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China Pulls The Rug From Under Europe, Halts French Bank Transactions, Makes Good On Trade War Ultimatum

Tyler Durden's picture


A flurry of headlines out of China suggest global macro-economic volatility may be ready to take it to the next level. We discussed last week how China's oh-so-generous offer of help to Europe was merely a veiled threat playing US against Europe in a game of who-gets-the-funding. Well, tonight, it seems, they are making good on some of those threats. Aggravated by EU's lack of market economy recognition, they pull trading lines with French banks, express concern at the EUR's safety (preferring US Treasuries), and indicate a clear preference for bonds over stocks - all the while warning of growing trade tensions - consider the sabre-rattled.

Initial comments from Commerce Minister Shen via Bloomberg:





was quickly followed by the 'threat/promise':



and then Reuters reports:

A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.


The European banks include French lenders Societe Generale , Credit Agricole and BNP Paribas.


"Apart from spot trading, all swaps and forwards trading (with the European banks) have been stopped," one source who is familiar with the matter told Reuters.

 And the piece-de-resistance of the night was, again from Reuters:

China, the largest foreign holder of U.S. government debt, will keep buying U.S. Treasuries, the official People's Daily, the ruling Communist Party's mouthpiece reported on Tuesday, citing government researchers.


In an article about the reasons for China's increased purchase of U.S. Treasuries, the newspaper cited Yan Xiaona, a researcher with the Chinese Academy of Social Sciences, as saying that the dollar "is relatively safer than the euro" because of the unfolding sovereign debt crisis in Europe.

Furthermore, as if he had just read our earlier debt vs equity post: 

Wang Chaocai, a Ministry of Finance researcher, was quoted as saying that "what else we can buy if not U.S. Treasuries? It's more risky to buy into equities."

Lastly, for feces and giggles, China Daily just had to throw in the military element with the tongue in cheeky "Backlash expected if US seals arms deal"...

It seems that China did not get the answer they wanted from the Europeans and just as we said last week, swung back in favor of the US - TSYs as opposed to stocks. China 3 - Europe 0 - US 1 is the approximate score in this first round perhaps.


UPDATE: The 'game' continues into the night as China's Xinhua News cites absolutely noone when it claims Fitch's bearish stance on China's banking industry has prompted suspicions of a 'conspiracy'. And remember Fitch is French-owned.

With Europe perceiving Fitch as “purposely targeting” the region, the ratings company needs to find a new candidate to add to the “blacklist” to show its fairness, the report said, citing Wu Jingmei, head of Renmin University of China’s credit rating research center.

and then goes on to comment (via Bloomberg)



and a seemingly well-time rebuttal from Ambassador Locke:





We have lost score now but this rhetoric seems to be gaining pace...


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Tue, 09/20/2011 - 02:36 | 1687771 AmCockerSpaniel
AmCockerSpaniel's picture

They are buying American Gold ore. Does that count?

Mon, 09/19/2011 - 23:29 | 1687367 lolmao500
lolmao500's picture

Stupid Chinese buying US treasuries.


Tue, 09/20/2011 - 00:57 | 1687651 Livingstrong
Livingstrong's picture

And silver!

Tue, 09/20/2011 - 02:05 | 1687721 TruthInSunshine
TruthInSunshine's picture


Snake eyes

Mon, 09/19/2011 - 23:30 | 1687372 Hopium Dealer
Hopium Dealer's picture

China will keep buying U.S. Treasury bonds


We'll going long Gold

Mon, 09/19/2011 - 23:46 | 1687417 Founders Keeper
Founders Keeper's picture


What Chicom say not what Chicom do.

(With kind regards to the humble, hardworking, kind, respectful Chinese people suffering decades of communist rule.)


Mon, 09/19/2011 - 23:31 | 1687375 Yen Cross
Yen Cross's picture

 Purely for fun... ) sort of(...   ?


                                                  I think you sunk  my { battle ship}...?

Mon, 09/19/2011 - 23:31 | 1687377 carbonmutant
carbonmutant's picture

Eventually self interest trumps bullshit.

Mon, 09/19/2011 - 23:35 | 1687395 The4thStooge
The4thStooge's picture

China smells blood in the water, and is moving in for the kill.

Mon, 09/19/2011 - 23:56 | 1687489 JW n FL
JW n FL's picture



China is a Puppet that is controled by American Interests.

Tue, 09/20/2011 - 10:36 | 1688650 HoardeBilly
HoardeBilly's picture


American Interests? All roads are the CBs roads. :(


China is sucking the juice box (USA) dry of gold and resources.

Tue, 09/20/2011 - 01:36 | 1687710 narnia
narnia's picture

when they make a $500 billion offer for Cargill, then we'll know they are getting serious.

Mon, 09/19/2011 - 23:36 | 1687397 Yamaha
Yamaha's picture

Cramer will be so confused tomorrow. Down 100 points Obama will do another TelePrompTer speech. Another 100 points. Liesman will start to cry because Rick is mean. Down 100 more. Becky will call Warren to warm up the tub. Final down -400.

Gold up $100! Glad to be short EAFE.........

Tue, 09/20/2011 - 00:07 | 1687536 carbonmutant
carbonmutant's picture

Obama's approval ratings are so low now Kenyans are accusing him of being born in the United States! 

Mon, 09/19/2011 - 23:36 | 1687398 jonjon831983
jonjon831983's picture


"zerohedge (Twitter)


Begun, the trade wars have: "U.S. trade officials will announce a major trade enforcement action against China on Tuesday- RTRS"" 

Mon, 09/19/2011 - 23:48 | 1687448 potatomafia
potatomafia's picture

YES!!!  That should fix our problems!!

Tue, 09/20/2011 - 00:01 | 1687507 JW n FL
JW n FL's picture

Bridge Comes to San Francisco With a Made-in-China Label


How much in State Tax Revenue did those idiots give up by sending all the work to China?


This Country has been fucked up on purpose!

