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China Central Bank Says It Is "Fully Prepared For Looming Currency War"

Tyler Durden's picture


Just in case Lagarde (and everyone else except for the Germans, who have a very unpleasant habit of telling the truth), was lying about that whole "no currency war" thing, China is already one step ahead and is fully prepared to roll out its own FX army. According to China Times, "China is fully prepared for a looming currency war should it, though "avoidable," really happen, said China's central bank deputy governor Yi Gang late Friday." We look forward to the female head of the IMF explaining how China is obviously confused and that it is not currency war when one crushes their currency to promote "economic goals." Of course, that same organization may want to read "Zero Sum for Absolute Idiots" because in this globalized economy any attempt to promote demand (by an end consumer who has no incremental income and stagnant cash flow) through currency debasement has no impact when everyone does it. But then again, this is the IMF - the same organization that declared Europe fixed in 2009, 2010, 2011, 2012, 2013 and so on.

More on China's FX troop deployments:

Yi, vice governor of the People's Bank of China, made the comment amid widespread concerns that the world's major economies would drive down their units to gain a trade advantage through monetary easing policies. 


A currency war could be avoided, Yi said, if policymakers in major countries observed the consensus, reached at the recent G20 meeting, that monetary policy should primarily serve as a tool for domestic economy.


G20 members promised that they would not wage a currency war, but none have shown signs of scaling back monetary easing that has injected a flood of cash into global markets. They worry that removing the stimulus will plunge their economies into another recession.


"China is fully prepared," Yi said. "In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

What probably requires clarification is whether the PBOC will tie up its currency, already pegged to the USD, to the Yen, or the Pound, or whatever is the worst performing currency du jour, and adjust the CNY trading band on a daily basis.

What certainly demands clarity is just how will crushing the Chinese currency prevent the kind of soaring energy and food inflation that led to an explosion in civil unrest and disobedience in 2011, and when it took an abrupt end to the devaluation of all central banks to prevent an inflationary conflagration first in China, and then across the world.

We hope to get the answer to both soon, because once you pop (the first FX war shot), you don't stop, until someone's currency hits rock bottom.


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Sat, 03/02/2013 - 09:13 | 3293154 MrX
MrX's picture

wars make me smoke doobies:

Sat, 03/02/2013 - 09:32 | 3293168 King_of_simpletons
King_of_simpletons's picture

There is no currency war. The G20 said so. There is only competitive quantitative easing masturbation jerkapalooza going on.

Sat, 03/02/2013 - 09:40 | 3293182 AssFire
AssFire's picture

Squirrel who run up woman's leg not find nuts.

Sat, 03/02/2013 - 09:54 | 3293204 GetZeeGold
GetZeeGold's picture



When we reach peak Yuan.....we plan on detonating.

Sat, 03/02/2013 - 10:06 | 3293227 SafelyGraze
Sat, 03/02/2013 - 10:16 | 3293241 NoDebt
NoDebt's picture

Currency drones!  They target you and drop worthless fiat ordnance on you until you succum.  Typically used on one's own citizenry in an effort to "help" them.

Sat, 03/02/2013 - 11:44 | 3293365 NotApplicable
NotApplicable's picture

So... do algobots speak Mandarin?

Sat, 03/02/2013 - 12:55 | 3293504 new game
new game's picture

expecting these 'pathics to not game to their advantage is like trusting a six time felon to watch your castle and expect the jewels not to be missing...

Sat, 03/02/2013 - 16:01 | 3293877 mjcOH1
mjcOH1's picture

They're about as prepared for a currency war as a 10yr old Liberian kid with a prom dress, magic hat, and AK-47 is to take on the WWI German army.  

If they haven't figured out by now that when the US goes we'll be taking everyone with us, they really do deserve what's coming.   But deserve it or not....they'll be getting it.

Sat, 03/02/2013 - 09:57 | 3293192 Element
Element's picture

If every cuntry added 15 zeros to their currency at midnight GMT would the debt end up inconsequential?

Maybe, but the problem is, everyone would also get a massive but meaningless pay rise.

So in order to debase away debts, you'd need to shrink wages proportionally (make sure they don't move, let alone catch up ... which is the same as hyperinflation).

But somehow that just seems less attractive than an informal default or jubilee.

Bottom line is devaluations won't work, currency war won't work, and trade war won't work.

But bankruptcy will work.

Again, the problem is, the chicken-shit govts and banksters won't let that happen, which is to say, the rich will not stand for going broke.

So they'd much rather get 'recapitalised', at taxpayers expense, and start WWIII instead - thanks.

Sat, 03/02/2013 - 10:56 | 3293301 centerline
centerline's picture

Any and every action with the current system would be nothing more than an attempt at stopping the ponzi from collapsing... which is impossible.  Doomed to failure.  Those at the top know this.  It is just math.  The public at large, politicians, etc. all bred to believe "the system is the system as it always has been" and "fixing it" is possible.

No matter what action is taken, the promises that have been made cannot be kept unless we can exponentially expand population further.  This of course requires similar expansion in energy, food, water, etc.

Reality is that we have hit the resource limits.  Technology allowed for expansion far beyond the nightmares of Malthus.  Now we are extending time by undertaking a more extreme Malthus counterpoint of redistribution... which also has limits.  After which, there is nothing else that can be done to buy any more time.  We are in this final stage today.

What is going on right now in this final stage is positioning.  Various factions of "landlords" jockeying for the right angle on whatever comes next.

I won't claim to have any clue what is coming next since I am a peasant in the grand scheme.  But I wager bankruptcy is the plan - at a sovereign level of course.  Debts that cannot be repaid, will not be repaid.  Instead, they will be destroyed - one way or another.  War is a possible outcome of course.

No matter what though, none of this will address billions of people around the world who depend on government, government aid, etc. to survive.  The best the "landlords" can do is attempt to stretch this out over a very long period of time to allow for a more gradual adjustment.  That assumes they have any sort of humanitarian characteristics... which I doubt.  It also assumes the trend can be changed in the context of competition for global resources, that there is enough time on the clock to allow, etc.  All of which violate the lessons from history about human nature.  Hence, my bet is that something more dramatic is coming.


