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As China's Offshore Yuan Crashes To A 2 Year Low, Beijing Warns Its Citizens: "Don't Buy Dollars"
We won't go into the specific details of China's burst housing bubble, the shady underworld of its pyramid scheme wealth-management products, the fact that any hard asset in China is rehypothecated literally a countless number of times, the nuances of its deflating shadow banking system, or even the complexities of its alleged capital controls (alleged, because as a reminder, they only exist for the common folks - the really wealthy Chinese are naturally exempt from any capital flow constraints). We will point out something even more disturbing.
Recall that China, a mercantilist, export-driven country, has a currency that is pegged to the dollar in all but name (yes, the technical peg was dropped in 2005 but since then the PBOC controls the daily moves in the strictest and tiniest of increments), a dollar which has soared in the past 6 months to levels which have prompted countless other central banks to ease in recent weeks, and even forced the Swiss National Bank out of the currency wars, waving a flag of surrender. As a result, China's exports have been crushed regardless of what fabricated and goalseeked Chinese data will have gullible observes believing.
And while the value of the local Yuan, the CNY, is set by bureaucrats and policy makers on a daily basis, and trades in a tight band around a specific, political number and thus never truly reflects the fair value of the Chinese currency, its offshore cousin, the CNH, floats and is impacted by the private demand of the Yuan. As such, the latter is far more indicative of the pressures that face the Chinese economy and what financial interests dictate should be the fair value of the domestic currency.
It is also the former, the Offshore Yuan, that overnight hit a two-year low, reaching a level not seen since September 2012.
Why do we bring this up?
Because in a notice posted on Chinese media yesterday, China is now openly scrambling and on the defensive, when it comes to an ever stronger rush by the locals to get out of their own currency and into the US dollar. As Want China Times reports, "prompted by the robust performance of the US dollar, growing numbers of Chinese are considering converting renminbi to dollar-denominated assets." It is for those "growing numbers" that China has a polite warning: "experts are advising them to think carefully before making the move."
And this is how China is hoping to keep locals more interested in the Renminbi than in the greenback:
Chinese-language China Business News reports that yield rates for US-denominated wealth-management products range only 1.2-2.5% per annum at major domestic banks, such as China Merchants Bank, Bank of Shanghai, and Farmers Bank of China, a far cry from renminbi-denominated products, such as deposits at Yu'e bao, the monetary fund under internet giant Alibaba, which hit 4.4%.
Interest rates for one-year timed deposits at major domestic banks now stand at 3.3%, much higher than the mere 0.95% for corresponding US-dollar deposits.
Investors in US dollar-denominated assets have the option of subscribing to the existing 10-odd QDII (qualified domestic institutional investor) funds, such as the Guangfa Fund, launched by the Bank of Communications, focusing on investments in US realty, which often generates higher returns but also entails higher risks.
In other words, China is pitching an investment in Ponzi schemes as a higher-yielding alternative than putting one's money in an appreciating dollar. Which, in retrospect is backed by another Ponzi scheme, so at least superficially it does makes sense. The bigger problem is that it would appear that the local citizens have figured out that in a time when the US Dollar is ascendent, the knock on effects on the Chinese economy are quite dangerous, and from the collapse in exports, to the imploding banks, to the halt in commerce and urbanization, the dollar suddenly looks like a far better option especially when the local currency is unbacked by anything: not gold, not crude, nothing.
The punchline from the Chinese media:
A forex trader said that despite the recent plunge in the value of renminbi against the greenback, the exchange rate of the former will fluctuate moderately at most, as the renminbi is essentially pegged to the greenback in value, according to China Business News.
Yes... unless China does indeed proceed to become merely the latest in a long chain of countries - main export competitors Japan, the Eurozone and Korea included - who have already devalued against the USD: something numerous experts have quietly voiced in recent weekly is not only possible by just a matter of time.
And why not: after all with China's economy dramatically slowing, it is virtually inevitable that China will have to devalue to spur its export-driven economy.
Of course, the flipside is that the resultant surge of capital flows in the USD assure that the US economy, with its currency at never before seen heights, grinds to a halt, the stock market crashes, and the US export industry falls like dominoes. In many ways, this would be reminiscent of the short-term pain Greece would suffer if its exits the Eurozone, the financial collapse that would follow and wipe out the legacy wealth but set the country on strong footing with its own currency going forward and a way to fix imbalances not only by cutting wages and welfare, but through its own currency as well.
And finally, even if China does devalue now, it knows very well that it has a currency put later: after all those thousands of tons of undisclosed gold that the PBOC has accumulated "secretly" since 2009 can very easily be used to backstop a new-regime currency, once which would redefine the global world order, and serve as the world's reserve.
When will all this happen? Nobody knows, however it is clear that with every passing day that the stronger dollar forces China's exporters into an ever more untenable position, the D(evaluation)- day comes closer.
