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A Suddenly Nervous China Tells The US To "Earnestly Take Steps" To Avoid A Default

Tyler Durden's picture




 

While the world's largest hedge fund, the Fed, may not care about the performance of its "bad bank" assets, and thus is largely ambivalent if the US Treasury defaults on the $2 trillion in US paper held by Ben Bernanke, others don't have the luxury of merely printing away any incurred MTM losses. Such as America's largest foreign creditor China, which at last check held at least $1.277 trillion in US Treasurys, which after realizing with a substantial delay that the US Congress is not precisely a "rational actor" and its bonds may be materially impaired in the case of a technical default, is starting to panic. In an oped in the largest media publication, China Daily, vice finance minister Zhu Guangyao, warned that the "clock is ticking" to avoid a US default that could hurt China's interests and the global economy. Somehow we doubt Boehner or Obama are particularly concerned about what happens to "Chinese interests."  Of course, if China so wishes, it can pen an Op-Ed in the NYT and tell the US just what will happen if $1.3 trillion in US Treasurys were suddenly to be dumped in a liquidation fire sale.

More from BBC:

China, the US's largest creditor, is "naturally concerned about developments in the US fiscal cliff", vice finance minister Zhu Guangyao said.

 

He asked that "the US earnestly take steps to resolve" the issue.

 

Mr Zhu said that China and the US are "inseparable". Beijing is a huge investor in US Treasury bonds.

 

"The executive branch of the US government has to take decisive and credible steps to avoid a default on its Treasury bonds," he said.

 

"It is important for the US economy as well as the global economy."

Zhu's parting words:

"We hope the United States fully understands the lessons of history," Mr Zhu said, referring to a similar deadlock in 2011 that led to a downgrade of the US "AAA" credit rating.

Well that, or perhaps some other history lessons, particularly those derived from Germany in the 1920s.

 

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Mon, 10/07/2013 - 10:17 | 4030068 SheepDog-One
SheepDog-One's picture

'Yankee keep printing money preeze'.

Mon, 10/07/2013 - 10:17 | 4030072 Stackers
Stackers's picture

The debtor is slave to the creditor

Mon, 10/07/2013 - 10:20 | 4030080 Headbanger
Headbanger's picture

NO WONTON SOUP FOR YOU!  FOR YEAR!

Mon, 10/07/2013 - 10:27 | 4030103 GMadScientist
GMadScientist's picture

You misspelled 'wanton'.

Mon, 10/07/2013 - 10:28 | 4030112 astoriajoe
astoriajoe's picture

no. stop. you're both right.

Mon, 10/07/2013 - 10:44 | 4030184 I am more equal...
I am more equal than others's picture

 

 

Would the change in interest rate be called the 'death spike?' 

Mon, 10/07/2013 - 10:47 | 4030196 Max Hunter
Max Hunter's picture

Expand bubble: Check
Create Crisis: Check
Allow Collepse: Check
Blame it on political polorization: Check

Retire to island: Check

Mon, 10/07/2013 - 10:49 | 4030206 whotookmyalias
whotookmyalias's picture

I checked engrish.com for the implied definition of "earnestly" but couldn't find it.  Sounds like they mean business this time.

Mon, 10/07/2013 - 11:38 | 4030468 Manthong
Manthong's picture

Confucius say..  when you lend money to bum, do not expect to get it back.. especially to bum that considers  Constitution to be toilet paper.

Mon, 10/07/2013 - 11:58 | 4030552 Muppet Pimp
Muppet Pimp's picture

The message from the entire world (short of the domestic democrats, and paid off dictators) to DC needs to be the following, loud and clear all with one voice:

DOWNSIZE YOUR OPERATIONS IMMEDIATELY

Until this message is resonating throughout the halls of our nations capital, we have a messaging problem to solve. 

Mon, 10/07/2013 - 12:00 | 4030559 kralizec
kralizec's picture

Sum Ting Wong

Wei Bi Phuc Toi

Mon, 10/07/2013 - 11:04 | 4030208 GetZeeGold
GetZeeGold's picture

 

 

China doesn't like American socialism all of a sudden?

 

You won't get your money back....but we'll sell you some wickedly expensive healthcare.

 

You can visit the First Lady's website....it's totally free and open for business. That outta be worth a billion to you right there!

AMBER ALERT WEBSITE SHUT DOWN, MICHELLE'S 'LET'S MOVE' STAYS UP

Mon, 10/07/2013 - 11:15 | 4030336 Son of Captain Nemo
Son of Captain Nemo's picture

Yes nothin says lovin like keeping the AMBER ALERT website closed down for business but sending 400,000 Federal contractors back to work for the DoD while still saying there's a shutdown.

Wonder how the AMBER ALERT translates for the U.S. military and CIA when all those Syrian and African children who are being killed by our soliders or "proxies" or that are being kidnapped as child soliders?

Mon, 10/07/2013 - 12:17 | 4030632 Tim_
Tim_'s picture

Insurgents in Syria force children to fight for them

"Russian Committee for Solidarity with Syria underlined that the armed terrorist groups in Syria 'recruit children and force them to take up weapons and to participate in battles against the Syrian Army and state.'"

"In a statement published on Monday, the Committee pointed out that these acts contradict the international law that prohibits mustering or recruiting children under fifteen in forces or armed groups and considers misusing them in conflicts as a crime whether through the direct participation in battles or through reconnaissance, espionage and disobedience or using them as a means for information or camouflage."

"The statement pointed out that it is important for the world to know and be informed of the practices of this 'fake revolution' in Syria."

Child recruited in terrorist group: I've killed 10 soldiers and 13 civilians

"Child, Shaaban Abdullah Hamida, from Aleppo province narrated the details of his recruitment in the so-called 'Ahfad al-Rasoul' terrorist group by his uncle Yehya Aziz Aziz to commit terrorist crimes."

