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Chart Of The Day: How China's Stunning $15 Trillion In New Liquidity Blew Bernanke's QE Out Of The Water
Much has been said about the Fed's attempt to stimulate inflation (instead of just the stock market) by injecting a record $2.5 trillion in reserves into the US banking system since the collapse of Lehman (the same goes for the ECB, BOE, BOJ, etc). Even more has been said about why this money has not been able to make its way into the broader economy, and instead of forcing inflation - at least as calculated by the BLS' CPI calculation - to rise above 2% has, by monetizing a record amount of US debt issuance, merely succeeded in pushing capital markets to unseen risk levels as every single dollar of reserves has instead ended up as assets (and excess deposits as a matched liability) on bank balance sheets.
Much less has been said that of the roughly $2 trillion increase in US bank assets, $2.5 trillion of this has come from the Fed's reserve injections as absent the Fed, US banks have delevered by just under half a trillion dollars in the past 5 years. Because after all, all QE really is, is an attempt to inject money into a deleveraging system and to offset the resulting deflationary effects. Naturally, the Fed would be delighted if instead of banks being addicted to its zero-cost liquidity, they would instead obtain the capital in the old-fashioned way: through private loans. However, since there is essentially no risk when chasing yield and return and allocating reserves to various markets (see JPM CIO and our prior explanation on this topic), whereas there is substantial risk of loss in issuing loans to consumers in an economy that is in a depressionary state when one peels away the propaganda and the curtain of the stock market, banks will always pick the former option when deciding how to allocated the Fed's reserves, even if merely as initial margin on marginable securities.
However, what virtually nothing has been said about, is how China stacks up to the US banking system when one looks at the growth of total Chinese bank assets (on Bloomberg: CNAABTV Index) since the collapse of Lehman.
The answer, shown on the chart below, is nothing short of stunning.
Here is just the change in the past five years:
You read that right: in the past five years the total assets on US bank books have risen by a paltry $2.1 trillion while over the same period, Chinese bank assets have exploded by an unprecedented $15.4 trillion hitting a gargantuan CNY147 trillion or an epic $24 trillion - some two and a half times the GDP of China!
Putting the rate of change in perspective, while the Fed was actively pumping $85 billion per month into US banks for a total of $1 trillion each year, in just the trailing 12 months ended September 30, Chinese bank assets grew by a mind-blowing $3.6 trillion!
Here is how Diapason's Sean Corrigan observed this epic imbalance in liquidity creation:
Total Chinese banking assets currently stand at some CNY147 trillion, around 2 ½ times GDP. As such, they have doubled in the past four years of increasingly misplaced investment and frantic real estate speculation, adding the equivalent of 140% of average GDP – or, in dollars, $12.5 trillion - to the books. For comparison, over the same period, US banks have added just less than $700 billion, 4.4% of average GDP, 18 times less than their Chinese counterparts – and this in a period when the predominant trend has been for the latter to do whatever it takes to keep commitments off their balance sheets and lurking in the ‘shadows’!
Indeed, the increase in Chinese bank assets during that breakneck quadrennium is equal to no less than seven-eighths of the total outstanding assets of all FDIC-insured institutions! It also compares to 30% of Eurozone bank assets.
Truly epic flow numbers, and just as unsustainable in the longer-run.
But what does this mean for the bigger picture? Well, a few things.
For a start, prepare for many more headlines like these: "Chinese buying up California housing", "Hot Money’s Hurried Exit from China", "Following the herd of foreign money into US real estate markets" and many more like these. Because while the world focuses and frets about the Fed's great reflation experiment (which is only set to become bigger not smaller, now that the Fed has thrown all caution about collateral shortage to the wind and will openly pursue NGDP targeting next), China has been quietly injecting nearly three times in liquidity into its own economy (and markets, and foreign economies and markets) as the Fed and the Bank of Japan combined!
To be sure, due to China's still firm control over the exchange of renminbi into USD, the capital flight out of China has not been as dramatic as it would be in a freely CNY-convertible world, although in recent months many stories have emerged showing that enterprising locals from the mainland have found effective ways to circumvent the PBOC's capital controls. And all it would take is for less than 10% of China's new credit creation to "escape" aboard from the Chinese banking system, the bulk of which is quasi nationalized and thus any distinction between prive and public loan creation is immaterial, for the liquidity effect to be as large as one entire year of QE. Needless to say, the more effectively China becomes at depositing all this newly created liquidity, the faster prices of US real estate, the US stock market, and US goods and services in general will rise (something the Fed would be delighted with).
