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Devaluation Stunner: China Has Dumped $100 Billion In Treasurys In The Past Two Weeks
On August 11, China devalued its currency, and in the subsequent 3 days the onshore Yuan, the CNY, tumbled by some 4% against the dollar. Then, as if by magic, the CNY stabilized when China started intervening massively, only this time not through the fixing, but in the actual FX market.
This means that while China has previously been dumping reserves as a matter of FX policy, after August 11 it was intervening directly in the FX market, with the intervention said to really pick up after the FOMC Minutes on August 19, the same day the market finally topped out, and has tumbled into a correction since then. The result was the same: massive FX reserve liquidations to defend the currency one way or the other.
And yet something curious emerges when comparing the traditionally tight, and inverse, relationship between the S&P and the Treausry long-end: the drop in yields has not been anywhere near as profound as the tumble in stocks. In fact, the 30 Year is wider now than where it was the day China announced the Yuan devaluation.
Why is that?
We hinted at the answer on two occasions earlier (here and here) and yet the point is so critical, and was missed by virtually all readers, that it deserves to be repeated once again: as part of China's devaluation and subsequent attempts to contain said devaluation, it has been purging foreign reserves at an epic pace. Said otherwise, China has sold an epic amount of Treasurys in the past two weeks.
How epic? We turn it over to SocGen once again:
The PBoC cut the RRR for all banks by 50bp and offered additional reductions for leasing companies (300bp) and rural banks (50bp). All these will take effect as of 6 September, and the total amount of liquidity injected will be close to CNY700bn, or $106bn based on today's onshore exchange rate. In perspective, the PBoC may have sold more official FX reserves than this amount since the currency regime change on 11 August.
There you have it: in the past two weeks alone China has sold a gargantuan $106 (or more) billion in US paper just as a result of the change in the currency regime!
But wait, there's more: recall that one months ago we posted that "China's Record Dumping Of US Treasuries Leaves Goldman Speechless" in which we reported that China has sold some $107 billion in Treasurys since the start of 2015.
When we did that article, we too were quite shocked at that number. However, we - just like Goldman - are absolutely speechless to find out that China has sold as much in Treasurys in the past 2 weeks, over $100 billion, as it has sold in the entire first half of the year!
In retrospect, it is absolutely amazing that the 10 and 30 Year Bonds have cratered considering the amount of concentrated selling by China.
But the bigger question is how much more does China have left to sell, if this pace of outflows continues. Here is SocGen again:
From an operational perspective, China's FX reserves are estimated to be two-thirds made up of relatively liquid assets. According to TIC data, China held $1,271bn US treasuries end-June 2015, but treasury bills and notes accounted for only $3.1bn. The currency composition is said to be similar to the IMF's COFER data: 2/3 USD, 1/5 EUR and 5% each of GBP and JPY. Given that EUR and JPY depreciation contributed the most to the RMB's NEER appreciation in the past year, it is plausible that
the PBoC may not limit its intervention to selling only USD-denominated assets.
* * *
China's FX reserves are still 134% of the recommended level, or in other words, around $900bn (1/4 of total) and can be used for currency intervention without severely impacting China's external position.
Should the current pace of liquidity outflows continue, and require the dumping of $100 billion in FX reserves, read US Treasurys, every two weeks this means China has, oh, call it some 18 weeks of intervention left.
What happens when China liquidates all of its Treasury holdings is anyone's guess, and an even better question is will anyone else decide to join China as its sells US Treasurys at a never before seen pace, and best of all: will the Fed just sit there and watch as the biggest offshore holder of US Treasurys liquidates its entire inventory...
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Devalue your currency to make your USD holdings more valuable in order to cripple the market. With your now more valuable holdings dump gradually and get rid of the bag (of now worthless FRNs) causing a market crash/currency crisis.
Finally, issue a new commodity backed currency.
...Didn't someone already outline this plan? Maybe it was China. Shit. It was China.
Beware the flight to safety.
Old habits die hard especially during times of great stress.
Shanghi will look beautiful covered in glass . . .
... unlike LA !
When Trump gets elected, thank China. If you think the Trump machine is going to let China dumping US paper at epic rates go unnoticed you've got another thing coming.
New bank financing for silk road and buying cheap paper gold
The greater question is what happens when the Fed liquidates its $4.3 Trillion of Treasuries and MBS's
no need for interest rate hikes at that point
When the Fed owns them all we cancel the debt, dissolve the fed and go to constitutional money?