"He added that he hunted soldiers and civilians alike, while his uncle notified him of the persons who would cross by and whom he should not hunt as they were affiliated with 'Ahfad al-Rasoul.'"

"'I've killed some ten soldiers, thirteen civilians and nine gunmen, and I got used to killing any person without feelings,' the child said."

Mon, 10/07/2013 - 15:18 | 4031396 WillyGroper
WillyGroper's picture

How many of those contractors possess hollow points?

ruh roh---brackrater

X

whatever

Mon, 10/07/2013 - 11:18 | 4030198 Ham-bone
Ham-bone's picture

Treasury market is $17T...$5T of this is held in "intragov debt" meaning there is little risk that the gov won't continue to roll over this portion. So the actual public debt is $12T w/ average maturity of like 5yrs plus the $700B in new annual issuance. The Fed buys $500B annually (Fed is buying $40B monthly...the other $45B goes to MBS purchases) plus rolling over existing T holdings of over $2T. So, we have an outstanding $10T Treasury market that must be constantly rolled plus the additional new debt that the Fed doesn't buy ($200B).  

Of traditional intragov buyers, seems there will be little expansion here as SS is not running the kind of surpluses previously seen. China, nope as they move more towards Yuan based trade. OPEC and petro dollar and US increasing oil production...hmmm. As of now it seems Japan is the big foreign buyer w/ freshly printed Yen in a currency debasement scheme.  

Last thing to contemplate bout the Feds buying is it's focus on 3yrs issuance and up. This is the most sensitive part of the curve and absent the Fed's buying here, interest rates of new and rollover could rocket higher. So not simply how much Fed buys but where on the curve it buys that makes it so critical and so unlikely for a taper...so unlikely for another party to take over this buying at anything near the rates the Fed accepts.  Check the chart of Fed holdings of Treasuries by duration...pre-crisis Fed had $1T but over $400B was in 1yr or less...now Fed has nothing 1yr or less and massive holdings in longer durations...who else would buy @ these interest rates??? Shudder to imagine what would happen if Fed didn't rollover their holdings or absolute carnage if they ever began to sell...not that either will ever happen.  That the Fed is the only buyer of longer duration coupled w/ the interest rate sensitivity of our economy mean a taper will not be coming our way. 
 http://www.zerohedge.com/news/2013-08-16/what-fed-...

Lastly, given that of the $5T in foreign holdings ($1T China and Japan apiece) they appear concentrated in the 1yr and less portion of the market...meaning a speedy exit (non-rollover) is very possible should US policy not be to their liking or agreement

Mon, 10/07/2013 - 11:28 | 4030404 Jumbotron
Jumbotron's picture

The Chinese version of Chucky Schumer telling Ben Bernanke...."Get to work ! "

Mon, 10/07/2013 - 13:08 | 4030644 Ham-bone
Ham-bone's picture

During 2012, Treasury issued following debt-

Notes (less than 1yr)- $708 B ($7.7 T in total public debt)

Bills (1yr to 10yr) - $137 B ($1.6 T in total public debt)

Bonds (30yr) - $178 B ($1.4 T in total public debt)

TIPS - $102 B ($900 B in total public debt)

Please note Fed purchased no Notes, and bought $480 B in Bills, Bonds (not sure on TIPS???) but Feds focus on longer duration means Fed is buying $480 B of a possible $417 B in new issuance...or put another way the Fed is buying @ 120% of Treasury longer dated issuance (if TIPS are not Fed purchased, then Fed is buying @ 160% of Bill / Bond issuance).  Think on this a little when tapering is being discussed.

Shit, there's only $3 T in public debt in Bills / Bonds...Fed already has $2.2T???  Is Fed now buying from intragovernment holdings??? 

Mon, 10/07/2013 - 13:49 | 4031065 HeadintheGame
HeadintheGame's picture

FYI

Bills <= 1 year

Notes >= 2 years,  <=10 years

Bonds > 10 years. 

Mon, 10/07/2013 - 18:03 | 4032048 Ham-bone
Ham-bone's picture

correct you are -  thanks for reading and keeping a poli sci / history guy straight...

Mon, 10/07/2013 - 10:26 | 4030109 remain calm
remain calm's picture

Little Chinese penis telling big black dick to get in line.

Mon, 10/07/2013 - 10:35 | 4030153 lakecity55
lakecity55's picture

At least the little chinese prick is not gay like the big black won.

Mon, 10/07/2013 - 10:43 | 4030186 Oldballplayer
Oldballplayer's picture

He is only half black, so his dick is not THAT big.

Mon, 10/07/2013 - 11:17 | 4030361 Hedgetard55
Hedgetard55's picture

He is half Irish so that means his dick is then just average, as Irish weenies are pretty small (from what I hear).  :~)

Mon, 10/07/2013 - 12:46 | 4030744 RafterManFMJ
RafterManFMJ's picture

If you'd stop riding donkey and elephant dick, you'd not be so desperate for bigger and bigger stimulus, nomewasayin?

Now come here and cuddle.

Mon, 10/07/2013 - 10:33 | 4030133 butchee
butchee's picture

Intlagovelnmetar Hordings!  Yankee sheeper have no crue...  http://www.treasurydirect.gov/govt/charts/principal/principal_govpub.htm

Mon, 10/07/2013 - 10:38 | 4030171 Freddie
Freddie's picture

Hey China Fruck Yu!  Obama is your boy.  You backed him and he bows to you, the Saudis and the tribe/red shield.

Mon, 10/07/2013 - 10:49 | 4030212 Idiocracy
Idiocracy's picture

Trump demonstrated that if the debt is big enough, the creditor is slave to the debtor

Mon, 10/07/2013 - 10:19 | 4030073 TeamDepends
TeamDepends's picture

You no like nervous China.

