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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

Tyler Durden's picture


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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Mon, 11/25/2013 - 15:54 | 4188564 Jonas Parker
Jonas Parker's picture

This will not end well... for anyone!


Mon, 11/25/2013 - 15:56 | 4188575 SafelyGraze
SafelyGraze's picture

china has exported all that inflation *somewhere*


Mon, 11/25/2013 - 16:02 | 4188588 hedgeless_horseman
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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.

Mon, 11/25/2013 - 16:06 | 4188598 TruthInSunshine
TruthInSunshine's picture

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.


Mon, 11/25/2013 - 16:18 | 4188645 ACP
ACP's picture

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...

Mon, 11/25/2013 - 16:43 | 4188714 ZerOhead
ZerOhead's picture

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...

Mon, 11/25/2013 - 16:58 | 4188770 James_Cole
James_Cole's picture

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.

Mon, 11/25/2013 - 17:08 | 4188810 SWRichmond
SWRichmond's picture

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)? 


Mon, 11/25/2013 - 17:31 | 4188876 Waffen
Waffen's picture

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.

Mon, 11/25/2013 - 17:50 | 4188926 TruthInSunshine
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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.

Mon, 11/25/2013 - 18:43 | 4189086 Stuart
Stuart's picture

Little wonder the Chinese are in the middle of the plot to hoard real physical gold. 

Mon, 11/25/2013 - 19:37 | 4189202 fockewulf190
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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.

Tue, 11/26/2013 - 05:59 | 4190077 Doña K
Doña K's picture

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.


Mon, 11/25/2013 - 20:44 | 4189354 Stuck on Zero
Stuck on Zero's picture

Most of that $15 trillion has gone to party apparatchiks.


Mon, 11/25/2013 - 22:05 | 4189474 MontgomeryScott
MontgomeryScott's picture

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!


One happy, surveilled, drone-striked, poorly-fed, slave class WORLD!

WHAT'S in YOUR wallet?

Tue, 11/26/2013 - 02:42 | 4189950 Fish Gone Bad
Fish Gone Bad's picture

The 'ONE ENTITY' will step up to the challenge, offering their help in stopping the collapse of the financial system

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.

Tue, 11/26/2013 - 06:11 | 4190082 Doña K
Doña K's picture

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!

Tue, 11/26/2013 - 07:52 | 4190147 Welder
Welder's picture

Best comment I've read in months !

Mon, 11/25/2013 - 21:44 | 4189460 MythicalFish
MythicalFish's picture

$15T at today's price buys you 373k tons of gold. Hey, wait a second..

Mon, 11/25/2013 - 23:14 | 4189629 SAT 800
SAT 800's picture

LOL. Yeah, interesting, isn't it.

Mon, 11/25/2013 - 18:46 | 4189094 SWRichmond
SWRichmond's picture

...the deflationary monster must be cataclysmic

Exactly so.  Leverage working against us now and the Fed is trying to print our way out...

Mon, 11/25/2013 - 20:03 | 4189275 whateverittakes
whateverittakes's picture

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.

Mon, 11/25/2013 - 21:59 | 4189477 DaveyJones
DaveyJones's picture

well said

Mon, 11/25/2013 - 22:33 | 4189541 Mrmojorisin515
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Mon, 11/25/2013 - 22:32 | 4189543 Mrmojorisin515
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two random names from what feels like ages ago reappear? Could actual discussion return to zerohedge message boards?

Tue, 11/26/2013 - 06:50 | 4190103 ArmyofOne
ArmyofOne's picture

Exactly, but, the banksters are all holding each others dicks and if one squeezes they all feel it. 

Mon, 11/25/2013 - 23:27 | 4189660 SAT 800
SAT 800's picture

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.

Tue, 11/26/2013 - 02:29 | 4189937 Waffen
Waffen's picture

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.

Tue, 11/26/2013 - 07:02 | 4190113 ArmyofOne
ArmyofOne's picture

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. 



Mon, 11/25/2013 - 20:30 | 4189331 Apostate2
Apostate2's picture

Thank you for underlining the most important sentence in the above article.