However, while the Fed certainly welcomes this breakneck credit creation in China, the reality is that the bulk of these "assets" are of increasingly lower quality and generate ever lass cash flows, something we covered recently in "Big Trouble In Massive China: "The Nation Might Face Credit Losses Of As Much As $3 Trillion." It is also the reason why China attempted one, promptly aborted, tapering in the summer of 2013, and why the entire third plenum was geared toward economic reform particularly focusing on the country's unsustainable credit (and liquidity) creation machine.
The implications of the above are staggering. If the US stock, and especially bond, market nearly blew a gasket in the summer over tapering fears when just a $10-20 billion reduction in the amount of flow was being thrown about, and the Chinese interbank system almost froze when overnight repo rates exploded to 25% on even more vague speculation of a CNY1 trillion in PBOC tightening, then the world is now fully addicted to about $5 trillion in annual liquidity creation between just the US, Japan and China alone!
Throw in the ECB and BOE as many speculate will happen eventually, and it gets downright surreal.
But more importantly, as with all communicating vessels, global liquidity is now in a constant state of laminar flow - out of central banks: either unadulterated as in the US, Japan, Europe and the UK, or implicit, when Chinese government-backstopped banks create nearly $4 trillion in loans every year. If one issuer of liquidity "tapers", others have to step in. Indeed, as we suggested a few weeks ago, any possibility of a Fed taper would likely involve incremental QE by the Bank of Japan, and vice versa.
However, the biggest workhorse behind the scenes, is neither: it is China. And if something happens to the great Chinese credit-creation dynamo, then we see no way that the rest of the world's central banks will be able to step in with low-powered money creation, to offset the loss of China's liquidity momentum.
Finally, when you lose out on that purchase of a home to a Chinese buyer who bid 50% over asking sight unseen, with no intentions to ever move in, you will finally know why this is happening.
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This will not end well... for anyone!
china has exported all that inflation *somewhere*
And nobody is talking about the death of the CNY.
No more race to the bottom, it is global synchronized diving; no strong currency left behind.
That's because China, Inc. is set to dominate the global economy & swallow competing nations whole, while it will soon own nearly every ounce, inch, millimeter, gram or cubic ton of every valuable resource on planet earth.
It's an unstoppable economic, military and cultural juggernaut that need not resort to the lowly tactics of currency debasement writ LARGE XXL.
Make sure, above all else, to teach your children Mandarin.
/s
Perhaps a deal allowing them attack and enslave the liberals on either coast would be enough to sate their unending lust for power.
I think Heinlein wrote a similar story...
Since the Pentagon already believes that China will be America's most formidible enemy in 2017, perhaps we could attempt to pacify them by giving them California.
It would be a brilliant Trojan Horse excercise of course... you know... considering the mountain of debt obligations they would have to assume it would likely bankrupt them...
http://rt.com/news/reforms-china-communism-crisis-447/
You don't start negotiations at the top, start with a basket of red states, throw 10 of 'em together, no one would notice. Losing 13 1/2 % of the US economy + the most productive state might be a bit of a dent.
Because after all, all QE really is, is an attempt to inject money into a deleveraging system and to offset the resulting deflationary effects.
Everyone on mutherf*cking planet earth needs to read and re-read that statement until they understand it. The Fed is printing "money" in an attempt to offset "credit destruction" caused by "capital destruction" of likely between $3-5 Trillion in the US alone, and in a leveraged, fractional-reserve system.
Are "money" and "credit" the same thing (hint: NO)?
HOW MUCH "MONEY" DO YOU THINK THEY WILL NEED TO PRINT?
zerohedge is a perfect example of too much information being a bad thing.
I have been reading this site for years and I don't know that I am much better for it. I really have no idea how this is going to play out. Many times I have thought I have known, but then there I am with no fucking clue again.
If chinas assets have grown that much and we still aren't really seeing all that much inflation, except in the most select classes, then the deflationary monster must be cataclysmic. but really wtf do I know? I just hope yellen prints sixty-six sextillion so we can start at 0 again.
No matter what, rest assured that this round of doing that which has never worked before (ever), this episode again will all end in yet another deflationary or inflationary crash - sponsored by fractional fiat reserve Harvest.
Little wonder the Chinese are in the middle of the plot to hoard real physical gold.
Not just hoard....hoard and then take control of the gold market. THEY want the power to price gold, and once they have enough of it, gold will be reset to a much higher price. How high? High enough that any financial threat that could cause the destruction of the Communist Party would be eradicated. Guess all those goast cities, dams, and what not, cost some very serious moolah.
Wonder how big the shadow banking world in China really is.
