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It's Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington
On Tuesday evening, we asked what would happen if emerging markets joined China in dumping US Treasurys. For months we’ve documented the PBoC’s liquidation of its vast stack of US paper. Back in July for instance, we noted that China had dumped a record $143 billion in US Treasurys in three months via Belgium, leaving Goldman speechless for once.
We followed all of this up this week by noting that thanks to the new FX regime (which, in theory anyway, should have required less intervention), China has likely sold somewhere on the order of $100 billion in US Treasurys in the past two weeks alone in open FX ops to steady the yuan. Put simply, as part of China's devaluation and subsequent attempts to contain said devaluation, China has been purging an epic amount of Treasurys.
But even as the cat was out of the bag for Zero Hedge readers and even as, to mix colorful escape metaphors, the genie has been out of the bottle since mid-August for China which, thanks to a steadfast refusal to just float the yuan and be done with it, will have to continue selling USTs by the hundreds of billions, the world at large was slow to wake up to what China’s FX interventions actually implied until Wednesday when two things happened: i) Bloomberg, citing fixed income desks in New York, noted "substantial selling pressure" in long-term USTs emanating from somebody in the "Far East", and ii) Bill Gross asked, in a tweet, if China was selling Treasurys.
Sure enough, on Thursday we got confirmation of what we’ve been detailing exhaustively for months. Here’s Bloomberg:
China has cut its holdings of U.S. Treasuries this month to raise dollars needed to support the yuan in the wake of a shock devaluation two weeks ago, according to people familiar with the matter.
Channels for such transactions include China selling directly, as well as through agents in Belgium and Switzerland, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales, said another person. They didn’t reveal the size of the disposals.
The latest available Treasury data and estimates by strategists suggest that China controls $1.48 trillion of U.S. government debt, according to data compiled by Bloomberg. That includes about $200 billion held through Belgium, which Nomura Holdings Inc. says is home to Chinese custodial accounts.
The PBOC has sold at least $106 billion of reserve assets in the last two weeks, including Treasuries, according to an estimate from Societe Generale SA. The figure was based on the bank’s calculation of how much liquidity will be added to China’s financial system through Tuesday’s reduction of interest rates and lenders’ reserve-requirement ratios. The assumption is that the central bank aims to replenish the funds it drained when it bought yuan to stabilize the currency.
Now that what has been glaringly obvious for at least six months has been given the official mainstream stamp of fact-based approval, the all-clear has been given for rampant speculation on what exactly this means for US monetary policy. Here’s Bloomberg again:
China selling Treasuries is “not a surprise, but possibly something which people haven’t fully priced in,” said Owen Callan, a Dublin-based fixed-income strategist at Cantor Fitzgerald LP. “It would change the outlook on Treasuries quite a bit if you started to price in a fairly large liquidation of their reserves over the next six months or so as they manage the yuan to whatever level they have in mind.”
“By selling Treasuries to defend the renminbi, they’re preventing Treasury yields from going lower despite the fact that we’ve seen a sharp drop in the stock market,” David Woo, head of global rates and currencies research at Bank of America Corp., said on Bloomberg Television on Wednesday. “China has a direct impact on global markets through U.S. rates.”
As we discussed on Wednesday evening, we do, thanks to a review of the extant academic literature undertaken by Citi, have an idea of what foreign FX reserve liquidation means for USTs. "Suppose EM and developing countries, which hold $5491 bn in reserves, reduce holdings by 10% over one year - this amounts to 3.07% of US GDP and means 10yr Treasury yields rates rise by a mammoth 108bp ," Citi said, in a note dated earlier this week.
In other words, for every $500 billion in liquidated Chinese FX reserves, there's an attendant 108bps worth of upward pressure on the 10Y. Bear in mind here that thanks to the threat of a looming Fed rate hike and a litany of other factors including plunging commodity prices and idiosyncratic political risks, EM currencies are in free fall which means that it's not just China that's in the process of liquidating USD assets.
The clear takeaway is that there's a substantial amount of upward pressure building for UST yields and that is a decisively undesirable situation for the Fed to find itself in going into September. On Wednesday we summed the situation up as follows: "one of the catalysts for the EM outflows is the looming Fed hike which, when taken together with the above, means that if the FOMC raises rates, they will almost surely accelerate the pressure on EM, triggering further FX reserve drawdowns (i.e. UST dumping), resulting in substantial upward pressure on yields and prompting an immediate policy reversal and perhaps even QE4."
Well now that China's UST liquidation frenzy has reached a pace where it could no longer be swept under the rug and/or played down as inconsequential, and now that Bill Dudley has officially opened the door for "additional quantitative easing", it would appear that the only way to prevent China and EM UST liquidation from, as Citi puts it, "choking off the US housing market," and exerting a kind of forced tightening via the UST transmission channel, will be for the FOMC to usher in QE4.