Sat, 03/02/2013 - 12:26 | 3293445 RockyRacoon
RockyRacoon's picture

Current policy:

"The Fed is buying $45 billion in Treasuries and $40 billion in mortgage bonds per month, its third round of "quantitative easing," and has said it will continue the purchases until it sees substantial improvement in the labor market outlook."

That translates thus:  The beatings will continue until moral improves.

Typical bureaucratic tactics.

Sat, 03/02/2013 - 12:36 | 3293469 C deK
C deK's picture

Agreed.  With those hurt by the sequester as prime example of the effect on sheeple.


Keep your powder dry.

Sat, 03/02/2013 - 13:05 | 3293511 Element
Element's picture

Yeah, govts and financials will maintain their deathgrip on the minds of the collective mass that turns to them ... to survive the mess that the earlier govts and financials created ... when they thus controlled the masses ...

hmm ... just like now.

I'm actually quite confident humanity is going to survive this rather easily. But I strongly suspect all forms of civilization everywhere are going to be downsizing rather abruptly. Just look at the population growth curve, as you say, it's all straight-forward math. It couldn't be any more clear we're approaching "Peak-Human".

And evolution has never been 'suspended', not on this planet, we're following the typical pattern of a bloom and die-back cycle that happens every organism that encounters more resources than it requires. Plankton or human makes no difference. The chances of population crashing soon after are of course enormously higher, than of stabilizing near the spike's apex level. It is completely unrealistic to expect stability anywhere near that point. Obviously a mean-reversion trend is entirely possible soon after the peak. But even then it's very likely millions of human beings on every continent will survive.

I'd really love to be around to see how that turns out. I find this insane rush toward peak-human kind of repulsive and disgusting most of the time.

On a long enough timeline we are all pre-fossils.

Sat, 03/02/2013 - 13:14 | 3293531 new game
new game's picture

centerline says;

This of course requires similar expansion in energy, food, water, etc.

Reality is that we have hit the resource limits.



the money game can be replayed, but the resource limits are just that - limits.

without projecting, i will say get out of the crossfire.

but logic might suggest that given the 'Fibonacci Retracement' and we hit the wall at 7-8 billion, well i'll let you do the math.



Sat, 03/02/2013 - 17:51 | 3294107 centerline
centerline's picture

Interesting take on putting Fib math to this.  Damn.  Now I am going to have to break out a calculator and charts.  lol.

Sat, 03/02/2013 - 20:06 | 3294045 fockewulf190
fockewulf190's picture

I suspect China´s trump card will eventually be it´s hoard of phyzz.  They are buying physical gold and silver like crazy, and the only information coming through as to how much phyzz is actually being bought, is coming from export reports from Hong Kong...and those numbers are enormus.  China has not updated it´s official gold holdings since 2009. 

There are probably multiple reasons for this.  As an outsider looking in, I suspect one reason is going to be related to internal security.  China is known to have regular riots, and most are related to the increasing divide between the haves and have-nots.  Reporting updated numbers of gold while hundreds of millions of Chinese are still living in poverty is politically explosive.  They would just be shooting themselves in the foot doing that. 

Another reason is to keep the west in the dark.  China loves cheap phyzz, and they are going to be nice and quiet and let the Fed, and all of the other behind the scenes players, keep the manipulation going for as long as the spice keeps flowing east. 

But the main reason for all the buying, and all the stealth, is that they are preparing for the Great Reset. More specifically, post-Great Reset.   They intend on keeping their renminbi not only as a national currency, but they intend to declare it as the new international reserve currency, only this time, it will be backed by gold.  Only then, when most of the world´s currencies have been vaporized because of the Great Reset, will they reveal how much gold they have in their possesion. 

Much of this gold will be stacked up neatly at the newly constructed vault located at Beijing Airport.  It is conviently located, and it will allow the beaten down dignitaries and financial ministers of devestated foreign nations to observe, in person, the hoard of true money backing up their currency.

And guess what, they will also be able to fix the gold price to the renminbi as they see fit. Yi Gang´s slip of the tounge regarding currency wars, fits the profile of one who knows what kind of preparations are being made in the backround, and he has spoken with confidence.

Sun, 03/03/2013 - 08:51 | 3295085 Marco
Marco's picture

It's just currency in the end ... if they are forced to run a current account deficit it will all phyzzle out.

It's invasion of Africa is a bigger trumpcard than phyzz IMO.

Sun, 03/03/2013 - 11:38 | 3295309 e-recep
e-recep's picture

the usa has too many nuclear weapons and too many rich jews to let this shift of financial hegemony to slip through quietly.

Mon, 03/04/2013 - 05:14 | 3297162 fockewulf190
fockewulf190's picture

The Great Reset will cause humanity to howl like never before.

Sat, 03/02/2013 - 10:31 | 3293269 rogeliokh
rogeliokh's picture

Is Bernank gonna do anything about "rising" Dollar

while Eur and GBP and YEN going lower?

How's he going to achive that? Print 2 trillion instead?

Sat, 03/02/2013 - 12:58 | 3293507 gmrpeabody
gmrpeabody's picture


Sat, 03/02/2013 - 17:23 | 3294064 Ghordius
Ghordius's picture

...he can

Sun, 03/03/2013 - 06:24 | 3295005 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

I qucikly scanned about 300 hundred of the 1400 + posts to the article you linked. People are waking up. I did not notice a single comment which supported the article.

Anyone who has the time should check it out. Most of the replies were what one could see here.

Sun, 03/03/2013 - 15:24 | 3295734 e-recep
e-recep's picture

desperate assholes are rooting for subprime lending once again.

Sat, 03/02/2013 - 09:21 | 3293158 Peter Pan
Peter Pan's picture

I am not saying anything new, but if you don't want currency wars and the whole infrastructure of hedging, speculation and vampire banks, then the solution of gold and silver for setting price and settling accounts is second to none.

Sat, 03/02/2013 - 09:33 | 3293171 narnia
narnia's picture

State issuing currency = imminent failure, backed or not backed by commodity.

Sat, 03/02/2013 - 09:26 | 3293164 narnia
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The countries seriously debasing their currencies are & have been primarily doing it for misguided Keynesian logic domestic reasons. It's called subsidizing banks, monetizing debt & gaming the government borrowing rate.