Tue, 09/20/2011 - 00:04 | 1687511 wisefool
wisefool's picture


Reuters REDACTED: The Agency is actually US-DOE. The enforcement action is actually purchase of solar panels for the white house since a certain california company could not deliver. You can go about your business. Move along.

Tue, 09/20/2011 - 00:25 | 1687600 jonjon831983
jonjon831983's picture

That's a relief! 


Tue, 09/20/2011 - 00:08 | 1687539 jonjon831983
jonjon831983's picture

Sigh... there goes the Global pledge to avoid protectionism.  Not that it ever went away.

Mon, 09/19/2011 - 23:38 | 1687410 lizzy36
lizzy36's picture

Finally this is getting interesting.

Looks like the foreplay is finally ending.

Mon, 09/19/2011 - 23:43 | 1687426 jdelano
jdelano's picture

This time for reelz: iacta alea est.

Tue, 09/20/2011 - 01:59 | 1687731 Alea Iactaest
Alea Iactaest's picture

Alea Iacta Est... did someone call?

Tue, 09/20/2011 - 00:10 | 1687548 DoChenRollingBearing
DoChenRollingBearing's picture

@ lizzy36: SJGR!

Tue, 09/20/2011 - 02:52 | 1687787 bid the soldier...
bid the soldiers shoot's picture

I was hoping for a few more years. I kinda liked it.

Mon, 09/19/2011 - 23:39 | 1687413 Seer
Seer's picture

I'm thinking that things aren't going all that well when the survival of China (and its communist [hybrid] govt]) is predicated on spoiled US brats plugged into iCrap (for them to pay the future interest on those treasuries).

Come to think of it... what a brilliant plan by the US planners! I failed to see the big payoff- saddling us with insurmountable debt in order to once and for all defeat communism! </sarc>

Mon, 09/19/2011 - 23:45 | 1687437 Caviar Emptor
Caviar Emptor's picture

I called it mutually assured financial destruction: a plan for debt-Ponzi to infinity and beyond. If my Ponzi implodes, yours will crash too. So keep the iCrap coming on credit else we'll just go back to living on Wheaties. 

Mon, 09/19/2011 - 23:41 | 1687418 Yen Cross
Yen Cross's picture

  China is projecting ( 9%) growth next year...  I'll take any bet from the world/ vs 6.7% in real growth?


     Any takers?  Just remember ( commodities are priced in U.S.D.)  and the YUAN isn't ( Floating)  TooT  TooT!!!

Tue, 09/20/2011 - 02:28 | 1687759 TruthInSunshine
TruthInSunshine's picture

Jim Chanos is the true wizard, as much as any man can be.

He called China out for the Paper Tiger it was three years ago, when calling China a Paper Tiger was tragically unhip on CNBcS & Bloomberg (as those two networks waved the BRIC-MoneyOnTheSidelines-It'sDifferentThisTime Pom-Poms).

Mon, 09/19/2011 - 23:42 | 1687420 Caviar Emptor
Caviar Emptor's picture

Yes, why not weaken Eurozone banks? That will make China banks the big gorilla soon enough, especially now that US banks are looking shakier. This is how empires are built

Mon, 09/19/2011 - 23:42 | 1687424 strannick
strannick's picture

I dont like the timing of this, the night before the FOMC 2 day meeting. This new Treasury buying could be an excuse for Ben to vacilate on more QEasy Money.

Tue, 09/20/2011 - 00:04 | 1687517 BORT
BORT's picture

They just told Ben not to do it.  Greek debt payment and rumored QE3.  Should be a volatile couple days

Mon, 09/19/2011 - 23:45 | 1687429 ToNYC
ToNYC's picture



China unloads its money shot, bitches.

Mon, 09/19/2011 - 23:44 | 1687434 NervousRex
NervousRex's picture

OK, everyone gets their own currency starting ... now! I mean everyone,

mine are NervousRex Dineros. Inflate 'em if you got 'em.


There are now 7 billion factorial crosses :-)


Tue, 09/20/2011 - 00:12 | 1687552 DoChenRollingBearing
DoChenRollingBearing's picture

Why not just choose the one that's already the world's choice for preserving wealth?  Gold.

Mon, 09/19/2011 - 23:45 | 1687435 Osmium
Osmium's picture

In an article about the reasons for China's increased purchase of U.S. Treasuries, the newspaper cited Yan Xiaona, a researcher with the Chinese Academy of Social Sciences, as saying that the dollar "is relatively safer than the euro" because of the unfolding sovereign debt crisis in Europe.


Uhhh, what about the unfolding debt crisis is the U.S.?

Tue, 09/20/2011 - 00:15 | 1687566 edotabin
edotabin's picture

Obama announced the Buffet Tax.  Where you been man? 4 Trillion in cuts over ten years. The US has grand plans! USA, USA, USA.....

Ok, so I'm being overly sarcastic this evening.

Mon, 09/19/2011 - 23:46 | 1687439 Stuck on Zero
Stuck on Zero's picture

And in this kind of environment of economic saber rattling, threats, currency controls, debt writeoffs, plunging confidence ...  gold goes down. WTF?

Mon, 09/19/2011 - 23:47 | 1687444 zorba THE GREEK
zorba THE GREEK's picture

U.S. money markets pulling out of Europe, Now China pulling out of Europe. Looks like things are coming to a head in Europe.

Tue, 09/20/2011 - 00:24 | 1687597 edotabin
edotabin's picture

UK "pulled out" 2-3 weeks ago.

Heads and three guys "pulling out".... what kind of a discussion is this anyway?

Mon, 09/19/2011 - 23:50 | 1687456 dwdollar
dwdollar's picture

Europe better pick up its game.

Mon, 09/19/2011 - 23:51 | 1687459 UGrev
UGrev's picture

OT: Maybe I missed it here on ZH.. but I just read on Fox that Chavez signed a law declaring that all gold that is mined in Venezuela (Anita  Conchita Alonzo Sanchez Villalobos Ramirez..sorry, couldn't resist)  must be sold to the government.