Unless, of course, the Fed capitulates in the meantime, and crushes all hope of a rate hike or even proceeds with more quantitative easing or even NIRP. In that case all bets are off, and so is the Fed's credibility, leading to an even more... exciting world.
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Tyler, that is the most chilling quote you have posted since 2008....
The party's over, call it a day. China says it doesn't play that way. It's over, oh baby, it's over...
I think that describing this move as a "Crash" is a little overdone? But did anyone really expect the Chinese to sit back and do nothing as Japan devalues the Yen in a futile Mercantilistic attempt to steal export business from China and Korea? This is all part of the currency wars which are just beginning.
...And the Chinese people don't need to be told to buy Gold not paper fiat Dollars.
KING DOLLAR!!!!!!
The sooner the economic collapse the better....wondering how many greedy ZHers will perish as as result of this event.
It takes a long time to die when you're chained to the oversized oar on a slave-galley.
Greedy ZeroHedgers = Lovers of wealth and pleasure. They are selfish, slothful, and indolent. They can be inspired to rise above their brutish existence only by fear of impending death or catastrophe.
Greedy ZeroHedgers are slaves of their own investments, and these worthless financial instruments will go down the toilet as soon as the economic collapse takes place, period.
Oh good, MDB's mean brother has shown up to disparage us as indolent wealth lovers. Actually I am a cruel heartless freedom seeking bastard..
Using one of John McCain's latest statements: Get out of here you low life scum
the Chinese will keep buying gold; meanwhile the price will stay fixed low as supply continues to drop and demand soars.
Ya know...the new normal.
But one of these days, bitchez...this shit's gonna pop!
Tick...tock...
Keep stackin' that phyzz, folks.
http://thewealthwatchman.com/so-are-the-attacks-over/
Just keep stacking phyzz, folks...everything else is just....noise.
Comte, you made it clear, you don't appreciate wealth or pleasure. You don't have any love for the ZeroHedge crowd. Your avatar is the "great pretender", the pompous fake. And you quote idiot John McCain in bold text.
Dude, you are pretty fucking hilarious!
I actually love commenters like Cunt duh Saint. It reminds us ZHers why we own assault weapons so when these slugs try to steal our wealth as to why we blow away 1000 rounds at the range whenever the fuck we feel like it.
Even a lower animal has more intellect than you, stupid good-for-nothing brute...your guns won't do any good when Martial Law is implemented....most likely you are one of those individuals who quietly will surrender his guns to the authorities.
Again, using one of John McCain's latest statements: Get out of here you low life scum
Serious question - Are you fapping off as you write this stuff?
Sen. John McCain earned some applause inside a Senate Armed Services hearing this morning after he erupted at protesters of former Secretary of State Henry Kissinger, calling them “low-life scum.”
“I've been a member of this committee for many years, and I have never seen anything as disgraceful and outrageous and despicable as the last demonstration that just took place,” said McCain, R-AZ.
https://gma.yahoo.com/senator-john-mccain-calls-protesters-swarmed-henry...
oh? how about him killing other sailors on his aircraft carrier? disgraceful? I think so.
Because you used that harsh language calling me a "brute" (I mean, really? Have commielibs gotten that wimpy?) I am going to purchase her home then foreclose on your grandmother and have her old ass on the street by the end of February so you'll have something else to do.
Yippee Kye AAyee! MFER!!! Then I'd flick a Siver eagle on your ass.....
As I thought, crickets from your technocrat troll ass, you fucking punk. Some day, come n down to Texas when you want to grow a pair of nuts, we will stomp a hole in your bored out ass you fucking liberal technocrat.
Punk....
@CdS, you read like an Internet control freak troll
Sniper rifles. Stock up now on them and the bullets. A good suppresor will also be necessary as sonic locators will be common.
"when Martial Law is implemented"??? I say throw a 60 minute video tape in the camcorder as it will be over that quick, there is a whole lot of fear in the governments actions as rational folks do not do the sort of stuff they do and there is a butt load of pent up whoop ass building up on main street. They know it's coming, it's the price tyrants always pay for their fleeting moments of boot stomping glory.
I guarantee with 100% certainty, even though you will try to survive by being a consumate sell out and government bitch boy, that you will die long before any of us do, and no one will remember or care. Cowards like yourself always end up in a hole rather quickly when the SHTF.
Hey, who pissed in your cereal?
Oh, take off your hair shirt and give your nipples a rest.
I was going along with it until this:
the resultant surge of capital flows in the USD assure that the US economy, with its currency at never before seen heights, grinds to a halt, the stock market crashes, and the US export industry falls like dominoes.
I don't see how that conclusion is reached. 70% of GDP is consumer spending, which increases with a strong dollar since all we consume is exports. The dollar rising is sucking all the money out of the rest of the world, and when (if) interest rates rise, it will only accelarate. No country ever went broke from the rest of the world asking them to hold their money. The Swiss have a problem with it because they don't have a reserve currency, we do. Of course this won't help the average Joe but it will keep the dow ascendant.