Tue, 11/26/2013 - 07:41 | 4190139 doctor10
doctor10's picture

Maybe enough to backstop the collapse of some 800 trillion or so worthless derivatives?

Mon, 11/25/2013 - 17:44 | 4188911 NOTaREALmerican
NOTaREALmerican's picture

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.

Mon, 11/25/2013 - 19:40 | 4189209 TheFourthStooge-ing
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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?

Mon, 11/25/2013 - 18:16 | 4189009 new game
new game's picture

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!

Mon, 11/25/2013 - 17:01 | 4188782 10mm
10mm's picture

The same military that recently just hosted Chinas military in Hawaii.

Mon, 11/25/2013 - 22:48 | 4189576 TheReplacement
TheReplacement's picture

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.

Mon, 11/25/2013 - 18:24 | 4189024 max2205
max2205's picture

So why isn't the shanghai not at all time highs...fucking amatuters

Mon, 11/25/2013 - 18:54 | 4189112 ZH Snob
ZH Snob's picture

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.

Mon, 11/25/2013 - 19:46 | 4189225 fockewulf190
fockewulf190's picture

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.

Mon, 11/25/2013 - 18:38 | 4189070 Groundhog Day
Groundhog Day's picture


"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

Mon, 11/25/2013 - 21:19 | 4189420 Miffed Microbio...
Miffed Microbiologist's picture

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.


Mon, 11/25/2013 - 22:14 | 4189487 DaveyJones
DaveyJones's picture

They are buying in the Seattle area like mad as well, with cash, often the waterfront

Tue, 11/26/2013 - 03:17 | 4189998 Ham-bone
Ham-bone's picture

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.

Mon, 11/25/2013 - 22:11 | 4189501 takeaction
takeaction's picture

I AM ALL IN TOO.....I have a $400,000 home...give me $800,000 right 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.

Mon, 11/25/2013 - 22:18 | 4189517 MontgomeryScott
MontgomeryScott's picture

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.


Tue, 11/26/2013 - 01:17 | 4189817 IrritableBowels
IrritableBowels's picture

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.

Mon, 11/25/2013 - 22:38 | 4189557 americanspirit
americanspirit's picture

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.

Tue, 11/26/2013 - 06:45 | 4190100 Big Brother
Big Brother's picture

Which Heinlein book are you refering to?  I'm reading "Starship Troopers" right now, and would read more of his works.

Mon, 11/25/2013 - 16:21 | 4188650 MrTouchdown
MrTouchdown's picture

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.

Mon, 11/25/2013 - 16:26 | 4188661 TheGardener
TheGardener's picture

China corny style will render everything invaluable for discerning westerners. Buy with eyes half closed but be beware.

Mon, 11/25/2013 - 16:31 | 4188681 TruthInSunshine
TruthInSunshine's picture

/s = international abbreviation for "sarcasm"

Mon, 11/25/2013 - 16:35 | 4188690 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

They are making it rain in the strip joints old school bitches. Soon it will be like confetti.

Mon, 11/25/2013 - 17:04 | 4188798 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

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.

Tue, 11/26/2013 - 03:05 | 4189989 Popo
Popo's picture

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".

Tue, 11/26/2013 - 06:12 | 4190084 PT
PT's picture

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? 

Mon, 11/25/2013 - 16:22 | 4188655 Moon Pie
Moon Pie's picture

That ain't no Chop Suey.

Mon, 11/25/2013 - 16:33 | 4188686 max2205
max2205's picture

Pa tu muc


When in doubt go big

Mon, 11/25/2013 - 16:37 | 4188697 TheFourthStooge-ing
TheFourthStooge-ing's picture

Now that's blobbing up.

Mon, 11/25/2013 - 18:10 | 4188992 Kirk2NCC1701
Kirk2NCC1701's picture

Blatant currency manipulation.
Commies! Fascists! Banksters!

Mon, 11/25/2013 - 16:22 | 4188656 Cognitive Dissonance
Cognitive Dissonance's picture

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?>

Mon, 11/25/2013 - 16:41 | 4188708 Patriot Eke
Patriot Eke's picture


Mon, 11/25/2013 - 16:54 | 4188760 TruthInSunshine
TruthInSunshine's picture

Engrish & Ebonics.