Bwuhahahha thats a good one
T
why...FFS ZH...let me finish my comment before bombarding me with ads
...would the Fed sell treasuries...they fucking print money...they don't need it like a regular bank...they need to keep the economy alive.
From people buying them with their own money...?
10 to 15 cents on the dollar
Actually I've just realised whilst writing this that such offers would imply the END of the FED, yeeehaa!
THIS JUST IN....
dont panic...
here Gold...here Silver....
Something is going down in September... The Pope talks to the United Nations? Let's all gather-round to see the final Jade Helm come to closure, shall we? And, what's with the Jewish 70 year and 40 year thing?
Zero hedge talked about September and the weird stuff happening.
What's going on is covert WOAR. The globalists/Zionists need to bring the FED to its knees and prop up the BRICS. The US is being demonized and the BRICS being built up as a viable answer. All of this plays into their long-term goal of having a one-world currency, and to get there, they need to bring the dollar down first. Expect China to sell ALL their US treasuries this year, and the FED to raise rates as well. All designed to bring down the system so they can institute their answer. This is the Hegelian dialectic in action, in its most glorified form.
They better start doing a better job of selling the BRICS to the American public then. Average Joe gives zero fucks about the BRICS and will look at them as enemies.
Even if what you say is true and TPTB are working towards your outlined goal, Europe and N. American public will freak out. I don't see their plan working out to well.
A one world currency is not as powerful as controlling multiple regional currencies. Easier to manipulate.
Correct
Looks like between PPT and mopping this shit stain up the Fed will need to ask for a credit line increase on the Capital One card. Whats IN YOUR WALLET.
Bond Liquidations tm. -Striking fear in the hearts of banksters and derivative dealers since 2007
[Knock Knock]
getting interesting
The sole factor supporting the dollar since 1971 has not been the 'petro dollar' as many think, it has been the willingness of central banks and 'speculators' to keep dollars off the market and squirrelled away keeping them from coming home and ratcheting up prices. This..... is .....ending....
If and when that flood of dollas comes home to the USA, it's going to be a doozy!
They will want to be buying real stuff with those dollars.
Lot's of local town and state pension funds took a big hit. They are looking to replace tax assessors that have QUIT, you know whats coming..... I see where most workers who had pension funds lose 20K in the last week. So much for the "pro's"...
Fuck them... Now to get ready to go fly fishing again.
Yep property values dropping means less taxes. Stress
So why is the US FX so strong dispite this? Trading seems like driving an amusement park bumper car in the dark with just a few high frequency electrical sparks for visual guidance.
The Fed can put any amount of dollars anywhere they want to.
Let your imagination run with that and see what kinds of "ideas" you can come up with to "help manage" the economy. This is why dollar strength is "real" until it isn't. People don't want to wrap their head around what they can do and how corrrupt with no oversight they are. Until people understand this, the Fed and the dollar are going to be fine. China gets it (they are pulling the same rabbits out of the same hat), but is that enough disbelief to tip the apple cart over? I don't know.
Because it is the American people that truely back up the value of the dollar and the majority of Americans are still virtuous for the most part.
this post is confusingly written. it needs to specify when it is talking of yield and when of price, regarding treasuries.
additionally, this line: "the tumble in stocks has not been anywhere near as profound as the jump in yields." is contradicted by the chart shown which shows a steep drop in yields.
check your math privilege
Good point. The two were flipped in the text and now corrected
This is possibly the scaryiest piece of news yet on ZH
US treasuries held by China were one of two things keeping the peace between the two. If anything stops trade between them, turn full prepper.
Thus the unusual number of unexplained explosions in China and a US military base in Japan.
How many US companies rely 100% on Chinese manufacturing?
The $10B consumer goods company I work for sources perhaps 8% of material components of its consumer goods from China. Tolerances are precise to fickle consumers and although China can do precision, their relationship with the West is based on speed and cost. We've started to source plastic components in Mexico, which is coming online rapidly.
"Good times"
In the words of an infamous European banker, they'll do whatever it takes to save their economy.
Let me translate that for you;
In the words of an infamous European banker, they'll do whatever it takes to save their ass.
Seems the shoe is on the other foot: China is calling in their loans to Zion.
Zion kept their scheme going too long, and is now in the process of losing to the east most of the world they tortured and stole. Zion will end up controlling most of western Europe, the western part of the Middle East, and a tentative part of the East Coast of their American colony. Tentative, because people like me will be violently pushing for them to "return," leave.
