who wins? Nearly everyone else in China, since everyone in the country is short dollars to the extent that there are imported goods in his life. The local tea seller is short dollars if his tea is delivered to him in gas-guzzling trucks, as is the family planning to visit Egypt next year, as is the local provider of French perfumes, as is a teenager who wants to buy Nike shoes, and so pay for the corporate sponsorship of a Brazilian soccer star playing for a Spanish team. Every household and nearly every business in China is, in one way or another, an importer (and this is true in every country), so unless they own a lot of assets abroad they are effectively short dollars and will benefit from an appreciation in the RMB
...seems like PBoC traders left buy orders to some major banks...and they use them to create their own shorts...sweet..1.18 next monday