China Just Threatened a Currency War if the Fed Doesn't Stop Printing

Phoenix Capital Research's picture


The tension between Central Banks that we noted yesterday continues to worsen. This time it was China and the EU, not just Germany, that fired warning shots at the US Fed.

A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its economy if the world is to have confidence in the dollar.

Asked whether he was worried about the dollar, the chairman of China's sovereign wealth fund, the China Investment Corporation, Jin Liqun, told the World Economic Forum in Davos: "I am a little bit worried."


"There will be no winners in currency wars. But it is important for a central bank that the money goes to the right place," Li said.


Speaking at the same session, French Finance Minister Pierre Moscovici voiced concern that the euro was becoming overvalued as a result of quantitative easing and other stimulus actions taken by other nations' central banks.


"Certainly, the level of the euro is high and creates some problem," he said, attributing the single currency's recent gains partly to the return of confidence created by the European Central Bank and euro zone governments in starting to overcome Europe's debt crisis.


So first Germany begins pulling its Gold reserves from the US, and now China and the EU are saying publicly that the Fed’s policies are damaging confidence in the US Dollar.


This does not bode well for the financial system. The primary role of Central Banks is to maintain confidence in the system. If the Central Banks begin to turn on one another it is only a matter of time before the system breaks down.


Remember, every time the Fed debases the US Dollar it forces the Euro and other currencies higher, hurting those countries’ exports. The Fed has recently announced it will be printing $85 billion every month until employment reaches 6.5% (obviously the Fed is ignoring the mountains of data that indicate QE doesn’t create jobs).


How long will the other Central Banks tolerate this before they initiate a currency war? Both Germany and China have fired warning shots at the Fed. And we all know that just beneath the veneer of goodwill, tensions are building between the primary players of the global financial system.


We offer several FREE Special Reports to help investors navigate this risks and others in the financial system. They include:


Preparing Your Portfolio For Obama’s Economic Nightmare


How to Protect Yourself From Inflation


And last but not least…


Bullion 101: Everything You Need to Know About Investing in Gold and Silver Bullion…


You can pick up free copies of all of the above at:



Phoenix Capital Research










Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
tony bonn's picture

china hasn't threatened squat....they are making noises like a republican and will soon fold like a cheap suit....

working class dog's picture

Marc Faber said on CNBC tonite "The Central Bank of the US should be very proud that it has lowered the value of the USD to below that of the sick currency the EURO".

Again no response from the MONEY HONEY WHORE MARIA, after all it's not what you say its the sound bites that get you to watch commercials!

stiler's picture

the nwo is so much bigger than anyone thinks it is; we are literally on the verge of, at the beginning of a OWGov, now. Corporat/Fascists, they are absolutely deceived, cause they're not going to get exactly what they're dreaming of. They'll ruin the world for everyone.

mightycluck's picture

Uncle Ben takes his marching orders from Uncle Mao's spirit.

stiler's picture

yeah, "power comes out of the barrel of a... printing press."

Chupacabra-322's picture

"I am a little bit worried."

What the hell should this Chink be worried about.  Last time I checked the Criminal Treasonist Federal Government is paying back the debt through assests and resources.

But it is not only just land and infrastructure that the Chinese have been buying up.

They have also been purchasing rights to vital oil and natural gas deposits all over the United States.

There have been two Chinese companies that have been primarily involved in this effort.

The first is the China National Offshore Oil Corporation (CNOOC). According to Wikipedia, CNOOC is 100 percent owned by the Chinese government…

The second is Sinopec Corporation. Sinopec Group is the largest shareholder (approx. 75% ownership) in Sinopec Corporation. And as the Sinopec website tells us, Sinopec Group is fully owned by the Chinese government…

Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.

Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.

Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.

Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.

Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.

Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.

Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.

Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.

TraderTimm's picture

The best part will be when bitcoin eats every sovereign currency's lunch.

I know, you like your current system with the guilded bars.

lakecity55's picture

but, massa chinamen, ah don print an de hood go up. mus have eebeetee.

"have your armed forces practice drills in each large "hood."

Wal, ah is alreddy tyrna take they gunz.

No more stalling. Now, the title to your statue of liberty, prease.

