This page has been archived and commenting is disabled.

Some Stunning Perspective: China Money Creation Blows US And Japan Out Of The Water

Tyler Durden's picture





 

With private sector loan creation in the US and Japan virtually unchanged since Lehman levels (and the US in danger of posting a negative comp in a very months) and Europe loan creation contracting at a record pace, it falls upon the Fed and Bank of Japan (and possibly the ECB soon) to inject the much needed credit-money liquidity into the system. And, as everyone knows, month after month the Fed and the BOJ diligently create $85 billion and $75 billion in new outside money out of thin air (that this "credit" ends up in the stock market is a different topic).

So to help readers get a sense of perspective how the US and Japan compare when matched to China, below we present a chart showing the fixed monthly "money" creation by the Fed and the BOJ compared to the most comprehensive money supply aggregate available in China - the Total Social Financing - for the month of November. The chart speaks for itself.

Basically, while everyone focuses on the breakneck money creation by the Fed and the BOJ, what happened in the past month is that China quietly created some 20% more money. Perhaps most impotantly, between these three entities, nearly $400 billion in liquidity was created de novo in one month! Because when the entire world is a credit-fueled ponzi scheme, these are the kind of numbers that matter.

For those curious, here is a more detailed breakdown of the Chinese numbers from Bank of America.

New bank loans and TSF rebounded notably in November

Despite higher and volatile interbank rates and rising bond yields, credit growth remained quite robust towards year-end. Two most watched data points, new bank loans and Total Social Financing (TSF), rebounded notably to RMB625bn and RMB1230bn respectively in November from RMB506bn and RMB856bn in October. YoY bank loan growth remained unchanged at 14.2%, while yoy outstanding TSF growth moderated to 19.5% from 19.7%. Today’s money & credit data should be positive for markets which have been worried that the PBoC could tighten credit supply to reduce leverage by citing rising bond yields and interbank rates.

Details of TSF: All financing activities accelerated

  • New entrusted loans rebounded notably to RMB270bn in November from RMB183bn in October, while new trust loans increased to RMB102bn from RMB40bn.
  • New corporate bond rose to RMB138bn in November from RMB107bn in October. We note that government and coporates delayed their bond issuance or scaled down the size after bond yield soared, but the net corporate bond issuance in TSF still rebounded due to a smaller amount of expiry in November from October.
  • New FX loan edged up to RMB12bn in November from RMB5bn in October.
  • Non-discounted bankers acceptance (BA) increased by RMB6bn in November after falling RMB40bn in October. We think the monthly numbers are particularly volatile, and there is no need to overly-interpret it (This is also the reason why we exclude it from calculating our revised TSF growth.)

Loan details: demand for working capital remained decent

  • New MLT corporate loans fell to RMB86bn in November from RMB144bn in October. Concerning seasonality, the number is not low. Note that it dropped to –RMB3bn in November 2012 from RMB169bn in October 2012 despite supportive policies and recovering growth momentum then. We believe policies would remain relative neutral in coming months and there could be no sudden reversal of policies.
  • New short-term corporate loans rose to RMB241bn in November from RMB215bn in October. Meanwhile, discounted bills also increased by RMB19bn after falling RMB71bn. It suggests loan demand for working capital remained decent.
  • New MLT loans to household (mainly mortgage loans) rebounded to RMB182bn in November from RMB154bn in October, supported by strong home sales momentum in previous months. New short-term loans to households rose to RMB80bn in November from RMB51bn in October, reflecting that SME loans could remain supported.

* * *

So how long before the developed and developing world "have" to create $1 trillion or more in money supply each month to keep the house of cards from toppling?

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 12/11/2013 - 10:50 | Link to Comment SheepDog-One
SheepDog-One's picture

They're making sure money ends up being worthless. Pretty scary stuff.

Wed, 12/11/2013 - 10:52 | Link to Comment NoDebt
NoDebt's picture

Good thing the Yuan/Renminbi is tightly pegged to the dollar or this might be a problem in the FX markets.

Wed, 12/11/2013 - 10:58 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Yes, but who's got all the gold?  Counterparty risk on paper promises can be a bitch.  History is very clear on that.  Eventually people don't give a shit about "mark to fantasy" accounting and they want to see the underlying collateral.

Wed, 12/11/2013 - 11:01 | Link to Comment Skateboarder
Skateboarder's picture

Chinese will gladly barter with gold. Unless mass gold confiscation occurs... but that will result in a civil war, even in the land of 'what dissent?'

Wed, 12/11/2013 - 11:09 | Link to Comment TeamDepends
TeamDepends's picture

"Perhaps most impotantly".  Love it, Tyler.  This is Fight Club!

Wed, 12/11/2013 - 11:20 | Link to Comment SafelyGraze
SafelyGraze's picture

fr: our cash buys govdebt and mbs
pboc: our cash buys serfdom

fr: our cash buys govdebt and mbs *and* serfdom
pboc: our cash buys serfdom and warmachines

fr: ourcash byys govdebt and mbs and serfdom and warmachines and devalues the unit
pboc: our cash buys serfdom and warmachines and emptycities and gold

usfr: assholes 

Wed, 12/11/2013 - 11:22 | Link to Comment The Limerick King
The Limerick King's picture

 

 

The race to the bottom is on

The Dollar, Yen, Euro, and Yuan

But I do not care

I'm a smart perma-bear

I'll have gold when all fiat is gone

Wed, 12/11/2013 - 11:51 | Link to Comment PT
PT's picture

Yes, yes, globalisation, free trade - what could possibly go wrong?

Wed, 12/11/2013 - 12:51 | Link to Comment TruthInSunshine
TruthInSunshine's picture

China is winning the global war of chess and will soon own the ENTIRE WORLD!