Mon, 10/07/2013 - 10:43 | 4030188 ArkansasAngie
ArkansasAngie's picture

Well ... if China would like to sell to me at 10 cents on the dollar I'll take $10,000 in T bills off their hands.

Mon, 10/07/2013 - 11:09 | 4030310 DaddyO
DaddyO's picture

Anybody remember the mysterious missle launch off the coast of Kalifornia a few years back?

http://www.cnn.com/2010/US/11/09/california.contrails/index.html

Was that an implied threat of nervousness. I wonder?

DaddyO

Mon, 10/07/2013 - 10:20 | 4030074 Arius
Arius's picture

oooppssssy ... we dont want to upset the chinese now, do we?

go talk to mr. Boehner not to BBC.  interesting times indeed.

Proud Muppet

Mon, 10/07/2013 - 10:34 | 4030117 bigdumbnugly
bigdumbnugly's picture

Somehow we doubt Boehner or Obama are particularly concerned about what happens to "Chinese interests."  Of course, if China so wishes, it can pen an Op-Ed in the NYT and tell the US just what will happen if $1.3 trillion in US Treasurys were suddenly to be dumped in a liquidation fire sale.

 

doesn't statement two answer statement one?

they care... or if not them, their puppet masters do.

Mon, 10/07/2013 - 10:44 | 4030193 ArkansasAngie
ArkansasAngie's picture

Go ahead and dump'em on to the market.  Me no care. 

Mon, 10/07/2013 - 11:45 | 4030502 Anusocracy
Anusocracy's picture

It's nice to know that the world's two largest economies are run by high time preference morons.

Nothing good can come of it.

Mon, 10/07/2013 - 10:20 | 4030081 Zer0head
Zer0head's picture

"We hope the United States fully understands the lessons of history,"

 

actually Mr Zhu was referring to Rome (but for some reason the BBC didn't want to tell its audience that)

Mon, 10/07/2013 - 10:37 | 4030157 insanelysane
insanelysane's picture

China's worried because they can't figure out how that CT lady rammed a barrier, a cop car, and a guard station in DC and her air bags never deployed.

Mon, 10/07/2013 - 10:51 | 4030211 Zer0head
Zer0head's picture

 yours is not to question

but to believe

join with Cantor and Hoyer in thanking the Capitol police for their bravery

http://www.youtube.com/watch?v=o8TJUzRDd3Q

Mon, 10/07/2013 - 11:17 | 4030355 Osmium
Osmium's picture

Bravery?  Shooting an unarmed confused woman sound more like cowardice.  Cantor is an idiot.

 

Mon, 10/07/2013 - 12:01 | 4030563 Anusocracy
Anusocracy's picture

Agreed, but nothing new there.

Everyone/every animal is a possible threat to the alpha-male in the alpha-male social hierarchy. In Homo sapiens, and due to the specialization of labor, the alpha-male is actually a mob of thieves called government.

Mon, 10/07/2013 - 12:44 | 4030730 Ying-Yang
Ying-Yang's picture

Is it better to live inside or outside the Evil Empire?

Mon, 10/07/2013 - 22:47 | 4032883 Anusocracy
Anusocracy's picture

My opinion is that it is better to live in a country that has good relations with, but not subservient to, Empire.

Mon, 10/07/2013 - 12:38 | 4030715 Freddie
Freddie's picture

Wasn't she driving a shitbox Lexus?   Shame she wasn't in a Tesla S - she could have put it in flamethrower mode.

Mon, 10/07/2013 - 10:51 | 4030216 rubiconsolutions
rubiconsolutions's picture

Memo to China

Re: Investing 101, Disclaimer Language

"Past performance does not guarantee future results"

 

Mon, 10/07/2013 - 11:34 | 4030262 Zadok
Zadok's picture

Translation: China not quite ready with new monetary system based in PMs for international trade (where we have to be honest) and devaluable fiat for the confined, domestic proles.
Please print Moar faster so China get couple more months to get international trade settlement system up and running.
Yes, when switch is flipped, it will be shockingly complete and frightenly sudden because we have to do it that way to make it work.
Look for an overnight on Thursday or Friday in US for execution timeframe.
After that, your on your own...suckars!

Edit: further down I see a lot of talk reflecting the idea that foreigners are still buying large quantities of our debt. This is not so. The same mechanisms of obfuscation and fraud that turned the stock markets into mere propaganda have been applied to bonds. The Fed is the main player. Expect QE to go up...by a lot.
It is even worse that that because redemptions have begun in earnest but it is in the interest of both parties to allow the charade to continue for now.
Transition to a PM based monetary system is in the very last tiny, scrambling phase of execution because the fall apart is accelerating rapidly.
Almost all discussion is about the propaganda fraud designed to keep you occupied so they can catch you off guard when it does execute.
Waste no time. Take joy in what you can now. It is very, very close to execution.

Mon, 10/07/2013 - 10:18 | 4030069 Devotional
Devotional's picture

Well, China should have not gone full retard in borrowing others money. Let this whole charade collapse baby!!!

Mon, 10/07/2013 - 10:28 | 4030111 GMadScientist
GMadScientist's picture

I'm not sure if you're confused about the situation or the definition of the word 'borrowing', but you're definitely confused.

Mon, 10/07/2013 - 10:34 | 4030127 Devotional
Devotional's picture

No need for sarcasm as it was a mistake. Lending is the correct term. Why did you not just point out the mistake instead of being sarcastic about it?

Mon, 10/07/2013 - 10:40 | 4030169 insanelysane
insanelysane's picture

I think you can get banned from ZH for not being sarcastic.