Seer's picture

Yeah, the Red Scare worked so well in the past...

Logic has it, however, that BAD systems FAIL.  I have no concerns of worry over BAD things, as they shall not endure.  Better to spend energy on good systems/means of life.

TPTB love to use this Red Scare stuff.

BTW - It's somewhat of a choreographed routine in which US companies will come back to US shores and to welcoming arms and flag waving (always the flag waving!) and given incentives (subsidies): they'll see the trade wars starting up and sense that the Chinese govt will look to take over their assets (here is where UST defaults will be attempted to be collected; but, we're not supposed to think in these terms because it detracts from their playbook [choreography]).  Those wondrous entrepreneurs will continue to be held aloft: all will forget their previous exploits with pink slips (in the US)...

Crummy's picture

Are they going to start throwing paper airplanes at one another?

Gold Dog's picture

But Dude! ALL of those puts you told me to buy two years ago expired worthless! (I am saving up for a new subscription. :)


f16hoser's picture

Fuck China. Lets "Get It On!"

Venerability's picture

China is very upset about "money printing" - but not by the US.

The Chinese are furious at Japan - as is practically everyone else the world.

Does this author think any number of red herring stories are going to fool a single market participant? 

f16hoser's picture

Actually, China and Japan quietly made nice. China want's the US economy to implode by FED printing. Obummer has already promised China what ever they want. Oil fields, land, infrastructure, housing, Etc... The sheeple better wake-up soon.

Seer's picture

China's export markets is what China wants.  But, as we know, you can't force people to buy when they're broke.

In the long-run, as partially eluded to by you, China has to have commodities, such as energy.  They already have plenty of contracts locked up here.  A strong RMB works for China in this case.  And keep in mind that as global exports continue to decline China's strategy is to shift toward internal consumption, which matches the notion that a stronger RMB is better for them.

I think that China wants to see the US military-arm cut off so that it doesn't go fucking up China's energy contracts.  China probably already knows that it may never be able to cash in USTs.  And, while I have no real basis from which to present my argument, I very much doubt that China is looking to occupy the US: their history is to stay out of other countries (something that the founders of the US Constitution seem to have agreed with).

lakecity55's picture

"Look, comrades, these interstate highway systems can be used to land your troop transports and your colonists."

"The ignorant amerikans are no match for my advanced socialist brain power. I will easily scare them into giving up their gunz. Then you land your airlifts and take over. It's easy!"

RuiNsPro's picture

FED would stop printing if China agrees to buy the minimum 1T junk bond every year to finance the welfare and Pentagon instead. LOL. Good luck with that.

steve from virginia's picture


Currency 'wars' threatened by China over the dollar?




WTF: what about the yen? What about the saber rattling between China and Japan over Senkaku Islands? Bernanke isn't blameless but China has no problem w/ dollars unless the flow dries up ... which would mean stupid Americans have stopped buying Chinese poison dog food.


China not buying Treasuries any more it seems war has already started ... until China trade deficit. Maybe later this year.


As for yuan as reserve currency: Saudi Arabia won't accept it until it trades freely on forex markets ... hell will freeze over first!



jimmytorpedo's picture

I imagine a currency war to be throwing useless paper airplanes at each other,...

Save the real money for shooting werewolves.

Anyone know if silver bullets work on vampires?


Seer's picture

Vampires?  Get fucking real!  It's Zombies!  Catch up quick lest you fall by the wayside!

orangegeek's picture

Fuck you China.  Suck it you fucking communists.

Vegetius's picture

“I hate purity, I hate goodness! I don't want virtue to exist anywhere. I want everyone to be corrupt to the bones.”

- G. Orwell

As George Orwell above points out in describing the Bolsheviks if everyone becomes corrupt who do you trust with your ill-gotten gains?

It’s a banking SNAFU without end. I don't see the point in finger pointing at the USA or Europe as the problem.

The problem is obvious, the so called wise guys thought they could game the system make a shed load of cash and walk, it’s all gone south and everyone is trying to get out from under…………

 But someone will have to pay with the lives of their families, friends and anyone who even looks like the elite, that’s the game they chose to play ask the Russian Aristocracy or French.