Wed, 12/11/2013 - 13:23 | Link to Comment Ying-Yang
Ying-Yang's picture

is this the plan? Every central bank print fiat until there is global hyperinflation?

Will the New World Order replace existing central banks with one NWO currency and one NWO central bank?

Can the elites pull this off?

Seems to me if this is the plan then those that own food and energy control everyone else.

Wed, 12/11/2013 - 13:27 | Link to Comment PT
PT's picture

... and so far it has all been with the rest of the world's blessing.

"Yes, yes, don't worry.  You can have our production.  You can have our land.  What do we need that for?  I'm always amazed at how rich you guys are.  Our peasants are so poor, they can't afford to bid up the price of anything.  They must be lazy ..." 

Wed, 12/11/2013 - 11:51 | Link to Comment Bananamerican
Bananamerican's picture

Fiat?

perhaps there's a way to make Stocks, Bonds, Lamborghinis, pricey Florida condos, Malibu mansions and politicians worthless instead?...

Wed, 12/11/2013 - 11:59 | Link to Comment SRSrocco
SRSrocco's picture

Someone brought this to my attention.  No wonder the Chinese can mine gold at $2,000-$2,500 an ounce, and the reason why we can continue the Shale Energy Ponzi in the U.S.

 

SILVER: Inflation Hedge, Store of Value or Great Investment
Wed, 12/11/2013 - 12:37 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

"They're making sure money ends up being worthless. Pretty scary stuff."

 

You're leaving something out though that I think is pretty important to point out. They're making it worthless for the little people. Not for the people that can create it and their buddies. It's a big club, and you and I aren't in it.

Wed, 12/11/2013 - 11:33 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Chinese will gladly barter with gold."  - I welcome this, and will be more than happy to accept their gold in exchange for my soybeans.  Sounds great!

Wed, 12/11/2013 - 12:43 | Link to Comment CheapBastard
CheapBastard's picture

It's no surprise [at least to me] that the Chinese are using that massive flood of money to buy every commerical and residential piece of RE in the world as well as stacking PMs to the sky.

Hard Assets for paper fiat.

They ain't Dumb.

Wed, 12/11/2013 - 11:04 | Link to Comment oak
oak's picture

the cny has not been  pegged us$ for a while now. it is misleading on peg. china is doing something differently. hope some one knows.

http://forex.tradingcharts.com/chart/US%20Dollar_Chinese%20Yuan%20Renmin...

Wed, 12/11/2013 - 11:26 | Link to Comment NoDebt
NoDebt's picture

No, it's not hard-pegged.  It's a managed float in a tight range around a peg.

"The RMB is now moved to a managed floating exchange rate based on market supply and demand with reference to a basket of foreign currencies. The daily trading price of the U.S. dollar against the RMB in the inter-bank foreign exchange market would be allowed to float within a narrow band of 0.3% around the central parity published by the People's Bank of China; in a later announcement published on May 18, 2007, the band was extended to 0.5%.[55] On April 14, 2012, the band was extended to 1.0%.[56] China has stated that the basket is dominated by the United States dollar, Euro, Japanese yen and South Korean won, with a smaller proportion made up of the British pound, Thai baht, Russian ruble, Australian dollar, Canadian dollar and Singapore dollar.[57]"

Wed, 12/11/2013 - 11:57 | Link to Comment oak
oak's picture

no offense, nd. therefore, china has a cny index similar to us$ index and does not peg to us$ only. us$ index does not include cny, very interesting. it appears cyn index includes china's major trading partners.

Wed, 12/11/2013 - 12:26 | Link to Comment donsluck
donsluck's picture

Lack of punctuation makes for a hard read. There are good reasons why language evolved the way it did.

Wed, 12/11/2013 - 12:11 | Link to Comment Atlasshruggedme
Atlasshruggedme's picture

Remember they are buying gold like crazy! So the money they are printing is backed by something. 

http://www.zerohedge.com/news/2013-11-02/chinas-gold-hoarding-continues-over-2200-tons-imported-two-years

If you are going to print money and have it backed by Gold. China might be printing money like crazy, but they are buying gold like crazy. Everything is backed. Why not increase your money supply like crazy, when they are suppressing gold prices?

Wed, 12/11/2013 - 10:54 | Link to Comment Occident Mortal
Occident Mortal's picture

It's one hell of a race.

Wed, 12/11/2013 - 10:58 | Link to Comment ArkansasAngie
ArkansasAngie's picture

So much for a race to the bottom.

My devaluation is bigger than yours ... nana booboo

And poor lilttle ole Europe is left with a the strongest currency?

Currency wars are here.

Wed, 12/11/2013 - 11:24 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

They're making sure money ends up being worthless. Pretty scary stuff.

In Chinese citizenism monetarist blobbing up, the numbers are the mattering thing.

Wed, 12/11/2013 - 12:48 | Link to Comment emersonreturn
emersonreturn's picture

it appears there is a slight difference, in that some small portion of the phantom money actually reaches the sheeple.  if even a small percentage reached small business and individuals here it would make a huge difference.  clearly tptb do not intend for the sheeple to recover.

Wed, 12/11/2013 - 14:38 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Dr. Albert Barltett (U of Colorado)  http://www.albartlett.org/.  I'm gonna go out on a ZH-limb here, to provoke a lively intellectual debate...

"The greatest shortcoming of ZH readers is their inability to understand the exponential function" and how TPTB can use/abuse it to their advantage.

TPTB can simply keep creating more Currency (that they call Money), if they switch to a LOG function.  Then the vast 'money' (currency!) creation looks linear again.  And humans love to think in linear terms.  It is SO easy to manipulate the human brain, given that 95% of them either suck at math, or are slaves to their ingrained Paradigms (mental models).