Sat, 03/02/2013 - 10:14 | 3293239 DaveyJones
DaveyJones's picture

...and theft

Sat, 03/02/2013 - 09:33 | 3293170 Sudden Debt
Sudden Debt's picture

To make something beautifull...

It's how the game works...
Where did you think all those central bankers got their inspiration from? They just want to create something beautifull... and like artists... they don't know yet what's it going to look like... but like art... you can smear crap on a canvas.... and sell it to a moron for a million bucks if you theml him it's the next picasso...

Sat, 03/02/2013 - 22:45 | 3294661 mkhs
mkhs's picture

Drinking already?

Sat, 03/02/2013 - 09:34 | 3293172 Tristan Ludlow
Tristan Ludlow's picture

Don't start a war if you don't know you can win. In this case, we are all losers.  Keep Stackin'.

Sat, 03/02/2013 - 09:35 | 3293174 Sudden Debt
Sudden Debt's picture

when you hear they're going to start a currency war...
it turns out... it's been going on for 4 years now...

Sat, 03/02/2013 - 17:27 | 3294070 Ghordius
Ghordius's picture

not more like 40? since one million bucks weren't one metric ton of gold - guaranteed and fixed - anymore?

Sat, 03/02/2013 - 09:35 | 3293175 DblAjent
DblAjent's picture


I thought it was already here!

(first post bitchiz...go easy on me)

Sat, 03/02/2013 - 11:01 | 3293312 GetZeeGold
GetZeeGold's picture



The progressives look a little stupid today.....cause no one actually died yesterday.

It was a great show if you like watching mass hysteria.

Sat, 03/02/2013 - 11:15 | 3293332 CH1
CH1's picture

first post bitchiz...go easy on me

Welcome to the party.

Sat, 03/02/2013 - 11:21 | 3293342 Karl von Bahnhof
Karl von Bahnhof's picture

Enjoy it!

Sat, 03/02/2013 - 19:21 | 3294256 chubbyjjfong
chubbyjjfong's picture

Matt Damon!  "The Bourne Awakening". Welcome!

Sat, 03/02/2013 - 09:37 | 3293176 Element
Element's picture

Funny, given the Chinese already flung the economic sanctions bomb at Japan.

Sat, 03/02/2013 - 09:42 | 3293185 Tao 4 the Show
Tao 4 the Show's picture

Yes, though the game still involves trying to sound like one holds the high ground. Obviously, none do. So the statements are mostly directed towards rallying the public opinion of their own citizens while at the same time pinging radar signals at the enemy ships.

Sat, 03/02/2013 - 09:50 | 3293206 Element
Element's picture

Quite T4, and good to see you again.

Sat, 03/02/2013 - 10:19 | 3293252 Tao 4 the Show
Tao 4 the Show's picture

Thanks Element - always enjoy your comments.

Sat, 03/02/2013 - 09:51 | 3293195 DblAjent
DblAjent's picture

Funny, given the Chinese already flung the economic sanctions bomb at Japan.


...along with the smog bomb...

Sat, 03/02/2013 - 09:39 | 3293178 Getting Old Sucks
Getting Old Sucks's picture

We do it and say we're not.

They do it and say they are.

At least they're honest.

Sat, 03/02/2013 - 10:16 | 3293243 DaveyJones
DaveyJones's picture

there's also that small detail that they're better prepared

Sat, 03/02/2013 - 13:00 | 3293510 post turtle saver
post turtle saver's picture

Better prepared for what? I don't think they're ready to handle what's coming any better than anyone else. The Art of Judo is plain on this... "if you have a hold on me, I have a hold on you". The rest of it is just hot air to placate their citizens.

Sat, 03/02/2013 - 18:29 | 3294165 DaveyJones
DaveyJones's picture

Oh I don't know. Maybe buying solid things from other countries instead of bizzare, criminal, and very inefficient "democracy / terrorist" projects just to name one. It has nothing to do with who is "better" but it may have a little bit to do with who's been around for a long time. Humility, patience, experience

Sat, 03/02/2013 - 09:39 | 3293180 LongBalls
LongBalls's picture

Do the Chinese have more gold than reported? Me thinks yes.

Sat, 03/02/2013 - 10:20 | 3293251 DaveyJones
DaveyJones's picture

and the russians have all that energy resource (along with the massive gold they've been buying). THings are getting very close. Keep thinking all the propaganda about US energy resources lately aren't just to confuse peak oil concerns  

Sat, 03/02/2013 - 11:02 | 3293314 Oldballplayer
Oldballplayer's picture

And a yuan/ renminbi backed by gold. Game over.

Sat, 03/02/2013 - 12:33 | 3293463 DaveyJones
DaveyJones's picture

and all those military toys and dead boys won't change a thing

except a mother's memory

Sat, 03/02/2013 - 09:40 | 3293181 WallowaMountainMan
WallowaMountainMan's picture

this is what the big boys want. there can be no inflating away of the funny money losses by the tbtf and the sovergns without all the planet onboard.

let the runaway begin....

Sat, 03/02/2013 - 09:43 | 3293187 williambanzai7
williambanzai7's picture

The G20 think China is going to sit around and let them yank it's currency chain. Good luck with that.

Sat, 03/02/2013 - 22:55 | 3294676 espirit
espirit's picture

Yes, that sickening Soros NWO interview indicates the 20 thinks it has leverege on the Yuan.

We'll see how it works out for them, no doubt. 

Sat, 03/02/2013 - 09:45 | 3293191 Shvanztanz
Shvanztanz's picture

Link Baiting You While They Are Stuffing Money in a Sack by the Fistful 

Sat, 03/02/2013 - 09:45 | 3293194 falak pema
falak pema's picture

lol, .....looming....casts a long shadow, for sure behind the real actors and their ongoing actions, not in front of them as would be the case of premonitary warning; inspite of what the G20 says!

All China says now is :  if the Japs RAMP it UP even more in response to FED/China ongoing war, there will be blood!

You don't say! 