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There is something priceless about a rabid, foaming-at-the-mouth White Supremacy loon who refers to himself as a "black" anything.
unless you're referring to some earlier comment{s} your comment is inane.
The role of Jews in Bolshevism is very well attested. specifically the Old Bolsheviks.
Did you read the link?
No of course not - and Churchill, Douglas Reed, countless others who noted the prominent Jewish role in the Bolsheviks - all just "anti-Semites" - right?
And the "neocons" - not disproportionately, indeed, vitally Jewish Zionists - right?
About half the people in the room when the Tsar and his family were murdered were Jews in a country that was certainly less than 3% Jewish.
Stop conflating discussing facts with supremacism.
it makes you look disingenuous.
Ewik, Muzzies are raping girls in broad daylight in Malmo guess they are not scared of you.. But then why would they their cultural diversity enriches Sweden, bwhaa
After that last foolish comment, labelling Churchill, who was part Jewish, as "a foaming at the mouth ...", I think you will find that this Larsen character don't know beans about Malmo, Sweden. Has to be another example of the knee-jerk, ideologue of the affinity fraud variety.
The Revolutionary Jew and His Impact on World History
http://www.culturewars.com/2003/RevolutionaryJew.html
Jews also were almost all of the 'Russian' oligarchs who arose under Yeltsin and made their wealth with help from western Jews and buying Russian national wealth for pennies on the dollar
http://www.softpanorama.org/Skeptics/Pseudoscience/harvard_mafia.shtml
http://www.thenation.com/article/harvard-boys-do-russia/
But for guys like Larsen, we aren't supposed to note this. It's hate.
But it's not hate ot bitch about "white privilege," right?
White Privilege as Jewish Privilege: Shuffling through the Complex
http://dissidentvoice.org/2015/08/white-privilege-as-jewish-privilege-sh...
Fuck yourself.
I want to know the truth. If I make a mistake, or if I'm being unfair - do let me know, but if I speak a truth you don't like and you call it hate, you can go right ahead and for yourself.
for over 2200 years, from ancient Rome to the court of Charlemagne to Medieval Poland and England to Tsarist Russia and many point inbetween - criticism of the GROUP BEHAVIOR of Jews [not Sionists - Jews] have noted similar behavior.
There are few things more dishonest in the history of the planet than dismissing all these people all these sources, all these instances - from the funding of the Normans and Cromwell by Jews, to being lied into Iraq largely by Zionist Jews - as "anti-Semitism".
It is a word which purports to dismiss the allegations of thousands of wise and intelligent men across time and space in order to whitewash the ongoing crimes of a tribal cabal that by its own ethics - regards The Other, as less than human.
Jewish apologetics claim that all the racism and hate in the Torah and Talmud can be explained away and that being "chosen" isn't about being better or superior.
Abject nonsense, all of it.
All this said, each individual should be judged on his or her own - but there is no nobility in pretending that Jews have been accused of the same behavior over and over for no reason.
Indeed - to "heal the world" requires - REQUIRES - being fully honest about both religious and political Zionism, and rabbinical Judaism.
As are almost all the oligarchs looting Ukraine and murdering Russian-speaking Ukrainians in the east of the country.
Interesting. Have not read all these links yet, but there is something profound in the idea of specific cultural revolutions (of which you are of course not allowed to speak of today). I have considered the very Jewish myth of Marxist revolution for some time; it essentially divides the classes into the exploited workers who must fetishise their victim identity, treat the rest oif the class as the goyim, and cause self-destructive return to the Holy City.
It is interesting also because of the cultural shift to information and its exploitation. I do not hold that any of these religions are necessarily worse, only that Judaism holds an important place due to its being the original religious exit from classicalism. The Jewish idea is largely a synthesis of Greek myths and fetishisation of the lost Egyptian God (Aten, and by his loss so too the Jewish people were founded in exile). This myth is very much a theology of theft and destroying all places which now stand, if only by subversion and abstract occupation of those places (this is essentially what cultural subversion of the goyim is, intelligence and psychological manipulation). This is where the Marxist idea of revolution can be seen clearly as Jewish/Zionist dogma.
What is strangest in this is that the Nazis essentially performed the inverse action of what the Jews wanted, expelling the diaspora to restore a Christian and pagan holy land to the goyim, freeing them from cultural manipulation. (Not saying this is right, only that it is another perspective and not deserving of outright condemnation/censorship.)
The Nazis proformed an invaluable service to the Zionists, seems few of the tribesmen wanted to try to develop an arid, poor piece of real estate, so they were given an 'incentive' to re-populate the land. All for the good of 'greater Isreal' of course.