Seer's picture

The "wise guys" were programmed (birth status and education) that the System works, and that They are responsible for maintaining it and, if necessary, fix it.  They don't care so much about "cash" so much as they care about their status, their ability to ride on top of the masses.  The masses can no longer hold these folks up.  And as they start to drop it'll be pretty clear that there really isn't any point in holding them up anymore.

Not sure where anyone thinks they can run to.  I'm thinking that there won't be any safe zones once everywhere is experiencing the collapsing of the global system.

redd_green's picture

We're asked to take China seriously, after decades of breaking every single WTO trade rule, constant tinkering with their monetary system to attract slave labor jobs there, and constant lying about a system based on grotesque corruption?  Heh, yeah, right.      Hey China:  go to  

lakecity55's picture

Hell, the Chinks are telling Ophone to Disarm all Americans!

Some outlet released a picture of Ophone "shooting skeet" to demonstrate what a gun nut he really is, but now it turns out the photo was a fake.

Now the Army is flying all over the country, Houston is the latest, practicing to blow away citizenisms with M60 machine guns on the choppers.

Keep it up, fascists/reds. This country may be a smoking ruin  by next autumn.


"Death to AMerika"

"Welcome to our ChiCom Overlords!"

-----B Huzzein Ozone

SamAdams's picture

LC855 SR556c LE6920

Most still aren't aware of the reality and proximity and complicity of the chi threat. T-paper traded not sold.

Is M60 psy-op for us or usarmy, are they expecting visitors or regulars?

Mi Naem's picture

So, the Chinese are concerned that the US Dollar might be undervalued, whereas the Renminbi has floated at market rates, right? 

And the Chinese, in retaliation, might start printing?!? 

besnook's picture

japan's abe just did everyone a favor by pulling off the kid gloves and putting everyone in a cage match where they can bludgeon each other into submission. the usa and eurozone will have to respond with a blizzard of paper to catch up. meanwhile, the sudden upturn in the value of the dollar allows china to reduce it's exposure even more while diluting the yuan through , now open, international channels. it is the euro that is really fucked  and any day i expect an announcement that the euro will be made in china from now yuan(lol). seriously, they may have to finally embrace the willingness of china to invest yuan in the eurozone and owe china in yuan. of course, that could be after the war. what would they call it? the wang fuk u plan.

Meremortal's picture

China will lose.

Radical Marijuana's picture

Everybody is going to lose, including the global elites that are going for broke to consolidate their systems.

BlackVoid's picture

Just blow up already.

darteaus's picture

Go ahead; make my day.

GreatUncle's picture

One part I am not sure everybody gets. A country has a shed full of debt and another nation starts to debase.

If the level of debt hits a certain level then all of a sudden the country being affected will be forced to debase and they have no choice. THE SELF PRESERVATION LEVEL.

The one bit missing in all of this no global concensus between central banks to determine when a currency whatever nation it is will be "allowed to debase". Without this then it is a race to the bottom because no nation on its own wants to face up the reality of its debt problem HERE, THERE EVERY F'ING WHERE!

If China is lying about the state of its finances, ha ha you will be found out soon when you start to devalue. When you start this we can then measure more precisely your true fiscal position. Bit like Japan, on the buffers now forced to go for a BIG PRINT! YOU HAVE JUST INFORMED EVERYBODY OF YOUR FINANCIAL STATUS.

Only a couple at the moment you cannot really determine and it is not that they would not print if they could. GREECE IF ABLE WOULD HAVE STARTED TO PRINT AGES AGO AND THE SAME FOR SPAIN HIDDEN UNDER THE RADAR OF THE EURO.

Then we come to this if ALL NATIONS IN THE WORLD ARE FORCED TO DEBASE THEIR CURRENCIES shows the world is the crap and not just any one particular nation. The global economy is not sustainable without some external planet to trade with so forced to feed on itself.

Seer's picture

Your last paragraph pretty much tells it all.

As I've been saying for years: we have no system that can deal with contraction on a prolonged basis (and this won't be politically driven- it's driven by the physical world, which has been shielded by all sorts of marketing and political mumbo-jumbo).

Reverse Economies of Scale.  People getting this yet?