TPTB can, and probably will do exactly this: Keep inflating, then switch to a Log function/graph.  The MSM will play alongAnd, as long as the CBs of the G10 keep inflating in synch, (a) the other CBs have to follow and (b) no absolute advantage is realized.  The game of Liars Poker continues.  Admittedly, this is not something that libertarians/Libertarians will relish, as they keep hoping for their Golden "Ship to come in"**.

The only TRUE winner in this game, is the currency with the GRC status:  the USD/Petro-Dollar.  The petro-dollar can force the rest of the world to accept their glorified Confetti, in exchange for real labor and services.  No foreign CB has yet had the "balls" to repudiate the USD. 

If the "hated" Fed reverted to 'real' money, Americans could hardly afford their mamby, pamby lifestyles (cheap oil, cheap offshore labor and wares).  

 

** In the interest of full disclosure, I will admit to hedging my bets in this Gold vs Fiat war-game, by holding some of each. Unlike many here (alas!), I do NOT 'expect' gold to become the Golden (Lotto) Ticket for a "get rich quick" scheme.  Rather, I'm hedging that holding some % of my family's portfolio in PM bullion (in  own possession!), that it will retain its value in the coming years and decades -- even if it keeps its present official status as a 'Precious Commodity/Resource'.  After all, the supply is VERY limited, and the ore concentrations keep going down, down, down (peak gold).  I don't care if I wait 5 yrs or 25 yrs for global production of PM to fall.  At some point even its 'commodity' value will increase, and thus retain its "store of value". 

And since I'm not a zealot or "one size fits all" type of guy, this will not stop me from using fiat and cyber currencies to diversify our holdings into select global stocks and productive real estate -- to grow wealth, maintain flexibility and mitigate risk.

Thu, 12/12/2013 - 02:06 | Link to Comment matrix2012
matrix2012's picture

Thank you Kirk2NCC1701 for sharing your practical thought. It's enlightening!

+100

Wed, 12/11/2013 - 16:46 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

Wonder how that actually breaks down in "Credit Creation Per Capita". Probably not as horrible as the USA.

Wed, 12/11/2013 - 10:49 | Link to Comment jkjacksonhole
jkjacksonhole's picture

This is stunning. Why have we not heard this before?

Wed, 12/11/2013 - 10:56 | Link to Comment NoDebt
NoDebt's picture

We did.  On ZH.  About a week or two ago.

Still pretty recent and I'm still not sure we're getting the whole picture here, but it is, as Joe Biden would say, a big f'ing deal.

Wed, 12/11/2013 - 11:03 | Link to Comment Obadiah
Obadiah's picture

you know now that you mention it... i bought all the "numbers" on money creation too.  WTF I am sheep.  Thes fuckers are prolly running the presses double what they say... right into thier physical asset of choice.

somebitchez!!!

 

get ready folks

Wed, 12/11/2013 - 11:40 | Link to Comment DeadFred
DeadFred's picture

If you're going to take over the position of world reserve currency you need an adequate supply to work with.

Wed, 12/11/2013 - 12:15 | Link to Comment Vendetta
Vendetta's picture

If you're going to take over the position of the world's leading toilet paper dispenser you need an adequate supply to work with.   There fixed it for ya.

Wed, 12/11/2013 - 11:52 | Link to Comment PT
PT's picture

jkjacksonhole re "..Why have we not heard this before?"

Best comment.  +++++++ 

Wed, 12/11/2013 - 12:57 | Link to Comment Ham-bone
Ham-bone's picture

Why have we not heard this before?

Seems this info that China is newest, latest, greatest credit bubble in history doesn't fit with the narrative of the dollar about to die...that the "strong" Chinese will be the new reserve currency is ludicrous.  There is just no truth that some nation would hold the US accountable for our own profligacy.  Japan is the debt bomb now (but they were going to be the new rulerz of the world) and China with it's credit bubble will collapse terribly.  Neither of our primary creditors are anything but massively weak, incapable ,and unwilling to slow down or change the dollar centric game.  Neither have dumped the dollar and both are at record holdings of US Treasury debt and US $ foreign reserves. 

The game is far more convoluted and collusive than folks want to admit.  Yes, seems all nations w/ a CB have held hands and agreed to print money forever...Maybe the more proper narrative should be that all nations are collapsing to benefit .001% of the worlds population.

Wed, 12/11/2013 - 15:09 | Link to Comment mkkby
mkkby's picture

We may not have heard this specific news before.  But did you really think they were building all those empty cities with a hard currency backed by a magical trade surplus? 

China has obviously been fucked up on a grand scale for at least a decade.  The western political class uses fake debt induced GDP to keep their pitiful government jobs.  China does it to keep a few billion starving peasants from slaughtering them...  much more pressing need.

Thu, 12/12/2013 - 13:47 | Link to Comment NO SOLICITING
NO SOLICITING's picture

I agree, Guns & Butter.

Wed, 12/11/2013 - 21:30 | Link to Comment Notarocketscientist
Notarocketscientist's picture

You mean why has the MSM not reported this before?

 

it's of course old news here on ZH: http://www.zerohedge.com/news/2013-11-25/chart-day-how-chinas-stunning-1...

Wed, 12/11/2013 - 10:51 | Link to Comment Jason T
Jason T's picture

meanwhile, China's currency is getting stronger and stronger completely unnoticed.

 

Declining West, Rising East.

Wed, 12/11/2013 - 10:58 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Declining West, Rising East." -  Bullshit, everyone is using "mark to fantasy" accounting.  Show me the underlying collateral, until then I remain unimpressed.