Mon, 10/07/2013 - 11:02 | 4030278 prains
prains's picture

yeah ~ just ask Francis

Mon, 10/07/2013 - 14:31 | 4031225 TheReplacement
TheReplacement's picture

Oh that Francis is such a sweet boy.  I wonder if he's had his DNA tested to verify he's not Jewish.  The irony would be... at least 105% of GDP.

Mon, 10/07/2013 - 10:51 | 4030218 GMadScientist
GMadScientist's picture

Perhaps the same reason you don't think before you type?

Mon, 10/07/2013 - 11:46 | 4030499 Pure Evil
Pure Evil's picture

Ouch!

Now you've done it, you've gone and hurt his feewings!

Mon, 10/07/2013 - 10:55 | 4030230 Mike in GA
Mike in GA's picture

@Devotional - How about a simple "Oops" and edit your comment rather than being so thin skinned about YOUR error?

Mon, 10/07/2013 - 11:00 | 4030270 GMadScientist
GMadScientist's picture

Give this man a prize!

Mon, 10/07/2013 - 11:04 | 4030285 Dr. No
Dr. No's picture

You cant edit once replied.

Mon, 10/07/2013 - 11:07 | 4030296 Mike in GA
Mike in GA's picture

Point well taken but I could write a post to clear up my error rather than blame someone for pointing out the fact I made one. 

Mon, 10/07/2013 - 11:50 | 4030523 Pure Evil
Pure Evil's picture

Why do that?

The best thing to do in cases like this is to pull an Obama and continue on as nothing has happened and then turn around and blame it on all your perceived enemies.

Next, hire some trolls to spread malicious lies and rumors about your opponent and attack the victim until they're suffering from Stockholm Syndrome.

Mon, 10/07/2013 - 11:28 | 4030402 Devotional
Devotional's picture

No, I would rather admit to the mistake.

Mon, 10/07/2013 - 11:08 | 4030294 chubbar
chubbar's picture

If he is from Minnesota or Wisconsin, that is how they speak. "Can you borrow me some money", never did get used to that.

Mon, 10/07/2013 - 10:17 | 4030071 MFLTucson
MFLTucson's picture

Have no fear, this is just another one of the courrpt goverment games to scare people!

Mon, 10/07/2013 - 10:18 | 4030077 Dr. No
Dr. No's picture

This is all for effect.  The debt interest will be paid.  I think debt payments are 6-7% of budget?  They will cut Amber Alert before they stop interest payment.  You want to see lobbiest coming out of the woodwork with backpacks stuffed with cash?  Threaten to stop debt payments.

Mon, 10/07/2013 - 10:27 | 4030118 GMadScientist
GMadScientist's picture

Lobbiest adj most abject and sycophantic

Mon, 10/07/2013 - 10:37 | 4030155 Devotional
Devotional's picture

This one is lobbying for correct grammar usage today. Just correct the person,there is no need for sarcasm.

Mon, 10/07/2013 - 10:50 | 4030220 GMadScientist
GMadScientist's picture

Eat a dick. <--- No sarcasm!

Mon, 10/07/2013 - 11:06 | 4030286 prains
prains's picture

self flagellation _ it's and old drink but drink it anyway

Mon, 10/07/2013 - 11:30 | 4030407 Devotional
Devotional's picture

I like vagina.

Mon, 10/07/2013 - 13:47 | 4031051 prains
prains's picture

especially when it purrrrrrrrrrrrs

Mon, 10/07/2013 - 10:41 | 4030181 Dr. No
Dr. No's picture

Dude, dont you have a job to do?  Or are you a furloughed gov employee?

Mon, 10/07/2013 - 10:54 | 4030231 GMadScientist
GMadScientist's picture

You mean a business to run, but that I can do when I feel like it (the boss and I get along extremely well, since it's a one-man operation).

Don't you have an EBT card to go swipe somewhere, Peon?

Mon, 10/07/2013 - 10:56 | 4030247 Dr. No
Dr. No's picture

Yeah, I grab your mom's EBT when she's done.

Mon, 10/07/2013 - 11:03 | 4030276 GMadScientist
GMadScientist's picture

I'd say stealing a dead woman's EBT fits your character quite snuggly, yes.

So here's the funny part (for those with neurons that connect): 2/3 of those corrections were jokes you're just too dumb to get.

Mon, 10/07/2013 - 11:21 | 4030377 Dr. No
Dr. No's picture

Well, I bet she was something before electricity!

Mon, 10/07/2013 - 11:21 | 4030368 Saint Tibb
Saint Tibb's picture

Yeah, we'll have the lobbiest lobbyists we've ever seen.

Mon, 10/07/2013 - 10:48 | 4030182 socalbeach
socalbeach's picture

Gross interest payments are 7% of revenue.

Net interest payments, taking into account Fed interest rebates, are a little more than 4% of revenue.

edit: as a % of expenditures, gross and net interest payments are 5.8% and 3.4%.

Mon, 10/07/2013 - 10:56 | 4030239 Winston Churchill
Winston Churchill's picture

What about debt rollovers ?

I thought a lot were coming due.

Mon, 10/07/2013 - 11:26 | 4030325 socalbeach
socalbeach's picture

Those numbers I gave were mostly 2012 figures, so since interest rates have increased a little, the percentages would be higher in 2013 due to debt rollover, all other things being equal.

Variables I used were FYOINT, FGRECPT, FGEXPND in the Fed FRED database.

Federal Reserve interest rebate figure came from the NY Times and is a 2012 figure also: http://www.nytimes.com/2013/01/11/business/economy/feds-2012-profit-was-...

Mon, 10/07/2013 - 11:17 | 4030358 Mike in GA
Mike in GA's picture

Yeah, and the maturities have been brought in closer and closer so now with a slightly higher rate just funding the current debt will cost more PLUS new debt will cost more PLUS the rates may move up even more causing even higher debt service costs!