And the 3rd reicht was destroyed in short order anyway.
Well done Blackfox! Has anyone else out there awoken to the facts of the damage wrought on western civilization by a fraction of a small minority of people without a country???
Here's a hint. Sociopathy is genetic. It is believed to be inherited from the mother's side.
There is no known case of a sociopath being cured. Ever.
Sociopaths, therefore, hate exposure. What we need is a Most Wanted DECK OF PLAYING CARDS. Mr Yellen and Bernanke, Mr Paulson and Blankfein, Stanley Fischer, Rockefeller, Kissinger... Then we go after the big fish.
I actually found out something recently which I never would have suspected. The ability to detect sociopaths may also be genetic.
In a random conversation with a family member I discovered that a branch of the family (4 generations worth at least) would react to certain types of people strongly, people that ended up not being the kind you would want in your life. The only other characteristic that was common in this lineage was an ability to spot things out of place extremely quickly.
The annual deficits are 1 trillion now. That is money that no one has, and never will, being spent. We do this every year now and no hyperinflation. They can buy all of China's treasuries and it won't cause hyperinflation. Hyperinflation is going to come but not just yet.
Chumba's sock puppet speaks.
Is that supposed to be information? You are like Bullshit Bullard "QE is not going to come for a while:".
That is NOT information. STFU .
Someone argued that buying a trillion of treasuries would cause hyperinflation. I argued against it.
Do you need a brush for all that sand in your vagina?
Viscious spiral.
Who is buying this crap 2% paper?
Prober said he's buying them by the millions.
China must be selling at a discount, right? Shouldn't the sale price be evident by auction sales? ( Ie, why buy from the Treasury if China is selling cheaper?). So if the recent auction was successful at low interest rates, then that must mirror China's experience.
Someone has a large appetite for UST right now is the only conclusion. Is it already the Fed? Is QE4 already in play?
"Is it already the Fed? Is QE4 already in play?"
Of course!
Game of OLD MAID kicks into high gear. All that sequestered debt held off market and only on balance sheet as reserves is converted to cash. Cash is converted into....? Things that hurt when you drop them on your foot? If Fed buys every offer by self or proxies and Sellers quickly moves to relieve themselves of rapidly devaluing non-interest bearing IOUs, then what catches all the bids? Strong dollar just hit a top. All that Treasury rain stored in the clouds is coming down. Don't wander into a tight canyon in a flash flood. And the world is a tight canyon.
1. Chinese govt. sells treasuries, buys Yuan.
2. Chinese govt. buys stawks from cronies and other rich fux.
3. Cronies and rich fux buy dollars, then treasuries.
4 ?
5. Profit!
So the Chinese are now playing the role of fed during QE...
And Cronies play role of Fed in tightening....
Fed doesn't need to do anything right now...
Got it.
U R via the FED
Laurence Kotlikoff: U S Treasury Bonds One of the Riskiest Securities in the World, Financial System Will Collapse Just a Matter of WhenWhere can you get a safe investment? Boston University Economics Professor Laurence Kotlikoff says, forget U.S. Treasury bonds. “I think they are one of the riskiest securities in the world because interest rates are likely to go up. I think the Fed is going to have to keep printing money because Congress isn’t paying our bills, and that’s going to lead to inflation eventually. So, I think long term Treasuries are extremely risky and they can drop 5%, 10% or 20% overnight. That could put my bank that was viewed as perfectly safe today–out of business. So, we could have inflation take off, and interest rates go up. We could have banks fail, and that could lead to runs on other banks. That’s the scenario,” says Professor Kotlikoff.
http://investmentwatchblog.com/laurence-kotlikoff-u-s-treasury-bonds-one...
“I think they are one of the riskiest securities in the world because interest rates are likely to go up."
Which will drive up the dollar against all other currencies, thus capital flight INTO US treasuries, despite rising rates which are offset by falling foreign currencies.
You gotta look at the whole picture. Sure, UST's are a shitty deal if you live and work in the US, but what about the ROW?
Going to push treasury rates (and mortgages, etc) much higher and when those dollas come flooding back to the USA we'll see inflation....what many have been waiting for. Those 38% pay-day loans will become even moar expensive and credit card interst will be painful for some.
Should exacerbate Merika's recession. I like Kotlikoff and agree with him that PMs are a good safe haven when this happens as the flood of dollas hits the markets.
let me see, if they don't use the dollars to buy and stabilize the yuan, they are going to buy up assets in the US like stocks and real estate, so you will see asset inflation and commercial property will increase in value, just wow
The Japanese did that when they weree flying high. It didn't work out well for them. The Chinese are not flying high.