Mon, 11/25/2013 - 18:20 | 4189015 RafterManFMJ
RafterManFMJ's picture

CD, the Chinese .gov is likely providing material support for that Mandarin program. 

Mon, 11/25/2013 - 18:40 | 4189078 post turtle saver
post turtle saver's picture

those programs are there to teach the spooks Mandarin... they aren't there for the common clay

Mon, 11/25/2013 - 19:14 | 4189156 Al Gorerhythm
Al Gorerhythm's picture

The teaching and learning of English in American schools, ended a long time ago.

Mon, 11/25/2013 - 21:17 | 4189415 sunnyside
sunnyside's picture

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.

Mon, 11/25/2013 - 16:30 | 4188678 Joeman34
Joeman34's picture

Replace "Japan" for "China" in the above and think back to the 80s.  Similar result expected...

Mon, 11/25/2013 - 17:00 | 4188786 Z_End
Z_End's picture

Bingo! I thought I was having deja vu...

Mon, 11/25/2013 - 17:02 | 4188792 oak
oak's picture

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.

Mon, 11/25/2013 - 18:21 | 4189016 new game
new game's picture

japan still don't! never will-fucked up species...

Mon, 11/25/2013 - 19:25 | 4189188 gearbaby
gearbaby's picture

yeah, but they've got some pretty awesome babes

Mon, 11/25/2013 - 21:19 | 4189421 sunnyside
sunnyside's picture

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.

Tue, 11/26/2013 - 00:38 | 4189787 ronaldawg
ronaldawg's picture

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....

Mon, 11/25/2013 - 17:37 | 4188887 mumbo_jumbo
mumbo_jumbo's picture


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.

Mon, 11/25/2013 - 18:17 | 4189001 oak
oak's picture

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.

Mon, 11/25/2013 - 18:27 | 4189032 new game
new game's picture

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

Mon, 11/25/2013 - 18:42 | 4189085 Groundhog Day
Groundhog Day's picture

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

Mon, 11/25/2013 - 17:57 | 4188950 putaipan
putaipan's picture

good a time as any to share this-

now c'mon everybody .... 'kinky tom kinky tom... he just sold the dog'

if you no clicky, you no get good laughy.

Mon, 11/25/2013 - 18:29 | 4189048 Groundhog Day
Groundhog Day's picture

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

Mon, 11/25/2013 - 23:12 | 4189626 kicksroute66
kicksroute66's picture

Don't believe the hype

Tue, 11/26/2013 - 03:29 | 4190011 Notarocketscientist
Notarocketscientist's picture

Nah - China is going to explode like the rest of the world - there will be no islands of prosperity.

Mon, 11/25/2013 - 16:06 | 4188601 LawsofPhysics
LawsofPhysics's picture

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.

Mon, 11/25/2013 - 17:38 | 4188892 Burnbright
Burnbright's picture

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.

Mon, 11/25/2013 - 22:09 | 4189497 SAT 800
SAT 800's picture

Bitcoins; the Tulip Bulbs of the new millenia. Hard to believe, actually; but then one is born every minute, according to P.T. Barnum.

Tue, 11/26/2013 - 00:33 | 4189781 Drifter
Drifter's picture

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.

Tue, 11/26/2013 - 02:30 | 4189940 disabledvet
disabledvet's picture

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.

Tue, 11/26/2013 - 04:43 | 4190055 Drifter
Drifter's picture

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.

Tue, 11/26/2013 - 02:56 | 4189973 tsx500
tsx500's picture

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 ...?

Mon, 11/25/2013 - 22:08 | 4189495 SAT 800
SAT 800's picture

Hedged accordingly.

Mon, 11/25/2013 - 16:16 | 4188634 Jaspergers
Jaspergers's picture

The difference is that the CNY can rise from the ashes thanks to who knows how many thousand tons of gold.

Mon, 11/25/2013 - 17:31 | 4188875 gatorengineer
gatorengineer's picture

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.