Sat, 03/02/2013 - 09:49 | 3293202 Shvanztanz
Shvanztanz's picture

What is the impact going to be of the 6 Trillion $ they plan to throw at infrastructure? Are they going to print that? Or is that going to be taken away from existing GDP? 

Sat, 03/02/2013 - 09:50 | 3293205 GraveyardSpiral
GraveyardSpiral's picture

"The IMF - the same Organization that declared europe fixed in 2009, 2010, 2011, 2012 and 2013    Didn't they already declare it fixed in 2014?    Oh, that's right, it might look foolish if they did that!    /S

Sat, 03/02/2013 - 09:52 | 3293209 Pretorian
Pretorian's picture

THey will fight through UK pound sterling. Thats why they brought the assasination men from Canada for governor of BOE. So no blame on major power such as US EU.

Sat, 03/02/2013 - 09:56 | 3293211 SDRII
SDRII's picture

Inflation rising in Pakistan, Indonesia, India, China as the tourniquet tightens. China just rebutting the IMF warning on their shadow banks as GS has been dumping their ICBC. Looks like the IMF is brewing a crisis just in case anyone decides it is time to amputate themselves from the system. The US just deployed its 2nd Xband radar to Japan as the hunt for proof of the NK test continues......


In the absence of discernible evidence from North Korea’s most recent nuclear test, Western observers are struggling to determine fundamental details about the bomb’s design and the materials used in its construction. 

Sat, 03/02/2013 - 10:14 | 3293242 SDRII
SDRII's picture

12-25-11 Japan/China FX swap

9-10-12 Japan Banking Minister Matsushita Found Dead at His Home

9-11-12 Japan buys disputed islands

9-17-12 Japan's ambassador to China dies amid rising tensions

11-11-12 Japan PM Noda: We will simultaneously pursue the TPP [US backed] and a trilateral free-trade agreement among Japan, China and South Korea [tensions have intervened however..]. 

12-26-12 Abe elected Japan PM

Just  Coincidence

Sun, 03/03/2013 - 15:16 | 3295714 supermaxedout
supermaxedout's picture

Japan is showing to the world what is not tolerated by the US.

I remember a picture taken appx 3 months after Fukoshima catastrophy. The Chinese, Japanese and Korean head of states standing together and the comment of the picture said, that from now on the three countries want to cooperate very close and in friendship. China and Korea promised Japan full assistance to overcome Fukoshima.   Not long after China and Japan signed an agreement eliminating the use of US Dollar from the trade among China and Japan. The same did Korea as much I remember.  It would have been best for Japan, Korea (and for China too) when these three countries would have formed a common economic zone as it was the plan at that time.

But this was not tolerated by the US simply for the fact that this would have been the end of the Dollar hegemony.  Its like during the last years of the Roman empire, the provinces have to suffer in order to keep Rome alive. 

Sat, 03/02/2013 - 09:56 | 3293213 Sandmann
Sandmann's picture

Did I miss something ? I had thought China had been engaged in a Currency War for the past 15 years and very successfully hollowing out Western economies. Pity Westerners are so stupid that they have little idea how much the Chinese hate the West for its role in the politics of Imperial China........and the Chinese have been busy running circles around the stupid West as it behaves as if ordering by number of a Chinese menu

Sat, 03/02/2013 - 10:34 | 3293276 GetZeeGold
GetZeeGold's picture



Almost forgot about that.

Sat, 03/02/2013 - 09:58 | 3293215 Oldwood
Oldwood's picture

Its not just the currencies that are being debased but the entire world economy. When people lose confidence in their economies they quit any long term, what we might consider "productive", investments and go for short term speculative "bets". Betting, gambling or what some might call investing has always been at play and as we have seen, introduces some serious risks to the economy through malinvestments, but the scale of it has grown so much, not just in dollar volume, but as a percentage of our economic activities, that it has put everything at significant risk. Government actions are directly contributing to this market chaos. Inflation by itself distorts the markets and investment choices but well beyond this is the general sense that nothing is rational much less predictable in the markets. The only common investment strategy now is QE. Its the only game in town so everyone is BTFD, yet we all know this can not last indefinitely. So our econoomy is based on Russian roulette, where everyday we spin the cylinder and hope for the best, knowing eventually we will pull the trigger on a magnum load. Governments have run out of options. To acknowledge our circumstances would mean certain death (at least profressionally) so it just won't happen. To admit what they have done is more than they can bare, so they won't. As we see with Obama, they will blame everyone else and are doing what they can to build the framework of "evidence" as it were, to build the alternate reality of accountability. You will be seeing more and more of the top dogs in these financial institutions stepping down. moving on, because they know whats coming. What many are calling for here, their heads. They have been willing accepting the gratuitous hand of government, all while torn appart in the government sponsored press. These people may be corrupt but they are not stupid. We all know this is a house of cards and exactly who the dealers are. Why would we think that when the card house collapses that those same dealers will not still be holding all of the cards. The Chinese are no different than the rest of the corrupt governments except they are likely worse. I don't think many would suggest that they have any huge empathy for their people. Those "leaders" want to end up on the top of the heap when it falls, like all the rest. I guess it is just a choice of if it is better to live in a house ravaged by termites or if we should just burn it down.

Sat, 03/02/2013 - 12:24 | 3293438 shovelhead
shovelhead's picture

+ for the Russian roulette image.

Exactly so.

Another image I have is monkeys with hammers taking turns banging on a nuclear warhead.

Maybe WB7 can have a go at that.

Sat, 03/02/2013 - 10:01 | 3293217 css1971
css1971's picture

Um. China has been fighting the currency war for a couple of decades already. They've just about won (just my South Korean pun there) too. China was fighting a currency war with the US while Americans were still dreaming of Star Wars, nuclear missiles and stealth bombers. Now they are dreaming of social security cheques.

As is traditional with the military, they are equipping to fight the last war, not the next.

With leaders like Kerry, no wonder the US is so screwed.

Sat, 03/02/2013 - 10:03 | 3293221 q99x2
q99x2's picture

I liked the post that talked about other countries starting to use drones. Now that sounds more exciting than pulling a dollar out of your wallet and staring at it until it shrinks in value.