"they are going to buy up assets in the US like stocks and real estate"
Or liquidate same to shore up domestic balance sheets.
The jury's still out on that one. You may see no effect at all, as the one cancels out the other.
"Suppose EM and developing countries, which hold $5491 bn in reserves, reduce holdings by 10% over one year - this amounts to 3.07% of US GDP and means 10yr Treasury yields rates rise by a mammoth 108bp "
108 bps isn't all that mammoth. And it's underlying assumptions include EVERYONE selling 10% of their TSY holdings at the same time, which isn't going to happen. As China sells, others will buy, not the least of which would be our own Fed that could mop up every dollar of that with 1s and 0s poofed out of thin air exactly when needed.
About the only thing that would shock me would be to find out the Fed isn't ALREADY leaning into that selling through Citadel or other 3rd parties (other central banks).
You missed the point and missed what was actually said. Quote: " reduce holdings by 10% over one year"; that is not all at the same time; it says over a period of a year. Furthermore; in the past 2 weeks, China has dumped 20% of that 10% and for the year 40% of that $500 billion (that 10%) as the example. So that would equal about 42 bp of upward pressure assuming all things fixed.
------------
There is more to come from China in the next few weeks. China's over indulgence along with the global "slow-down" are causing the need to deleverage all asset classes and it will spread across continents over the next few weeks to few months. This never ends well and TPTB will put more printed band-aids on the "problem"; only to make it worse for everyone. Wait till the municipals begin to fall apart; they already are, but for some reason it has not manifested itself as it eventually must.
I hope you're right. As for myself, I don't really undertsand market influences and behaviors. I keep hearing, "this is finally it" -type speech, and hearing very logical arguments, but the staus quo is always maintained. I'm sure it'll come eventually - sanity I mean.
I do know one thing though, the fact that the markets rebounded so strongly yesterday on what was obviously heavy PPT buying tells me that the 1000+ point drop in the Dow the other day was likely NOT intentional to get people begging for more QE. That is a sign that the manipulators aren't all powerful, and are starting to reach their limits. That's encouraging.
Hopefully this really is it.
The status quo is never being maintained. That's why the global currencies are being harder and harder hit, at faster and faster rates. The ponzi's are breaking down and the rats are fighting over the final scraps. Only seems like nothing going on to those that can't see. Look at the lack of liquidity in markets. Look at the timing between global financial crisis. You'll see a patern if you chart it.
The provderbial is hitting the fan. Just because it's not happening so hard and fast you can't see it like a televised siege doesn't mean it's not happening. And it will come at those speeds soon. Keep watching.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
As long as we are running a trade deficit with China, they give us goods and we give them USD's. Many of those USD's end up in US bonds. That's just the way it works. If you were China, were would your money feel safer? In China or USA?
Safer in the Himalyan mts of Tibet by far.
just in time for schmeeta
stock market "bounce back" = QE4
Its official. The Fed started QE4 to buy these treasuries. Just like they were forced into QE3 to bail out JPM's whale trade. Finally. An asset class they can have an excuse to buy.
So the currency war now has a true focus : dedollarization as longer term objective.
The FED and POtus CANNOT stay indifferent to this Chinese MAJOR financial objective of HUGE geopolitical consequences.
China's top man coming to the WH...
What's one of the biggest derivatives positions in the world? Treasuries! Trillions in notional value! Imagine if the market goes the wrong way for a while such that someone has to start paying out big time on all those interest rate swaps? Can you say UGLY time for the big banks and brokerages? Naaaahh the fed's just going to have to buy it all to prevent an accident I guess. Where is all the dollar demand going to come from then...? Debt deflation -- the old standby! The musical chairs get taken away and everyone has to scramble selling anything for their bucks to pay dollar debt. Me thinks the stock market is going down to save bucky.
Nothing, apart from the USD matters now for the FedRes.
The economy,stawk marketc, whatever will be scarificed so they can maintain their control.
Big money only has 2 choices
Stawks or Bonds.................if Bonds blow up .......................they will run to stawks
Just Stawks blow up they flock to Bonds
JMHO
Perhaps as well Gold. Greek Islands. High-Priced art. Vintage cars. The misforture of other people.
@bunnyswanson
Not enough gold, greek Islands etc for the trillians in big money
"Not enough gold, greek Islands etc for the trillians in big money"
Not true. Just not at current prices! Just start pumping 10-20 trillion into the gold market and see what effect that has on the spot price. Gold (and other assets of tangible wealth) can always take up all the fictional cash in the world. It just does an accounting of them if there is a rush. After all - that is what stackers bank on in a limited crash, right?