Zion is a scheme, not an ethnicity..
not calling in loans--just selling paper---
WAR!
China will NOT be ignored.
Even though UST is acting like she JUST doesn't get it.
The US / China love child is no more. In it's place a Deflationary hell.
https://www.youtube.com/watch?v=DM64Y8ndyG4
-
And here comes Tianjin part 2 in 3...2.......
So who printed 100B to buy them? Oh. Nevermind.
fed balance sheet 4.1 > 4.2T...
So, yields really don't look like they've moved much. Granted, there's something to be said for this considering that one would think that yields would have precipitously declined given the carnage in the stock markets. However, with that much selling, it seems that yields still should have spiked though my analysis is pure pontification and completely void of any real mathematical analysis... given that, the question that I have is who the hell is buying all of that paper right now? Do traders panicking out of stocks and, therefore, buying all of the trasheries that China is dumping fully explain the lack of a more dramatic move in the long end?
to the china .01%---get yer loot out---by tres on sale now--party hacks, the line forms on the left----
but the markets were crashing with flight to, drum roll, u guessed - treasuries, hmmm.
nice plan china, or ...
No worries, the Belgians can suck down the entire trillion if need be.
Ahh yes and the global chess match gets more interesting by the day
Chess is boring. Let me know when it becomes Command and Conquer: Red Alert.
So the Fed buys the treasuries off the books. No one asks questions, the media looks the other way. Outta sight, outta mind. Should anyone dare inquire, a Caytlin Jenner nip slip will make a good distraction.
Where are those Korean subs?
Underwater.
Those payments are killing them, eh?
(rim shot)
http://www.globalfirepower.com/navy-submarines.asp
70 friggen subs sheesh, u can ask that again... Me grandpa would be shitting a brick.
Who did the Chinese sell 100 billion of US treasuries to?
its being privatized---IMHO---insiders of china --
china printing to make loans to insiders to buy bonds ---the big QE of china rip off of the entire country by the few-- just guessing
well it happened in the USA didn't it---why not china---I read today on ZH-----china 2015=USA 2008----so???
My assumption is that the Fed bought them.
why would they?
The Fed has been buying them from the Treasury, via other dealers. ZH a while back showed how this was happening by tracking where certificate numbers were showing up in various records on various dates. Sell to the dealer, then it shows up on the Feds sheet a few days or weeks later. The dealer gets a commission for doing the Fed this favor.
We have a check kiting scheme going. US issues the Treasury, the Fed buys them and prints money. Meanwhile the US taxpayer is on the hook for it. The Fed does this because not very many other people/entities are buying them. It is a way to "print" into infinity. It is also a way to OWN the US when it defaults.
If China dumps them all of a sudden, I think the Fed would buy them to disguise the fact that very few people want them. If they go bidless, the real nature of the situation is out in public for everyone to see.
yeah but---if the US tres issues they first have to borrow from the fed to issue---so the fed is owed the bond---the US gets the money from the sale and spends it --- it still owes the fed-- but now the bond is out there and someone has it---so they put it up for sale and if the fed doesn't buy it the sale price will go down but if its held to maturity it just pays face plus intrest- then the US tres will have to pay --and that means it needs to borrow more from the fed to cover. So instead the fed picks up the bond off the market at a lesser price and holds the bond to maturity --the fed is a bank in business to make a profit-- it owes some of that (6%)? to the US tres for the charter. it loans money to member banks who buy the bonds (surrogates) and get the commish--so in the end its the US tres which owes the fed the payoff at maturity-- how is this a check kiting scheme?
If and investor holds a bond that matures at 5% in 2yrs which he paid $95K for and new bonds come on the market one year later that yields 6% in 2yrs at maturity which he can buy for $94k he needs to sell the first bond at $97.5K to get his interest and buy the second bond at the bid. But if the second bond is on the market and others are in the buying mood they might offer to buy that new bond at $94.1K or even more. They wont buy a bond that only will yield 2.5% which is what the first bond holder wants to sell at--for the first bond holder to compete in the market he needs to sell the bond for $97K or less--the value of his bond dropped. This is why china is dumping bonds --they believe the fed will raise rates and need to get out of the bonds the have to not lose.
well said
Beg to differ, the American public and others are buying up Treasuries in the short run with the latest Fear index. But when that capacity runs out and the Chinese keep dumping, either the Fed props it more or the rates begin to skyrocket.