Wed, 12/11/2013 - 11:03 | Link to Comment Jason T
Jason T's picture

http://research.stlouisfed.org/fred2/graph/?s[1][id]=CHNGFCFADSMEI

 

20 million cars sold in China this year?  Few more completed high speed rails? 

 

Wed, 12/11/2013 - 11:52 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Unless those cars and trains are running on solar power or some new fancy fusion reactor, I remain unimpressed.  What I do see, is many chinese customers and I will happily accept gold.

Wed, 12/11/2013 - 11:55 | Link to Comment El Vaquero
El Vaquero's picture

What is impressive is that China appears to be trying to position itself so that it gets the lion's share of the remaining oil for cheaper than everybody else, and it may very well be successful at that.  I agree, it's not a long term solution to the world's energy problem, but it very well may hurt us before it hurts them. 

Wed, 12/11/2013 - 11:55 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

European train companies are doing booming bithness in China.

No bitches for those bithnessmen.  Just Happy Endings after haircuts and massages.

Wed, 12/11/2013 - 11:37 | Link to Comment Calmyourself
Calmyourself's picture

Chinese collateral hmm lets see..  20-30 million excess males, most of East Africa, moar gold than us and yeah deliverable nukes that ought to do it..

Wed, 12/11/2013 - 11:49 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Many have deliverable nukes, so what?  So you are saying that China is to the 21st century, what Germany was to the 20th?  thanks for confirming what many already knew.  Now how did that turn out?

Wed, 12/11/2013 - 11:57 | Link to Comment El Vaquero
El Vaquero's picture

 

Now how did that turn out?

Not as bad as it would turn out today.  Problem is, we'd nuke back.  The other issue is that China would have a helluva time delivering all of those troops to invade the US should more conventional means be chosen.  We may be broken and fucked up, but we do have some serious naval hardware, and the logistics of getting a huge army over the Pacific is no joke. 

Wed, 12/11/2013 - 13:07 | Link to Comment WarPony
WarPony's picture

sleeper cells embedded yesterday

Wed, 12/11/2013 - 13:11 | Link to Comment Ghordius
Ghordius's picture

"Now how did that turn out?" hmmm... the winners were on the side Russia was on?

Wed, 12/11/2013 - 11:51 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

the chinese labor is the collateral as they are the only ones who are working, for now

Wed, 12/11/2013 - 15:16 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

@ LoP: "...Show me the underlying collateral"

Hate to break you the bad news, my friend, but in their minds... you and me and all the other "Minions" (outside the Select Club) are the collateralOur taxable or confiscate-able assets (via Eminent Domain or EO from the POTUS), our taxable labor (i.e., present and future "claims to labor"). 

They don't just leverage 'OPM' (Other People's Money).  They leverage 'OPA':  Other People's Anything (assets/wealth, labor, knowledge, ideas, connections...).  They've taken Slavery to its (logical) extreme:  From mere physical slavery, to Total Slavery.  Theirs is a philosophy of demonic hunters: You can run, but you can't hide.  For long.

It's a Brave New Big Brother World:  By, For and Of the Global Rulers and Oligarchs.  The kings and Pharaohs of old would be proud.  /s

Wed, 12/11/2013 - 11:07 | Link to Comment oak
oak's picture

cny is stronger with respect to usd and jpy but weaker to euro. do not know what they are trying to do. it is not comforting.

Wed, 12/11/2013 - 10:50 | Link to Comment kliguy38
kliguy38's picture

hehehehehhe......yeah baby......WE print money and buy Shit and they print money and buy Gold.....WHO do ya think is gonna be on top at the end?

Wed, 12/11/2013 - 10:53 | Link to Comment ssp2s
ssp2s's picture

Yeah, but China's currency is just backed by paper.  Now, if they were storing record amounts of gold, I'd be concerned.

Wed, 12/11/2013 - 11:01 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Barbarians!

Wed, 12/11/2013 - 11:54 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Jimmy, m' lad, I'd also be concerned if they backed their fiat promises with cheap labor and few regulations on Mfg.

Good thing they have neither, eh.

Wed, 12/11/2013 - 10:53 | Link to Comment pragmatic hobo
pragmatic hobo's picture

this is how china can manufacture goods then sell them at loss while still appearing like they are making money ...

Wed, 12/11/2013 - 11:11 | Link to Comment oak
oak's picture

they can purchase raw materials cheaper and export products higher in us$.

Wed, 12/11/2013 - 11:16 | Link to Comment pods
pods's picture

Walmart writ large.

Wed, 12/11/2013 - 12:02 | Link to Comment Bananamerican
Bananamerican's picture

or they can pay Wang Lung a kernel of rice for his day's wages, with a carbon monoxide chaser...

Wed, 12/11/2013 - 10:59 | Link to Comment Paper CRUSHer
Paper CRUSHer's picture

Yeah but PBOC's bullion hoard is also increasing proportionally.

They don't give a hoots about their "stawmarket" Gong Ing Don

Wed, 12/11/2013 - 10:55 | Link to Comment holdbuysell
holdbuysell's picture

And there's no inflation to be found....except:

Risk assets: all time highs

High end real estate: near all time highs

Fine wines: all time highs

Diamonds: all time highs

Art: all time highs

Rare maps: all time highs

Did I miss anything?

Wed, 12/11/2013 - 11:16 | Link to Comment starman
starman's picture

Classic and antique car prices are fucking through the roof!

Wed, 12/11/2013 - 11:32 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

How is pooter pricing?

Wed, 12/11/2013 - 11:01 | Link to Comment itchy166
itchy166's picture

Fiat to zero means Bitcoin to ? 