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Hey Victor
I have an ounce for sale only 1 Million...................beat the rush as you know it's going to 10million
Theres a reason you are surrounded by idiot's
Tulip........................comes to mind
'That is so,' said Wormtongue; 'but there is a third kind: pickers of bones, meddlers in other men's sorrows, carrion-fowl that grow fat on war.'
Speaking of carrion fowl, it's time for the 8:30 precious metals smackdown.
The entire house of cards will collapse. They feed off each other.
Last card standing is an ace.
The bond market is what you need to pay attention to because what happens to the largest ponzi scheme affects all the other ponzi schemes. China's bubbles are deflating and soon it will be here to stay and the world will change for the worse, which proves we are devolving, not evolving as Darwin already knows since he wishes for a cool glass of water and can't get it as we speak.
Fugly! Yellen will be come a heavy Manischewitz drinker soon. That's why her face is already red at those hearings I bet.
You hit the nail on the head, there's a bit over $2 bln shift for each basis point. 108 basis points is $208 bln. JP Morgan has $27.83 bln liquid. Can you say fire sale?
Now its really starting to get interesting.
scary interesting
You talk to a typical person and they entirely blame the market volatility on China's own singular problem since "nothing has changed" in the US.
Little do they know or anticipate how China will ACTUALLY be affecting us in the future. The typical person's shallow explanation will soon be demolished by the true depth of China's impact.
All you have to do is ask; in which country are your clothes and electronics and now "chickens" produced in? If they say anything other than China (minus the chicken), then you know you are talking to a real "zombie", move on. If they say China, then shout what happens to China matters! That should do it.
The crap produced in China can easily be made in a dozen other places, like Bangladesh, India, Pakistan, Indonesia, Vietnam.... need I go on?
That shift is already underway, which is part of the problem China faces. The other problem, shrinking export markets aside, is that they can't move up the value chain in the same way the Japanese did because those markets are already saturated. Japan had first mover advantage, followed by Korea and the Asian Tigers. China is late to the game and has a much larger population to feed. Their principle export today is educated Chinese, the very people they need to pull off a Japan miracle (leaving aside how it ended for Japan, which is a different issue).
Incidentally, high end microchips come mostly from Taiwan, not the PRC. The low end stuff, anyone can make.
You're just a dumb reptile. Many clothes and electronics aren't produced in china. My clothes were made in Bangladesh for the most part Andy phone was made in Malaysia. So you're little whatever fails miserably.
Belgium is a buyer.
Belgium is the fence, not the buyer.
China looks to be in for an extremely bumpy ride as a lot more investors question the risk of holding yuan assets. The general consensus held by everyone from deposit holders in Hong Kong to high-yield-bond investors in Europe was that growth would continue. Money flowing into China over the years has pushed along the misallocation of credit on a grand scale and continued the build-up of bad assets in the banking sector.
An estimate by Goldman Sachs has indicated China might be facing credit losses of as much as $3 trillion as defaults ensue from the expansion of the past four years. Nomura claims $90 billion left the country in July with the pace accelerating since the People's Bank Of China shocked the world by ditching its currency peg to the U.S. dollar. Capital flight for the first three weeks of August may be approaching $100 billion despite the use of harsh anti-terrorism and money-laundering laws to curb illicit flows. The article below looks deeper into this shift and its implications.
http://brucewilds.blogspot.com/2015/08/chinas-massive-capital-outflows.html
Adding to my short here :)
Hyperinflation looming.
https://m.youtube.com/watch?v=F7qOV8xonfY
Ah, who cares! "We" have buyers aplenty. Freinds world wide that love us, and want to be just like us.
Or perhaps we will just start eating ourselves.
Same as it ever was.
A skit from the '70's.
Inflation is your friend - SNL season 4 ep 4 introductionhttps://www.youtube.com/watch?v=SyybS-Vh2Dg
Aykroyd was Nostradamus as it turned out. That audience wouldn't laugh today - sheep now think this is really how it works. That script is today`s Econ 101 course, called MMT.
"Men on the Moon. Hahahahahhaahaha" -Dan Akroyd, Coneheads
Ponzi Casino Capitalism USA is
D E F U N C T.
Ahhhh, there is nothing quite like an out of control controlled economy.
Tulips, anyone?
China sells - someone buys. So...what's the point? I don't see the problem.
Begin with an H and ends with tion.
hydration?
close? Hyperinflation. Hyperdisinflation. Hyperstagflation.
Hyper cool nation?
China sells - someone buys
It's not like Obamacare......no one actually has to buy it.
This true,but someone eventually has to pay for it.
http://www.cnbc.com/2015/07/20/irs-more-paid-obamacare-fine-than-expecte...
Only numbers I have seen confirm your ACA suspicions.
"It's not like Obamacare......no one actually has to buy it."
What commie asshat downvoted you?
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Hydrogenation? Or hydrogenisation?