Sat, 03/02/2013 - 10:05 | 3293225 eclectic syncretist
eclectic syncretist's picture

Sounds like China figures they will have enough gold and silver to ride any hardships out to the end and come out better than most.

Sat, 03/02/2013 - 10:08 | 3293230 Fix-ItSilly
Fix-ItSilly's picture

THis article was awful, ignores reality and perpetuates a dictatorship's propaganda.  China has no free exchange flow.  China has rigid currency control (except for connected apparatchiks).  China pegs its currency to a country it doesn't socially and economically resemble and does not trend with.  China doesn't need to prepare for a currency war, it started the war.

Sat, 03/02/2013 - 10:17 | 3293245 Oldwood
Oldwood's picture

In the end, does it really matter who started the war? Blame it on Nixon as he is the one who opened relations with the chinese. But who cares at this point? Like Hillary said, what does it matter who's fault it is! She is admitting to reality in that causation is irrelevant if you are not worried about ever preventing the same thing from happening. Either you think the world is ending and such senarios wil never have the opportunity to occur again, or you want them to happen again, and remain completely unforeseeable. Ignorance truely is bliss and all that matters is who wins the war, and it's not going to be us, at least no one I know personally.

Sat, 03/02/2013 - 10:35 | 3293277 DaveyJones
DaveyJones's picture

Hillary got that line from Bill when arguing over the blue dress

Sat, 03/02/2013 - 14:59 | 3293716 Element
Element's picture



"Blame it on Nixon as he is the one who opened relations with the chinese."

No, not quite, it was an Australian Labor Leader of the Opposition, Gough Whitlam, who was the first Western Political leader to openly visit Beijing, and Australia was the first Western country to open formal mutual Diplomatic relations with China, and also made the first trade agreement and trade relationship with China.


June 27 1971 - Gough Whitlam flew to China and met with Chinese officials soon after, including Zhou Enlai. He arrived in Beijing on July 3rd 1971

Nixon's National Security Advisor Henry Kissinger secretly visited Beijing in the days immediately after this inital Whitlam meeting.

July 15th 1971 - 12 days after Whitlam first arrived in Beijing Nixon announces he will visit the PRC the following year.

February 21 to 28, 1972 - Nixon visit to China

February 28, 1972 - Joint Communiqué of the United States of America and the People's Republic of China, also known as the Shanghai Communiqué, declared a mutual intent to negotiate a normalization of relations, at some unknown future date.

Dec 2nd 1972 - Gough Whitlam is elected Australian Prime Minister and immediately orders negotiations to establish full relations with the People's Republic of China (plus breaks-off relations with Taiwan)

21 December 1972 - Just 19 days later full diplomatic relations commence between Australia and China. Joint Communiqué details:

Oct 31 1973 - Prime Minister Gough Whitlam in China to make the first trade agreement with the People's Republic of China.

January 1st 1979 - Almost seven years after Nixon's visit the US finally establishes official diplomatic relations with the People's Republic of China. 


It was Australia who went to China first and made those initial moves. The US was watching to see what would come of it before they committed to complementary action.  

Sat, 03/02/2013 - 23:06 | 3294696 espirit
espirit's picture

1971 does ring a bell as the end of an era.  Now what was it now?

Maybe the contents of Ft. Knox were delivered to the Chinese as goodwill for opening trade with the west.

Sun, 03/03/2013 - 01:34 | 3294868 Element
Element's picture

Ha, that's quite hilarious, two complete morons down-voted the documented chronological facts.

Sun, 03/03/2013 - 18:16 | 3296018 Tompooz
Tompooz's picture

You got one up from me, Element. But what we don't know is what Kissinger communicated to Whitlam behind the curtain before he decided on arranging the visit.

Sat, 03/02/2013 - 13:04 | 3293520 post turtle saver
post turtle saver's picture

I don't know who voted you down (emotional fools most likely), but for my part you nailed it... +1

Sat, 03/02/2013 - 14:02 | 3293626 disabledvet
disabledvet's picture

what i think is interesting about this very true comment is the thought "just where is the RNB trading?" the term "inside the Bank itself" comes to mind. this is a POWERFUL piece of information to have when deciding on how to deploy one's bank capital on any given day since "you have a critical piece of information" (the RNB is surging/the RNB is collapsing) that is simply not available to the market participants writ large. in other words "i would trade this market differently if a knew the RNB was in fact following the Chinese property market into the basement." but i do not know this...nor can i ever actually. as with the rest of us here in the cheap seats then "we have to make an educated guess" and go from there. for specificity "we had know way of knowing that the sudden increase in yields after 2008 would moderate and turn into an outright massive bull run where we find ourselves with the Treasury complex today." but the Big Banker types knew this as they had a heads up on a MASSIVE currency flow that we do not have access to directly down here. As it was the "bond panic" subsided and the capital outflows from China have increased massively...pushing equities right back to all time highs again. this has been a major problem in the Zero Hedge "plumbing" and i think a fundamental cause for missing this entire market rally. Simply put "the unequal distribution of information is good for market prices" not bad and hence why "a random walk down Wall Street" works again. we'll see if we go into correction mode here but the burden of proof is still on the bears to prove their case vis a vis the markets. (clearly the case has been made relative to the economy.) i find it very interesting how these events figure into "the war effort" as well. we're monetizing the debt to the tune of trillions and yet can't spare a dime for the Defense Department? "there's something wrong with that picture" and "it don't sound small to me."

Sat, 03/02/2013 - 10:10 | 3293233 Oldwood
Oldwood's picture

As with all systems, we are only viable as long as we hold value. Our value is slipping by the day. If we are not contributing to the system through our labors, our willingness to invest in the stock market or gov bonds or do their handy work, then we are redundent overhead that cannot be sustained. They have people working on that very equation right now, so have little doubt about where we stand. Labor camps are where they will squeeze the last drop of "value" from our souls. You can't inflate that!

Sat, 03/02/2013 - 10:19 | 3293249 BurningFuld
BurningFuld's picture

If I were a country I be doing nothing but printing money and buying gold with it. All the Gold I could get my hands on. To the other dumb countries out there I would say "snooze ya lose."

Sat, 03/02/2013 - 10:37 | 3293279 GetZeeGold
GetZeeGold's picture



Spend a little printed money to suppress it while you're buying it.