Mon, 09/19/2011 - 23:58 | 1687495 JW n FL
JW n FL's picture

that is a month ago when he nationalized all the mines.

Tue, 09/20/2011 - 00:05 | 1687519 UGrev
UGrev's picture

Oh shit.. I didn't realize it happened then. I thought that was just speculation (pardon the pun)..  that's what I get for skimming a replies and not reading the posts haha. Well, guess that means it's time for me to go to bed. :) Thanks for the hammer to

Mon, 09/19/2011 - 23:51 | 1687462 Yamaha
Yamaha's picture

China will still have big problems with their banks and real estate circus. They are another form of the USSR - but we cannot grow our economy with Nero in the WH!

Mon, 09/19/2011 - 23:55 | 1687484 alien-IQ
alien-IQ's picture

then maybe we should stop electing Nero(s). Haven't we had enough of them already?

Mon, 09/19/2011 - 23:51 | 1687465 Mr_Potatohead
Mr_Potatohead's picture

Looks like traders in the forex, gold, silver, and oil markets are completely ignoring all of this.

Tue, 09/20/2011 - 06:10 | 1687939 TGR
TGR's picture

Calm before the storm I would imagine. Kind of like staring out to sea at a tsunami of such proportions it deceivingly appears as a blue sky instead, so nothing to be phased about. Give it a little time...

Mon, 09/19/2011 - 23:51 | 1687466 Dingleberry
Dingleberry's picture

That's it.......I'm boycotting P.F. Changs!!!!!!

Tue, 09/20/2011 - 00:08 | 1687543 Yen Cross
Yen Cross's picture

I { stung ya' left  Jalapeno>

Mon, 09/19/2011 - 23:52 | 1687468 Mutatto
Mutatto's picture


Mon, 09/19/2011 - 23:53 | 1687473 alien-IQ
alien-IQ's picture it's a party.

Tue, 09/20/2011 - 01:33 | 1687707 SilverDosed
SilverDosed's picture

China just put its dick in the mashed potatoes?

Mon, 09/19/2011 - 23:54 | 1687479 gdogus erectus
gdogus erectus's picture

Can't we send Bevis back over there to patch things up.  They thought he was pretty funny last time he went.

Tue, 09/20/2011 - 00:00 | 1687501 dwdollar
dwdollar's picture

I'm not sure he provides much beyond comedic relief.

Mon, 09/19/2011 - 23:57 | 1687492 wharfdaddy
wharfdaddy's picture

Timmy may not be that naive about the chinese, he grew up in Thailand, which is owned and run by chinese thais..

Tue, 09/20/2011 - 00:15 | 1687565 Let them eat iPads
Let them eat iPads's picture

Until the bastards are run out of the country in a coup.

Tue, 09/20/2011 - 00:03 | 1687512 reader2010
reader2010's picture

To get Chinese money,  all EU has to do is to allow China to buy EU's advanced weapon systems plus tech transfer.

Tue, 09/20/2011 - 00:03 | 1687514 Ye Ye
Ye Ye's picture

More evidence that Chairsatan has assured the Chinese that this week's FOMC announcement will be balance sheet neutral.  I'm not expecting a commodities pop after the FOMC.

Tue, 09/20/2011 - 00:18 | 1687573 Caviar Emptor
Caviar Emptor's picture

Been sayin'. 

Tue, 09/20/2011 - 00:04 | 1687522 walküre
walküre's picture

China, China, China..

You love our Beemers, our Mercedes and Audis and you love our appliances that actually work when you plug them in.

We've basically given you the blueprint to build your own Transrapid and what are we getting in return?

Dollars and cheaply made crap.

If you stop buying our bonds, we stop buying your crap. Simple.

Try and sell it to your own people who are dying to get the real stuff "Made in Germany".

We can build up India and get them hooked on our brands.

Sorry, China. You can't win. Play again?

Tue, 09/20/2011 - 00:37 | 1687622 Troll Magnet
Troll Magnet's picture

Hear hear!

Tue, 09/20/2011 - 00:05 | 1687524 ricocyb13
ricocyb13's picture

China is intelligent.

US and EU folks are dumb.

Tue, 09/20/2011 - 00:13 | 1687555 in4mayshun
in4mayshun's picture

Ya, China is building cities inhabited by no one. They are Super intelligent. Their collapse will be epic.

Tue, 09/20/2011 - 02:43 | 1687773 Maxter
Maxter's picture

I have feeling these cities will be useful in case of a nuclear war or maybe even a conventional war.  That or they are really stupid..

"Some estimates put the number of empty homes at as many as 64 million, with up to 20 new cities being built every year in the country's vast swathes of free land."

Impressive numbers. 

What would be interesting is to see their location.  Are they all far from the cost?  Are they in the middle on a desert or near rivers? etc etc.


edit: “We . . . will prepare ourselves for the destruction of all of the cities east of Xian. Of course the Americans will have to be prepared that hundreds . . . of cities will be destroyed by the Chinese.”

look where Xian is on a map.  I wonde if the empty cities are located West of Xian.

Tue, 09/20/2011 - 08:07 | 1688067 falak pema
falak pema's picture

The long term strategy is to create a land of 1000 and one nights, a marvelous place inhabited by imported women, harem land, R&R center for tired chinese males and vagrant tourists. Its a way of bringing tourist industry to MArco Polo's old silk route...Once USA implodes, the sexy place to go will be outer mongolia and humping in a yurt on siberian tiger skin rug with a red headed babe from Tiperrary or Winnipeg, "eat your heart out Las Vegas"...will be the sign on the bill board in Oulan Batour land.

Hot spot is Erenhot...starring Hu flung Sperm, co-starring My Thong.