The destruction of the US is not making the dollar collapse "not possible" it will be more nations trading avoiding the USD. Like China, Russia and India already are and it will be by the actions of the FED (self inflicted to attempt to preserve oneself) that will make it happen.
but that is speculative, the reality now and the current forecast are for the dollar to continue rising as people seek shelter. Chinese, Russians, and Indians are all diving into dollars and US denominated assets. The logic of how the premise of this article (the rush of chinese money into dollars) will be bad for the US economy escapes me.
US will find it diffucult to sell loans, or pay them off with a riseing currency. No one wants to barrow and everyone wants to sell into a market that isnt growing. Hww many buinesses have most of their earnings from overseas? Dividends will be cut, buybacks will stop and this market will learn again what it always forgets.
yep-repulsed, cast off, avoided, dumped, shit on, stomped, beaten, dragged down the road of demise...
The US is doing a fine job of collapsing itself. Thank you very much. We don't need outside help.
We so got this. There should be a line in Vegas so we can clean up. Err, wait.
Don't try to think it through too hard. It makes no sense. While ZH is an incredible resource, it is stridently anti-American. The fact of the matter is that the exact same scenerio played out in the 80s and led to the greatest wealth creation this country has ever seen. Plenty wrong with this country, but an appreciating currency isn't one of them. It's never a bad thing when people around the world want your currency. Yes, it's fiat, but the same thing would happen to a larger degree if we backed with gold - would that be a bad thing?
You dont remember the 80s vary well do you.
Some of us did pretty well in the 80s... You just gotta know how to play the game.
To put it in context you have to remember the stagflation of the 70's. If you were a saver in the 80's, you did OK with Fed funds hitting 20%. 30 year zero coupon bonds were the place to be, but almost any interest bearing instrument kept you in clover. OTOH, it totally sucked to be a borrower....
Rrright, because there will never be a reversal of that flow. Ever.
not the US buster
Nope, the US aint gonna steal no stinkin export business from anybody.
The US is just gonna steal as much imports as their worthless dollars will buy.
Time for China to build a bunch more No Dong missiles. Or is it N. Korea that has the No Dong missiles? Either way... Keynesian economics says go No Dong.
Not a crash its a collapse yeah that's it a collapse..
Dolla Dolla Make you Holla?
Paper sucks. Unless its backed?
RIPS
Hmmm, dollar will not come down, euro will not come down, Ruble will not come down, yuan will not come down, the only money that will come down is in my pocket, or maybe not
We Gona get unpegged by some folks
I'm glad china is being pressured to either devalue against a dollar they despise or else drop the GOLD BOMB on the world and quit waiting for a better day. but it would seem they have paper-pushing crooks of their own to contend with. might they be the very same ones who get to decide the fate of their country and its people? they have to decide if they want to continue to be a nation of oligarchs or if they want to foster a return to sound money and an equitable and unmanipulated economy.
can't any of these greedy pricks see the world desperately needs something different than what it has?
Who's world? Yours or theirs?
there is only one world, but the elite have successfully deluded themselves into believing otherwise.
No, there are many worlds. The elite just haven't quite figured out which one to go to, and how to get there. But they're working on it.
As long as they can keep printing fiat and keep buying with it then they will continue to do so. It is both consolidation and pure profit In the end they will let it crash and replace it with some new instrument while writing off lots of debts. Too bad that by then they will hold all the asset cards and guns.
this entire piece amused me... I found myself chuckling out loud a couple of times... then there was this zinger...
"And finally, even if China does devalue now, it knows very well that it has a currency put later: after all those thousands of tons of undisclosed gold that the PBOC has accumulated "secretly" since 2009 can very easily be used to backstop a new-regime currency, once which would redefine the global world order, and serve as the world's reserve."
lol shyeah right... it's teh secretz Chinese gold, kittehs... the new regime will be here any day now... all hail the shining dawn of the new global world order...
any day now...
still waiting...
waiting...
in the meantime the Chinese people are no fools and are rushing to appreciation as fast as they can... in other words, the US dollar and such denominated assets... why not gold? huh? why?
Have you read ANY of the articles here on China's gold imports and public gold consumption? No, thought not.
This is global empire stuff, not monopoly in the living room. When they make their move they must win because if they don't there will be utter destruction for them. The longer this plays out the stronger they get militarily which will eventually change the calculation.
The sooner the better for us. The calculations on the other side of the Pacific may be a bit different.
Have an interesting day.
give me a break... "Chinese accounting" is a laughingstock... I've seen tons of claims that China is owning all the gold we're doomed omg but there is... no... proof...
even if it were proven so, public gold consumption doesn't mean squat for their so-called world reserve plans unless the Chinese govt goes in and confiscates every last ounce... even if they did, they still wouldn't have the reserves of the US... do you have any idea how much gold the US has mined since the mid 1980s? It's at the point where the US is approaching Australia's yields, and has already passed Russia in mining the yellow stuff...
people here can be really clueless sometimes... the US is an advanced economy, hell it's _the_ advanced economy... you expect that to just dry up and blow over any time now, but you may as well push the ground as hard as you can to get Earth to change orbit... it's just not going to happen... seriously, get real
turtlLeneck highest gold amounts with usa ? lol yeqh i sawvthatbin fed auditingb.
