After "Murderous" Squeeze, China Boosts Capital Controls By Ordering Banks To Limit Yuan Outflows
Back in September, just weeks after China's first dramatic currency devaluation, and when Bitcoin was trading at $220, we wrote that "China Scrambles To Enforce Capital Controls" and explained why this is "Great News For Bitcoin." Sadly, China's attempts to boost its capital controls failed as confirmed a few months later by the biggest one-month reserve liquidation in history which took place this past December, while fears about ongoing currency devaluation have led to lines of people rushing to exchange their Yuan into dollars. Oh yes, Bitcoin today is double where it was in September.
So, now that China renewed its currency devaluation over the past 2 weeks with the CNY and CNH both plunging and unleashing the latest round of cross-asset selling across the world, it was only a matter of time before China boosted, or at least tried to, capital controls once again. Which according to Bloomberg it did moments ago:
- CHINA’S SAFE SAID TO ASK BANKS TO LIMIT YUAN OUTFLOWS
Actually, since all Chinese banks are at least partially state-owned, change that "ask" to "order." Here are the details:
China’s foreign-exchange regulator has verbally instructed some banks operating in the mainland to limit yuan outflows and reduce offshore yuan positions and liquidity, according to people with knowledge of the matter.
Banks are asked to better manage net yuan outflows in their capital accounts in the near term, according to the people, who asked not to be identified because the information hasn’t been made public.
Banks are also requested to properly manage cross-border interbank yuan borrowing and corporate offshore yuan lending.
The State Administration of Foreign Exchange didn’t immediately respond to a faxed request for comment after office hours.
This takes place after overnight the PBOC unleashed a "murderous" liquidity squeeze, which sent the deposit rate on the offshore Yuan to 66%, or an overnight widowmaker for anyone who was short the currency.
What happens next? Most likely a rerun of September, when a comparable (failed) attempt to boost capital controls and preserve capital outflow simply lead the public to find more effective ways to evade said capital controls... and also lead to a doubling of bitcoin in 4 months.
Finally, how long before it becomes obvious to everyone that what is going on in among the top echelons of power in China can be summarized with one word: panic.
(7 votes)
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Thar she blows!
And where would you say the center-of-gravity of world trade and economic activity currently is, on this graphic?
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016...
I feel... targeted, when you do and say this kind of things. oh, at least Draghi is going full speed ahead
Cleanest dirty shirt syndrome. ;-)
of course it's some kind of syndrome, but I would prefer to call it in a different way
Element, it's my understanding that only a fraction of a fraction of the ships shown on those tools ever leave the coasts or, when they do, are shown on the tools, which show transponder signal returns
for every ocean-going ship there is a whole fleet of small coastal vessels that nevertheless have less tonnage then the ocean-going ship
and the big ships are ever increasing in size, making this kind of visual comparisons completely useless for the purpose of visualization of trade
Not really, in Western countries transponders are required for all commercial transport shipping, and are actively monitored. If a ship doesn't have its transponder on it's a deal. Some countries don't have the infrastructure for it as their traffic is too low to merit it. Busy shipping areas (busy economies) insist on a functioning transponder to even leave port.
Got BitchCoin?
I only have FartCoin.
All your Yuan are ours.
An unbeliever!
http://www.zerohedge.com/news/2016-01-07/introducing-pathogenic-finance-...
agree, but a transponder... reacts. to a signal. where is that signal coming from? in my understanding, from shore-based antennas. reaching hundreds of miles out, yes, but not across oceans
Incorrect, the transponders emit a continuous data broadcast and beacon that announces its presence, then it can be interrogated by codes as necessary, by other transponders, to provide more data on that emitter's target, if requested. Some are done by line of sight VHF/UHF, or else HF radios for long distances, or a SATCOM link. A maritime authorities radar can also interrogate the transponder, if it is in line of sight range (usually not).
There are also scheduled radio calls (or there was, that may be packet radio text by now), that provide voice comms and radio checks, plus details about mechanical issues, failures, crew illness, weather conditions, location details, cargo type, intentions, any other matters that affect ship safety. If the radio calls are not made someone will come and find out why not. There are also big fines involved for non compliance, much as with the road rules.
+1, I stand corrected
Is it reasonable to assume that eventually all smart money will flow and then lock up the best global locations/companies/investments? Leaving the 'others' to fight/trade/save at the 'not going anywhere' retail/NIRP level? This may be the time to think, really think, about where that financial paradise may be?
My last month paycheck was for 11000 dollars... All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour... Try it yourself... www.wallstreet34.com
"And where would you say the center-of-gravity of world trade and economic activity currently is, on this graphic?"
After thinking that there's no way in hell that there aren't ships at sea, I did what the author of that story should have done - I investigated.
Ships far out at sea need to use a satellite system to report their location. THAT info is not provided by free tracking sites. You need to pay for that.