There will be no PM's for sale in a few years. Let the elite collect objects of art and pretentiously overpriced wines. Physical PM's in any form will be the true wealth along with the ability to generate KW's/per hour.
Most of that $15 trillion has gone to party apparatchiks.
I gotta interject.
Y'all (most who only concentrate on money changing shit) are missing the larger picture.
China's banking is just as infected as everyone else's, at this point. This should be OBVIOUS by reading the article. The question would be; NOT; WHODUNIT; but RATHER; WHY is this the goal of those who actually pull the strings in global banking? Did the PLA have anything to do with it?...PROBABLY, not DIRECTLY; they are like the Democrats and Republicans in the States (or any OTHER foolish 'political party' in any other nation).
Qui Bouno? (Who benefits)? Wrong question.
FIRST, set a GOAL...
Start with the correct question: WHY?
Postulate a theorum, and look for physical, real-time measurments to explain it (as is now obvious, historically and currently), and start asking the correct questions...
WHAT is the GOAL of causing ALL fiat currencies to spiral out of control SIMULTANEOUSLY? (Create a PROBLEM)
IF ONE entity (or group of active collaborators or conspirators) COULD cause the collapse of ALL currencies SIMULTANEOUSLY, an immediate call would be made WORLDWIDE for a 'financial voice of reason' and GLOBAL INTERNATIONAL MONETARY PARITY and CONTROL. (Wait for the REACTION)
The 'ONE ENTITY' will step up to the challenge, offering their help in stopping the collapse of the financial system (as well as the starvation of huge swathes of humanity). (Introduce and implement the SOLUTION that achieves the AGENDA desired)
See? Classic!
PROBLEM-REACTION-SOLUTION...The Hegelian Dialectic in ACTION, NOW!
One happy, surveilled, drone-striked, poorly-fed, slave class WORLD!
WHAT'S in YOUR wallet?
Between Corexit, Fukushima, all the nukes set off in Nevada, and all the leaking nuke plants, everyone is going to have a much shorter and painful life... including the 'ONE ENTITY'. Their victory will taste like ashes in their mouth.
Doing the right thing will upset the equilibrium of workers, productivity, taxes for state services and among others consumerism.
No sane person will pull the plug for the reset as the reset will be catastrophic. The extend and pretend is their best solution at the moment. There are no white knights on the horizon.
To reach the same equilibrium with sustainability will take a few generations. Pity our children and grandchildren
Que barbarida! Que lastima!
Best comment I've read in months !
$15T at today's price buys you 373k tons of gold. Hey, wait a second..
LOL. Yeah, interesting, isn't it.
...the deflationary monster must be cataclysmic
Exactly so. Leverage working against us now and the Fed is trying to print our way out...
Debt is future deflation. They can only print their way to a future day of reckoning which will be even more cataclysmic. The Forestry service used to try to stop ALL forest fires from occuring but they learned that it only resulted in a much bigger more uncontrollable fire later. That is why the use control burn. FED should learn from forestry service.
well said
...
two random names from what feels like ages ago reappear? Could actual discussion return to zerohedge message boards?
Exactly, but, the banksters are all holding each others dicks and if one squeezes they all feel it.
You want to know how this will play out? Why? Isn't it the case that you should want to know what you should do? It's not a mystery paper back , you know, where you get to the last chapter, and say, "oh, that's how it plays out". It's going to play out with Silver selling for more than 145$/oz. and the collapse of more than one major currency; probably with martial law and "civil unrest"; (which is anything but civil). What you want to do is get out of the Continental US if possible and convert all your capital assets into Silver Bullion. We are going to start over from zero, regardless of what Yellen does; but be careful what you wish for. What other source of information would be better? The New York Times? I don't think so.
I have been here almost three years, you think I haven't come to those same conclusions at some point? However you do not know that it will play out that way. You are going on faith, faith that you have it right. Well sorry, but you don't know, non of us know. No one paying attention would have thought things would go this far, that global bankers would have pulled it off for this long.
I am no longer convinced that this thing will break and reset, I only have hope for it. All of our greatest fears however seem to be playing out, we are sliding into a dark hole, a controlled collapse were the .01% get more filthy rich and the rest get more hopelessly out matched.
The only hope we had was to catch an asset bubble and become rich enough to ensure we weren't part of the non persons,
like catching a chopper off the top of the American embassy in Veitnam. Was that the last chopper? We don't know if there will be another. Sadly I think the gold and silver choppers were shot on take off. Hats off to those that got on the bitcoin one. As for those that rode the market, well fuck you, you lucky bastards. Any sane person would have stayed the fuck away from the market.