Wed, 12/11/2013 - 11:04 | Link to Comment Skateboarder
Skateboarder's picture

About tree fiddy.

Wed, 12/11/2013 - 11:14 | Link to Comment Sonic the porcupine
Sonic the porcupine's picture

Bitcoin IS fiat.

Wed, 12/11/2013 - 11:18 | Link to Comment itchy166
itchy166's picture

It is fiat with one major difference.  It is the first fiat that can not be inflated away.  A kind of fiat that is designed to behave like a PM.

Wed, 12/11/2013 - 11:25 | Link to Comment Skateboarder
Skateboarder's picture

A PM doesn't go away when you turn off the electricity.

Wed, 12/11/2013 - 11:28 | Link to Comment iLiquid
iLiquid's picture

That's why it is called a deflationary currency... once you turn the electricity off, it deflates away.

Wed, 12/11/2013 - 11:32 | Link to Comment Skateboarder
Skateboarder's picture

'Ba-dum-pshh!' of the week.

Wed, 12/11/2013 - 12:04 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

If the electricity goes off over the ENTIRE PLANET, you'll have bigger problems, and your PM will mean jack shit.  Cause then it's "Game Over" for planet earth. 

/ But, hey, according to Hal fucking Lindsey and his Latter-Day ilk, that's gonna happen "any day" now.  Right?  "Jesus is Coming" or "The Rapture is near" has been going on since the 1800s, with particular popularity in US every so many years.  Elmer Gantry was a fucking genius.  There's a sucker born every minute. /s

Wed, 12/11/2013 - 11:19 | Link to Comment Sonic the porcupine
Sonic the porcupine's picture

duplicate

Wed, 12/11/2013 - 11:01 | Link to Comment sudzee
sudzee's picture

Population needs to be taken into account.

Wed, 12/11/2013 - 11:13 | Link to Comment itchy166
itchy166's picture

Not population, but the size of their economy.  China is roughly half as big as the US, and is printing more than double...

Wed, 12/11/2013 - 11:19 | Link to Comment NoDebt
NoDebt's picture

That's the right way to look at it, I think, itchy.  At least, that's the first thing that popped into my head.

Wed, 12/11/2013 - 11:45 | Link to Comment Calmyourself
Calmyourself's picture

Umm, triple the population and about 32K less sq. km.. Population is key to credit creation at the very least a critical factor in the required size of the liquidity creation.

 

Wed, 12/11/2013 - 11:53 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Population is key to credit creation" - Yes, a successful ponzi requires many sheep.

Wed, 12/11/2013 - 12:13 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Mako tried to teach us how 'credit' was created , but he was banned from ZH........population has nothing to do with, Labor does......

Wed, 12/11/2013 - 12:06 | Link to Comment Bananamerican
Bananamerican's picture

"China is roughly half as big as the US, and is printing more than double..."

reminds me of the Great Leap Forward when CH.gov had millions of Chinese peasants, all over the country, individually melting down scrap metal in home-made "furnaces", in an attempt to "beat the west" at Steel production...They, of course, ended up with a bunch of blackened, smoldering Shit!

Wed, 12/11/2013 - 12:43 | Link to Comment WarPony
WarPony's picture

... that ended up being purchased in the rust belt of USA.

Wed, 12/11/2013 - 11:20 | Link to Comment falak pema
falak pema's picture

You do know that the current president of China is running a huge anti corruption campaign. Mr Zhou is being house arrested; the man in the PREVIOUS politburo who headed up the security ministry and spent MORE money policing the SERFS, aka internal security, than on defending State; aka the army. He was also big boss man of the OIL corporations; very rich kick back funding turbine. 

So...maybe this will put a stop to all that money creation for the wrong reasons and push it towards consumer and pollution protection. 

Who knows what goes on in the Politburo unless you smoke havanan cigars and shake hands with Raoul Castro in Soweto! 

That new Chinese president looks like he has his head screwed on tight and his eyes very focussed on making China top Tiger in South China Sea as in BRIC Africa!  

Wed, 12/11/2013 - 11:03 | Link to Comment lostcause
lostcause's picture

Maybe that's why their procuring all that gold! 

Wed, 12/11/2013 - 11:04 | Link to Comment ghostzapper
ghostzapper's picture

Great piece.  This is why I think ZH will be considered one of the most influential voices of this era where we transition to a new financial system.  

Still think ZH is wrong on Gold and BTC but analyzing what is really goin on is something for which I am always thankful.  

Wed, 12/11/2013 - 11:30 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

Who has got it right about PM in the last 4 years?

Wed, 12/11/2013 - 12:08 | Link to Comment Bananamerican
Bananamerican's picture

he just toldja...

china

Wed, 12/11/2013 - 14:01 | Link to Comment ghostzapper
ghostzapper's picture

The charts have been right about PMs for the last few years and have always been right frankly.  The charts have told you to not put on any new longs for about two years now.  I've said that here a few times and I am not patting myself on the back.  I admit that I let the charts tell me what to do.  Iam more interested in silver and will start to "stack" when the chart tells me to.

Basically i just think there are two risks that are not fully appreciated by some of the PM people:

1. manipulation

2. confiscation

I can't exactly qunatify them but i know they are there and I think they are some of the reasons why gold has not rocketed above $2,000 and on to $5,000 and higher.  I agree with all the fundamental things supporting PMs but fundamentals aren't the whole story. 

Wed, 12/11/2013 - 11:10 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

China is building this massive capacity...just as productivity starts moving to the NEW cheapest place to manufacture.

Wed, 12/11/2013 - 12:10 | Link to Comment Bananamerican
Bananamerican's picture

yeah, back here.