Mon, 11/25/2013 - 17:41 | 4188903 Charles Nelson ...
Charles Nelson Reilly's picture

it will never be a question of quantity, it will always be a question of price

Mon, 11/25/2013 - 17:41 | 4188904 Burnbright
Burnbright's picture

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.

Tue, 11/26/2013 - 02:19 | 4189922 Race Car Driver
Race Car Driver's picture

So who are teh tards who bumped him?

Just goes to show ... for every one you see, there's five in the bushes.

Mon, 11/25/2013 - 22:06 | 4189494 SAT 800
SAT 800's picture

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.

Mon, 11/25/2013 - 22:23 | 4189525 putaipan
putaipan's picture

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.

Tue, 11/26/2013 - 00:48 | 4189806 Drifter
Drifter's picture

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)

Mon, 11/25/2013 - 16:05 | 4188590 Cognitive Dissonance
Cognitive Dissonance's picture

What's good for the Fed goose is good for the PBOC gander.

<Maybe even better.>

Mon, 11/25/2013 - 16:19 | 4188643 NotApplicable
NotApplicable's picture

Other than the bottom comment from "Vance" the commenters are pretty much all idiots, demanding ever more criminal solutions to this problem.

Mon, 11/25/2013 - 16:34 | 4188692 fonzannoon
fonzannoon's picture

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.

Mon, 11/25/2013 - 17:06 | 4188795 James_Cole
James_Cole's picture

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.

Mon, 11/25/2013 - 22:04 | 4189491 SAT 800
SAT 800's picture

What can you do" join the wealthy in their perspective and buy something of actual value; that's cheap. Silver bullion.

Mon, 11/25/2013 - 17:38 | 4188896 11b40
11b40's picture

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.

Mon, 11/25/2013 - 19:57 | 4189250 jonjon831983
jonjon831983's picture

Nice, looks like ZH put your article up

Mon, 11/25/2013 - 16:15 | 4188627 Bangin7GramRocks
Bangin7GramRocks's picture

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.......

Mon, 11/25/2013 - 16:37 | 4188698 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

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!

Tue, 11/26/2013 - 02:07 | 4189901 Never One Roach
Never One Roach's picture

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.

Mon, 11/25/2013 - 18:31 | 4189051 1000924014093
1000924014093's picture

Ah, I believe "Chinamen" is not the preferred nomenclature. "Asian", please

Mon, 11/25/2013 - 19:59 | 4189258 Diogenes
Diogenes's picture

What is wrong with Chinaman? Is it worse than Englishman, Frenchman or German?

Tue, 11/26/2013 - 00:22 | 4189771 Renfield
Renfield's picture

I'm sorry, Smokey. You were over the line. That's a foul.

(Mark it zero, Dude.)

Mon, 11/25/2013 - 22:03 | 4189489 TheFourthStooge-ing
TheFourthStooge-ing's picture


Ah, I believe "Chinamen" is not the preferred nomenclature. "Asian", please

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.

Tue, 11/26/2013 - 01:03 | 4189836 playnstocks
playnstocks's picture

Oriental is not a person, The term Oriental is used for furniture, rugs and stuff .. You know like an Oriental Rug....   just sayin!

Tue, 11/26/2013 - 00:19 | 4189762 Renfield
Renfield's picture

<<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.

Tue, 11/26/2013 - 02:43 | 4189887 Tom of the Missouri
Tom of the Missouri's picture

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:

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:



Mon, 11/25/2013 - 22:41 | 4189564 americanspirit
americanspirit's picture


Mon, 11/25/2013 - 16:15 | 4188629 TheGardener
TheGardener's picture

Total collateral lays where in the chain ? 3 Trillion re- hypothecated by how times many ? China hasn`t started yet on her leverage.

Mon, 11/25/2013 - 16:22 | 4188652 CPL
CPL's picture

Not yet, but if the timing is 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'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. 

Mon, 11/25/2013 - 16:52 | 4188750 Matt
Matt's picture

What is happening in February?

Mon, 11/25/2013 - 19:05 | 4189128 moonstears
moonstears's picture

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

Tue, 11/26/2013 - 11:27 | 4190496 cro_maat
cro_maat's picture

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!