The craft seen on that free page are ones that have automatically passed along their position either by automated line of site radio contact or automated intership relay. That's why all the ships you CAN see on that page are near land. For those that don't look like they are, zoom in and you'll see that they're near islands.
China, the "economic miracle of the East" is collapsing even faster than we are. Amazing.
Not hearing much from Jim Rogers lately.
tad too much debt and leverage? and how are those assets to secure this debt doing?
and with demand falling, hmmm.
seems pretty basic to me...
Vladimir Putin’s interview. he said something about Chinahttp://thesaker.is/vladimir-putins-interview-with-the-german-newspaper-b...
Went to the LCS yesterday and they were CLEANED OUT of most silver coins. All they had were a few Merc dimes and Buff nickles, in addition to the pretty uncirc coins all wrapped in plastic which will of course go last. We scooped up the Mercs, said, "thank you very much" and went on our merry way. Interesting times.
And if I think back of all the Libertarian authors, who predicted China kicking America's ass...
Porter Stansbury, Simon Black, Robert Kiyosaki, and one ZH writer after another. What say you now, subscription-seeking, book-selling 'entrepreneurs'?
That remains to be seen.
Sell everything and move to cash. Buy back in after the crash. You will make more money that way.
Unless the whole concept of fiat paper backed by nothing is wholly rejected. Then you are fucked.
Exacty...
What is a Mega Milliopns tichet worth before the drawing, and then the day after.
Most are worthless paper...
Just like Fed notes will one day be. Everyone knows it. Why exactly does printed paper appear to be appreciating and real assets are falling?
if they decide to print and give every citizen a everest size pille of $100 bills you are done !
- google finland cash handout
Hold the citizens still for their God damned monetary beatings you idiot, "Hold them STILL!"
The financial war seems to be moving along...not long before the shooting begins?
Sounds like a financial roach motel.
You can buy in, but you can't sell out.
Should be bullish for gold. /s
If the Chinese are converting to an internal consumer based model.....why all the concern with keeping the RMB devalued? They could become the world reserve currency really fast by short selling their treasury holding! Who would want that $3.5 trillion monkey on their back when they could, just as easily, screw Janet Felon by driving yields through the roof by having a fire sale??????
Pull the trigger already!!!!!
And we can get ready for the Barter Town model, and demand the FRBNY open their books and force them into bankruptcy!!!
It would be the fastest way to, ultimately, realize financial world domination, which is China's rightful place amongst nations.
All this suspense is tiring.
Taking Copper down to CHINAtown
http://goldenopportunitytrading.blogspot.co.uk/
"Asked"
See here's the deal.
Most of our dear leaders think of us as economic units or SHEEP to be farmed. Their worldview is that we are here to serve their interests and not the other way around.
All the world makes more sense when you view it from this angle it makes NO SENSE AT ALL if you think that leadership exists to serve the people.
We the sheeple of the world will UNITE and we will compose a strongly worded letter immediately, followed by a lot of bleeting and then huddling in the corner praying they'll take the other sheep and not us this time.
Great news for gold. Those banana vendors are buying hand over fist if they can get it.
If middle class and working class people would own a larger chunk of the Chinese financial assets I guess that there would be less need fore capital controls. They don´t transfer their money to bank accounts abroad like rich people and corporations do. The Chinese communist party should probably also try reduce the fear for confiscations of assets in China.
Maybe the Chinese central bank should print money, give it to ordinary people and let them buy stock for these money. If the stock they would buy would be locked in some kind of retirement accounts there would be no or little inflation as a result of this money printing. I also guess that the Chinese rulers could boost their popularity by doing this.
This is impossible because the priests and followers of the shiny-shit cult have prophesized for years that the USD is worthless and doomed to be replaced by the infinitely superior and safer chinese and russian fiat because their hyper-corrupt regimes are so much more clever than the idiot American regime and have accumulated large piles of magical shiny-shit.
Is it possible that the priests and followers of the shiny-shit cult could be fundamentally wrong, year after year, year after year, year after year ??
I must also be imagining the surge in my US treasury portfolio, ON TOP of the interest payments I receive.
the problem is that the shiny shit is far far far less "rare" as one would expect
mountains the size of the moon are crushed every day in mexico etc to produce ZILLIONS of ouces of the shinny shit
How many gazzilion ouces do you want to buy for tomorrow PHISICAL delivery ?
Treasuries UP
Shiny shit DOWN
Looks like the only exit is (as usual) REAL ESTATE
Here in my country I see a mile long line of people to bid on a completly destroyed appartment to revamp and rent for a 30% year profit
I have no idea where all those goons come from willing to rent at unreal prices... but they come !
Houses are less than 1 month on the market
Soon to gradually withdraw about $3.5 Trillion in Treasury Bills.Sure hope the NeoCons under the WarParty get their budget under control.