I totally agree, they are getting ready for the big hit and it's going to get ugly.
Don't buy dollars. Yeah that will work.
And don't think of an elephant.
Yes, The Government telling you not to buy dollars will result in a stampede for the cash dispensers.
Our Soviet Central Planners can beat their Soviet Central Planners.
Why does that not quite sound kosher?
Plausible deniability. The so-called ‘rich’ aren’t going to change after the collapse.
After the Chinese citizens realize they have been looted the leaders will say, ‘we told you those Americans are such and such…’
They're gonna want to 'get us'.
So the strong dollar/yuan is not hurting Chinese exports at all? And the Chinese government isn't even thinking of allowing the yuan to weaken a little bit?
Governments always maintain that their pegs are absolutely solid, right up until the evening when the break them.
Did you forget the /sarc?
Spin up the five-year.
http://www.bloomberg.com/quote/USDCNY:CUR/chart
When the chinese central bank version of Larry Silverstein says to "pull it" it won't be because he is protecticting china.
https://www.youtube.com/watch?v=hwhvByj8YG8
Reverse psychology?
Don't do dollas = Suck the liquidity out of their vampiresquid veins and force the Fed to buckle?
WTF?!?!
The Moscow library known as INION—the Institute of Scientific Information on Social Sciences—went up in flames on the evening of Jan. 29.
Interfax reports that the fire, which started on the building’s third floor and spread to 2,000 square meters, is now contained. But damage already appears to be extensive, with at least part of the roof having fallen in.
According to RIA, the library was founded in 1918, and is home to more than 14 million books, including rare texts in ancient Slavic languages, as well as documents from the League of Nations, UNESCO, andparliamentary reports from countries including the US dating back as far as 1789 (links in Russian). One of Russia’s most important libraries, INION maintains a book exchange with 874 partners in 69 countries.
Injuries have been reported, but not yet confirmed (link in Russian).
http://qz.com/336926/a-moscow-library-containing-rare-un-documents-ancie...
The library may have had a copy of the original 13th US Constitutial amendment. Or Sandy Berger couldn't destroy all the evidence by carrying it out in his socks.
Ahem, you mean Sandy Burglar, right... Just a wee mistake like any dem operative would make covering Bill and Hill's ass
"Pull it."
Shit. There goes Chalky's actual birth cert. Dammit, I thought that place was safe.
okay, zh is going full retard. on the one hand a chinese currency devaluation is all but inevitable but on the other a bold ultra strong gold backed currency will replace it? RAFF MY ASS OFF!!
i recall a voice in the wind whisper, "ZH is a cynical joke fest"
junkers taking life too seriously...
In the world of "search" (google) you will find Zero Hedge and "ZH'ers."
This is how knowledge is attained now...not that libraries don't matter.
In some ways they matter more.
But to work in "real time" you need access....not just to knowledge but to what people are thinking. "With a time stamp."
Maybe we find ourselves laughing at the same thing all the time...
Can't confirm myself, but I've heard that The wind cries Mary.
Next verse " full of grace" Luke:1.28
"And the wind it cries Mary THE TRAFFIC lights they a turn blue tomorrow. "
"All along the watchtower, sphincters tightened up."
-Jimi
I think it's more the fact that they have accumulated at least a sum of 6000 tons of gold, most of which is unofficial. The thought is that if the dollar crashes, their gold is their currency hedge. I don't think credible people believe that china could abide by a gold standard.
i agree with your comment but not with this:
those thousands of tons of undisclosed gold that the PBOC has accumulated "secretly" since 2009 can very easily be used to backstop a new-regime currency...
Go ahead and ask the Swiss how well a strong currency helps the old export driven eCONoME.
"Polo, what is the Secret? You know it. Tell my "Ministers," who boast only of Arms and War."
"Great Khan, with enough of the yellow metal, you can control the world."
"You hear, Ministers? The Barbarian from Venice knows the Secret. Perhaps not in my time, but One Day, the Han Empire will Rule the World."
"Our advice is good, Oh Great Khan. The paper money can give us immense power."
"Throw your paper money into the fire, there. Throw in this Gold. Which will survive?"
How'd that work out for Venice or Khan?
5 years since they allowed private gold ownership. A shiny rock, collecting dust, will be preferrable to NIRP.
Don't you think that if China falls that they will take the global economy with, or will the contagion be contained as they sell their $1.3T USTs? If every ship sinks will not everyone scramble onboard any new ship that offers salvation?
Never ret a crisis go to raste.
Baltic Dry down to 608, another 24 points. Do I buy more gold or do our masters have another rabbit before this thing gets interesting...