Tue, 09/20/2011 - 13:29 | 1689393 Rhodin
Rhodin's picture

I suspect incoming Chinese missles to USA could be dealt with by the anti-missle system we don't admit to having.  But i wonder what would happen if they were to use modified 767s? TOT on regular air routes?

Tue, 09/20/2011 - 00:15 | 1687564 DoChenRollingBearing
DoChenRollingBearing's picture

No, see above comment by walküre.

Tue, 09/20/2011 - 00:48 | 1687633 xtop23
xtop23's picture

 Not quite. China's first, and perhaps last, mistake was being suckered into a maze with no easy exits.

 China is motivated and industrious. That doesn't automatically denote intelligence.

 This is a LONG running game and they're extremely late to the table.

Tue, 09/20/2011 - 00:06 | 1687531 poor fella
poor fella's picture

Is it too late to get all our machinery back?

Tue, 09/20/2011 - 00:10 | 1687545 Yen Cross
Yen Cross's picture

 " MARS"

Tue, 09/20/2011 - 00:11 | 1687550 urbanelf
urbanelf's picture



Tue, 09/20/2011 - 00:12 | 1687551 xtop23
xtop23's picture

 In a beauty contest between the Euro and the USD it boils down to two girls with club feet , hairlips , IQ's of 11 , and raging cases of Herpes. The only difference is one is blonde and one is burnette.

 China apparently likes blondes.

Tue, 09/20/2011 - 00:44 | 1687634 Troll Magnet
Troll Magnet's picture

They'll take what they can get.  Remember, there's a HUGE shortage of females over there. 

Tue, 09/20/2011 - 00:14 | 1687559 Big Ben
Big Ben's picture

the dollar "is relatively safer than the euro"

Whether 'tis safer to jump out of an airplane at 30,000 feet with no parachute, or to attempt to trek to the South Pole in June wearing nothing but a single pair of cotton pajamas.

It is said that a fool and his money are soon parted. And the Chinese leaders are clearly fools with money.

Tue, 09/20/2011 - 00:16 | 1687567 Milton Waddams
Milton Waddams's picture

A 1967 NSC / CIA video titled China: The Roots Of Madness

The video concludes:

"If the Chinese mind craves order, they must be brought to recognize that they are the biggest factor in the world's disorder.  And We must untangle the madness of their mind.  The most difficult task is to reach the minds of men who hate you."

Tue, 09/20/2011 - 06:49 | 1687932 falak pema
falak pema's picture

...The most difficult task is to reach the minds of men who hate you."

Since when does the west have the right to say that? Look back over the last two centuries and you will notice it is the West that started the hate race during the Colonial european period that led up to the BOxer revolt and the subsequent breakdown of Chinese feudal society that resulted. 

If they have a communist regime that has now muted to a form of state entrepreneurial capitalistic economic model married to a single party political hegemony, now flexing its economic muscles in the name of making the Middle kingdom center piece in the world economy, it is to reset the geopolitical balance. This is arguably totally legitimate as long as it stays a peaceful, trade oriented  strategy that US pax americana has promoted since FDR days.  "Free markets and democracy. Lets trade and not make war"...was the aim of the UN/BW construct after WW2. A bit like in the days of Kublai Khan and the MArco Polo silk route.

Lets not take our own "hate" smear campaign too seriously, it is historically false. It could end up by starting the type of disastrous knee jerk in East-West relations that got  Bush father and GWB into their NWO and clash of civilization mind frame in the Oil patch. For the wrong oligarchical reasons as the west is totally addicted to THAT energy tit, moot issue in any NATIONAL import energy mix today (as since fifty years); as we are globally in peak cheap energy but we don't want to pay its exorbitant geopolitical price to police that region coming to boil.

The USA can't afford to wage world or regional wars any more. Unless you feel its time for collective suicide...

Tue, 09/20/2011 - 00:17 | 1687572 LarryDallas
LarryDallas's picture

So in all seriousness, what to do now?  Pop open a cold one?  BTFD on physical or wait for further liquidation?  Am of course long PMs, short the market via ETFs, long vol via VXX, but also frustrated that things aren't moving quickly/in as straight a line (down) as I think they should.

What worries me most is the serious and continued cognitive dissonance given news like this and stocks that continue to pop and largely shrug off the bad news.... I prefer credit and options markets as more useful indicators of what's really going on, but man...WTF am I missing?

Tue, 09/20/2011 - 00:20 | 1687583 Absalon
Absalon's picture

China is a toothless tiger.  What are they going to do?  Refuse to manufacture iPads and all the rest of the Western designed manufactured goods they are making?  If they do, India or the Philipines or Alabama or some other low wage backwater picks up the business and China collapses.


China is at bigger risk right now than the US or Europe.  As for the poster who said that Democracies don't cope well with crises - they probably cope better in the long run even if they respond a bit slower at first.

Tue, 09/20/2011 - 01:02 | 1687657 wretch
wretch's picture

Let's see what happens when we release a toothless tiger on Absalon while he's sleeping...

Tue, 09/20/2011 - 00:32 | 1687614 Theta_Burn
Theta_Burn's picture

First Siemens, now China why everyone Dis-tancing from French?

Dow down HUGE tomorrow @ -28

Tue, 09/20/2011 - 06:45 | 1687917 falak pema
falak pema's picture

Bringing down France is key to destabilising the EUro construct. Its a two pillar political construct. The German pillar is too strong; not so the French one. Whence the logical ire of the US  led oligarchical HF/PDs markets to take out the only real contender to USD and pax americana. The race to the bottom in the west continues.  The chinese are shrewdly playing one against the other, as their long term aim is to ensure their own hegemony over the new world order, once the dust has settled. 

They have time and resources on their side of the balance. The world center of gravity is moving east and south.

The EU is now slap bang in the middle of the financial maelstorm, the politics of this sixty year build up called the EU now threatening to tip back into centuries old national rivalries and jingoistic, protectionist traditions. Its big decision time in EU.

Keeping in mind the "nuclear-gold" strategy that EU disposes as per Fofoa blog's excellent analysis of USD debt based system above...