Perhaps the day for those with metals can still come, but that's just resting on faith IMO and to rest on faith is the act of a desperate man.
Histroy has plenty of clues to look at. Yet, this is on a global scale and it will, in my opinion, lead first to a finacial war, then to resource war, then to a war to the death.
WAR!
Thank you for underlining the most important sentence in the above article.
Maybe enough to backstop the collapse of some 800 trillion or so worthless derivatives?
Re: start with a basket of red states, throw 10 of 'em together, no one would notice
Best of all, politically, they'd fit right into China.
.
Would their patriotic bedazzlement treatments still include the same US slow motion flag waving in the breeze, a Chinese Citizenism slow motion flag, or a gradual and barely perceptible transition from one to the other?
give them our brightest from the ivy leaugers or lagers-hehe, send em with the university professors to boot all expenses paid. throw in a few union bosses and 535 vips from dc and we are all good!
The same military that recently just hosted Chinas military in Hawaii.
one interesting article, http://www.forbes.com/sites/stephenharner/2013/11/23/as-china-and-japan-...
All things considered, we would be lucky to not have to pay China to take the west coast, Fukafornia and all that. It is a given that Japan itself is a bargain giveaway now too.
So why isn't the shanghai not at all time highs...fucking amatuters
the more I hear of this rush to debasement the more I am convinced that there really is a global reset ahead. it is as if every nation is looking to cash in (or out, as the case may be) before this happens. if that is true then the only question left is what kind of reset. the basket of resources sounds like the most likely one.
If you thought the 20th Century was pretty much FUBAR, we are well on the way to Mad Maxing ourselves here in the 21st. Going to have to ask the Duck Dynasty folks if they have any calls made up for black swans.
"Finally, when you lose out on that purchase of a home to a Chinese buyer who bid 50% over asking sight unseen, with no intentions to ever move in, you will finally know why this is happening"
If I can get 50% over spot on my house they can most certainly take it so that i am free of the tax shackles and free to buy more metals. ow do i contact a chinese realtor and let them know i want to sell sell sell
They are buying like crazy in our area causing our prices to jump. The funny thing is they are buying all those shoddily built McMansions. I know 3 homes in Scripps Ranch that went for 700K+ in a few days. Two overlook canyons that are high risk for wildfire. So in a few years,the joke will be on them.
Miffed;-)
They are buying in the Seattle area like mad as well, with cash, often the waterfront
Same in Portland...realtors are having a 2007 year all over again. Homes all going over asking and they're building new as fast as possible.
I AM ALL IN TOO.....I have a $400,000 home...give me $800,000 right now...you can have it...and I am off to the lake for the boating trip with my metals. I have learned that many here take their metals on boating excursions...must stabilize the boat or something. I am going to give it a go.
Sell your property for a night in Vegas.
Let the Chicoms buy what you own, using currency that is worthless, and maybe put it in your bank, earning worthless monies (called 'interest').
Wake up a year from now, after buying their products, wishing you had a place to live and stay warm.
Go back to them, begging to rent your former property.
HELL, you sure got a good deal! So did your children and grandchildren and everyone else you know (or don't know)!
You will get...worthless scrip...for your property...but, HELL, you sure got a lot of them! FUCK the future, the FUTURE is NOW! EAT, DRINK, and be MERRY, for TOMORROW you will SURELY live (the CORRECT quote, by the way).
When the Chicoms look at you, when you ask to be allowed to rent back your property that you FORMERLY owned, will you be pleading with them to take you in; and willing to do their bidding; living with the FACT that you sold out your SOUL to them (as well as taking a bunch of worthless crap paper for it)?
Sorry, I gotta down-arrow your response.
Why doesn't he move and get a house somewhere else and buy metal with the proceeds? Why would ANYBODY do what you just alluded to? Fuck, everybody is essentially 'renting' from the government anyway.
Sorry, I gotta down-arrow your response.
Craigslist. I regularly post my Texas ranch on Craigslist Tokyo/Osaka at triple its value (no buyers yet) because one of these days some smart Japanese buyer is going to realize that the homeland is soon to become uninhabitable. I think I'll begin posting on Craigslist Shanghai at 10x. Payable in gold bulion at spot.
Which Heinlein book are you refering to? I'm reading "Starship Troopers" right now, and would read more of his works.
If China owns every bit of every valuable resource, then that means there are no sellers and thus, all that "valuable" stuff has no value.
I love the doom-pr0n too, but let's keep it realistic. This isn't Michael Bay economics.
China corny style will render everything invaluable for discerning westerners. Buy with eyes half closed but be beware.