Not that hard to figure out, it is all the flight capital out of the equity market so far buying them up. That could well change though, and if the fire sale continues, the recent drop in rates is going to be shortlived. There is only so much spook capital out there, aka risk-off. This predictable BS behavior in the financial markets is a big reason why I left the markets, this time for good most likely. Too much rumor, spook and fear and not enough intellectual analysis on exactly what the hell is going on. Why crash now when it could have crashed in any year since 2008? There has always been rot in the system for anyone paying attention. ZH has long said that QE has been propping up the equities, this spook will continue while the interest rate hike specter is out there (at least the next 30 days if not more if they actually start to jack the rates). Where are all the middle class jobs to merit jacking interest rates to cool the economy?
seriously,... why should china hold so much us`paper [sdr's] when trade with ussa is going no-where fast having such an overpriced dollar?
japan has to, as does [did?] saudi arabia?
QE = Quixotic Eugenics
amazeballs.
This article is likely incorrect. First, selling treasuries does not weaken the Yuan, which is what China currently wants. Second, if they were selling this much, then the bond markets would not be dropping. Third, the source of this information does not seem reliable.
That said, once the Chinese do decide to dump their treasuries, it is game over. Interest rates will rise and the US will likely have to default on their debt. However, the Chinese know rates will rise and they probably don't want that outcome. For this reason, I don't expect the Chinese to sell until they can smell an economic collapse in the US. Are we there yet? Probably not. Are we close? You bet.
Ref: http://atimes.com/ 8/25/15
Front page:: 'People's Bank of China finally cuts rates' #1/4
'Those who resist Xi's reform push, block China's progress' #3/4
great site
jmo
My understanding is they are selling USTs and other reserves (and buying Yuan) to bolster the Yuan in an otherwise out of control devaluation due to capital flight and anticipation of further devaluation in the FX markets.
They are selling USTs to maintain the peg, but just at a lower level. What they did was (intentionally, IMO) tip their hand through economic data releases and the 5% currency devaluation on their current issues and direction.
What if they hold the current peg for 18 weeks using the 900B in USTs and then devalue to equilibrium after the fact? Seems that would be a brilliant move.
If you actually read the article, you will notice that what it says is that the Treasury selling takes place when China is stabilizing/ supporting the Yuan, only this time instead of in the fixing, it does so in the open market.
I believe China is cashing in to buy a load of life support items needed over the next few years, yes the country is going Prepper. There are 1.4 Billion people who need a lot of food, energy, etc. The US and others have bought a load of goods from China in return for paper.
It is not a scheme but simply good planning and prep.
Oh and kchrisc If your planning any violent trashing of my American Jew neighbors? Know they will not be standing alone and there are others quite capable of violence such as myself who wiont tolerate fuck flakes such as you jackin people in our neighboorhood.
I should let him speak for himself and you may be right, and I am wrong, but my impression is that he has a problem with Zionism, not all Jews. Zionists imprison Palestinians on their own land, and abuse them every bit as much as the Nazi's are said to have abused Jews in the ghetto.
He may generalize to all Jews, I never paid attention to that, but my impression was that his beef is with Zionists specifically. Many Jews have problems with Zionism and just want to share the land and live in peace with Palestinians.
I think you are right on in your comment.
Many Israelis and Jews do not condone Zionism.
For many people Zionism equates to Judaism. That is like calling a Catholic an Evangelical.
Zionism, invented by an avowed, and commensurately accursed, atheist, Theodor Herzl, whose line, like Reagan's is cut-off, is anti-prophecy, anti-Torah, anti-Bible, anti-God, hence anti-Judaism.
The Hebrew Isaiah's several interlocking prophesies incontrovertibly define "Zion" (Hebrew for "perfection"), the "New Israel," God's "Promised Land," and only America's foundational Jeffersonian utopian ideals fulfill each and every one of the given signs; Vatican banker-intermediary, patron of Marx and Herzl, Rothschilds' "State of Israel" meets not a single one.
Prophecy is "mathematical" and "binary." The sign is fulfilled or it is not.