Tue, 09/20/2011 - 00:37 | 1687620 anonnn
anonnn's picture

Has it gone unnoticed that the AngloAmerEuro heavies suckered China's interests in Lybia? China has the patience to endure insults and its memory is long and continous these last 2500+ years. They know how to fight losing battles...and persist.

 One might hope its accumulated wisdom for survival will yet be a benefit to the global village. Who else knows how to fight losing battles?

Tue, 09/20/2011 - 00:56 | 1687636 Outlaw Of The W...
Outlaw Of The Wasteland's picture

Does anyone doubt that we are trading with or against london and their premeditated, sociopathically-timed tape bombs at all times?  They have really decided to leave nothing on the table for anyone.  Every and all of these chess moves are known and planned in advance to cause/extract maximum damage.  Buy and hold physical.  The rest is shit.

Tue, 09/20/2011 - 01:07 | 1687670 wretch
wretch's picture

Wow.  Perfect execution on their part.  Nice planning.  Seems they really deserve to be our betters after all.

Tue, 09/20/2011 - 02:19 | 1687677 Outlaw Of The W...
Outlaw Of The Wasteland's picture

It's quite a simple plan, really. If these jews and pasty brits ever tried to pull this shit in person, they would be coughing up their spleens in the gutter within a day. So they obfuscate.  Their weakness is palpable.  Their dupes on the jewtube and in their shitrags increasingly absurd.

That City should be fucking BOMBED and then BOMBED again.  Then pour salt and ashes in its crater.  Hitler was right.

"We were not foolish enough to try to make a currency coverage of gold of which we had none, but for every (new reich´s) mark that was issued interest free [non usury system], we required the equivalent of a mark's worth of work done or goods produced. . . .we laugh at the time our national financiers held the view that the value of a currency is regulated by the gold and securities lying in the vaults of a state bank." -Adolf Hitler, 1937 (CC Veith, Citadels of Chaos, Meador, 1949.)

"And it proved sound. It worked. In less than ten years Germany became easily the most powerful state in Europe. It worked so magically and magnificently that it sounded the death knell of the entire (Zionist) Jewish money system. World Jewry knew that they had to destroy Hitler's system, by whatever means might prove necessary, or their own [system of usury] would necessarily die. And if it died, with it must die their dream and their hope of making themselves masters of the world. The primary issue over which World War II was fought was to determine which money system was to survive. At bottom it was not a war between Germany and the so-called allies. Primarily it was war to the death between Germany and the International Money Power." -William Gayley Simpson "Which Way Western Man"

Tue, 09/20/2011 - 02:55 | 1687791 jomama
jomama's picture


Tue, 09/20/2011 - 01:03 | 1687650 BlackholeDivestment
BlackholeDivestment's picture

...China Trouble? Hmm, wonder what kind of flu the lab ( ) will produce? See any 2008(9) moves, (market insider) like the flying PIIGS? You know, something to destract and kill people with.


Tue, 09/20/2011 - 01:10 | 1687673 wretch
wretch's picture

Looks like you've broken out in linkivitis.  Have a doctor check that out.

Tue, 09/20/2011 - 01:18 | 1687686 Outlaw Of The W...
Outlaw Of The Wasteland's picture

You should kill yourself.  Your whore mother sharted out a loser.

Tue, 09/20/2011 - 01:24 | 1687690 BlackholeDivestment
BlackholeDivestment's picture's OK, the Great Wal Mart of China, well, me no shop there and I'd like to see some government puke try to stick mwa with Chairsatan's illiquidity and Rosemary's Baby's needle too. Not going to happen ...but, it's going to be interesting avoiding the shit storm, ain't it? <<<distraction music

Tue, 09/20/2011 - 01:31 | 1687702 Yen Cross
Yen Cross's picture

 This a thread of champions.   A ( bookmark) for later.  Thank you all.

Tue, 09/20/2011 - 01:31 | 1687703 monopoly
monopoly's picture

Tic, tic, tic!

Tue, 09/20/2011 - 06:11 | 1687940 WoodMizer
WoodMizer's picture

Just like the movies, the longer you watch the clock; the more your perception of time is distorted.

Tue, 09/20/2011 - 01:59 | 1687730 chump666
chump666's picture

...and China's US indexed Fraud caps.  Respect to the traders obliterating those BS entities.

All bubbles implode.  China is going to crash, probably already happening.  Copper has sunk last few sessions

Tue, 09/20/2011 - 02:05 | 1687738 Peter K
Peter K's picture

Obviously a vast right wing conspiricy :)  Hillary, is that you?

Tue, 09/20/2011 - 02:36 | 1687757 kurzdump
kurzdump's picture

There is absolutely no reason to be afraid of China. Our printing presses outperform their economy. Well and without us buying all their crap in exchange for our doomed fiat they are totally fucked. China's domesitc economy is loughable. I would advise Mr. Shen to rethink his latest announcements and resume keeping up the status quo (TM).

But wait... what if they stop producing iPads? We better run for cover!

Tue, 09/20/2011 - 02:51 | 1687785 Outlaw Of The W...
Outlaw Of The Wasteland's picture

let them eat corn (syrup)

Tue, 09/20/2011 - 02:56 | 1687795 TruthInSunshine
TruthInSunshine's picture

Foxconn, the Chinese company that produces Apple's toys (along with much of Dell's, HP's, Acer's, etc., etc.), is replacing 1 million of its now 2 million strong workforce with robots within 18 months. It won't be long before 90% of the remaining 1 million humans working there lose their jobs to robots. And it won't be long after that before it's completely arbitary whether FoxConn stays in China or leaves for another nation, more conducive to its bottom line (and if its not a creator of jobs for Chinese workers, it won't be smiled upon by the Chinese Dear Leaders).

Tue, 09/20/2011 - 02:50 | 1687784 reader2010
reader2010's picture

Let's drop nukes on China and bomb those motherfuckers back to the Stone Age. According to Krugman,  the rebuild process can pull the world out of the Greater Depression.