/s = international abbreviation for "sarcasm"
They are making it rain in the strip joints old school bitches. Soon it will be like confetti.
No they rent everything out to the masses. We are fast reverting back to feudalism 21st century style at this rate. You own nothing and you license and lease from the owner(s) who create a faux illusion of choice using public/private partnerships with a few systematically important coprorations. The consolidation is fast tracking the US now from 5 or so major corporate parents controlling the majority of all major markets by owning or having a majority stake in every major brand out there to now systematically declaring them TBTF and therefore extensions of the government itself.
Exactly. There is no property ownership in he USA. The government is the owner of all properties, and "owners" rent from the government in the form of taxes. Stop paying your "rent" and the owner kicks you off your property. That is clearly not "ownership" by any definition of the word, Ownership is ownership. If you have to pay to use it, it's obviously not yours. Particularly when the amount you have to pay can change at the whim of your "landlord".
It is true that there is no point buying a million dollar house when the same thing is renting out at 400 per week, but due to the effects of inflation, my "mortgaged based rent" is a lot cheaper than if I was really renting. In order to take advantage of the above scenario, you still have to be able to afford 400 bucks per week.
But as I mentioned recently, the fact is that the land has been stolen from you and everything else is smoke and mirrors.
Oh yeah, and "we're all going to be better off with free trade!" See how much better off we are?
That ain't no Chop Suey.
Pa tu muc
When in doubt go big
Now that's blobbing up.
Blatant currency manipulation.
Commies! Fascists! Banksters!
Interestingly even the (very small) rural school system up here in the mountains of Virginia offers Mandarin as a foreign language. What's even more interesting is that they don't offer French.
<And soon maybe English?>
.
Engrish & Ebonics.
CD, the Chinese .gov is likely providing material support for that Mandarin program.
those programs are there to teach the spooks Mandarin... they aren't there for the common clay
The teaching and learning of English in American schools, ended a long time ago.
My father grew up in a little town in Virginia called Woodstock. Later in life he got tired of the "not that Woodstock", so he just started saying he was from nearby Edinburg. Beautiful area of the country.
Replace "Japan" for "China" in the above and think back to the 80s. Similar result expected...
Bingo! I thought I was having deja vu...
china buys gold, meanwhile, she prints yuan as a counter measure to the fed. japan in 80s did not have a clue on what they were doing.
japan still don't! never will-fucked up species...
yeah, but they've got some pretty awesome babes
I gotta agree. I find the Japanese ladies very attractive, whereas I don't find Chinese, Korean, or SE Asians attractive. Therefore, I am rooting for the Japanese to take us over.
So is the Chinese Remni real or just fake money fiat money (numbers on a ledger) - is the increase of $15.4 trillion real or a fake computer number?
So if China's banks somehow blow up - does that mean the smart real money will flock to UST?
Then it is Japan in the 1980s again. Weird how that keeps happening....
truth,
then why peg their currency to the dollar? and i don't see how ending that is going be good for china either. personally i think this shows the end of a trend and without these massive injections their ecomy is toast, just like ours. i think 2014 is gonna end the exact opposite of the way i keep reading about....taking a trend an projecting it forever into the future is a suckers bet.
looking at how much cny can be conversted per us$, it is suspected cny is no longer pegged to us$ for a while. simply no one broadcasts it.
slowly letting it rise to boil the inflation frog, but give commoners some long overdue spending power. all on plan. they fleeced facist corp america and played us like a f'kg fiddle and now theygot the intellectual prop., manfctg. facilities and supply line of distrb. in place, now to turn the screw slowly and avoid the dollar and look to better countries to fleece next. mainly pick the pockets of western debtor nations ripe for demise and selling low labor cost products... lol
All we need now is Albert Joseph Cohen of the Goldman Sachs to come out and say s&p 3000 for 2014. That would be the icing on the cake
good a time as any to share this-
https://www.youtube.com/watch?v=L0DNBIipaKs
now c'mon everybody .... 'kinky tom kinky tom... he just sold the dog'
if you no clicky, you no get good laughy.
Naturally this explains the daily gold smack downs, since we're printing til the cows come home, why not print an extra billion a day just to keep the daily market sell order going. I can't wai for the uh oh momment when everyone is scambling for physical
Don't believe the hype
Nah - China is going to explode like the rest of the world - there will be no islands of prosperity.
Correct. All fiat will be destroyed, no exceptions. I have been saying for years tht the last thing the Chinese/American elite want to change the game now. There will be a few wealthy owners, then everyone else...
hedge accordingly.