Edit: Is anyone sure that the gold thats been flowing into China is being hoarded by the gov or in smaller personal holdings? I know the numbers are big, but its a huge population (40'000 new millionaires a year).
All I know is 1/2 of my oligarch clients have decided to forgo a month on the Florida
'season' ,for parts down under .NZ specifically.
Never happened before, and they are leaving next weekend.
Haven't heard yet if they are taking the rest of their extended families.
Winston, how about expanding on that without revealing sources etc.. Please help a brotha...
disclaimer - I have no idea who this guy is, but I stumbled across this the other day.
https://www.youtube.com/watch?x-yt-cl=84838260&x-yt-ts=1422327029&v=Sriu...
http://www.mirror.co.uk/news/world-news/panicked-super-rich-buying-bolth...
A Bozo who reads silences and has a high regard for Obama is too whackily self-deluded for me.
I was just interested in the NZ getaways for the rich folks. Dude is whacked out for sure.
beware the ides of March, or any month for that matter.
Do not congregate in malls or crowds.
3 months food and water minimum.
candles lighters fuel and blankets.
bug out plan. get out of big cities.
pray.
http://www.locutions.org/read-the-locutions/
Don't forget the TP and tampons. Happy wife, ever so slightly less miserable life.
If the Chinese dont like it then how about sell dollars?
That's a good idea.
Selling dollars high and buying rubles low.
I wonder if anybody thought of that?
I wouldn't mind if they took the /DX down 30%
My short dollar position is so far underwater I think it is developing bioluminescence....
Is not China (and Russia) a net seller of USTs now?
I said this before : When China really joins the currency war all the stops come out.
This global system that the two neo-Polo brothers of US oligarchy built : Clinton and Dubya, is now the gorilla that NWO neo-liberalism has unleashed through greed and slave labour arbitrage mantra.
America made that choice to priviliege the 1% by SINKing the 99%, when Reaganomics and supply side deregulation started. That was the great scheme of things : no more welfare state and free rides for the unkempt and coloured, better the WS stock spike and resultant shooting match with the Soviet enemy in arms race all thanks to cheap surrogate Saudi oil.
Now thirty years down the road having created their own opposite in China, a capitalist hungry monopoly construct around a defunct Communist party turned Confucian aristocracy; having created their own Frankenstein in their Oil patch; having alienated friend and foe, simple man and neighbour; the US Oligarchy now faces its own slow demise in the Xanadu ghetto it built itself just as Orson Welles had predicted in Citizen Kane.
An empire is always an appointment with a dream that goes inevitably sour as its nature is predatory to the bitter end.
Jefferson knew that, his proud successors forgot it. Now a couple of generations will pay for it.
A stong dollar and a world that won't want to buy US made stuff, the house of cards then is casino bereft of clients.
As for a global asset dump and reset without a major war; it seems a far away possibility when pathologically minded oligarchy thieves, drunk on power, fall out.
You might want to check, but I think your tin foil hat just fell off....
no worry it fits my head PERFECTO!
A little sealing tape rolled in little balls helps as well as a 9 volt battery hung form the chin strap wires soldered to the hat itself. Sometimes my neighbor's garage door opens as I wander past wearing it on moonlight nights.
all fun and "the life" til not quite enough to plunder. the table is set with nary a currency not seated. servings are shrinking, some are skipped, and a few are getting ornry with pangs. anybody packing? a candy bar, ha...
The Chinese-Jews were recently reactivated.
The Chinese are going to want to leave their polluted hell-hole and visit us here.
but what about Buttercup?
Just how do you justify calling either the US or China capitalist? Both are command economies and have been for quite some time now.
Just what are you railing at? Oh, talking points, disinformation, collecting a paycheck. Gotcha.
Yeah. He got Reagan wrong for sure. Ramped up both the welfare and warfare state. But he was really good at confusing everybody by asking "there's only one question you need to ask yourself - are you better off now than you were 4 years ago?" That question really fucked up a lot of people from making any sense of anything anymore.
Reagan WAS Elmer Gantry : he preached one thing and practiced another. Centralized power in the hands of the 1% capitalists of Supply side voodoonomics--Gordon Gekko type asset stripping/Mike Milken type junk bonding--, for which the state (Maggie and he) bent over backwards, WAS his idea of how the world should be ruled by the US unilateralists dipped (like born again baptists) in the holy waters of the mantra of exceptionalism.
Your perspective differs from mine on ONE fundamental point :
When you and I as Westerners talk about reality and concepts we have a heirarchy of value systems : Its called primacy of FACT. Its called "we are what we do not what we say". Those are the ethics that formed the West.
In your analysis the word "capitalism" means conforming to an IDEAL which is ingrained in your MINDSET, aka free markets and invisible hand. In my analysis it is ingrained in what the capitalist class DOES, those who are the key decision makers in society and whose ACTS define the ages.