Tue, 09/20/2011 - 03:17 | 1687810 DosZap
DosZap's picture


Surely you jest, our Ex POTUS Mr.Cant keep it in Pants, GAVE China the latest in Cray  Super computer technology, and also the latest guidance system data for their ICBM's.

Till that time they were only capable of hitting the West Coast,with bad accuracy to boot.

NOW, they can put one in your city in 30 mins,anywhere in the USA.

Tue, 09/20/2011 - 02:58 | 1687796 jmc8888
jmc8888's picture

As horrible as the investments they are, there is one good thing about treasuries....China may one day redeem these en masse for guaranteed resources to build their west. (well that is if we don't hyperinflate before that..even then we could still decide to offer them that return for the crap they bought from us...kind of a goodwill gesture to avoid war.  Much better than saying tough to the chinese after getting them to buy all this crap and then debasing that wealth out from under them...not by a little, but almost entirely).  There is no reason we can't honor them, unless we believe there is some legitimacy in the devaluation for fraud.  We would be choosing to accept China's investments were devalued.  The whole monetary construct is bullshit.  We'd just have to agree to exchange tangible things for worthless paper....much like the Chinese are doing now.

Given that the Euro is an artificial construct in the most extreme of ways, and there are the complexities with all the gov't's involved regarding anything (especially $$$), the same cannot be said for sinking their wealth into Europe (reedeem for anything).  This flaw cannot be fixed.  If it is attempted, and we are far past it legitimately happening (if it was even possible under sane conditions), then a whole new set of problems arrise.

Of course for those treasuries to hold value, we'd actually have to do that (make the raw materials and expertise deal), instead of embarking on more monetary (monetarism) skullfucking.  But if a sane administration came into office (none running this election cycle on any side fwiw in REALITY) then they could do this.  The same can't be said in any capacity for Europe. 

Interesting enough, they basically have accumulated enough to make this deal already, so how much more 'buying' will actually net them is basically unknown.  At what point would it be say 30 years of raw materials versus 29 or 31?  Who knows.

Glass-Steagall and don't screw the chinese with them.

Europe as far as I can see can ONLY screw over the chinese. Their debts unpayable, and they cannot print.  Default = 0. Debasement is = >0, but maybe not by much.

Neither are good investments going forward, but only one actually has a shot (albeit low given Benocide and MONETARISM [any kind] rule our roost) of payback. 

We can get our house in order, and can do it in 24 hours if we half ass it.  The Euro cannot be saved if you gave them 24 years and they really tried.

One wonders in the realm of unintended consequences how much such a decision by China(if it's medium term or longer) will affect the speed and scope at which 'Big Ben' Bernanke prints. Directly as a pullout of funds, or indirectly as a morale booster that the U.S. has backing.

Also since China won't be bailing out Europe (if it's to believed to be a medium term or longer decision) much does the dollars printed by the fed to bail out Europe (if it maintains it's swap lines) change the value of those treasuries held by China? 

Looks like Ben wants Europe to print (at least equally or thereabouts to maintain exchange rates [roughly]) and China doesn't want to throw it's wealth into a lost cause but rather a poor cause.  At least until something better comes along.

If Europe can't or is unwilling to print....and no one wants to Glass-Steagall the fraud and end monetarism, which of course they don't because fraud is all they know, then it looks like extreme dollar devaluation or outright collapse of Europe is probably the future (if not both), which somehow is better than complete loss through European defaults.  They're being asked to buy the shittiest of shit.  What the hell is a bond in euros worth if there is no euro?

Is China more concerned with wealth preservation, wealth appreciation, or are they still trying to do both? My guess is both.  After all China isn't a country populated by one person with only 24 hours in a day and ten fingers.  Yesterday they took one course. Today they took another.  Tomorrow, will it be yet another?  I wouldn't bet against it.  Tomorrow they'll also be interested in both wealth preservation and appreciation. Monetarism changes the reality at will.  You can't hold stationary monetary beliefs in a collapsing monetary system. 

Of course when Europe (or anywhere) goes down the shit hits the fan everywhere. Even if the dollar goes away in favor of a different American currency, it is still an American currency where one gov't body can transfer rights from one currency to another.  In Europe you have the possibility of getting 0 and anything received back would be in god knows what currency, with a much smaller footprint than the euro as a whole. 

They want something more lasting than buying shit, and if not, will buy something returning >0 rather than most likely 0.  Thus they go after political decisions to go with their investment decisions.   Aren't these great decisions monetarism forces people into?  Political decisions are focused on monetary decisions.  That's what politics devolves into when monetarism is setting the economic landscape.  Monetarism dictates the politics.  It dictates the social security debate, it dictates capital investment, wars, platform infrastructure, everything.  We don't make political decisions anymore...we make monetary decisions.  Monetarism forcing political foreign policy decisions is a bad recipe, but China has the clout to do that now. 

Yes, I can see why everyone wants to maintain monetarism, rather than an economic system based on reality as we humans have the power to create it (legitimately).  Instead we must create all this bullshit to sift through like a card game where we make up the rules as we go along...all arbitrarily and none of it based on real tangible works. Surely at some point such a game won't piss a player off enough to create a sea of mushroom clouds.  How much wealth do these fun and monetary games have to lose before the proverbial 'someone loses an eye'?

Glass-Steagall is good for everyone, even most of the banksters...although not by their usual metrics...and not the ones arrested for fraud.

Just remember, if anything else, the complexity of the bullshit is all MONETARISM.  You can almost skip with any actual analysis just by figuring out how complex this gets, whereas how complex it should be.  Tangled web...weaved. Affirmative.  Needless.  Better options are there.

Tue, 09/20/2011 - 03:04 | 1687802 Outlaw Of The W...
Outlaw Of The Wasteland's picture

Fairly well thought out.  But you are avoiding the obvious question which everyone is asking, to which we all know the sad result. 