Mon, 11/25/2013 - 17:25 | 4188860 disabledvet
disabledvet's picture

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's a way to get around currency controls and start buying dollar denominated 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.

Mon, 11/25/2013 - 16:37 | 4188701 Chupacabra-322
Chupacabra-322's picture

@ SafelyGraze,

What a coincidence. So has the Criminal US, Corp.

Mon, 11/25/2013 - 17:58 | 4188943 Dr. Bonzo
Dr. Bonzo's picture

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.

Tue, 11/26/2013 - 02:41 | 4189949 disabledvet
disabledvet's picture

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?

Mon, 11/25/2013 - 22:02 | 4189488 SAT 800
SAT 800's picture

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.

Mon, 11/25/2013 - 22:55 | 4189595 FreedomGuy
FreedomGuy's picture

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.

Mon, 11/25/2013 - 16:10 | 4188614 post turtle saver
post turtle saver's picture

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

Mon, 11/25/2013 - 16:15 | 4188630 LFMayor
LFMayor's picture

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.

Mon, 11/25/2013 - 17:08 | 4188809 10mm
10mm's picture

China has a military/weapons and are wicked, Japan has bad memories and are lackeys for USA.

Mon, 11/25/2013 - 18:55 | 4189111 post turtle saver
post turtle saver's picture

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

Mon, 11/25/2013 - 22:13 | 4189500 DaveyJones
DaveyJones's picture

"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 

Mon, 11/25/2013 - 20:35 | 4189337 g speed
g speed's picture

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 --

Mon, 11/25/2013 - 17:09 | 4188814 Z_End
Z_End's picture

Bingo! Those roaring 80s are back...

Mon, 11/25/2013 - 17:46 | 4188914 Burnbright
Burnbright's picture

So what your saying is we are going to see a remake of karate kid but have a chinese teacher? 

Mon, 11/25/2013 - 17:14 | 4188827 tempo
tempo's picture

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.

Mon, 11/25/2013 - 17:16 | 4188836 mt paul
mt paul's picture

Fiat currency


the ultimate 

economic weapon ...

Mon, 11/25/2013 - 20:26 | 4189319 Machination
Machination's picture

And that explains why Chinese are gobbling up Bitcoin

Mon, 11/25/2013 - 21:27 | 4189435 Nothing but the...
Nothing but the truth.'s picture

This will only encourage the Fed to play catch up.

Tue, 11/26/2013 - 01:01 | 4189829 playnstocks
playnstocks's picture

China buying up real estate:

I know, I know I hate CNBS too!

Tue, 11/26/2013 - 07:38 | 4190135 doctor10
doctor10's picture

The difference is that we use it  for EBT cards, The Chineseuse it to buy mines, farms, and oil wells.

Mon, 11/25/2013 - 15:55 | 4188569 SILVERGEDDON

Anything you can do, I can do better ! Ha ha ha ! 

Imperialist running dogs have nothing on paper printing Chinese glorious Revolution dog eaters.................. 

Mon, 11/25/2013 - 16:16 | 4188633 LFMayor
LFMayor's picture

LOL!   AnAnon is gonna like that post so much you can come over to China and fuck his sister!

Mon, 11/25/2013 - 16:41 | 4188709 TheFourthStooge-ing
TheFourthStooge-ing's picture

Wok dog while you can. According to Rudwig von Maoses, going to end in blob-up boom.

Mon, 11/25/2013 - 16:47 | 4188726 Terminus C
Terminus C's picture

His parents tossed his sister in the dumpster when she was born... so no go on the fucking...

Mon, 11/25/2013 - 15:56 | 4188571 ssp2s
ssp2s's picture

Joke's on them.  We did it WITHOUT gold.

Mon, 11/25/2013 - 16:11 | 4188621 Jaspergers
Jaspergers's picture

All the gold they have hoarded probably makes abandoning the race to debase a little less scary for them.

Mon, 11/25/2013 - 17:17 | 4188838 DosZap
DosZap's picture

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.

Mon, 11/25/2013 - 18:08 | 4188985 Son of Captain Nemo
Son of Captain Nemo's picture

Boy you got that one so right.

This ain't your parent's I love the 80's American economy anymore!

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