Sooo, funding 17 trillion +/-, costs maybe 10 basis points more (IDK exactly) then that's 17 billion dollars more per year or 1.5 billion per month, 327 million per week, 47 million per day, 2 million per hour, $32,432.00 per minute.

Imagine a rate spike.

Mon, 10/07/2013 - 12:01 | 4030488 socalbeach
socalbeach's picture

FYI, the Fed FRED interest number I was using (FYOINT) doesn't count interest accruing but not paid to the SS Trust fund, ie, intra-governmental debt.

Also, most interest paid to the Fed gets refunded to the Treasury, and interest isn't paid on currency and coins, so that was subtracted from gross interest to get a net figure.

So the $17 trillion figure gets reduced to $12 trillion when you consider only debt held by the public. Then it gets reduced by approx another $3.5 trillion when you take into account Fed purchases of debt, leaving a net debt of "only" about $8.5 trillion that interest is paid on.

http://www.treasurydirect.gov/govt/charts/principal/principal_govpub.htm

http://research.stlouisfed.org/fred2/series/BASE

Mon, 10/07/2013 - 10:42 | 4030185 lakecity55
lakecity55's picture

They just cut Amber Alert, but, mysteriously, not the Wookie's website.

Mon, 10/07/2013 - 11:14 | 4030328 Zadok
Zadok's picture

+1 for the manly wookie reference!

Mon, 10/07/2013 - 19:07 | 4032309 Nick Jihad
Nick Jihad's picture

The bastards better not have cut Big Bird!

Mon, 10/07/2013 - 11:01 | 4030265 whirling tword ...
whirling tword freedom's picture

Yeah, I think they have to pay the interest on the debt....   I have no doubt though that if this administration *could* have them stop, they'd sign up for that in a second.  They seem to love the power that chaos brings to their positions.... and they'd get to take America down another rung in the ladder at the same time.  ( maybe a whole lot of rungs )

I've never seen in my life where we had an administration that was truly an enemy of the country and the people that live in it.   I just hope we live through it.  It won't be easy.

Mon, 10/07/2013 - 10:20 | 4030078 astoriajoe
astoriajoe's picture

So, basically, the next "flight to quality" goes toward the renminbi or the ruble or the Sing$, and away from the USD.

Nice while it lasted.

Mon, 10/07/2013 - 10:33 | 4030134 CPL
CPL's picture

That's if people actually recognize any of it.  Which they won't.  Most people can't balance a check book on this planet, it's doubtful that any secondary adoption will happen ever.  historically what always happens is gold, silver and other PM's become money.  Always have, always will.

If any country doesn't recognize that fact, fuck'em, they weren't thinking long term enough.  Besides China has it's own problems besides it's 30 year adoption of 'capitalism' instead of just doing Business and Trade.  If it gets caught with it's pants down, I suppose that will be economic reset number 200+ for China in a very loooong history of trade and commerce that is on record all over the world over 12000 years (invoices are far more common than religious references btw if looking for information about the past).

So China calling the kettle black...no, lol. 

Balance is going to be restored.  They have direct source material on the subject of Balance and how to apply it in their libraries if the 'communists' didn't burn it all.  What's sad is when history is altered or missing or told from ridiculous regional/religious/political standpoint, it's very very difficult to find the process to reestablish the situation quickly.  Usually that society just disappears with it's people and it's history.

Mon, 10/07/2013 - 10:38 | 4030168 Zero Debt
Zero Debt's picture

Sing dollar? Excuse me but do you know the size of the US treasury market vs Sing dollars outstanding? And what is the Sing dollar backed by in their basket, you think?

Renminbi = not covertible = fail

Ruble = lol

 

Mon, 10/07/2013 - 11:17 | 4030346 Kirk2NCC1701
Kirk2NCC1701's picture

I think the $ing is backed by foreigners' gold deposits.
Simon?

Ruble is backed by real assets (carbon-fuels, gold, platinum, titanium and ABC WMDs).

Yuan/Renminbie is backed by real assets also (gold, rare-earth minerals, 1.3 Billion people --> 200 Million armed soldiers with ABC WMDs).

The USD is backed by...

Mon, 10/07/2013 - 13:02 | 4030824 WOAR
WOAR's picture

Oooh! Ooh! I know this one! Pick me! Pick me!

Mon, 10/07/2013 - 11:25 | 4030387 Mike in GA
Mike in GA's picture

Not gonna happen.  $$ is only game in the world of a size for a flight to quality.  Gold and the PM complex will benefit before the currencies you mention.  If the $ gets to the point that it is no longer the reserve currency because of printing, internal strife or other capricious gov't stupidity, we are gonna have big, big troubles right here in our own neighborhoods, towns and cities.

Mon, 10/07/2013 - 10:21 | 4030083 Oldballplayer
Oldballplayer's picture

Seems to me that China would be within their "rights" to protect their assets. 

"Taiwan is a pretty nice looking island.  Hey, Barak, what you do think it would be worth at an auction?  It would be a shame to have such a nice island wrecked."

Mon, 10/07/2013 - 10:20 | 4030084 GVB
GVB's picture

This is serious business, they're playing with moral of society. Take that away and you wish you had never asked for a gold price skyrocketing. You'll be glad you have the gold, but not at the expense of what will unfold. With all respect.

Mon, 10/07/2013 - 10:23 | 4030091 astoriajoe
astoriajoe's picture

F*cked if we do.

F*cked if we don't.

 

Mon, 10/07/2013 - 10:26 | 4030101 GVB
GVB's picture

you're dead on

Mon, 10/07/2013 - 10:37 | 4030156 CPL
CPL's picture

Fucked if you do.

Free if you don't.

 

There, fixed.  No one rides through life for free and the cost is extracted one way or another.  All that you are really deciding on is whether or not it's a one sided trade or equitable during the transaction.

