Chinese Overnight Funding Rate Hits Unprecedented 105%

Tyler Durden's picture

It appears Chinese authorities are deadly serious about crushing shorts and halting speculative outflows as the liquidity freeze in Chinese markets has sent overnight deposit rates to a record 105% as one or more bank's utter desperation for funds looks like a giant fat finger.

Today's spike is up 45 percentage points from yesterday's 60% rate...

 

and at the same time, PBOC strengthened the Yuan fix by the most since 2005 to narrow the gap to the massive short squeeze move in offshore yuan...

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buzzsaw99's picture

105%, lulz. that'll leave a bruise.

knukles's picture

Ha! It'll buff out!

(Everybody knows they don't have very big fingers.)

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) knukles Jan 5, 2017 9:53 PM

Hey Bitcoin is back to $1028 now? What happened you dumb pieces of dog *&(*IHP??

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Bill of Rights Jan 5, 2017 10:06 PM

Yeah I smell those pigs too. A few people on here even accused muh of "money laundering" whatever the hell that means?

HungryPorkChop's picture

Has Fonestar returned as Draybin?  He was the ultimate tramp for Bitcoin and either its him or another apple that didn't fall far from the tree.  Bitcoin is being pumped and dumped just as I thought.  No one wants to invest once this hits near all time highs.  Bitcoin has nothing behind it!  No oil wells, zinc mines, military, highway infrastructure, land, etc.  There's just nothing!  Call me whatever name you want but I'd take the U.S. Dollar, Yuan, Pound even the Peso above Bitcoin where they have real tangible assets.  Of course, precious metals like gold trumps all...  On second thought just give me gold!!

johngaltfla's picture

The shorts took it in the shorts on this one.

Never, ever, ever, ever, bet on or speculate on the ChiCom government or banks. It's suicide.

old naughty's picture

they have "experts", same as...

short is so persistent coz...

matching strides ?

RadioactiveRant's picture

Whats behind the pound? There are no mines or precious metals. All I see are empty oil wells, a housing bubble, and a financial sector that will soon be cut off from its export market.

buckstopshere's picture

Bitcoin is going down 30% within a week.

By end of 2017 it will be close to $300.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) buckstopshere Jan 6, 2017 2:31 AM

Fat chance of that ever happening. That's below cost for the miners.

buckstopshere's picture

Miners will go out of business.

Especially the leveraged ones.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) buckstopshere Jan 6, 2017 2:48 AM

Why would they go out of business? Do you understand how price discovery works? And have you been given a list of talking points here or something? You always have these "computer sciencey (sic)" sounding things that will probably scare the average Zerohedge user out of Bitcoin.

buckstopshere's picture

End to end correlation attacks are how many Bitcoin users will be unmasked even if they use mixing services.

Bitcoin serves really one purpose and that is to transfer funds across border for a one-way trip out of the country.

Caveat emptor.

People need to understand what Bitcoin is. Risks, benefits, etc.

sinbad2's picture

Wait till Bitcoin hits 5 cents, then buy for the fun of it.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) sinbad2 Jan 6, 2017 2:33 AM

Weren't you saying that in 2010, 2011, 2012, 2013, 2014, 2015, 2016...

At what point do you just say that you have no fucking clue what you're talking about?

zorba THE GREEK's picture

There has to come a point where panic sets in and gold goes over $2000. After all, China is the world's 2nd largest economy.

jmack's picture

why would you buy gold in china, when you can send bitcoin to switzerland and buy it there, or singapore, or a million other places.  yuan to bitcoin to physical gold out of reach of your governments capital controls....   it aint rocket science.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) jmack Jan 5, 2017 10:06 PM

Even better idea, just buy the Bitcoin and don't use that to buy gold.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Draybin Deffercon III Jan 5, 2017 11:09 PM

Psst... Draybin, Your SchlongWave spammer is here, below. Don't you want to play with him?

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) LowerSlowerDelaware_LSD Jan 5, 2017 11:17 PM

Yeah those guys at least recognize muh brilliance and want to listen to muh.

Draybin deflectin' the convo direction! Draybin defecating teh nation! Draybin stayin up late eatin cheetos and cake!

BTW even Bix Weir and V agree that Bitcoin RULEZ over stupid goldc0in now...

https://www.youtube.com/watch?v=0iVPII9hulk&t=6s

Xena fobe's picture

I hate to say it but maybe schlongwave is sanctioned by ZH.  The accounts should have been blocked. 

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Xena fobe Jan 6, 2017 1:02 AM

Possible.  Hard to believe the way that they are so amateurish and in your face with their spam.  We'll see what happens in the near future.  If they are sanctioned ZH will be deleting me.  I guess that might be a relief over a spam filled comments section.

sinbad2's picture

High gold prices would aid China, they have by far the largest stash of gold on the planet.