Hopefully you're joking...but just in case you're actually clueless, here is the problem.
The "somebody" is us...we buy them with newly created/counterfeit money. At some point the entire globe realizes any UST's they hold aren't worth shit which triggers a currency crisis.
Triggers it? We're already in one. Accelerates it perhaps.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
After the financial crisis, I'm always thinking about how derivative products will be impacted by environments such as that existing now.
Is there anyone with a great deal of expertise in this area who could weigh in here? Thanks in advance.
Not a financial expert, but my political instincts tell me the debt will be wiped clean after all the "real" fiat has been milked out of the ponzis. Think sub-prime loans. The magic wand will cure all for the masters of money.
Today's word of the day is...chicanery.
Banking and finance is not about money, but deception, theft and enslavement.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Carry trades unwinding.
Borrow dollars to buy higher yielding Emerging Market debt.
What could possibly go wrong?
So....
Global economy slows down, capital returns to US, drives dollar higher leaving carry trades on the losing end. What to do?
Sell foreign bonds and currency, buy dollars to unwind carry trade.
The whole process feeds on itself.
The strength in the US dollar is a symptom of financial crisis in ROW. Capital flees to US as no other market has the depth and certainty. Yeah, it's all an illusion, but as long as everyone buys into it, the game goes on. Besides, even if you know it's fake, at least it's a genuine fake. Not like those other phony baloney currencies.
Inflation in the 3rd and 2nd world, deflation in the 1st. Bet on it.
I went to a place where we may eat environmentalists..can't spell, too much alcohol.
I presume China is selling the Treasuries for a profit to boot.
Georgia Guidestones...here we come !!!!!11111
Just doing some number fudging off the top of my head, I figure with enough ropes and pulleys it's possible to hang about 32 bankers/hour on those stones. At that rate, it would take less than two years to off 500,000 of them...the 'magic' number.
"Do not be a cancer on the Earth" - OK, done.
Engaging in more QE makes no sense. The Fed is in business to make money. At this point it is obviouse QE does not help in that regard and only puts the Fed further into debt. Eventually they will have to cut their losses and start liquidating their questionable purchases of the last few years. They are not part of the U.S Government. No matter how federal-sounding their name, in the end their survival will require that they dump their excess baggage like everybody else. Will it work? Probably not. But it's the only option left. Another QE will only insure their demise that much sooner.
@fremannx
They can only start liquidating if there is a buyer
What if buyers lose CONfidence in $
Your point is well-taken and I didin't say they would be successful -- only that they have no other options. But don't forget the power of what P.T. Barnum said. There will be enough suckers initially for the scam to work for awhile. It can't work forever though. Personally, I don't think the Federal Reserve will exist 10 years from now... maybe not that long.
Thats what the carrier task groups are for: Tasks.... We wil bomb you into confidence..
The longer they can keep running the ponzi and grinding down the middle class, more farms, small businesses, real estate, etc will be liquidated and ownership transfered to the corporate rulers.
Marie Antoinette eventually lost her head... so will they.
Nay, Nay, Nay
http://www.bbc.co.uk/news/business-34074377
USA is growing tremendously, middles class all fine and spending loads of money.
(It is on the BBC, it must be true)
The nation is much like old money that has squandered its inheritance. Prior reputation and pretext can carry the farce far further than most realize. You can look at the worn carpet and the shabbiness of the butler and sense the general state of decline. The government like bankrupt old money cannot pay its bills. Social Security, Medicare, Medicaid, the pensions, the infrastructure, the military, SNAP all of it is unaffordable. The only option is to mouse click the needed trillions into existence. The guy at the top of the pyramid, the secret puppet master, he knows, but what choice does he have? We are looking at immediate social and institutional collapse if sound money policy is invoked. Instead, through effortless, electronic fabrications the lights are kept on for another day.
Nope, just the death of the dollar. The masters of money are not ruled by the same rules as you or I. Their "debts" can be forgiven at the stroke of a pen - the NWOs "New Deal". QE for the US, or for that matter, currency devaluations for all the currencies of the world until their collective deaths, is on the books.
The objective is not to "make money". They print that shit at will.
The objective is global domination and universal enslavement. They're hunting bigger game.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
I'll bet they haven't sold any of the gold reserves; just that funny paper "money".
"He who laughs last is laughing at you."
~ Old Chinee Proverb
No problem here, just sell them to Belgium they have a huge economy to absorb them!
Aw fucki it. I'll buy them.
A whole lot of Belgiumimians were just given their US citizenship
Preemptive strike on US 'safe haven' myth. Currency and cyber warfare to escalate sharply, culminating in hot war.
And not becasue of financial actions, but because of economic ones - those damn yellow rocks they stashed away. Gives them a sense of freedom - and that gives them a backbone.