Our mexicans have learned their lesson....pffft

Wed, 12/11/2013 - 11:15 | Link to Comment Stuck on Zero
Stuck on Zero's picture

This is just another example of the U.S. falling further and further behind.  First we heard about education.  Now money printing.  Shame. The solution is for the Fed to print $100B and hand it over to the Department of Education.  Quickly we'd be caught up in money printing and education.

 

 

Wed, 12/11/2013 - 11:13 | Link to Comment Donlast
Donlast's picture

China has 3.5 billion people.  

Does that not play a role in how much money they need to create?

Wed, 12/11/2013 - 11:20 | Link to Comment itchy166
itchy166's picture

No, their economy is smaller. 

Wed, 12/11/2013 - 11:27 | Link to Comment Whiner
Whiner's picture

Peasant in rice patty need no money; urban factory working stiff in 420 sq ft apartment w shared bathroom only need $123 per month. Still a lot of yang money to absorb. How do it stay afloat? China probably has seven thousand tons of AU. State secret.

Wed, 12/11/2013 - 12:34 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

1.5 million.

Soon to be overtaken by India, if it hasn't happened already.

Wed, 12/11/2013 - 11:20 | Link to Comment youngman
youngman's picture

Now I know why they are buying gold....but rulers need to get enough paper fiat out there to get it accepted in the world for a reserve currency....get it in peoples hands in other countries to get it started...

Wed, 12/11/2013 - 11:26 | Link to Comment Martel
Martel's picture

Ho Lee Fuk, Wi Plin Ting Tu Lo.

Wed, 12/11/2013 - 11:20 | Link to Comment Donlast
Donlast's picture

Gold is about a global monetary system between sovereign states. The society of sovereign states is a Hobbesian one and it is brutal.  Gold - and silver - will trade any time, anywhere, under all circumstances, from bitter talk to genocide.  Diamonds are pretty good too. 

Fiat money, in certain circumstances, is literally not worth the paper it is printed on.  Electronic bytes in the virtual sphere even more so. Not even thin air.  Nada. Nothing.

Wed, 12/11/2013 - 11:57 | Link to Comment PT
PT's picture

... and make sure you can enforce your side of the transaction.  Otherwise you are a "donor".

Wed, 12/11/2013 - 12:06 | Link to Comment artless
artless's picture

"Diamonds are pretty good too"

Only because they are controlled by a cartel. They are not rare, not that hard to make via artificial means which are almost 100% indistinguishable from natural made diamonds.

I'll stick with gold and silver thanks.

Wed, 12/11/2013 - 11:36 | Link to Comment iLiquid
iLiquid's picture

The TSF is defined to measure "total funds the real economy obtained from the financial system" over a month (http://articles.chicagotribune.com/2012-11-13/news/sns-rt-china-tsf-fact... ). The TSF excludes money raised by government bonds, so it's not really comparable with QE money that is directly injected into the banking system in exchange for the (already paid-for) gov. bonds.

Unlike in AMerica where households are broke and rely on Free Shit, Chinese families actually have deposits that "back up" some fraction of this exorbitant amount of loans.

Wed, 12/11/2013 - 11:26 | Link to Comment Donlast
Donlast's picture

China is a smaller economy...

Chinese eat, drink, travel, buy washing machines, tech stuff, household goods and now cars.  What do you think they use - shirt buttons.

Wed, 12/11/2013 - 11:28 | Link to Comment q99x2
q99x2's picture

Yellen. Bernanke teach you how to print or not. What you waiting for.

Get to it.

Wed, 12/11/2013 - 11:28 | Link to Comment cassotto
cassotto's picture

china's population: 1.351 billion

Wed, 12/11/2013 - 11:52 | Link to Comment Zerohedge fan
Zerohedge fan's picture

come on, man!!!!

got to buy gold with somethin'

Wed, 12/11/2013 - 11:57 | Link to Comment GoldenDonuts
GoldenDonuts's picture

Wow if your China the world is your oyster.  Print monopoly money so that you can sell naked shorts on the comex.  Use your stolen cash to buy actual pms and raugh all the way to the bank.  The Fed needs to look to these guys for some lessons.  I'll bet however that when they print their funny money they don't create debt for Mrs Wong to pay off.  Its just roll the presses.

Wed, 12/11/2013 - 12:03 | Link to Comment PT
PT's picture

That's why I get the feeling that it was all planned out to simply withdraw prosperity from the US and give it to China.  No-one can be that ignorant.  No-one can be that stupid.  Someone(s) actively planned to destroy the US and give the wealth to China.  Everything else was propaganda.

Wed, 12/11/2013 - 12:16 | Link to Comment Bananamerican
Bananamerican's picture

or do TBTB in the west believe they can finally sever the thousand years link with AU/AG..... and laugh at China's ravenous apetite for the barborous relic?

Wed, 12/11/2013 - 13:37 | Link to Comment GoldenDonuts
GoldenDonuts's picture

Hey I didn't say that the MBA class running the western world right now aren't a complete bunch of soulless, brainless idiots.  I just said that China is printing money like toilet paper to take advantage of that fact.

Wed, 12/11/2013 - 12:02 | Link to Comment artless
artless's picture

I siad it before and I'll say it again: China is going to be a fucking trainwreck down the line. Demographics people. Thye cannot feed their population without massive imports. They have an ever growing young, umarried male population that they must keep occupied. That means more Foxcons and huge manufacturing outlets when the world is pivoting AWAY from Chinese labor as it becomes more affluent. What exactly are they gonna replace that with, huh? Their central-planned nightmare? They have to buy all their oil. They don't produce much oil. They have MASSIVE ecological problems like say, their fucking seas are dead 'cause they fished them to death. Now they troll the waters of West Africa after destroying the New England fisheries.