Mon, 10/07/2013 - 10:39 | 4030166 BandGap
BandGap's picture

And we will do something.

Like the "lesser of two evils", the only choice you have is still evil.

Mon, 10/07/2013 - 10:33 | 4030132 lakecity55
lakecity55's picture

I think we knew that going in.

It was for protection. We are going to need it.

Due to the mental illness Bath House suffers from, you can only expect his edicts to become more and more bizarre.

By the by, has the MLK park "shut down" yet?

Mon, 10/07/2013 - 10:38 | 4030160 CPL
CPL's picture

The parks are only closed if no one visits them.  How's that for a slice of Zen?

Mon, 10/07/2013 - 10:43 | 4030183 lakecity55
lakecity55's picture

haha +1

Mon, 10/07/2013 - 12:15 | 4030594 Kirk2NCC1701
Kirk2NCC1701's picture

If Cannabis plants grow in the Parks, can anybody hear the plants grow? ;-)

Seriously though, Long legalization of Hemp and Pot products.

/ Of course if they also nationalised pot (for "National Security" reasons), then the CIA and DEA would now be officially self-financed. / s

Mon, 10/07/2013 - 10:59 | 4030257 Mike in GA
Mike in GA's picture

Yes MLK is closed but there is a dream to reopen based on the content of the Spite House, not the color of its....oh nevermind

Mon, 10/07/2013 - 10:38 | 4030161 Zero Debt
Zero Debt's picture

Wishes to the gold price are never granted.

Gold will do its job of balancing the money supply, whether the government or anyone else want it or not.

When the gold price speaks, one should listen closely.

Mon, 10/07/2013 - 11:19 | 4030357 Zadok
Zadok's picture

Is that 'the price of gold' or 'the gold price'?

Mon, 10/07/2013 - 11:12 | 4030314 10mm
10mm's picture

That's spot on GVB.

Mon, 10/07/2013 - 10:22 | 4030085 Bosch
Bosch's picture

We can barely afford the interest payments alone on that debt anyway, so joke's on you bitches. 

Mon, 10/07/2013 - 10:23 | 4030093 Oldballplayer
Oldballplayer's picture

We can pay the debt payments for a while.  That isnt the problem.

The problem comes when everyone gets scared and the interest rates pop up.  THAT is what is going to bankrupt the US.  Well, its already bankrupt...but you know what I mean.

Mon, 10/07/2013 - 10:50 | 4030217 James
James's picture

Not so fast Bosch, Any Corp. that moves to China gives China 51% control as a stipulation for doing business there.

U.S. corps. over there are only subsidiaries of the Parent that remains here. China could take full control of those by default.

Mon, 10/07/2013 - 11:04 | 4030287 Mike in GA
Mike in GA's picture

Yeah James, it seems a lot of Americans including commenters here think of China as they were in the 19th century.  The Chinese have more experience with capitalism than America's entire existence.  Their failed experimentation with communism is a 20th century aberration.  they drive china-centric hard bargains, steal intellectual property and maintain controlling interest in every deal.  They aren't pussies to be brushed off lightly. 

Mon, 10/07/2013 - 11:12 | 4030311 prains
prains's picture

there is no such thing as, fair, honest, rational in the Chinese form of capitalism either > tough to deal with, much like dealing with a criminal gang, they only respect real power

Mon, 10/07/2013 - 20:21 | 4032537 MeelionDollerBogus
MeelionDollerBogus's picture

There's no such thing as "intellectual property"

Mon, 10/07/2013 - 10:23 | 4030092 SpanishGoop
SpanishGoop's picture

We no sell you goods anymole, no do dly cleaning fol you anymo too.

Noodle eaters.

 

Mon, 10/07/2013 - 10:25 | 4030094 SheepDog-One
SheepDog-One's picture

'Lessons of history' which was 2011's credit downgrade? Well, that was nothing but GOOD NEWS! DOW easily 4,000 points higher since then, credit downgrade is something to cheer! RIGHT?

Mon, 10/07/2013 - 10:25 | 4030099 dudeman
dudeman's picture

Maybe they shouldn't have bought all those Treasuries that they can't sell.

Mon, 10/07/2013 - 10:40 | 4030180 Zero Debt
Zero Debt's picture

But then they could not push down their RMB exchange rate and keep their people meaningfully employed.

They could never engineer a centrally planned economic growth so they had to let the multinationals do their bidding.

However the currency game is nearing the next phase.

Symptoms to look for: unemployed overeducated ant tribes in China and other plebes who do not know what to do.

Mon, 10/07/2013 - 12:39 | 4030709 Kirk2NCC1701
Kirk2NCC1701's picture

No problem: they all get US visas, since all large US corporations are PC fanatics. They'll be hired under 'Diversity' quotas. When was the last time you had a stroll around a West Coast campus of Intel, HP or Microsoft?

Good luck in getting hired if you're not a "minority"*, or Chosen. You're guaranteed a high tech job (need to only fig a mirror, it seems) if you score enough 'Points'. Ideal candidate is handicapped, female bi-racial Asian. Worst chances for Christian WM, >50. Regardless of skills, experience, etc. You get too many Demographic Demerit Points scored against you. Your odds are best at a company <50 people, where the boss is in your demographic group. Sad but true.

And as much as HR depts 'suck' (lack of competence), the real policy decisions are made by the General Counsel pricks anyway, who worry only about 'compliance' to Fed employment laws, and exposure to litigation (that risks affecting their image or stock price).

Mon, 10/07/2013 - 10:26 | 4030100 Quinvarius
Mon, 10/07/2013 - 10:25 | 4030102 Bunga Bunga
Bunga Bunga's picture

No more toys!

Mon, 10/07/2013 - 10:29 | 4030104 Number 156
Number 156's picture

Chinese are stuck with it. A fire sale would be like setting off a doomsday device in both economies, and the Chinese know it. They have too much skin in the game now, and have built one too many ghost cities.