Who wants to pay retail?

Sat, 03/02/2013 - 17:34 | 3294084 Ghordius
Ghordius's picture

sadly there is one country that would be very pissed at you. you know, the one nobody else can ignore

Sat, 03/02/2013 - 10:44 | 3293288 DUNTHAT
DUNTHAT's picture

Put together 40 charts of the world's currencies...

Need to keep a watch at the deterioration and who is participating.

click the link for Currency Review


Sat, 03/02/2013 - 10:48 | 3293293 Charles Nelson ...
Charles Nelson Reilly's picture

In the alternate federal reserve propagandized universe we currently live in, the hacks at CNBC will promote this as bullish for all currencies around the globe.

Just wait til China reports the REAL amount of gold they have. Now that will be a system shock that will send Liesman into a fucking much needed coma.

Sat, 03/02/2013 - 11:50 | 3293373 DblAjent
DblAjent's picture

Just wait til China reports the REAL amount of gold they have.


It'll be more than 'reportedly' exists on the earth, yet less than the paper in the market...

Sat, 03/02/2013 - 10:55 | 3293303 Charles Nelson ...
Charles Nelson Reilly's picture

Off topic, but I went to my lib aunt & uncles for dinner last night. They had MSNBC on and Ed Schultz was interviewing Paul Krugman in studio. They almost kicked me out when at the end of the segment I laughed and called them dishonest political hacks that should be used for torture at guantanamo bay. Krugman makes me want to beat the shit out of any asshole who reads his communist garbage.

Sat, 03/02/2013 - 11:12 | 3293327 GetZeeGold
GetZeeGold's picture



Let me get this had to bave dinner with your inlaws and watch that talk slut Ed Schultz at the same time?


I'm forwarding your name to the Vatican for sainthood.

Sat, 03/02/2013 - 12:12 | 3293409 Bansters-in-my-...
Bansters-in-my- feces's picture


I ain't picing on you so I will leave your spelling alone,but comprehension skills...???

Previous poster comment was he/she they visited their aunt/uncles,not their brother/sister "inlaws".

Just saying.

Sat, 03/02/2013 - 19:56 | 3293370 hootowl
hootowl's picture

The Khazarian/Babylonian/faux-Hebrew fraudulent economic infestation of the productive West is the source of evil that has been systematically destroying the West for the past several centuries. The economic ignorance that has been imposed upon the people of the West through the takeover of the, so-called, institutions of higher learning utilizing the power of issuance of the infinite fiat currency of the so-called Western "central banking" systems (which are NOT banks, but monstrous criminal/political frauds), publishing, and media resources will soon so weaken and diminish the productive host upon which the parasitic Khazarian/Babylonian/faux-Hebrew infestation feeds that it will finally have to feed upon and ultimately consume all of its myriad appendages in a futile attempt to survive.  The irrevocable cannabalization of itself by the fraudulent universal Western "central banking" infestation is now processing.  In its death throes, it will eventually, after more egregious political and economic impoverishment of the ensnared populations, along with likely episodes of violent resistance of the various populations, whose lives have been destroyed by this great evil fraud, take down all subservient political entities that do not quickly repulse and repudiate the evil infestation and the mountain of worldwide fiat and fraudulent forms of casino scripts it has excreted.  It is late....but not yet too late to decorate every lampost on earth with the dead and decomposing remains of the godless demons responsible for this great evil.

This Beast, knowing its time has runout in the West, is now abandoning the West to its impoverishment, and moving its physical wealth and resources Eastward to Asia, China, and newly-reborn fascist Russia, where it intends to extend its parasitic feasting by the defrauding of a new, as yet unsuspecting, population of human hosts upon which to feed.

Beware the banking systems of the East, they are already infected.


Sat, 03/02/2013 - 11:34 | 3293353 Smegley Wanxalot
Smegley Wanxalot's picture

What China needs, and what will fix everything, is a 6.3 Trillion Yuan platinum coin.

Sat, 03/02/2013 - 11:36 | 3293357 Lordflin
Lordflin's picture

Who would have thought the day would come when we would have to go to the Chinese and Russians for truth... And it really pains me to say this... But even some occasional light comes out of Iran (if you can work past all of the anti semitic rhetoric for which I am not a fan... And yes, I am familiar with the history of Jewish banking, and the role of Jews midst the ranks of the neo cons, etc., but I find group hate in general to be mindless)...

But this currency war will go hot... Russians and Chinese own most of the gold... Ah, well, there is the 25 percent the Fed assures us is still in their vaults... We own the bigger guns... Of course the world is armed to the gills with nukes and biologicals, and everyone's favorite, EMP...

Should be a wild ride...

Sat, 03/02/2013 - 11:45 | 3293366 Yen Cross
Yen Cross's picture

 Something tells me Treasury yields are going up, and [Chair Satan] can't do a damn thing about it!

Sat, 03/02/2013 - 11:45 | 3293367 CTG_Sweden
CTG_Sweden's picture


The more China depends on exporting cheap junk, the more sensitive their economy is to unfavourable exchange rates.


Given the potential economies of scale of the Chinese economy I wonder whether the Chinese would have been better off if they had pursued another strategy than the current export driven economy. Consider the rapid transformation of the US economy which took place from the late 1880s to the late 1920s with very little exports and imports.


Of course, China depends more on imported raw materials than the US did 100 years ago. So they got to export something in order to be able to buy oil iron ore, for instance. But it seems to me that China could have imported less high-tech products like aircraft than they currently do. If they had begun developing more commercial aircraft models 10-15 years ago they could probably have exported commercial aircraft to the Middle East and Africa by now in return for oil and raw materials rather than exporting cheap junk to the US and Europe and buy oil and raw materials from the Middle East and Africa for these export incomes. There is a shift going on in the Chinese economy to more advanced products. But I suspect that this transformation of the Chinese economy could have taken place at a faster rate if they had invested less in real estate and more in factory equipment and tooling. As far as I know, there has not been any shortage of engineers in China, but rather the opposite. So that has probably not been the bottle-neck. So it is probably at least to some extent true that many Chinese politicians have favoured investments in real estate rather than more productive investments since this kind of deals has been an easy way to accumulate personal wealth (especially for the extended family of the politician in question) and incomes for local governments.