Marx and Keynes respectively at least taught the world that "reality"; after the 19th century pillage of working class as portrayed by Oliver Twist and the Great Gatsby rampage of capitalist exuberance leading to 1929 asset deflationist hangover.
If you've been reading here as elsewhere about the root causes of the malaise of current US power construct, as its played out, you would have noticed that this phenomenon has accelerated ever since REaganomics started in 1981 and led on to NWO.
That is fact, that is reality, that is not theory. And I'm sorry if it knocks the teeth out of your invisible hand glory hole of what capitalism is in "the wealth of Nations" !
This analysis is corroborated by ex Reagan aides like Stockton and P Craig Roberts, both of whom contributed to the theoretical inception of Reaganomics, and then were thrown off the power construct as it panned out in reality.
Your mindset is in Denial. You privilege theory over practice, just like devout Christians or Moslems feel that their faith is pure. Whereas all history proves that their faith, as its has played out in REALItY, impinging on the politics of each age, has contributed to disseminating the contrary to what the theory preached as CARDINAL values : peace and love for both faiths.
History is a bitch and nails man to what he does.
So don't play at being a witch who can only see truth in the bones of your past visions of glory, on the heath of Macbethian vainglorious dreams of sunlit morrows.
That truth in DC/WS is now as ragged as Lady Macbeth walking the corridors of power singing : out out damned spot!
Does anyone else see the bad shit that is happening daily around the world right now?
.........and the US export industry falls like dominoes.
Uh we export debt and invest in outsourcing-mostly in China.
We're actually to the point where fucking America in a currency war is good for America, good for offshored corporate revenues.
Print away Mr Han!
At some point, if you want to make a comeback, you have to die first.
5 pages of buy gold spam, really ZH?
Bullshit.
The Celestials have a shit-ton of Gold. Maybe the yuan is not officially backed, but the gold is there.
And, why tell their citizens not to go into dollars? "Cause a Surpise is coming, Sgt. Carter! Surprise surprise!"
Are the Celestials related to the Annanuki?
I knew there was something fishy about the way they all look like devils, rats and lizards.
I picked that term up from watching too much Deadwood, Knux.
I like it, though.
"What surpise, Pyle?
Sgt Carter, me 'an DUke watched these Chines fellers gettin' rid of dollars for some yeller bricks down at the resevoir when we wuz on guard duty. Th' general wuz there an' he wuz really sad."
Ah! Those Celestials.
Why of course.
Silly me.
Which are the ones that are 9' tall and came to earth to mate with us...? Ah well, I must run along Bugs and find my illudium Q-36 explosive space ModulaTORRRR...
All related to the Brotherhood of Babylon who descend from the Serpent Masters...
HEY Don't talk aboout my bastard-brothers that way.
Sorry but WTF?
China can flip the switch at any time. Divest domestic consumption ponzis and invest in domestic producers. When it happens, all G3 currencies get whacked.
And Russia can just stop selling oil and Iran will just grow it's own food once it has nukes and gold will be the new reserve currency....
My my, how the collective IQ of ZH has fallen...
so easy, a caveman can do it...
this is what happens when the fifth column starts to actually believe their own bullshit... life is hard, but it's harder when you're delusional
YEA, YEA, EVERYBODY HAS A PLAN TIL THEY GET SMACKED IN THE FACE.
It been published very recently before on zerohedge " In a bad neighborhood, the dollar appears to many in the world to be the best house to live in" and that wil not change till unca sammy gets his ass wooped!.
NIRP would be a self-inflicted whooping, where people would wake up and abandon the dollar.
What if everyone else is even NIRPier? No, someone is gonna have to go to bat and swing away with a new bat - medium of exchange.
dollatodonuts that don't change much, these guys in charge really know how wag a big stick which keeps them in control, so they can continue to manipulate markets. You see if all you had to do everyday is figure out another scheme for keeping the balls in the air and you had unlimited financial resources to do it, well need I write anymore. F--k-- assholes
Beautifully put. What's is the great attraction of trying to save banks full of bad debts, that will never be repaid? There must be something good to recommend it, the Govts of a few billion people are doing everything possible to 'save' them at any cost, rather than serve their people's vital interests. You know, the stuff they pretend is so important and must defend at all costs. But when it comes to broke criminal-infested Ponzi banks, apparently these are far more vital that people's vital interests, for some inexplicable reason.
When they do finally totally implode and piss-off several billion people are going to be asking why these banks were not executed years ago given the extreme medium-term upsides of no longer having these banks constantly poisoning and strangling the entire system, encouraging criminal acts and gross irresponsibility, and impeding and eliminating basic economic functioning (the thing big banks were supposed to do the very opposite of).
Hold on lady, we about to go for a ride.
Short round
I'll never understand the handing of US industry over to China on a silver platter, the ultimate abrogation of political responsibility.
If you have the mind-set of a 19th century baron, then giving the "enemy" a means to compete is madness. 21st century internationalism aka globalism understands that lifting all rabble benefits their precious global corporations. This was the whole rational of opening China in the 1970s.