Can't have that.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Fiat currencies with insurmountable debt that are backed by another fiat currency with insurmountable debt are going to find out what happens when this whole illusion wakes up to reality.
Get ready for the financial reset. Most analysts agree some kind of system that returnes to Bretton Woods or something similar.
Financial analysts don't know shit. History is not written by financial analysts.
Their analysis of the situation is correct. Their conclusion is wrong.
The reset is coming. but it will be headed off at the pass. A reset at the moment on the current tragectory would shift global power to the Chinese and the Ruskies.
The war will go hot before that is allowed to happen. Think about it.
You think the masters of money will just give up on global domination just because one of their ponzis times out?
Not in this eon.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
What if China is also dumping gold? Careful what you wish for, you just might get it because USTs are supposed to be the safe haven asset, so is gold.
No, USTs are fictional crap, just like currencies. Gold is a real, tangible, universally, eternally valued store of wealth.
The only reason the US hasn't blown China to hell and back already in order to pillage their gold is the size of China's military. Russia too for that matter.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
International political economy degree here: what China is doing is insane. Or it's a cover for the real motive.
Here's the move: sell treasuries for USD to buy back your own currency (selling USDs) to maintain the peg. This allows those who hold yuan a liquid market to buy dollars. You're enabling the capital flight. A floating currency would have corrected this and slammed the door shut and forced realized losses.
Say they're just insane and they think this will stem the capital flight (it won't). Like the above comment from ZH on the UST market, the rest of the USTs you hold DROP in value. Your ability to buy dollars and turn around to buy yuan to maintain the peg becomes impaired. Your dollar-denominated assets take a dive, you have fewer dollars in the warehouse.
As for another motive... when we discuss "China", let's just be clear there is no China as one collective. They're like people. A billion or so of them. And the ones that have the biggest motivation to drop yuan and buy dollars are probably the ones that have a lot of yuan. These hyper-rich oligarches who realize this thing is f-ed. And they'll use the PBoC to keep the peg liquid so they can cash out.
I can't believe it took all the world's analysts (including ZH) about 2 weeks to figure out that this devaluation is just plain capital flight. Or are they getting it yet?
Hmm.
On second thought, hmmmmmm.
They (all the theys) are never insane, the question is what is their rationality.
Getting away from from both textbooks' theory and sine-wave mechanics of markets, the beach always makes a nice metaphor this time of year...
What happens if the tide goes out, but the water level doesn't recede?
What are the implications if price actually is analogous to water level?
Nothing. People trade. That's what makes up price. They trade for a reason. You can't know those reasons. But it is purposeful action.
Waves on the beach have no purpose. Their action is dictated by the laws of motion and discoverable through scientific discovery. It is not analogous to human action.
It's OK that you don't get what I was saying, but if you think "nothing" happens then you should avoid beaches (and markets) for your own safety and stick to ivory towers. The price rises.
I'm sure you and your pot dealer have it all figured out.
No doubt you compare him to the central bankers who are also directors, board members or observers of the BIS Bank for International Settlement, a criminal organization manipulating heads of state on a global chessboard while these esteemed leaders preen themselves ever more with every pat on the head.
The bankers are playing chess all right, but the world's political/economy types are still in a sandbox.
As heard recently on Jeopardy... I'd like the Pot Dealer for $100 please Alex.
Supporting a currency peg is a mug's game, just ask Switzerland. The USD is killing RMB and commodity currencies, so the price is right to dump US debt to save themselves short-term. Capital flight is a red-herring, a mere drop in the proverbial GDP bucket for a country that can introduce more capital controls, overnight, anytime it wants.
Why would they ever need to buy USD when they already have well over a trillion already? Do you think maybe they might just sell some to support the RMB, stock markets, buy assets like ports and farmland or, gosh, REAL money?
'...let's just be clear there is no China as one collective. They're like people.' Huh, Reeeally? WTF?
Show a long dead Latin poet some respect. International political economy degree, (not too f*%(@n pompous) does your office have a window?
War DUMAZZ phd, huh good God y'all
What is it good for?
Absolutely nothing, just say it again...
Songwriters
Strong, Barrett / Whitfield, Norman J.
going back to your original question, what makes you think they want to stem capital flight?
Because what else is their central bank supposed to do? When you peg, you can't just print at will. You have to buy dollars to turnaround and sell them to support the peg. That's the only way they print with large outflows of money.
Why would the PBoC want to stem that? (1) support the peg and (2) stem the bank run. #2 is the only reason a central bank exists.
But like I said, it's insane to sell treasuries. They don't have enough treasury stock (though it may be in the trillions) to stop a capital flight at this peg.