The Creator, God Almighty, is America's named Sovereign, the Author of Adam Smith "Capitalism," the "Invisible Hand," and of all prophecy, including that which foretells the attack on "Israel" and Godly Capitalism by the "Fascism" of "Gog and Babylon," the Khazars and their ancient partner, Rome...which has come to pass since Meriwether Lewis' assassination on the Natchez Trace; John and Martin; Vietnam; 9/11; the FedScam faction's debasement of our currency, and finance through Prescott Bush and the Dulles brothers of Hitler; Holodomor and Holohoax; Waco; OKC; the psyop of Aurora; and the hoaxes of Sandy Hook, Boston, and Charleston to further Fascist rule...demarcated by the symbol of the power and authority of the Roman state, the Fasces - antithetical to the "whig" ideals upon which Our Holy Nation was founded - affixed to the front wall of the U.S. House after the Roman Catholic victory of the "Civil War."
This is why the Confederate Battle Flag with its "Cross of St. Andrew," the symbol of "Protestantism Overseas" for which Black and White Southerners nobly fought and died - is to "enemies, domestic," anathema.
There are hundreds of millions of Americans execrated as "sub-human animals" to be "lied to, cheated, robbed, enslaved, and killed, with impunity," and it's real obvious who's acting on that Saturday morning liturgical execration and just who, partnered with them - cult impalers and lictors in antiquity - in control of the SCOTUS, Congress, CIA/FBI/Organized Crime, Hollywood Babylon and the MIC today, have been playing "good cop/bad cop" since together they crucified tens of thousands of Christs and Immanuel, and followed that up by running, together, "the Wall Street of slavery" at Rome for over 2,000 years before it was temporarily derailed by our credal civil religion whose three tenets are yet enshrined on The Geat Seal of the Covenant of the sovereign People with our named Sovereign, God Almigthy.
Our New Secular Order ("Novus Ordo Seclorum") is the terminal threat to the satanic Old Sectarian Order of king and pope ("Ancien Régime") the banker-intermediaries of monarchy and popery have rebadged as the New World Order.
Their hope is to gaslight we Goyim and expunge our divine right of Individual Sovereignty we require the Bill of Rights to protect and effect.
Vets sworn on their lives to The Oath, and true American active military and law enforcement are waking up. Despite Rockefeller-Bush/Clinton's, Chomsky's, Zionist Knight of Malta Trump's, Bilderbergs', Kissinger's, and all their shills', puppets', and prostitutes' "best efforts," the Beast, by grace, shall soon be cast down, praise God.
America is Zion and there is but a single God Almighty, our Soveriegn, the Creator of the universe, ergo atheist Herzl's Zionism is treason against America and against God.
Death for Treason - and may God bless America once more.
Kcirsch snip "Zion will end up controlling most of western Europe, the western part of the Middle East, and a tentative part of the East Coast of their American colony. Tentative, because people like me will be violently pushing for them to "return," leave."
I got no beef with anyone unless they start jacking with me or my neighbors or threatening me or my neighbors, Some neighbors are: Baptist, Catholics, Presbiterian, Jews, Blacks. Hispanics and a few White Boys like me who dont give a rip what kind of ism is around as long as it keeps out of our business. Were I livin in Palestine and Zionist were jacking with my neighbors likely I would be just as riled up.
As you said, he (or whatever) can speak for himself.
many Jews are fine people, but the world has had a serious problem with powerful jews and organized jewry for for many cenuries, if not milleniums -well before Zionism was ever dreamt of. There is something about their religion -especially reflected in the Talmud -which places the Tribe at odds with the rest of humanity. Their religion, contrary to other faiths, is one of supremacy, rather than universal salvation for all men. Not all Jews espouse these beliefs, but their powerful leaders generally do. You may not like it, but that is historical fact.
hey you Michigander leftist buttwipe --did you go next door and get your fortune read by those gypsies--seeing as how you're all up on how the "violence" will come down---you fucking creep--
you'll be the first goy that gets it in the back-- what a jerk.
China has a Rod of God, also.
It's only 3 inches long though.
This is already ugly, and worsening at an accelerating pace. Crude oil and shipping costs are the true canaries in the coal mine.
Get out of the markets and get your money out of banks !
Go long on Ammo, Food, Whiskey, Gold and Silver in that order.
Who the fuck wants hundreds of thousands of dollars (or more) of "stuff" in their house? People who want to worry all the time? People who want to NEVER leave the house for fear of losing their "stuff?" People who want to be a more lucrative target than an armored truck full of money?
100 Billion you say? That seems like a lot. I think the Pentagon needs to blow-up another Chinese port and kill a bunch of innocent people. Seems to be their Mod-us Operand i.
So they are not greatly rotating into US equities like I have been told?
As usual I only have a juvenile comment. Fart what?