They have engaged on the greatest Keynesisn "stimulus" ever seen in history with the real estate, the ghost cities, and now the military build up. That's gonna end well. Not. Now the monetary inflation coupled with the patently ABSURD provincial debts that are exploding.

Top that off with the fact that they own US Gov Debt in the trillions. My take is they are gonna get fucked on that one. I believe even SNL understood that with a skit a few years back. Quite possibly the ONLY thing they are doing inteligently is buying gold. That and colonizing paces like Africa with trade, etc but I don't think they can offset their mistakes.

Of course it's really a race to see who can fuck up the worst, first. The US or China. We can solve pretty much every one of our problems TOMORROW if we had the balls but China on the other hand has some institutional and structural problems such as if we pack up all our shit and go home they are dust.

Wed, 12/11/2013 - 12:13 | Link to Comment forwardho
forwardho's picture

Why then, at this of all times have they repealed the one child only law?

China plans long, They plan on needing a buttload of extra people in 18 - 20 yrs.

War game the motive, there are huge implications to this social change.

Wed, 12/11/2013 - 12:18 | Link to Comment Calculus99
Calculus99's picture

Art, you're right.

 

It's the combination of ecological problems (they've imported much of the West's polution over the last 2 decades) plus lack of oil. Oil makes the world go around as we know.

Some even say the country might split into West and East. The coastal versus the inner country. Basically the productive West can't support the East. 

Folks, as the money runs out for most countries, the world is going to get pretty jumpy for the next few decades.

 

Wed, 12/11/2013 - 12:36 | Link to Comment WarPony
WarPony's picture

Check USA refinery production @ 90+% and the draw down in refined product and you can bet the USA is selling a shitload of product to the chicoms.  Certainly isn't providing the USA consumer with any relief at the pump.  Trigger point is built in the E. China Sea - for the shooting wars that follows the currency wars.

Wed, 12/11/2013 - 12:07 | Link to Comment forwardho
forwardho's picture

How come China's is refered to by the happy term "social financing"

And we get stuck with the psychosexual term "liquidity injection"

If a scientist is comparing apples to apples...

At least use the same term.

Wed, 12/11/2013 - 12:07 | Link to Comment deus x machina
deus x machina's picture

Isn't china yuan 8 to 1 to US dollar?  

Wed, 12/11/2013 - 12:07 | Link to Comment Trimmed Hedge
Trimmed Hedge's picture

China is kicking our asses!

Wed, 12/11/2013 - 12:18 | Link to Comment Bananamerican
Bananamerican's picture

China, like us, is kicking its own ass...

Wed, 12/11/2013 - 12:19 | Link to Comment falak pema
falak pema's picture

Meanwhile in the Euro zone, while this currency war in Billions per month rages between the Big Three, here is some news on the Western Front of UE : 

‎www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/140041.pdf

Does this provisional treaty mean that the Euro Banking Union will be in place by Feb 2014? 

Wed, 12/11/2013 - 12:55 | Link to Comment Ghordius
Ghordius's picture

in the matter of "resolutions", as soon as it passes as law through the EU parliament, yes

did you note this tidbit? "Eligible deposits from natural persons and micro, small and medium-sized enterprises would have preference over the claims of ordinary unsecured, non-preferred creditors and depositors from large corporations."

Wed, 12/11/2013 - 14:05 | Link to Comment falak pema
falak pema's picture

well its nice to see some "bottom up" logic in a top down banksta world! 

Wed, 12/11/2013 - 12:16 | Link to Comment JailBank
JailBank's picture

Hold on guys the US dollar is not just paper. No it is backed by the full faith of the US gubment, and that means something. Every time I see Nancy, Barack, Johnny B, and Harry I think "Yeah they got my back, and this $1 means something becuase they are here watching out for us".

 

You are welcome ZH on behalf of their sacrifice.

Wed, 12/11/2013 - 12:17 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Once again someone is mixing up money and credit on the asset side versus currency on the liability side.

China creates currency in connection with new credit, not money.

 

Wed, 12/11/2013 - 12:22 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Its only 6 Yuan to a dollar, its not really that bad.

Wed, 12/11/2013 - 13:19 | Link to Comment TWSceptic
TWSceptic's picture

Yes but Yellen will taper in december. Or maybe next year. Well ok when economic conditions allow it.*

 

*actually we don't know what the f* we're doing.

Wed, 12/11/2013 - 12:26 | Link to Comment ebworthen
ebworthen's picture

Hell, the FED should have sent me $3 Million five years ago.

Wed, 12/11/2013 - 12:28 | Link to Comment kahunabear
kahunabear's picture

As the great economists Sting and Mark Knopfler said, "Money for nothing"

Wed, 12/11/2013 - 12:36 | Link to Comment Yen Cross
Yen Cross's picture

   China outspends the US and Japan by almost 25% and the yuan is at 6 year highs vs the usd. Central ponzi at it's finest.

 

Wed, 12/11/2013 - 12:40 | Link to Comment TORNasunder
TORNasunder's picture

Currency Wars; Fed, BoE, ECB, BoJ versus BoC. Whichever bank collapses first gets the blame for the resulting worldwide collapse.

China is no panacea. They have as much financial shenanigans as the rest of the world. The difference though is that China and it's people are buying hard assets with their funny money. US and Europe keep propping up the paper ponzi with theirs.

Wed, 12/11/2013 - 13:17 | Link to Comment TrustWho
TrustWho's picture

What the hell are hard assets.....$1+ trillion USA Treasuries!!!! or better poor quality ghost cities!!!!!! (do not tell me that Chinese developers did not cut corners to put as much money in their pocket as they could).