A "dollar" is shit.  It's worthless.  Same goes for a "euro"(whatever the fuck that is), a "quid", and basically every other "full faith and credit".

Maybe it has always been this way.

Tue, 09/20/2011 - 04:15 | 1687854 jomama
jomama's picture

the shiniest turd in the punch bowl is still the shiniest.

Tue, 09/20/2011 - 04:35 | 1687857 bid the soldier...
bid the soldiers shoot's picture

"is China more concerned with wealth preservation, wealth appreciation or both."

Hmmm. What if this nation, which lived in isolation until they were fucked over by the West from 1839 until Nixon went there in 1972, is more interested in punishing the West for it's rapaciousness and then returning to the isolated existence it enjoyed for thousands of years?

It may be difficult for homo Americanus to grock, but perhaps the Chinese are not the possessive, envious creatures we Americans were born to be. Perhaps they will be content with the tremendous infrastructure we have built there and the technology we have taught them, but without any ugly Americans to spoil it for them.

You can read at zerohedge the contempt for the Chinese by so many of the commenters here. Why would they want to see the holders of those feelings strolling in Tiananmen Square?

They think differently than we do. After all, their brain case is larger than the Caucasian one.

What are the Chinese characters for "Fuck you, Americans and your worthless dollars too?"

Tue, 09/20/2011 - 04:36 | 1687870 Econmike
Econmike's picture

I noticed that you neglected to mention that the last time they were "fucked over by the west", it was because they were pulling the same mercantilist shenanigans they are now. Fuck em.

Tue, 09/20/2011 - 04:50 | 1687876 bid the soldier...
bid the soldiers shoot's picture

and that was when?

Tue, 09/20/2011 - 05:26 | 1687910 Econmike
Econmike's picture

How about when they tried to bankrupt England's treasury by demanding that England trade silver for tea, and refusing to let peasants buy any other goods that England offered.

Same thing they do now, really. It's a fucked up place. I happen to live there.

Tue, 09/20/2011 - 05:37 | 1687919 Econmike
Econmike's picture

Oh, and as for not being possessive....possessions and status is ALL Chinese care about, unless it is their mistresses. Haven't you been to Shenzhen, Dongguan, and Shanghai recently?

Tue, 09/20/2011 - 12:39 | 1689214 bid the soldier...
bid the soldiers shoot's picture

What were the English and the other countries of the 8 Nation Alliance and their troops doing in China in the first place?

It was like the Nazis in Czechoslovakia. The Czechs didn't want them and when someone killed Heydrich, the Nazi commander, the town of Lidice was wiped off the map. The Nazis had no business in Czechoslovokia (thank you, Chamberlain); the English had no business in China. And the English were selling Indian opium that no one wanted to boot. Fuck them.

As only 300 million of the 1300 million Chinese have any real possessions
the Chinese PTB will have no problem disabusing those not in the inner party of the importance of possessions.

You live there? Maybe you should move.

Tue, 09/20/2011 - 03:40 | 1687829 Archduke
Archduke's picture

fyi, fitch is french-owned, through FIMALAC.  but just because the chinese are paranoid doesn't mean the french aren't out to get them.

Tue, 09/20/2011 - 03:52 | 1687839 juicy_bananas
juicy_bananas's picture

Thermonuclear war, bitchez!

Tue, 09/20/2011 - 04:02 | 1687844 plonati
plonati's picture

Chinese historically tend to be cunning but not wise. They are choking the golden egg hen. All this crisis, we shall overcome eventually, comes from the lack of free trade on chinese currency. China is going straight in the direction of a japanese style lull, but with the subtle difference of not being a democracy. Let's wait a little, I bet we'll see some interesting times.

Tue, 09/20/2011 - 04:02 | 1687846 Bear
Bear's picture

In terms of GDP, China outprints us 4 to 1.

Tue, 09/20/2011 - 04:06 | 1687848 The4thStooge
The4thStooge's picture

CAC 40 up 1%. Markets have offically gone FULL retard.

Tue, 09/20/2011 - 04:09 | 1687851 Bear
Bear's picture

Europe expects to Ben announce European bailout on Wed ... another Marshall Plan

Tue, 09/20/2011 - 04:36 | 1687871 lolmao500
lolmao500's picture

The markets have been full retard for a while now. 3 years at least.

My guess the markets are not moving that much because... either the FED-ECB will provide the ``cut-off`` banks with unlimited Chinese currency for no additional tax.

Or the swaps between the chinese banks and the europeans banks were small... which is why there's almost no effect.

Tue, 09/20/2011 - 04:47 | 1687882 kurzdump
kurzdump's picture

Markets can go full retard as long as some rich people, the FED or whoever want it to. However, there is one thing that will ultimately end the game - private debt. More and more people will become insolvent in the near future. Who is going to bail them out? No one! The creditors will be bailed out instead. Think about the consequences. If we keep bailing out everything ALL the debt will end up becoming national debt at a very fast pace. Thats not sustainable unless those few wealthy people remaining pay more than they earn - or in other words wealth is redistributed.

Social unrest is the only consequence if no other soultions than bailouts are found. It doesnt matter if markets go retard or not. 


Tue, 09/20/2011 - 04:31 | 1687866 yabs
yabs's picture

how the f*ck can markets be up?

fully retarded, markets are truelly broken alhtough we knew that

Tue, 09/20/2011 - 04:56 | 1687887 silver is money
silver is money's picture

What China need is to make RMB fully floated after back their currency by GOLD and SILVER

Tue, 09/20/2011 - 05:48 | 1687925 gwar5
gwar5's picture

The Euro, USD and Yuan are wrangling to survive to be reserve currencies and the Euro is quickly falling out of consideration.