What's amazing is that no one was willing to swap with them. It means that something is broken in shadow banking world.
Here we started
http://www.veteranstoday.com/2015/08/25/confirmation-tianjin-was-nuked/
disinfo site.
Gordon Duff isn't his real name.
Ask yourself why he's on the BOD of an english defense co.
There's a reason many left his site.
Yes Willy, you might be right, one always wonders, but the damage is veery suspicious.
I agree with you.
Duff is a mystery in some ways, but one thing is clear - he is often full of shit, and doesn't care one bit about lying to his handful of readers.
He's disinfo, and possibly mentally ill.
Then again Marines aren't known for being especially bright.
Take it from a guy who used to periodically rescue them.
Special forces?
Corpsman.
Thee most special of special forces if you are a grunt with a fresh blow out.
Obama dispatched rice yesterday to china. Putin n town for the China mil parade where per reports 84 percent will be nbew equipment including the carrier killer and presumably the bigger Mobil launch platforms recently spotted on road. German media leaking like bursting dam with anti American info including the GMO ban yesterday, the us aiding isis smuggling days ago and accusations of economic warfare against it and russia re sanctions and migrant flows. US deploying raptors to Poland for who russia or Germany? German spd bomb threats as the foreign minister ups his rhetoric against us action in Ukraine and more broadly. China just launched cargo train to Germany. Russia media reports retired f117 seen flying and asks why? The one shot down over Serbia. US saying b2s in Korea. Just waiting for the spark. Russians on snap drills every other day as us pushes huge nato exercises in europe.
Here comes Jim Willies Scheissdollar.
"Get in there and sell....sell".
Are said Treasuries the flushable, biodegradable version?
If not, there will be a lot of fucked up septic systems around the globe in the near future when they are worth more as ass paper than anything else.
Thank God for those Belgians, holding the global economy together.
Belgium is the Yucca Mountain of finance.
https://en.wikipedia.org/wiki/Yucca_Mountain_nuclear_waste_repository
"They didn’t reveal the size of the disposals."
When I think of the term disposal I think of garbage. The leak has started and if it continues eventually the dam will bust. People said theis would never happen. We have been warned.
This needs Ozzy Osbourne screaming "Let the madness begin!".
Shemhitah is back on - screw the dead shemhitah bounce
I hope China is going to have really good security for their parade!
The Fed is buying Treasuries at rock bottom prices, and they will keep doing so. The United States are on the hook and will pay up.
At some point the same people will crash the Stockmarket and do the same thing there.
There is nothing new about this, it's the same old pump and dump, it's just that most people don't see who the big players are and what their objectives are. Most still believe in the equivalent of Santa Claus; that the Fed is trying to help the economy or some bullshit like that.
But...but.... "China selling Treasuries is “not a surprise, but possibly something which people haven’t fully priced in,” said Owen Callan, a Dublin-based fixed-income strategist at Cantor Fitzgerald LP."
Sorry OT: the United Arab Emirates have landed quite a force in Aden, Yemen. 1/3 of their tank force, 100 French made Leclerc tanks has disembarked and is now moving towards the capital Sanaa.
Problem with those French tanks is that they only run in reverse.
Russia is too, right?
will Brazil and India follow?
I think Brazil might.
Could never figure out why Brazil was stupid enough to join the BRICS. Don't they realise they are on the wrong side of the Atlantic to side against the US?
Suckers want to be blown up.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
"They didn’t reveal the size of the disposals."
Sounds like they have a garbage problem.
That's nice. Buy something to help someone out, then have to communicate with their authorities when you sell? LOL. What is this? To have and to hold forever?
Then maybe the announcement is just so the 'secret buyer' can be aware of them hitting the market and the Fed's balance shit can keep growing to infinity. Oops.
Bond yields will not be allowed to rise. Just not going to happen.
Then you are stating the FEDs will NOT raise interest rates. They will not need to raise rates when this all unravels beyond their control. Right now TPTB appear to be in control, but unless they can control the Chinese via the back-door and FED intervention (i.e. Overseas Central Bank hidden QE to absorb the UST dumping), then eventually the coiled springs gives way. I say September will be known as "Bloody September" in more ways than financial. Enjoy having King Obama, for we will never make it through the next election...by design. Stupid people vote for stupid people; thus we have Obama.
Rome let its Constitutional Republic slip away in similar fashion. You think Obama is bad for the Republic? He's just the culmination of all the corruption to date.
Try voting the populist Trump in. The average US citizen thinks he might restore the Republic.
The Roman citizenry thought the same of Caesar.
Side note: Caesar was a bald, charismatic, rich prick too.
"My greatest flaw. I surround myself with idiots."
- Victor von Doom
Yellen print the difference and buy em up no problem.