Don't suppose they bought Apple stock too?
And it's gone...
https://www.youtube.com/watch?v=-DT7bX-B1Mg
The world will simply point their finger at the US.
you guy's just dont get it...PBOC is intentionally allowing the RMB to devalue which will in tern force other Asian countries to devalue...forcing the US dollar higher and wreck their balance of trade and destroy their economy...China is selling/liquidating treasuries and will use the dollar to scoop up and force the Fed to dump what is left of their gold supply....otherwise gold prices get squeezed higher....
The devaluation of the RMB will be offset by the coresponding appreciation of the gold largely held in Chinese hands....at worse they remiain neutral, most likely come out well ahead as the AIIB and the Brics development Bank require gold backed letters of credit for future trade...Western banks are caught with worthless Treasuries and no gold and will scramble to acquire gold in order to import goods that they no longer produce....
As dollars are exchanged for gold more dollars are returned to the US as countries refuse the dollar as exchange value causing the deflationary hit to move into hyperinflation/depression with scarce goods....ie you wont be worried about buying the latest iphone but where you can find your next meal.....
The U.S., other Anglo nations, and Europe have a large majority of the world's gold reserves. I don't see how this would hurt us at all.
You don't see it because you're head is buried somewhere dark and smelly.
I asked zh to comment on the socalled impossible trinity or trilemma whereby china tries to control its exchange rate, its interest rate, and allow the free flow of capital.
dumping bonds amounts to selling dollars and buying yuan, which suck yuan out of the system. china want more yuan in the system. so it sells yuan by lowering interest rates and reserve requirement but...
any explanation would be appreciated.
yaun grows (QE) with debt--debt finances bond buying by "insiders" ( the .01%) -- remember the China bosses are corrupt and care not a lick for china--any more than blankfin or buffet care about the USA. It's the power that is the elixir.
Bonds are safe international mostly liquid assets --perfect for the swindle--
The redemption literally transfers funds from bonds...long term interest liabilities backed by the UST...to cash...a more liquid non-interest bearing short term asset.
Reducing fiat reserve holdings weakens the chinese leger...on paper...by converting reserves to illiquid assets.
Paradoxically, by spending fiat which has no intrinsic worth and converting it to national (or privately) held assets...china weakens its currency but strengthens its REAL asset base...all the while sticking its thumb into the eye of the FED...which will have to compensate by REDUCING the introduction of an equivalent amount of FRN's...which is the real fuel of the USA war machine.
Chinese aren't stupid, and they are playing to win!
Nice!
I agree with you, Shibumi2.
They have used UST paper as currency to buy up commodities, mines, farmland, precious metals, and other assets all over the world, including Africa, Australia, Canada, and South Asia. Perhaps now they are selling UST's and handing the cash to the sellers, thus completing deals and taking ownership. The fiat never affects their on-shore Yuan because it was pledged a long time ago, and they are just now paying everything off. The end result will be that the Fed is left holding more and more worthless UST's, the price of outstanding paper drops since the Fed is not in a position to buy everything that will be offered without setting off massive inflation if not hyperinflation, interest rates will rise despite anything Ol' Yellen can do, and the stock market tanks even further.
The redemption literally transfers funds from bonds...long term interest liabilities backed by the UST...to cash...a more liquid non-interest bearing short term asset.
Reducing fiat reserve holdings weakens the chinese leger...on paper...by converting reserves to illiquid assets.
Paradoxically, by spending fiat which has no intrinsic worth and converting it to national (or privately) held assets...china weakens its currency but strengthens its REAL asset base...all the while sticking its thumb into the eye of the FED...which will have to compensate by REDUCING the introduction of an equivalent amount of FRN's...which is the real fuel of the USA war machine...as well as the political machine
Chinese aren't stupid, and they are playing to win!
Playing to win? Playing someone else's game. And "they" just changed the rules. The beatings will continue until compliance is attained.
The things they are playing with are backed by YOUR sweat equity.
Chinese are sitting at the table...you, sir, will be pushing the broom after the game is over
"The great questions of the day are decided not by Diplomacy (or trade), but by blood and iron." I'm not even remotely worried. China will be a toxic waste dump full of dog eating rice farmers after we're done with them (too late). If they really want to wear the big boy pants and challenge the entire Anglosphere + Europe to some kind of show down at this point in history then they are retarded. They should accept their 2nd class status for another 50 years and then maybe they'll be ready to pretend to be a first world nation.