Wed, 12/11/2013 - 13:05 | Link to Comment luckylongshot
luckylongshot's picture

This chart unfortunately does not do justice to this issue. First it uses the official level of US money creation by the Fed, rather than the actual level, which Jim Willie claims is so much higher it leaves China a distant second. Second, as the government owns the central bank in China, money that does not need to be repaid can be created and issued interest free. By rights this should be deducted from the Chinese figure so an apples with apples comparison can be made. It is reasonable to conclude if both theses factors were considered that US money creation is a significant multiple of Chinese money creation.

Wed, 12/11/2013 - 13:33 | Link to Comment the grateful un...
the grateful unemployed's picture

First it uses the official level of US money creation by the Fed, rather than the actual level

we know that private debt creation just about stopped in 2008, and isn't anywhere near what it was, the private creation of debt as money became problematic, the Fed was losing control of the money supply, and in effect crashed the market, a move which trumped Greenspans cramdown on the Nasdaq in 2000. you can't create an all powerful Fed and then start taking away their power and not expect them to do something about it. in the interest of market stability, mind you. now we have the whole bitcoin problem, which again threatens their control of the money supply, not just how much money, bu the entire capital formation system, ie through big institutional banks which are really no longer banks but cyber loan sharks. if they need to crash the system again they will, however if the big institutions adopt the cyber currency, the Fed will be odd man out. well obama promised us change and hope, we'll probably get the first half anyway


Wed, 12/11/2013 - 13:22 | Link to Comment the grateful un...
the grateful unemployed's picture

lets see American financial aid to the oligarchs, 85B, PBoC financial aid to everybody (social) 203B, adjusted for economic standard of living (lets say ours is 2X theirs) 203-85= 118 (needed to keep the 99% and their economy running smoothly) X 2 = 336B a month just to meet our social financing needs. welcome to the gulag.

Wed, 12/11/2013 - 13:26 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Chris Martenson nailed it when he said that “Money is a Claim on Human Labor” – Chris Martenson, The Crash Course

http://www.youtube.com/watch?v=bkC_jSuKq8Y (19:00-19:52)

With endless fiat/currency creation, the Debt is the Government's way of allowing a country's Oligarchs to institute a Modern Era of Perpetual Slavery.  My father was right, when he told me years ago that "America never got rid of slavery.  Its rulers simply swapped iron chains with financial chains.  Thus Slavery moved from the South to the North.  Then it spread everywhere, like a cancer."

Never mind 'Roll over Beethoven'.  Roll over, Washington, Jefferson, Franklin, Jackson, and JFK.  Spin in your graves!

"Roll over, peasants!" - Regards, your Oli(garch)s.  Love, Jamie Demon, Lord Bankfein, etc.

p.s. Besides Chris, the other people who have their heads on straight and see the world as it IS, IMO, are Charles Hugh Smith, James Howard Kunstler, Jim Rickards, Ron Paul and a few others.  They're smart, level-headed, articulate, educated & informed, balanced, and with great analytical skills and insight.  They have their heads and hearts in the right place.  Too many others are way to biased or extremist, too 2-dimensional, and have some kind of a 'agenda' (that's too self-serving) that they're peddling to gullible and uninformed people.  IMO.

Wed, 12/11/2013 - 14:27 | Link to Comment HOBO POTHEAD
Wed, 12/11/2013 - 16:01 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

One way out would be to use currency that meets "sound money" requirements, as I posted on 11/8  4137185

My fully expanded List of Attributes of Ideal Money and Currency is... 

IDEAL 

MONEY                      FIAT                       GOLD                       BTC

1. Finite Supply              N                             Y                            Y (21,000,000 to be issued by 2140)

   (store of value)

2. Portable                    Y                             Y+N                        Y (Cold Wallet, Password-phrase in your head)

3. Fungible                    Y                              Y                            Y

4. Non-forgeable            N                      Y (but has                     Y

                                                                Assay issues)

5. Divisible                    Y                       Y+N (impractical at        Y

                                                                     Retail level)

6. Private                      N                               ?                          Y (Peer-to-Peer.  No banks, CBs or BIS as middlemen)

7. Acceptance               Y                              Y+N                      Limited but growing fast

8. Conf/Theft-resistant    N                            Y+N                      Y (in cold-wallet.  Can lose it if stored online)

                                                             Confiscated or Stolen

                                                             at Private level

9. Durable                     N                              Y                           Y+N ('No', if all CBs in the world ban it)

10. Legal tender             Y                          N (few exceptions)    N (but banks poised to issue own version)

                                                                                                 Currently suited for Private/Parallel Economy, as it

                                                                                                 removes VoM from fiat-currency/official economy

 

/ The alternative is to keep playing the Currency Creation game, until they have to switch to a Log scale, to create the illusion of linearity in the minds of the Sheeple. /s

Wed, 12/11/2013 - 16:16 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Looking at this chart, and thinking about what China is doing, I'd conclude (among other things) that China is saying to the Fed & Friends (and the world):  "You wanna play money or currency wars?  Bring it on!  We'll See you and Raise you."

They're basically saying to the Rothschild clan to go fuck themselves: "You can't threaten us with Conventional armies, with ABC weapons, with real Money or with fiat/confetti Currency.  Fut you, you Foreign Devils in the UK, USA and Japan (who invaded us in the past)!  You.  Shall.  Not.  Pass."

Fri, 12/13/2013 - 23:33 | Link to Comment daedon
daedon's picture

If you think about it carefully, the "greatest shortcoming of the human race" is its inability to understand psychopaths and acknowledge that psychopaths exist.

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