Mon, 10/07/2013 - 10:26 | 4030107 SpanishGoop
SpanishGoop's picture

Just buy back the paper at discount prices, 1 cent on the $.

 

Mon, 10/07/2013 - 10:28 | 4030108 John McCloy
John McCloy's picture

   China is not going to grow a pair in the near future..If they had a sack ,(Russia) they would start selling the treasuries or come out and say they are reducing theit debt purchases...at this stage a lightbulb should have went off back in 2011 to scale back purchases..your telling me they are still buying impunity for all these years?

  Not very wise.

Mon, 10/07/2013 - 10:29 | 4030121 GMadScientist
GMadScientist's picture

"China and Japan led an exodus from U.S. Treasuries in June after the first signals the U.S. central bank was preparing to wind back its stimulus, with data showing they accounted for almost all of a record $40.8 billion of net foreign selling of Treasuries. The sales were part of $66.9 billion of net sales by foreigners of long-term U.S. securities in June, a fifth straight month of outflows and the largest since August 2007, U.S. Treasury Department data showed on Thursday." - Reuters

Mon, 10/07/2013 - 10:35 | 4030152 SheepDog-One
SheepDog-One's picture

Who the fuck was crazy enough to buy that garbage? The Fed?

Mon, 10/07/2013 - 10:41 | 4030178 Professor Fate
Professor Fate's picture

I really see no problem here.  All they have to do is call the Bernank.  He's got plenty of room on the Fed's balance sheet for another trillion or two.  I also hear Venezuela is buyer.  BIG shortage of toilet paper down there.

Fate the Magnificent
"Push the Button, Max" 

Mon, 10/07/2013 - 10:30 | 4030120 lakecity55
lakecity55's picture

Someone needs to tell China we are under the Rule of a malignant narcissist who is too busy trying to close the oceans, throw old people out of their private homes on park lands, and beating up WW2 vets to be concerned about "finances."

Had Enough, America?

What does it take?

Mon, 10/07/2013 - 10:36 | 4030150 Flakmeister
Flakmeister's picture

I suggest you read the following:

http://www.nytimes.com/2013/10/06/us/a-federal-budget-crisis-months-in-the-planning.html?hp&_r=2&

I don;t think that the Kochs really value your liberty all that much...

Mon, 10/07/2013 - 10:37 | 4030163 lakecity55
lakecity55's picture

Take your strawman and shove it up your assholio.

Mon, 10/07/2013 - 11:01 | 4030266 Flakmeister
Flakmeister's picture

Likewise, take your regurgitated bullshit as it is clear that you're nuthin' but an ignorant kochsucker...

BTW, pretty obvious that you don't even know what a strawman is...

Mon, 10/07/2013 - 11:15 | 4030334 10mm
10mm's picture

Falls in line what DHS insider reported (Rosebud). Both are in collaboration on this Budget closing and the worst will happen. WATCH.

Mon, 10/07/2013 - 10:52 | 4030222 John McCloy
John McCloy's picture

       This President is a complete child. He cares nothing for anyone but himself...Can you imagine how the staged media would be taking W. to task if he done done things such as this:

DOJ Shuts down Amber Alert Website:

http://therightscoop.com/obama-plays-politics-with-your-lost-children-sh...

Park Rangers set up blocks to prevent Mt. Rushmore viewings:

http://www.argusleader.com/article/20131005/NEWS/310050021/Mount-Rushmor...

 

    After all this time do people really not see what a malicious personality this President is? Does anybody really question now who was ordering the I.R.S. Audits? There is nothing I could hear about this President having done at this stage that would suprise me in the slightest.

Mon, 10/07/2013 - 11:45 | 4030497 Flakmeister
Flakmeister's picture

You have an overactive imagination if you think the WH is ordering the Park Service to do anything of the sort...

Take it up with the Kochs and their willing pawns.... 

Mon, 10/07/2013 - 13:03 | 4030826 akak
akak's picture

You are either wildly naive, or flat-out disingenuous, to suggest otherwise.

In politics (particularly modern-day American politics), reality is often worse than imagination.

Mon, 10/07/2013 - 14:01 | 4031105 Flakmeister
Flakmeister's picture

I would guess that it is a few Park Rangers pissed at being furloughed...

You know Occam's razor is preferable to a grand conspiracy, at least in places where rational thought prevails...

Mon, 10/07/2013 - 14:22 | 4031193 akak
akak's picture

You are really being a disingenuous asshat with your strawman and red herring of the suggestion of "conspiracy" here.

To NOT believe that this administration would use, and IS using, and playing up, this 'federal government shutdown' to acheive their political ends is simple idiocy and being blind to the manifold evidence staring you directly in the face.

I have often stood up for you in the past here, but not this time Flak --- you are being a particularly egregious fool and liar in this case.

Mon, 10/07/2013 - 15:13 | 4031404 Flakmeister
Flakmeister's picture

Akak,

          we will just have to differ on this one... The way I see it, Kochs and the right-wing oligarchs have been planning the shutdown for a while:

http://www.nytimes.com/2013/10/06/us/a-federal-budget-crisis-months-in-the-planning.html?hp&_r=1&

Mon, 10/07/2013 - 20:14 | 4032530 MeelionDollerBogus
MeelionDollerBogus's picture

It's not - "grand conspiracy" is the singular purpose of operation of the US Federal government. It has no secondary mode of operation.

Mon, 10/07/2013 - 20:12 | 4032523 MeelionDollerBogus
MeelionDollerBogus's picture

Kochs are just lobbyists - they don't make the blockades, place them or pay the lowest government employees.

Mon, 10/07/2013 - 11:30 | 4030418 edifice
edifice's picture

It takes cutting off the NFL/Wings/Beer feed for the plebs.  You know, real pain.