This article explains why bitcoin is being ramped up. I imagine if PMs were not monkey hammered daily you would see similar returns in gold and silver this year. Well it will be epic explosion when the bitcoin lemmings realize you can create an infinite number of crypto currencies. Ah well.
Bitcoins; the Tulip Bulbs of the new millenia. Hard to believe, actually; but then one is born every minute, according to P.T. Barnum.
If Comex had a futures market for Bitcoin I'm pretty confident wall street would be using some of those excess reserves to hammer Bitcoin spot price down just like they hammer gold spot price down.
And yes I would expect lots of naked shorting. No, they wouldn't need any Bitcoins for delivery, just like they don't have any gold for delivery. Just pay off in dollars.
see below. you cannot short bitcoins...yet. The Winklevoss Twins are in New York now setting up a BTC Index fund...once it's a go then bitcoins can be converted to dollars at a market rate...and my guess is bitcoins will collapse in price as everyone will try and cash in their tokens all at once. Then you might to buy into the index fund...especially if it involves the said mining of said "tokens." in effect you would be by a an interest in the controlling stake of the "virtual currency." In theory you could use your bitcoins to trade in currencies...right at the ATM.
Of course you can short Bitcoin if the loser's payoff can be dollars, no Bitcons have to be delivered.
It's just a bet. You betting short, someone else betting long. You can bet on anything if you can find someone to take the other side of that bet.
Futures and options markets merely provide a government authorized casino to do your betting in. The whole thing can be dollars. Betting on Bitcoin but paying dollars. Very simple.
I don't know why it hasn't been set up yet. Maybe it will be before long. And if it is, we'll see wall street hammering Bitcoin spot down like they hammer gold spot down.
And no it won't mean Bitcoins actually trade at that price. There might be a high premium to get actual Bitcoins, just like there is a high premium to get actual gold.
you mean, 'create an infinite number of crypto currencies' kinda like right after eBay launched and naysayers said you can create an infinite number of online auction sites ...?
Hedged accordingly.
The difference is that the CNY can rise from the ashes thanks to who knows how many thousand tons of gold.
Wow 24 trillion at $1250 an ounce is only 6,000,000 tons..... Do math much? Gold cannot underpin any future monetary system, not enough of it to be fungible.
it will never be a question of quantity, it will always be a question of price
Wow you fail. Your right, gold at 1250 an ounce isn't enough to back up 10s or 100s of trillons of what ever paper stamp you carry, yep not at that price...durrrrrrrrr.
So who are teh tards who bumped him?
Just goes to show ... for every one you see, there's five in the bushes.
You merely reveal that you don't understand the subject. this is a sort of Kindergarten level objection to a Gold Standard. Try educate yourself; it won't hurt; really. you won't even get a headache. And it'll be a new experience.
6,000,000 tons? interesting. if karen hudes can just find another 150,000,000 we'd be there. she's at 450,000,000 now.
In a gold-BACKED currency the gold doesn't have to be enough to be fungible because it's never paid out like it would be in a gold-REDEEMABLE currency.
And I suspect backing ratio would be more like 10,000 CYN / gold ounce, not that it matters, the ratio isn't important. The ratio NOT CHANGING is important.
And 10,000 CYN / gold ounce is way better than 10,000 USD / nothing. (divide by zero)
What's good for the Fed goose is good for the PBOC gander.
<Maybe even better.>
People are starting to notice.
http://freewilliamsburg.com/douglas-elliman-rep-70-of-brooklyn-home-sales-going-to-hedge-funds-investors-and-international-buyers/
Other than the bottom comment from "Vance" the commenters are pretty much all idiots, demanding ever more criminal solutions to this problem.
damn right. I emailed this article to the editor and told him to add it as a link to help his confused hipsters get a clue.
While the peons squabble over whether raising the minimum wage a few cents will destroy 'merica, the global rich are buying everything in sight with printed $.
By the time the market crashes they'll already own everything of actual value. Probably a dumb strategy, but what can you do.
https://dailysegfault.files.wordpress.com/2013/02/first_memo_1.jpg
What can you do" join the wealthy in their perspective and buy something of actual value; that's cheap. Silver bullion.
2 personal friends have sold homes in CA this year. One in L.A. proper and one in Palos Verdes. Both sold for cash, both sold faster than they had expected, and both sold for more than they imagined they would get. Both to Chinese buyers.
Nice, looks like ZH put your article up
Attention All Chinamen! I have a house that I will gladly sell for 50% over an absurdly high listed price. I will have my shit packed and gone in a jiffy. Call me.......
Chinese are going to be the bag holders. This is a repeat of the Japanese invasion circa late 1980s-1990s. They lost a pretty penny!