Rickards: "German reluctance on the bailout has recently led to a weaker euro as a default or break-up loomed. However, this euro weakening broke the global arrangement with China, which was now faced precisely with its worst case – a weaker euro and a weaker dollar at the same time. China is prepared to accept one or the other but not both...."  My Blog 

Secrets of QE, Gold & Currency Wars: Bizarre Love Triangle  -- J. Rickards, 9-18-2011



Tue, 09/20/2011 - 05:52 | 1687927 decon
decon's picture

Somebody (I wonder who?) dumped a bunch of dollars into the markets at about 2:30 EST.

Tue, 09/20/2011 - 06:23 | 1687950 yabs
yabs's picture

silevr si money

don't think so

if they backed their money with gold remimbi would be strong and detroy their export economy

Tue, 09/20/2011 - 06:24 | 1687952 yabs
yabs's picture

what marklets up 1 to 2 percent i  europe

the fed must be about to launch QE3 or more

the news is only bad sop somthbing must be brewing

Tue, 09/20/2011 - 06:29 | 1687956 Gandalf6900
Gandalf6900's picture

china pulls out....brazil pulls in

Tue, 09/20/2011 - 06:43 | 1687965 NuYawkFrankie
NuYawkFrankie's picture

I think it behooves us all at this time to not panic and jump to rash conclusions, but rather take a wider historical perspective.

For as Confucius - the Big Fortune Cookie himself - never tired of saying:"He who sick of Euro swill, must recover on T-Bill..."

And again, from his later writings: "When Euro in tank, rely on Ber-nank"

Hope this at least supplies a context for the current goings-on.

Tue, 09/20/2011 - 06:43 | 1687966 NuYawkFrankie
NuYawkFrankie's picture

I think it behooves us all at this time to not panic and jump to rash conclusions, but rather take a wider historical perspective.

For as Confucius - the Big Fortune Cookie himself - never tired of saying:"He who sick of Euro swill, must recover on T-Bill..."

And again, from his later writings: "When Euro in tank, rely on Ber-nank"

Hope this at least supplies a context for the current goings-on.

Tue, 09/20/2011 - 06:51 | 1687969 Bohemian Clubber
Bohemian Clubber's picture

LOL, you joking right guys... China is gonna take one up its ass very soon..

Tue, 09/20/2011 - 06:52 | 1687970 peterAUS
peterAUS's picture

When visiting China recently I discovered that what we pay in the west in dollars for cheaply mass produced imports, spending the same dollar amount in China will buy you high quality. Don't be fooled into thinking that the Chinese can't produce quality - they produce (from foreign innovation) Apple computers, iPads, Iphones and other quality name brands that we are not even aware of being manufactured there. Unfortunately, like in the west, their wealthy comprises only 1% of the population, and their greed and disregard for their poor leaves the wests wealthy look like kids on the block. That will be their downfall as the wealth of the top 1% is accellerating leaving a larger gap between the wealthy and the poor than the west has ever experienced. Charity is non existent in the Chinese dictionary, they are only looking out for themselves (the powerful and the rich).

Tue, 09/20/2011 - 07:00 | 1687976 stant
stant's picture

while everyone is worried about the eu china us me. turky sits there ready to pounce.

Tue, 09/20/2011 - 07:21 | 1687992 yabs
yabs's picture

I am working in China right now and I can tell you its one big construction site

condos and business blocks going up everywhere, but from what i can see no c *nt is living in  them

the real estate bubble here makes the on in the west look tame ikn my opinion

their whole economy resides on a real estate ponzi scheme where righ buyres buy hoping to flog it for a profit to god knows who

Tue, 09/20/2011 - 08:03 | 1688075 Unsympathetic
Unsympathetic's picture

China calling someone else "protectionistic?"  The irony makes me laugh.  They have a 25% import tariff on everything, the US is between 1-3% depending on the good, and any change to that is "protectionist?"  Um, no.  The US should equal China's tariff -- that's how to start the process of regaining jobs in America.

China does not own us - we own them, and they know it.  Don't forget, we can also declare their T-bills null and void with the stroke of a pen.

Tue, 09/20/2011 - 08:12 | 1688097 yabs
yabs's picture

china does not own you?

think again they can also turn your bennies into toilet tissue by selling all your T's

you both have each other by thye balls its check mate

Tue, 09/20/2011 - 08:12 | 1688099 yabs
yabs's picture

china does not own you?

think again they can also turn your bennies into toilet tissue by selling all your T's

you both have each other by thye balls its check mate

Tue, 09/20/2011 - 12:40 | 1689216 cranky-old-geezer
cranky-old-geezer's picture



It amazes me how blind and bigoted many comments here are.

Under cover of its #1 consumer oriented manufacturing economy in the world, China is quietly preparing militarily to go head to head with America, and part of that preparation is building a strategic military alliance with nuclear powers like Russia who just happens to have the largest-yield nuclear bomb on the planet, and they've had it a long time, implying they've perfected it even more, i.e. made it even larger yield.

China foresees such a future head-to-head confrontation very likely turning nuclear, explaining those "ghost cities" they've been building ...while we've been laughing thinking they're crazy.

I rather suspect they just might have the last laugh.

America can defend its own soil pretty well, but America is too dependent on resources from other parts of the world they can't defend very well. China (and their alliance partners) are fully aware of these weaknesses. That's all I have to say about that.

And defending our own soil wouldn't be possible if things escalate to nuclear.

Unlike America's gutless leaders, China's leaders (and their alliance partners' leaders) aren't afraid to push the launch buttons, and no they don't have any hesitation about being the first to push them.

Many here say it's high time our corrupt banker-controlled government comes down. Ok, China (and their alliance partners) may do it. For us. We wouldn't have to lift a finger.

Tue, 09/20/2011 - 13:09 | 1689326 bid the soldier...
bid the soldiers shoot's picture

You forgot the Chinese Space Station. What do you they're stocking up there? Dim Sum?

How do you do stop an incoming missle from orbit accelerated by both rocket and gravity?

Tue, 12/27/2011 - 04:54 | 2012844 hamza123
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