I would agree to a point,but not for the reasons you think.
I met a governor of one of the larger provinces and he told me, essentially, that "if you think china is wealthy, know that those who sold America out kept 75% of the total profits"...in other words, chinas vast fortune amounted to a 25% commission...about what a good liquidator would get at an auction.
What makes china a viable force is they now control the means of production. The iron and tools of warfare have shifted east...along with the gold.
How will you fight this war?
With nuclear submarines.
How will you fight this war?
Default.
The things they are playing with are backed by YOUR sweat equity.
Chinese are sitting at the table...you, sir, will be pushing the broom after the game is over
Where is that ekm guy? Can't remember specifically buy seems like he had a theory that seemed crazy then but is starting to make sense now.
"he had a theory that seemed crazy then but is starting to make sense now."
basically the military will step in before they let the tards in dc and wall street screw the pooch. scarey shit there
The bankster tribesmen were ALWAYS going to fuck the chinks, both the communist party leaders AND the peasants. That was ALWAYS baked into the cake. When you shop at a kosher bakery don't act surprised when you end up eating stale bagels.
All that talk about the "rise of state capitalism" (mercantilism is an OLD system, not new) and how China was going to soon overtake the U.S. as the number 1 economy was always a joke. "They" haven't finished breeding into the Chinese bloodlines and infiltrating their society yet (Zuckerberg, Wesley Clark, and countless less high profile tribesmen are busy right now making half Chinese babies to carry out this mission though) so "they" won't let them get too strong yet.
The game is rigged. There was never a scenario under which China came out the winner. Not as long as they are playing someone else's game. And the only way to take control of the game is through mass violence, i.e. war. A war they could never win. So it's game, set match. Check mate. The dominoes have fallen like a house of cards. King me.
When the US is alone on the island onto which it has exiled itself, tell me, King - how do you win a war with a nation that knows the art of war?
No man is an island, for a good reason.
In Albert Pike's vision of WWIII the Christians & the atheists annihilate each other. Currently, that's clearly the USA & China. All preordained.
This is what Albert Pike wrote about world war three:
"The Third World War is to be played out by stirring up hatred of the Muslim world for the purposes of playing the Islamic world and the political Zionists off against one another. Whilst this is going on, the remaining nations would be forced to fight themselves into a state of mental, physical, spiritual and economic exhaustion."
Kinda sounds like all is going to plan, eh Rothschild?
Too god-damned strong...
King me.
China has been fucked long time by Rothschild, China will be patient getting revenge.
China man plays go.
And their opponents take a chain saw to the go board.
OK China - your move.
Up vote if you think the Jews are gonna win.
Down vote if you think the Chinese are gonna win.
Ladies and gentlemen, place your bets....
Anyone else find it ironic that the prequel to The Walking Dead just started this sunday?
so maybe with china dumping treasuries, more US dollars will be destroyed and the dollar may spiral upward out of control...... wouldn't that be ironic?
how does that work? china sells bonds and dollars get destroyed? clue me in please?
So China undertakes a devaluation, prompting the market to calculate how much further it needs to devalue to an equilbrium level, thereby causing pressure on the currency to devalue too quickly, thereby compelling China to sell USTs to relieve the pressure.
China gets rid of USTs (and can justify doing so up to $900B worth or a vast majority of them in order to keep everything in the region stable), loads up on gold, sets up the SCO, AIIB, an alternative SWIFT system, et al. all at the same time.
Was this all by chance or was this some clever genius at work?
Sounds genius to me. The art of war. I've read about something like that before from some country...
I think the Chinese are flexing their muscles and experimenting with different forms of manipulation to see which method is most effective in supporting their economy and also getting rid of FX reserves which may soon be worthless. Their next move may be completely different. Time will tell and let's see if they do this again.
Holy hell. China's going to win the currency war. I wonder who will win the shooting war?
What indication is there that they are "winning" anything other than the race to the bottom and annihilation of their people's wealth?
So, they sell 100 billion and the yield goes down. Sell it all, I say.
And to think of all that gnashing of teeth over the red menace owning our debt.
Okay can someone explain this to me.
How come the argue of "China devalues currency, dollar raises, buys gold with devaluved dollars" works..
But the fed can't use the same dollars it has to buy gold and it's discount window with it's on dollars?
I guess that China is no longer going to be selling as much stuff to US (US is broke), they need the cash for living expenses until they can get their economy geared more toward domestic consumption, military, yet still maintaining supply sources in Africa, South East Asia, South and Central America.