Roger that.
I bought two condos in the early 1980s and sold them before the crash to some japanese for 300% over my price [SWEET!]...then the market crashed leaving them holding the bag.
Ah, I believe "Chinamen" is not the preferred nomenclature. "Asian", please
What is wrong with Chinaman? Is it worse than Englishman, Frenchman or German?
I'm sorry, Smokey. You were over the line. That's a foul.
(Mark it zero, Dude.)
.
Technically, if you're going to use the term 'asian' to refer to a Chinaman, you need to qualify it as 'oriental asian' or 'asian oriental'. This helps to avoid confusion with Armenians, Palestinians, and other 'occidental asians', at least according to what I read in The Grand Coolie Gazette.
Oriental is not a person, The term Oriental is used for furniture, rugs and stuff .. You know like an Oriental Rug.... just sayin!
<<Ah, I believe "Chinamen" is not the preferred nomenclature. "Asian", please>>
The Chinaman is not the issue here, Dude. I'm talking about drawing a line in the sand, Dude. Across this line, YOU DO NOT...
Aw, MAN. I remember when Walter Sobchak and the Dude were quoted here daily. Now if this "Chinaman" stuff is Rayciss(TM)...Tyler, I mean, clearly, man...this isn't a guy who built the railroads here. This is a guy...Look, this isn't 'Nam. This is bowling. There are rules.
I don't know the proper nomenclature for Chinamen because I don't have any dealings with any. But all Asian girls will always be China Girls to me. Why, because when I am with one I can't get this out of my mind: http://youtu.be/E_8IXx4tsus
I am personally dating a Korean now, but any flavor will do. As a friend who also has a China girl recently told me, once you have had yellow, you can't go back.
Apparently I am not alone in this affliction: http://qz.com/149342/the-uncomfortable-racial-preferences-revealed-by-online-dating/
Herro?
Total collateral lays where in the chain ? 3 Trillion re- hypothecated by how times many ? China hasn`t started yet on her leverage.
Not yet, but if the timing is right...it can amplify an other problem exponentially. Remember the reserve currency is still the USD and it is at the moment able to turn from a 1 dollar in a banking system into 9. Because those are the rules as dictated by the fractional reserve banking industry. 1 becomes 9 magically. Shove that 15 trillion into a USD account...lol...it's going to be an inflationary shit storm of breath taking proportions.
The weakest point to drop the deuce in the bowl though, or the best point depending on the perspective, is Feb 2014 when the US and EU default happens. Gotta feeling the number of 'billionaires' is going to increase substantially and it'll be hard not to meet a millionaire on the street.
And whomever is the trillionaire once it gets rolling is obvious the greedy monkey with the hand in the jar.
What is happening in February?
Debt ceiling US Natl Budget must be addressed. Not sure for Europe. CPL is expressing a belief this causes high inflation, leading to hyper inflation(loss of fiat trust) methinks
There is no longer a debt ceiling and there will be no US Natl Budget (as there has not been 1 for years). The coming govt. theater will all be kabuki!
i disagree. this will result in a DEflationary shitstorm of epic proportions as the Chinese bubble bursts and what happens over there makes Japan in the 80's look like child's play. bitcoin is the straw breaking the camel's back in my view...it's a way to get around currency controls and start buying dollar denominated assets...it hasn't truly taken off yet because there are so few dollars to actually be had in the bitcoin universe...but if along the lines of GLD a BTC index fund is created then suddenly you get bitcoin convertability and many fiat monies will simply vanish from the earth. i would expect the price of bitcoins to collapse upon some level of convertability...but it can be seen as an excellent inflation hedge...similar to Solar Cities and Tesla's...all part of a "new economy" for the digital age.http://online.wsj.com/news/articles/SB1000142405270230460710457921210135...
@ SafelyGraze,
What a coincidence. So has the Criminal US, Corp.
Yeah. Right here. Hong Kong. Property prices up 100% across the board, prices vary by development, some luxury properties up by 200, 300%. Food prices on average up anywhere from 20~60% depending on what staple you're talking about. Rents are up 60~100%. Transportation costs skyrocketing. "Official" inflation figures put it at 2%.
Wages and salaries stagnant.
Thank you evil overlord motherfuckers.
silver dropped below twenty today. gold damn near collapsed today. this looks like an absolutely stupendous property bubble in China to me. if there's a panic I think they'll buy treasuries by the A380 load. interest rates are soaring over there right now. what was that group called again? the Falin Gong?