Sat, 03/02/2013 - 11:56 | 3293387 Yen Cross
Yen Cross's picture

     China is moving towards a consumption based economy. They have been telegraphing it for quite some time. Iron ore has peaked.  Mining Boom in Australia Edges Past Peak as UGL Touches Low - Bloomberg

     The Pacific Rim and Asia as a whole are slowing down. The world is going into a deeper recession, and inflation is only making it worse. Nice work {Global Central Banksters}   usd/cny chart.  The strong $ ain't so strong in China.

Sat, 03/02/2013 - 13:03 | 3293515 Lordflin
Lordflin's picture

The problem with a shift to a consumption based economy is, as people get more they want more... Ultimately this bodes poorly for the power elite at the top who want it all... China has a history of civil war and is playing a dangerous game. On the other hand, now that they have created a manufacturing based economy the production has to go somewhere.

And not to keep harping on a theme, but war isn a great destroyer of excess production... Wouldntake care of the 14 - 16 million excess males too. In fact, if this thing really gets going that will be justna down payment.

Sat, 03/02/2013 - 13:15 | 3293538 Yen Cross
Yen Cross's picture

   Thanks for your comments.

Sat, 03/02/2013 - 15:05 | 3293756 Lordflin
Lordflin's picture

Damn iPad... I knew I should have shorted AAPL...

Last paragraph was meant to read... And not to keep harping on a theme, but war is a great destroyer of excess production... Would take care of the 14-16 million excess males too (in China). In fact, if this thing really gets going that will just be a down payment.

Sat, 03/02/2013 - 11:57 | 3293390 They Tried to S...
They Tried to Steal My Gold's picture

Pretty much confirms what I've thought for years.....


Lovely Is The Feelin' Now
Fever, Temperatures Risin' Now
Power (Ah Power) Is The Force The Vow
That Makes It Happen It Asks No Questions Why


Michael Jackson was the best Central Banker.....

Sat, 03/02/2013 - 12:13 | 3293410 joego1
joego1's picture

If they peg their currency to the dollar, as they have been doing, all they have to do is continue to flood their economy with fiat just like our central planners are doing. Nothing new here.

Sat, 03/02/2013 - 12:13 | 3293411 Uber Vandal
Uber Vandal's picture

Well, at least the US has an infinite amount of money.....

Mr. Bloomberg argued the United States could owe “an infinite amount of money” and there is no specific amount that would cause the country to default.......When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more.

Sat, 03/02/2013 - 12:27 | 3293451 Quinvarius
Quinvarius's picture

National debt is a Keynesian inflationary reservoir.  Of course Keynes never thought it would get so messed up that he would go full circle into Austrian economics.  The idea that national debt would become the uber credit bubble didn't figure into his political utopia disguised as a economic theory.  The dude is practically a Pol Pot.  Keynesianism is complete and utter political trash without a shred of real economics in it.  But politicans love it.  So we die now.

Sat, 03/02/2013 - 13:29 | 3293569 thefedisscam
thefedisscam's picture

Keynes fully understood the consequencies of endless printing. That is why he said Everybody has to die That is the answer, and also the result!

Sat, 03/02/2013 - 12:22 | 3293421 Quinvarius
Quinvarius's picture

And the bear trap in gold clamps shut.  You can add 20% to every line on this chart, except the gold price, to get a picture of how cheap gold is by the end of this years QE, if it remains under 1600.

Sat, 03/02/2013 - 12:27 | 3293448 Mr. Hudson
Mr. Hudson's picture

The end result of a world-wide currency war is "isolationism". Countries will not be able to afford imports, and they will be forced to buy only products and goods made locally. Unfortunately, as long as the United States' FRNs remain the world's reserve currency, and as long as OPEC continues to sell their oil for U.S. dollars, the dollar will remain strong in comparison to all the other world currencies; no matter how much paper Bernanke prints.

Sat, 03/02/2013 - 12:30 | 3293458 Edward Fiatski
Edward Fiatski's picture

Bring it on. :)

Sat, 03/02/2013 - 12:32 | 3293461 Quinvarius
Quinvarius's picture

According to this pattern, China is about to spike their currency in circulation:

Big bump.  Little bump.  Little bump.  Big bump.  Repeat.  We just finished the second little bump.  I guess all this chatty global nonsense is good cover for the inevitable.

Sat, 03/02/2013 - 13:13 | 3293532 VonManstein
VonManstein's picture



Sat, 03/02/2013 - 12:40 | 3293473 khakuda
khakuda's picture

Let's face it.  It is China's that has been the leading cause of deflation in the world at an accelerating rate over the last 25 years.  They had cheap labor and were able to suck up a lot of jobs and, as a result, the rest of the industrial world lost jobs in that process.  If you are a central banker in Japan, US or Europe and you hear the words job losses and deflation, you become easier than a prostitute.

Unless Pierre, Joe and Takashi are willing to work for $5 a day, they can't compete.  And they can't work for $5 a day when the cost of living in their countries is dramatically more than that, unless their countries are allowed to experience deflation.  But, because they all have mega levered banking systems, the bankers can't let deflation happen because it leads to defaults and depression.  So, they pump up the economies with free money, expanding asset and commodity prices even more, raising the cost of living further.  Makes sense, no?

Thus, we have the word of the day:  Fucked.


Sat, 03/02/2013 - 13:23 | 3293553 thefedisscam
thefedisscam's picture

There is NO Chinese labor paid for $5 a day now. Your number is SOOO last decade!

Nowadays, the lowest cost of unskilled labor in China is around 2000 yuan a month (a little >US$10 a day). Those with some skills, will have to pay at least 4000-5000 Yuan a month, which makes US$20-25 a day.

Plenty of white color workers with good skills and some senirorities in big Chinese cities are now getting paid RMB10,000 a month or more. 

Sat, 03/02/2013 - 12:58 | 3293506 fiftybagger
fiftybagger's picture

"All war is deception...when strong, feign weakness, when weak, feign strength." - Sun Tzu

Your guess is as good as mine as to which one this is.