Why would you possibly think that a nation can become a consumer oriented economy without possessing the world's reserve currency backed by the world's most dominant military power in human history?
You need a skinny willy to reconcile these two comments. Especially when thick willy refers to your thick tongue.
Why don't you tell us what you really think about 'a consumer oriented society' like the one we have here.
Loudmouth shill outed. Excellent.
Where is the source for these comments from SocGen?
I acutally specifically remember a think tank that was war gaming this came out and said with just a couple words the president cant tell the comex to stop all physical gold shipments and not deliver any orders to a specific country
KingFish, who is smarter than the entire gaggle of the Fed's Ph.D. economists says: "Holy Mackerel, Andy! Who be buying 'dat shit?..."
Hopefully,2 billion Chinese wipe their asses with the T-notes,before shipping them back to the Fed..
When you read here on ZH, via reliable sources, that there are U.S. naval groups either at, or en-route to the South/East China seas - or the 'sand castle' areas, you'll know it's on for real. And of course there will be the obligatory 'news story' about a huge 'hacking' operation, 'blatant currency manipulation', or some 'bullying' of a neighbor, to justify U.S. military posturing in the area. Keep an eye out...
This explaines why US stock markets must crash. To generate demand for US Treasuries otherwise rates would skyrocket.
Doesn't make sense. Why crash and then try and rescue markets to the tune of 100s of billions of $ just to get panicked retail investors to buy only 100 billion in treasuries? Why not leave stocks alone and then just spend the 100 billion on the dumped treasuries?
Just why? Why would you sell the collateralizing instrument? Unless someone is demanding ACTUAL US DOLLARS. UST are still money good.
Would no bank sleave a swap with them?
It's still a speechless scenario.
Casablanca gambling? I'm shocked!
http://www.youtube.com/watch?v=SjbPi00k_ME (0:19)
Who is buying them?
The FED.
Print alah print.
:)
I always thought when Lehmann Bros went down and many iconic corporations, it was an American problem that the world also ended up suffering over.
When the neigbor who has a dog that continues to keep you awake at night by barking, the neigbor has a gun and tells you to 'fuck off', what do you do when you have no gun or dog?
Use your brains.
That is what the Chinese are doing, using their wits.
I have a means of getting rid of a barking dog: Soak a sponge with bacon grease, throw it over the fence. Dog eats sponge and dies from intestinal blockage. Or I could just find an excuse to shoot the dog, then the neighbor would know I also have a weapon.
That explains a lot: Dollar crash and forced Yuan devaluation.
And since August 10th, when the Chinese selling began, the yield on the 30Y has soared by...soared by...er, wait a sec, the yield on the 30Y has actually dropped from around 2.90% then to today's 2.85%. Foreigners collectively own only about 8% of US Treasurys with maturities over 10 years. The long-term Treasury market is primarily a domestic market, and so far it doesn't seem to care about the sale of the shorter term paper.
The Fed is constantly stepping in and making sure the rates don't rise.
The Federal Reserve is like a huge vaccum cleaner sucking in all the dumped treasures.
Chinese and Russian Hackers need to break into the Federal Reserve's electronic balance books and reveal what they really own.
The Chinese can reveal the Fed's stealth actions as well as their gold holdings. Find out the Fed is so full of BS. Same with the ECB.
its all right chicken little, belgium is buying those treasuries
The stock correction is really meaningless for economy, lower prices mean higher yields, ie take stocks down 30-50% and yields on stocks from dividens will go from 2-4%. To 5-7%.
That will then make treasuries ect look even more over priced than they are.
Ie it's all about bonds and the US Govt ability to finance the armed forces and pay pensions / benefits to keep economy going.
Higher yields on stocks would put bonds under pressure, that's why they never let stocks stay low. All the panic on TV oh no stocks are lower what will we do now that we can if all by investments that have proper yield.
Quick someone from the Fed/ Gov driven the price back up so we're getting 0-3% again..
China maybe sick of zero yield and sell short dated tres to by gold / fixed assets even their own equities .
It doesn't mean it will work ect but their big enough to try and develop themselves.
Also notice US has some control over almost all decent floating currencies ie Eur ( troops in Germany/Italy). yen ( troops in. Japan). Aud/ Canada / UK all rely on US for security.
so china floating currency will be first large one that could challenge US. think of the rebalancing flows out of USD controlled currencies
But doesn't mean they can't live together .. Have to see .