Not Yet. Prepare for headline" china buys last available shipment of Silver Bullion from london @ 145$/oz." That kind of liquidity is going to make a lot of chinese buy a lot of PM's; which we "think" we've already seen. IMHO; we ain't seen nothin yet.
Actually...they have imported ours because of their fixed exchange rate. On their own, their currency probably would be stronger allowing them to buy energy and other things (denominated in dollars) on the international markets.
What is interesting is that this could be part of debasing their currency to sort of justify the exchange rate. The fix for a crash or hyperinflation would be PM's which they buy on the open market in enormous quantities. They also keep all their own domestic production.
The most realistic possibility is they are losing control of their currency and do not want to stop the party.
this will not end well for _China_
this is the '80s Japan scenario all over again
"you got a hold on me, I got a hold on you..."
- China takes all their new-found liquidity and bids up the price on everything
- a lot of that everything will be in depreciating assetts (and yes, I include housing, commercial RE etc in that category)
- we'll see a lot of "oh, it's a new day, we're taking over the world and buying up the USA & Europe lol stupid round eye" rhetoric
- at which point we deflate the ever-living crap out of anything of value in the USA & Europe and buy it back for pennies on the dollar
- queue up the next asian "tiger", lather rinse repeat
You sir, are spot on. And you must be getting gray, like me. I remember when Japan was going to own us all. Hell, they even wrote the theme into the cinematic for "BladeRunner".
This too shall pass.
China has a military/weapons and are wicked, Japan has bad memories and are lackeys for USA.
we had to nuke the Japanese twice and bluff to do it a third time before they surrendered, with both USA and Russian forces on their doorstep... say what you will, but given they were an island nation with no real natural resources to speak of they were hell on wheels when wartime took hold...
the Japanese are called many things but I wouldn't call them "lackeys"... or the Germans, for that matter... they were beaten by logistics, not by lack of will
now compare that to China... if you dig deeply, you see a very similar situation... a strong and proud people, but they simply aren't set up militarily or logistically to project power on a global scale... and, every time a nation has tried to chase down the USA in that fashion, they end up disgorging time and treasure that they simply can't afford only to find the goal posts have been moved... which is what China's trying to do right now... they think the mere brute force of their presence in Asia can pull this off, but I seem to recall a nation by the name of USSR attempting similar and ending up on the dustbin of history...
the _only_ way China can win is if they find some way to drive a serious wedge through NATO... I simply don't see that happening in the near future... maybe 100 years from now, but not 10... and, if they don't play their cards right with this particular gambit, possibly never
"and, every time a nation has tried to chase down the USA in that fashion, they end up disgorging time and treasure that they simply can't afford"
that's the thing about history, at some point, things change
there's a lot of things, like resource and ecological resource destruction that people were just telling us would take 100 years. They have since changed their timeline
hell yeah ---they even have a ??state of the art?? aircraft carrier. And don't forget their friend (in good times and bad) the Koeans of the North--very scary --
Bingo! Those roaring 80s are back...
So what your saying is we are going to see a remake of karate kid but have a chinese teacher?
This will not end since all major economies are engaged in competitive currency devaluation. So there is little of no impact on these developed economies or about 1/2 the world's population. Its necessary to stimulate because most labor is becoming obsolete and entitlements are becoming increasingly necessary to maintain social order in the developed world. The other 3 billion people were poor anyway so no one cares. YE 2014 SPX target is 2250 to 2500.
Fiat currency
the ultimate
economic weapon ...
And that explains why Chinese are gobbling up Bitcoin http://captiongenerator.com/9908/Hitler-not-pleased-with-Bitcoin
This will only encourage the Fed to play catch up.
China buying up real estate: http://www.cnbc.com/id/101225345
I know, I know I hate CNBS too!
The difference is that we use it for EBT cards, The Chineseuse it to buy mines, farms, and oil wells.
Anything you can do, I can do better ! Ha ha ha !
Imperialist running dogs have nothing on paper printing Chinese glorious Revolution dog eaters..................
LOL! AnAnon is gonna like that post so much you can come over to China and fuck his sister!
Wok dog while you can. According to Rudwig von Maoses, going to end in blob-up boom.
His parents tossed his sister in the dumpster when she was born... so no go on the fucking...
Joke's on them. We did it WITHOUT gold.
All the gold they have hoarded probably makes abandoning the race to debase a little less scary for them.
Joke's on them. We did it WITHOUT gold.
Disagree, they have stockpiled ALL PM as much, and as fast as possible.
Learn Mandarin, your neighbors will be 50% Chineeeee soon.
Boy you got that one so right.
This ain't your parent's I love the 80's American economy anymore!