Matt0515's picture

The US dollar's status as a world reserve currency, backed by nothing today but a promise to pay by issuing more FRNs, is now at risk because the first currency to be backed by precious metals will become the next world reserve currency.

The first WRC was the Portuguese escudo, the second was the Spanish peso, followed by the Dutch guilder, the French franc, the British pound and then the US dollar from 1944 onward, agreed at Bretton Woods, when it was backed by US$35 an oz of gold.

But Tricky Dicky Nixon closed the gold window on 15 Aug 1971 after America cheated and printd more dollars (to fund the Vietnam war) than it had gold to back them up and now the US dollar is just a piece of paper with green ink, backed by cruise missiles and nukes. (See examples: the invasion of Irag and bombng of Libya for wanting to stop using the US dollar).

So if China backs the RMB with gold and silver, the US dollar's role as a WRC is toast. Does China have enough gold and silver to back the RMB? Yes, if the RMB is priced at say 69,000 RMB an oz of gold. That will make it the new world reserve currency. This means at the current exchange rate of 6.9 RMB to 1 US$, the price of gold in dollars will be US$10,000 a oz vs US$1,177 an oz today, a depreciation of the US dollar by 850% vs 136% as tweeted by Trump a day ago for gold price to rise to US$1,600 an oz.

If the US has 8,100 tons of gold at Ft Knox then Trump should be glad because he can print enough dollars to build his great wall, bridges and high speed rails across America. In 1933 Rossevelt depreciated the dollar from $35 to $42 an oz of gold, a depreciation of only 120%, to fund his New Deal. Trump should be nice to China and both countries will benefit with a rise in the price of gold.

Lady Jessica's picture

The sovereign with the global reserve currency has to run a deficit.  Triffin Dilemma.

The Chinese consumer ain't there yet.

Matt0515's picture

"The sovereign with the global reserve currency has to run a deficit" only if it consumes more that it produces, like what the US is doing right now and the national debt has soared to US$20 trillion. China has learned a lesson.

There are probably more rich middle class folks in China than in the US and they own gold. So if gold is priced at 65,000 RMB an oz many will have lots of RMBs to spend. But if a country needs unbridled consumers to get rich then why not just breed locusts?

Kayman's picture

"the first currency to be backed by precious metals will become the next world reserve currency."

No currency is going to be backed by freely exchanging it with real gold. Never. That country would be drained of it's gold reserves faster than you can say, pickmeuptruck.

Matt0515's picture

It depends on how much of the currency is backed by gold. At $35 an oz the US almost ran out of gold in 1971. At 65,000 RMB per oz of gold it will take a long time to drain China's gold reserves, especially when China is the biggest gold miner in the world. If you still labor under the illusion that China is not serious to back the RMB with gold then go to the link below and see for yourself why it is a given:

https://www.sovereignman.com/trends/the-chinese-have-put-out-billboard-a...

 

Winston Churchill's picture

Luigi ,bone crusher,Paisani is their debt collector.

MJ4Vets's picture

<---- Invades Japan

<---- Invades Taiwan

<---- Invades AUS, other SE Asia, Arabia / oil producer, western nation

(yeah, i know there's no option to pick the 3rd, but China's history shows they *invade* when they are about to have a Civil War (aka economic collapse)

jmack's picture

probably africa, considering they have already colonized it.

Xena fobe's picture

Probably America for the same reason.

sinbad2's picture

Really, you got an example?

The US usually invades a country when a President is coming up for reelection, but to my knowledge, apart from Tibet, which is like Texas to China, they haven't invaded a country in hundreds of years.

max2205's picture

What's that annualized 

NoDebt's picture

105%  (already annualized)

Dark Daze's picture
Dark Daze (not verified) NoDebt Jan 5, 2017 9:41 PM

I think he meant compounded

chubbyjjfong's picture

105% (already anal-lised) FIFY

Dark Daze's picture
Dark Daze (not verified) max2205 Jan 5, 2017 9:40 PM

185.33%, or 0.5% PER DAY

illuminatus's picture

Desparate times call for desparate measures.At least they are not confiscating gold and fiat yet.

Stormtrooper's picture

They can have the fiat.  They'll only get the gold if they survive a lot of lead.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Stormtrooper Jan 5, 2017 10:17 PM

They can pry muh bits from muh cold dead brain....

JackT's picture

Or use their network kill switch.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) JackT Jan 5, 2017 11:10 PM

D'Oh!

sinbad2's picture

China is the largest gold producer in the world, and they don't export a single ounce, but they import by the ton.

China's gold reserves are massive, much bigger than their declared holdings.

China will go gold backed after the crash, and the US will go silver.

mickeyman's picture

They are trying to bounce Soros.

sinbad2's picture

Soros works for the US.