Madcow's picture

We have tricked China fair and square.  They have given the USA 30 years of productivity in exchange for a bunch of Chuck E Cheese game tokens. Fools !!

kchrisc's picture

Those tokens still carry value, at least until they don't, and the Chinese know this.

That is why they are buying any and everything that they can get their hands on around the world and within the US.

We are producing "tokens" and trading them for crap while they trade the tokens in for valuable resources and access to more and influence--the US gov and FedRes is literally selling the US and the American people to China and the rest of the world.

No the "trick" is on the American people, hence NDAA 2012/13, etc.            hujel

Seer's picture

The Chinese had been signing up all sorts of contracts.  The Good is that they did so in a nice business-like way.  The Bad is that the US and its military are really good at fucking up contracts.

Even IF the Chinese continued to have access to their contacts they'd experience what every other manufacturing country that is dependent on energy imports does- a negative trade balance.  Although not know, it's a certainty that they'll hit this point: the US hit it in 1970/1971.

The common people in both countries are fucked.  Folks in the US have had a head-start, and while it may not look like they are understanding this and adjusting, they ARE.

The Chinese can't really dump US Treasuries without it killing their (China's) export market.  Yeah, really, how fucked up has it all gotten?  They keep their factories running so that they can sell trinkets to the US in exchange for paper IOUs.  If they demand more than paper their export market takes a nose dive.  They're trying to hedge for this by jacking up internal consumption, but one has to ask how long it will be before the people of China realize that they're doing nothing but make-work, and are racking up debt (imports of raw materials and energy)- this is NOT something that the average Chinese is used to.

MrSteve's picture

When Nixon took the USA off the gold standard, his Sec. Treasury, "Texas John" Connally told DeGaulle:: It's our currency and your problem.

If he hadn't gone broke and died, he'd probably tell China the same thing today, except it is also our problem now too, the "wee Americans".

Tango in the Blight's picture

De Gaulle died in 1970 and left office in 1969. He was dead when Nixon took the $ off the gold standard.

caShOnlY's picture

We have tricked China fair and square.  They have given the USA 30 years of productivity in exchange for a bunch of Chuck E Cheese game tokens. Fools !!

48 million former workers and now food stamp collectors will certainly agree with you.  Boy did we fool China!!!  hahahahahahahahahaha.... jokes on China!!!! fools!! and we get Walmart and all those jobs that come with it!!! hahahahahahah  China joke!!! hahahahahahahahahaha    This country is loaded with fuktards.  HAHAHAHA China funny..... we devalue and joke is on  China, you China keep the jobs..... we fukky you debt!! HAHAHAHAHAHAA


Seer's picture

TPTB in the US still have firm control.  THIS is the "people" that we're really talking about.  The "common person" has always been pretty much fucked (and on that road).

Drones.  Ultrasonic weapons.  Most addicted to controllable items.  The US power structure CAN contain and enforce any rationing: this is happening via EBT NOW!  The Chinese, while they've been able to do this to some degree in the past (how do you really control people out in the countryside?), are now faced with a more potentially unruly, and HUGE, number of people wondering what happened to the promises.  You see, in the US the wind-down has been in effect, most KNOW that things aren't going to get better.  Take away the punch bowl and there will be little surprise.  When this happens in China (due to further deteriorating global trade) people are gonna be in a different mindset.  And in China they don't have all the sophisticated controls like in the US.

As for all the industry that China has acquired, this is mostly stuff that's dying, stuff that just won't be happening in the future.  It's shit that requires being plugged into a modern world, a world that must have vast amounts of energy.  Where's China's energy coming from?

Vendetta's picture

exactly.  US got some cheap plastic shit for our entire manufacturing base ... what a 'deal'

Carl Spackler's picture

Too bad for them.  Not our problem.

The Chinese were asking for this by not letting the Renminbi float 10 years ago. 





SheepDog-One's picture

'Threatening' a currency war? How haven't we been in full scale currency war since 2008 at least?

Ghordius's picture

escalation is still possible - it can get much, much worse

LawsofPhysics's picture

So the merchantilist "winners" of the currency devaluation game are pissed that the Fed wants to devalue faster?  Fuck them.