Another Nixon achievement to be ranked alongside the deadly removal of the gold standard. I'm not sure which was worse. Those republicans sure know how to cause a mess. I realise it was Clinton who kicked away the final leg of the stool.
"I'm not a crook."
Prudent advice from the PBOC to the subjects. PBOC will eventually be forced to dump some dollar reserves and inflate the value of the yuan against other currencies to induce more domestic consumption. Of course, China's advantage is that it will be much less drastic given that most of the good they need to purchase are already manufactured at home.
Case in point, Apple now sells more iPhones in China than America. Just a few years ago many scoffed at this very predicton as well as the prediction that by 2016 China's GDP will be the largest in the World. Of course, some always point to per capita GDP as the "real metric to watch". When the renminbi appreciates against the dollar and euro there will be a concomittant increase in GDP/head. Expect GDP/head to match the West by 2025 or earlier.
China may yet decide to back their currency with military might like we do. Then all bets are OFF.
Then what? They'll make a deal with Russia to protect Russian oil from American interests? I mean, military might works to protect the PETRODOLLAR, not to protect the dollar itself.
If China decided to just back it's currency with it's military it would find itself feeling pretty short (HA!) on the world stage. Also it'd have to kill someone worth taking down to prove it had the might to back it up. Can't take the US out, so who? Again, Russia is the only player on the block China has a chance to win a war against that's respectable enough to prove China is a power.
Which would likely led to Russia and America fighting on the same side again....
what if the Chinese exporters' letters of credit read payable in renminbi
The Waltons will just have to have their banks sell dollars and buy renminbi. Or the Waltons will have to stock their stores with merchandise from 75 different countries with 75 different levels of quality.
And all since last March -- 10 months ago -- has the USD scaled the Mt Everest of belief.
ALL THE QE DOLLARS PUSHED THE DOW TO 18,000.
INTENSE VOLATILITY AND PROFIT TAKING IN THE LAST COUPLE OF MONTHS.
FOLLOWED BY THE DOLLAR FLYING HIGHER THAN A HERD OF PIGS.
We better ask Sherlock Holmes what's going on.
Or Stanley Fischer.
The Chinese are befuddling me........?
When they say "you better think about putting all your cash in USD!!!!!......think about it!!!!!....could be a bad move!"
Could they be sincere?
Getting ready to unleash the gates of Hell and sell UST bonds short in the secondary market?
I have a large position in rmb denominated accounts. I see what the SNB achieved this month and I wonder if the PRC central bank might do the same?????????
The Yuan has modulated between (6.25-6.04)/6.04 ......3.5% in a few weeks.
I think they will decouple and go for parity w/ the USD!!!!!
I believe the Chinese are trying to scare as much action as possible out of the Yuan and then stick it to the USD holders.
If the rmb:usd goes more than 6.30:1, I am buyer of Yuan and will double down.
I reason the PRC Central Bank has no debt while the US Treasury has $16 trillion in debt.
How can I lose by shorting the dollar as a long term strategy?
What am I not getting?
Ah no. If they float that currency, the Yuan will collapse. Also, the Europeans and the Japanese will buy every teasury note or bill China and Russia sells. I mean every.
Good for them. Let them buy all that paper. They have two futures. In one, the US defaults on its bonds.In the other, inflation makes them worthless and America pays them with pennies on the dollar. Door Number Two always wins.
Meanwhile, China is switching to a gold-based currency.
China isn't switching to a gold based currency. That's retarded on it's face.
If China tried to free float it's currency it's the end of the game for them. It does go a long way to solving EU problems though. This would be why China hasn't, in all this time, even hinted at or allowed any real appreciation of it's currency.
You sir, have gone full retard.
An export country upset over a depreciating currency?? Worried it might fall further while its pegged to the dollar ( the peg is a small range in which China allows the rise and fall of its currency). ??? The U.S. dollar appreciating means that the U.S. is probably getting ready for some more QE via printing, while trying to make Russia capitulate.
"Beijing warns"
Funniest two words ever put together in that order.
This is shocking. I thought China was going to bring America to her knees. LOL, many of the America haters are clueless. This business i am in we see the wealthy in China bringing in capital to store here, along with their kids, and parents.
They are strip mining their own country of capital. In the ed it will be die hard communists and the poor left. BTW, this has already happened in mother Russia.
China is by far one of the prettiest horses in the glue factory and stands to be THE WORLDS TOP ECONOMIC POWER when the dust settles from all of this QE (debasing the money supply).
We are now starting to witness what it looks like when a nation LOSES FAITH in it's currency in Greece. The people are taking to the streets and taking their government back from central banks rather than continue to be extored and have their assets plucked away from them. This week the probability that Greece would leave the EU was >70% according to ZH.