Silver For The People

Sat, 03/02/2013 - 13:02 | 3293516 tempo
tempo's picture

robots and currency wars. Automation (robots) eliminates million of good paying jobs every year throughout the world. Thus tax revenues drop, unemployment rises and it falls back to the central bankers to fund the entitlements and consumption needed to partially offset the declining wages and standard of living (all to keep social unrest contained).
Then the zero sum game (ZUG)of currency war starts. Now that is serious. Thus far the FED QE programs have pushed inflation into the 3rd world countries and most people in the US love the entitlements,medicare, student aid and a President that doesn't believe there is a debt problem and an infinite amount of debt can be issued. Viva central bankers.

Sat, 03/02/2013 - 13:16 | 3293546 post turtle saver
post turtle saver's picture

"AMONG THE MOST viable of all economic delusions is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. Whenever there is long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong."

Sat, 03/02/2013 - 14:57 | 3293739 CTG_Sweden
CTG_Sweden's picture





"Automation (robots) eliminates million of good paying jobs every year throughout the world. Thus tax revenues drop, unemployment rises"




My comments:


If the general public saves some money rather than consume all their money and gradually accumulates stock, capital income can replace parts of their salaries. Some people may not have to work at all.


Automation is no problem provided that the general public can replace their pay-cheques with capital income. If you don´t replace income from work with capital income and the labour market doesn´t need as much labour as in the past, then you got a problem. Especially if you continuously add lots excessive labour. Then you got to keep interest rates low in order to make people consume rather than save and thereby increase demand for labour. But in the long run that doesn´t work. I think that the US and some other countries (like Sweden) with excessive supply of labour and a general public which has almost no savings may have some problems in pipeline.

Sat, 03/02/2013 - 13:08 | 3293523 VonManstein
VonManstein's picture

"Prepared" can also suggest a defensive posture. it doesn’t mean devalue and could mean revalue.
less or more are not defined. Maybe they will do the opposite of everyone else and protect their currency.



Constant reading of things with a bias doesn’t do truth any favours. You guys actually think that CNY will be devalued by 20% to match the JPY GBP and support the USD yeah good luck convincing 1 billion people of that.

China isn’t playing along and ZH seems to have gotten a little caught up in this thoroughly tabloid "currency war" thing

CNY = Gold. this is how they are prepared.



Sat, 03/02/2013 - 16:28 | 3293949 besnook
besnook's picture

it obviously connotes a defensive position but it serves as a warning that defense is a good offense when the often stated aim is to control, possibly to the point of economic destruction, the chinese juggernaut vis a vis the corroding usa empire.

this is really not about fairness or bias. this is war. parsing the vaguery of semantics is pointless, however, the implication of defense is the other side is the aggressor. the connotation this implies is the person on defense is weaker. this is not true unless you still suffer from "usa is number one" syndrome.  the correct analysis, proven by history,is this currency war is the death throe writhing of a soon to be former empire.

Sat, 03/02/2013 - 13:13 | 3293534 Freewheelin Franklin
Freewheelin Franklin's picture

Classic Farage on Ms Lagarde:

Sat, 03/02/2013 - 15:27 | 3293807 suckerfishzilla
suckerfishzilla's picture

China is just an innocent victim in this currency war. 

Sun, 03/03/2013 - 05:28 | 3294973 Kirk2NCC1701
Kirk2NCC1701's picture

Nice sarcasm, but no, they are THE target of it.

The US wants to (1) inflate its way out of its Chinese debt, and (2) to export its inflation to China. As long as all Western fiat currencies inflate in synch with the Fed (actually, take turns), there is no 'war' amongst themselves. 

It becomes a Fed-led war (crusade) against the Chinese (infidels).  And we know how 'crusades' end. Badly for all players on the front lines and paying the bills.  Not so bad bad for its financiers, who make a real... killing.

The goal is to cause inflation in China and thus cause economic unrest, which then leads to political unrest, to weaken the regime.  Leaving it vulnerable to fragmentation, infiltration and takeover from within by the NWO zealots.  An ancient bankster trick, used for decades against other countries.

Problem is, the Chinese are not like other countries.  MSM propaganda aside, China and the East is financially healthier than the debt-riddled and demographically handicapped West.  The East will increase its trading zones that increasingly isolate the USD from the picture -- no BIS for you! -- eroding its GRC status.   Money and power IS shifting to the East.  Sorry, don't shoot the messenger (with down arrows).

In time China & friends will offer its own basket of PM-backed currencies as an alternative to the USD.  That is the day the dollar dies, or goes to WW3 in its final act of corruption and desperation by the NWO Elite.

Don't believe me?  Well, then put this scenario to the author of Currency Wars:  Jim Rickards.  And see what Jim says.  I dare you.  I double-dare you.

Sun, 03/03/2013 - 19:50 | 3296198 suckerfishzilla
suckerfishzilla's picture

Who was the target of melamine in baby formula and dog food that US consumers purchased from China?  Who was the target of lead in the toys that US consumers purchased from China?   China can jump in the lake.   Any day the State department decides to nuke the bastards is OK by me. 

Sat, 03/02/2013 - 16:18 | 3293921 Vigilius
Vigilius's picture

Long as they keep their currency pegged, that's their "act of war."

Sat, 03/02/2013 - 20:45 | 3294468 shinobi-7
shinobi-7's picture

Nixon started the currency war in 1971. What's different now that growth is gone is that it is a zero sum game...

Sun, 03/03/2013 - 02:40 | 3294918 resurger
resurger's picture


Sun, 03/03/2013 - 04:27 | 3294967 Meat Hammer
Meat Hammer's picture

I bought a Kahr PM9 and a thousand rounds from my neighbor for a Kruggerand.  It felt so real it was unreal.  

The previous comment is meant for truly-free-market illustrative purposes only. 

Sun, 03/03/2013 - 04:52 | 3294971 Kirk2NCC1701
Kirk2NCC1701's picture

Here's some sage advice from China's famous philosopher Confucius, to "female head of the IMF" (Christine La Garde):  Woman who fly plane upside down, will have crack up.

I doubt that the Germans would have their leader fly too high or upside down -- thank God.

Do NOT follow this link or you will be banned from the site!