Mon, 10/07/2013 - 10:31 | 4030125 arnoldsimage
arnoldsimage's picture

i know most of us here keep waiting for this bs to end, but rest assured, the fed has no way out. either death by drowning or death by suffocation, the fed is dead. they have run this charade to it's end. no way they will choose a quick death, however.

Mon, 10/07/2013 - 11:08 | 4030299 hawk nation
hawk nation's picture

When you can print money to acquire real assets do you think the fed cares if it all collapses they will be positioned to do well
They already have their plan for who to blame during the reset so they remain in power

Mon, 10/07/2013 - 11:37 | 4030463 Mike in GA
Mike in GA's picture

Always amazing to see how they keep it going but I believe you're right.  There have been more people joining that argument of a Keynesian end point just this year than the last 5 combined it seems to me.

When you logically follow through the excesses of monetary policy there has to be an end and there has never been a seamless transition to a new monetary construct. 

Mon, 10/07/2013 - 10:31 | 4030128 eddiebe
eddiebe's picture

Never let a good crisis go to waste. 

Mon, 10/07/2013 - 11:40 | 4030470 mt paul
mt paul's picture

crisis, reaction, solution...

 

control 101

Mon, 10/07/2013 - 10:37 | 4030140 Spastica Rex
Spastica Rex's picture

After a lecture on economics and the structure of the Federal Reserve System, Ben Bernanke was accosted by a little old lady.
   
"Your theory that the Fed is the centre of the economic universe, and that QE has saved the global economy has a very convincing ring to it, Mr. Brenanke, but it's wrong. I've got a better theory," said the little old lady.

"And what is that, madam?" Inquired Bernanke politely.

"That our economy is a ponzi scheme built on the back of a giant con job."

Not wishing to demolish this absurd little theory by bringing to bear the masses of economic evidence he had at his command, Bernanke decided to gently dissuade his opponent by making her see some of the inadequacies of her position.

"If your theory is correct, madam," he asked, "what does this con job stand on?"

"You're a very clever man, Mr. Bernanke, and that's a very good question," replied the little old lady, "but I have an answer to it. And it is this: The first con job stands on the back of a second, far larger, con job, which stands directly under it."

"But what does this second con job stand on?" Persisted Bernanke patiently.

To this the little old lady crowed triumphantly. "It's no use, Mr. Bernanke---it's cons all the way down."
   

(adapted from J. R. Ross, Constraints on Variables in Syntax 1967)

Mon, 10/07/2013 - 10:36 | 4030159 Flakmeister
Flakmeister's picture

I like how you turtled your way out of that...

@Flakmeister

Mon, 10/07/2013 - 10:59 | 4030258 Haole
Haole's picture

Flakmeister: Irrelevance personified.

Mon, 10/07/2013 - 11:02 | 4030274 Flakmeister
Flakmeister's picture

Oh my.... You do realize that you are anagram of ahole? 

Somehow that is a perfect fit for you...

Mon, 10/07/2013 - 11:06 | 4030284 Haole
Haole's picture

Glad you could take a moment out from under the desk perfecting your felatio at the IPCC to prove my point.

Mon, 10/07/2013 - 12:27 | 4030354 Flakmeister
Flakmeister's picture

Christ, if you are going to use big fancy words like fellatio at least spell them right...

 

Edit: BTW, the IPCC is old hat, here is something from today

http://press.web.cern.ch/press-releases/2013/10/cerns-cloud-experiment-shines-new-light-climate-change

Looks like it ain't cosmic rays (not that anyone serious ever though otherwise)...

I suggest you might read this

http://tamino.wordpress.com/2013/09/02/el-nino-and-the-non-spherical-cow/

but if you don't know how to spell fellatio, then it is clearly above your pay grade....

Mon, 10/07/2013 - 13:31 | 4030760 Haole
Haole's picture

"Looks like it ain't cosmic rays (not that anyone serious ever though otherwise)..."

Cern article:  "But it does not rule out a role for cosmic radiation..."

 

"Computer simulations of earth’s climate system can actually reproduce the ENSO phenomenon..."

Oh great, more computer "simulations"... 

"While the ENSO phenomenon has a potent impact on global temperature, it’s one of those phenomena which doesn’t create a long-term trend. It can and does cause temperature to go up and down and up and down and down and up and down and up, so that short-term (a decade or even longer) trends are profoundly affected, but on longer timescales (30 years or more, which we usually associate with “climate”) the ups and down mostly cancel each other and the long-term trend impact is minimal."

"The phrase “global warming” refers to climate change, including temperature increase, which is caused by mankind, and that has continued unabated. In fact, if it weren’t for the continued warming due to human activity, natural variations (like ENSO) would have brought about a notable cooling over the last decade or so. But earth hasn’t cooled during that period, not even at the surface where we notice it most immediately, and that’s because the man-made component — global warming — has continued."

Looks like the IPCC isn't old hat, just repackaged in different speculative "science".  Still blaming mankind for warming that hasn't happened in well over a decade now complete with attributions to gasses and airborn particulate in the thousanths of a single percent...

That's great Flakmeister.   I'm more comfortable haphazardly missing one letter in a word on occasion than to have virtually everything I write reference conjecture, propaganda and junk science based on biased computer modelling with a proven history of failure. 

I'm even more convinced after reading those articles that you're best just ignored altogether.

 

 

 

 

 

Mon, 10/07/2013 - 13:57 | 4031095 Flakmeister
Flakmeister's picture

My what a cunning riposte...

Would you like to comment on where ~97% of the heat has always gone and what is happening there of late?

http://skepticalscience.com/nuccitelli-et-al-2012.html

Didn't think so...

And it is pretty clear that you don;t have a fucking clue about any form of computer modelling....

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