Now we are starting to see the same thing in Spain as the people are beginning to realize that they cannot feed their enormouse debt with... more debt. Anyone who has been underwater with their credit cards knows this... and the PEOPLE are the ones saying NO MAS.
This is what it looks like when a country defaults folks. This is what happens when ALL FAITH is lost on the money backing the economy. And it's happening right now. Keep in mind, all any of these FIAT currencies have backing them is FAITH. Other than that, they are just paper.
Unless you are China, Russia, or anyone else buying precious metals.
China has been very smart. They have been working to build up their middle class in order to make the switch off the US consumer economy to their own. They invested their money (trillions) in infrastructure, cities, and REAL ASSETS while the USA invested trillions doubling down on the same banksters who almost took down the system with derivatives (extreme risk hazard at 1 quadrillion dollars). When everyone defaults, who will be the more foolish? Those who actually built something with that money or those who doubled down on central bankers?
When we realize that CHINA finances much our our DEBT, then the picture becomes even more grim. What if China suprizes the market by dumping ALL of it's US dollars and other instruments at once (to say buy gold). And then, at the same time, decides to unpeg from the dollar? Whad do you think this would do to the US economy and stock market? We may find out soon enough.
Does China have it's problems? Abso-friggin-lutely. Right now, they are fighting corruption issues of their own. Regardless of the government, wealth and power always seems to accumulate with a select few. The crackdowns you are hearing about in CHINA do not have as much to do with corruption as it does "who's in and who's out". If you are "not in", then you better look out.
The environment in China is really suffering from it's double digit decade growth. However, things are so bad, that they are likely to be addressed sooner rather than later and with the majority of solar and wind manufacturers in China (as well as the rest of the MANUFACTURING INDUSTRY), they are positioned to make a real switch away from fossil fuels while the USA has a strong addiction to oil (and nuclear) energy that is not expected to be diminished any time soon.
Human rights is also an issue in China. Internet censorship and crackdowns on Hong Kong's call for democracy is an example. However, as a communist nation, when China decides to do something, they DO IT. I am still in awe at the opening of the Olympic Games when they were in China (as compared to England which was a HUGE DISSAPOINTMENT). It was as if they they said, "We have arrived". And so they have. They have built entire cities, hydroelectric dams, and continue to provide the bulk of the worlds manufactured goods.
For all of these reasons, while not perfect, China has everything to gain. The USA on the other hand has been losing it's status as a reserve currency at breakneck pace, and many analysts (including myself) do not expect interest rates to rise any time soon as we are on the crazy train to hyperinflation. QE4 is just around the corner as the western economy is already showing signs of recession and if you are in Europe, they are likely to find out what is worse than deflation in the coming months... stagflation. What do we have for our 18 trillion + debt? Nothing other than a wealth gap so large that a revolution is almost guaranteed as the middle class has yet to recover from 2000 let alone 2008. It's hard to have a consumer driven economy when you drive the consumers into poverty.
In the end, Napoleon said it best...
"Let her sleep, for when she wakes, she will shake the world."
The dragon has awoken.
"China's exports have been crushed"????????????????????????
WTF????????? Step away from the crack pipe.
Things are a tad slow this month, that's all.
What a load of alarmist drivel.
"China's burst housing bubble," ?????
The market backlsides a bit from time to time, and then continues onward and upward. I live in China, People keep building buying houses at a rate that you can't imagine. The "ghost cities' befin to fill up after a couple of years, but the western press keeps reporting 5 year old stories just show China in a bad light. I think it's because their own countries are sliding into a Vaselined-lined snakepit of failure.
I believe that 71% of China's GDP is in housing? And it's not just from domestic, it's from foreigners probably betting up on demand for housing in China.
Fort Knox is devoid of Gold...long gone to cover the bank shorts and into the vaults of Russia (expanded now to 25,000 tons) and China (expanded also over the last few years to 20,000) tons. "...the dollar suddenly looks like a far better option especially when the local currency is unbacked by anything: not gold, not crude, nothing..." is the dumbest thing I've read in 10 months. Contracts (oil and others) are the cause of the dollar "valuation". Gold bullion (larger) purchases are almost double the "paper" price. The dollar will be going down like a rock at some point...the day when the delivery price of gold doubles and paper gold trade at pretend prices vanish. And, when (more) new Oil contracts are made outside the soon to be avoided dollar.
China and Russia's currency is actually (value) gold backed and the Dollar is not. Each of both these nations have reasons from not trumpeting this fact, ie, they still have treasuries they want to dumb to support investments made by other nations who will purchase China/Russia goods and services in Treasuries. That is how their dumping operation has proceeded.
The BRICS have 140 nations silently signed on with Greece, France and Germany set to move into the BRICS out of the EU. The weight of the population and nations of the Earth have gone against the US. When the contracts (Swiss Franc, Oil, Silver etc.) have to be finally dealt with the dollar will decline in international trade...again because of drivatives, ie, reality. These realities will result from the FED covering insolvent bank paper with QE's to "infininty".