The "Dumb Money" Refuses To Play Along: China State Media Says It Won't Rescue Europe
A few days ago China telegraphed it refuses to continue to be seen as the world's rescuer and the dumbest money in the room. Many assumed China was only kidding: after all how would China let its biggest export partner flounder? And furthermore, all China does is provide vendor financing, right? Well, as it turns out, wrong, because to China the current state of Europe is far from the terminal crisis Europe is trying to make it appear. This is happening even as a thoroughly desperate and grovelling Europe, kneepads armed and ready, has said via the EFSF's Regling that it will even consider issuing Yuan-denominated bonds. Alas, China is less than impressed. As AFP reports, "China’s state media Sunday warned that the country will not be a “savior” to Europe, as President Hu Jintao left for an official visit to the region including a G20 summit. Hu’s visit has raised hopes that cash-rich China might make a firm commitment to the European bailout fund, but in a commentary, the official Xinhua news agency said Europe must address its own financial woes. “China can neither take up the role as a savior to the Europeans, nor provide a ‘cure’ for the European malaise. “Obviously, it is up to the European countries themselves to tackle their financial problems,” it said, adding that China could only do so “within its capacity to help as a friend." A friend, who at this point is quite sensible, and realizes far better deals are to be had down the line if one merely waits. That said, we are certain China is not the only one out there with an instant notification pending the second Santorini, Ibiza or the Isle of Capri hits E-bay.
More:
China’s Vice Foreign Minister Cui Tiankai said Friday that the G20 should focus on the sovereign debt crisis in “developed countries” and the growing pressure of global inflation.
He added that members should make efforts to stabilize financial markets and restore investor confidence.
For its part, G20 partners will also be looking to China to stimulate domestic demand, diversify its export-led economic model and allow the yuan currency to appreciate more freely so as to slim down its massive trade surpluses.
Another Chinese official has played down hopes of a breakthrough at the G20 meeting. Vice Finance Minister Zhu Guangyao, also speaking Friday, said investment in the European bailout fund was not on the agenda.
Beijing fears the financial risk of a major investment, which could also spark a domestic backlash as the Chinese public asks why they should bail out wealthier nations. Already, opposition to such a move is being expressed on the Internet, on China’s hugely popular weibos - microblogging sites similar to Twitter - and in state media.
The bold says it all. And for those to whom it is still confusing:
“China will only participate in a global program that is defensible to the Chinese people. So don’t expect a ‘bailout’ or ‘rescue’ from China,” China Macro Strategist for brokerage CLSA, Andy Rothman, told AFP.
China has been burned before on overseas investment. It bought stakes in investment bank Morgan Stanley and asset management firm Blackstone only to see values collapse in the 2008 global financial crisis.
“China was taken in. Once bitten, twice shy,” said independent economist Andy Xie, former chief economist for Morgan Stanley.
So, about that magical European box full of promises and quite empty of money...
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Rollercoaster time!
I was wondering if I could make my clients pay me in ounces of gold instead of fiat.
Back in '09 I put a sign up in my (Machine) Shop to stop people walking in with stuff they needed fixed. It reads:
Shop time is 2 Ounces Silver per hour plus tooling costs.
Gold is acceptable as well. WE NO LONGER ACCEPT USD.
I've had a couple of people that actually came in with some small jobs and had Silver to pay me. Once I had a run of parts and was paid in American Gold Eagles. Putting that sign up was the best thing I ever did. It also stopped most people taking up my time wanting me to make a bracket or an adaptor and whining about my $80 an hour shop time when I quoted that. I would just as soon not deal with the public at large.
China is saying, plint rike we do
Chinese understand that the european plan is a completely wonton attempt to kick the can further down the road.
Wonton!
i think people here might accept that because of its novelty factor.
But I was just thinking... is it possible that it's an awesome tax loophole? If I get paid in, let's say 20 gold Canadian Maple Leafs, it's still officially a total of 1000 Canadian dollars, those coins being legal tender...
That's been tried. The IRS was not too keen on it: http://www.lvrj.com/news/46074037.html
If you research this you'll find Kahre ended up convicted with nearly 50 counts of tax evasion in 2009.
The wierd thing is he was found not guilty in 2007. (I guess the IRS isn't subject to double jeopardy limits.)
It's not about tax avoidance at all. If people are allowed to use real money for trade or in exchange for labor the whole ponzi will collapse. They're making an example out of him to send a message out to people trading in gold and silver. The only reason fiat currency is still used is because of force to preserve the ponzi and without force it's just worthless paper. Somebody tell me the definition of fiat.
You better believe they will come down hard on you because it's a threat to the entire ponzi.
Exactly. Once faith in paper is lost, the paper-pushing fucknuts lost the power. Victums of their own greed if you ask me. Crash the fucking system already so we can find out just what the "value" of everyone's labor really is. Bring it!
They'll start convicting people for debasement of currency for criticising the ponzi before they bring in real money that has value (it's done in China which is a model state). They won't let go of fiat currency without a fight and if it crashes they'll just replace it with an even bigger ponzi.
Eventually enough inefficiencies in the state system result in the failure of the system to deliver basic necessities. At that point there is only one option. People die. No amount of bullshit (paper or otherwise) will "provide" anything if the resources are simply not there. Sort of like praying for rain in a desert.
There is no law that requires you to file or pay income tax.
as shocking as this may seem to you, there is a world outside the US.
I can assure you that over here there is such a law.
I observed a jury trial of a Amercan citizen who was charged with 4 counts of failure to file. The jury found him not guilty because the prosecutor and the judge could not produce the law that required the defendant to file, despite being asked by the jury twice for the exhibition of such alleged law.
Timmy G.?
Well, why don't you try not filing or paying income taxes and see how that works out for you in the long run. Will give a new meaning to the term "bitchez" so readily used on this site!
that's rich,... clinton "Mark Rich"
Thanks for the tip, Long John. I have a shop too - similar situation.
They're missing the investment opportunity of a lifetime!
Seriously though, no shit...
Whoever thought China was all-in on further funding Europes 50 year retirement and 6 months paid holidays at the beach was dreaming.
Prior Socialist India also get it - so we will hear "no soup for YOU"!
Women in China retire at 55. It's not about retirement or holidays. It's about posturing.
Unlike Greeks though, they start work in China at 5. I reckon they earn their retirement.
no jobs for them anyway. besides, they are not getting rich off Chinese pensions.
In state owned enterprises and official positions... yep, retirement's set at 55 and that's a fairly hard stop with little exception. For men it's 60. What do women want though? To boost it to 60. It's all about making room for the younger generation and it works out fairly nicely.
thought id throw this out there.....IMF planning new short term rescue fund.....http://www.yomiuri.co.jp/dy/business/T111029002454.htm
Yeah, is that the one where Italy won't be eligible for help? good luck with that.
Well at this point in China's history; they can either be the dumb money or the no money like everyone else. They already fronted the credit and are using propganda to keep their slaves from becoming angry that they eat 2 cups of rice a day while they are paying for Europe to eat 4.
A bit off-topic but I know ZeroHedge readers will love this ...
On LiveLeak, video of a man and a woman having sex while skydiving, they start making love on the aeroplane, and jump while joined to one another, and a camera follows their love-making while descending ... softcore images only but some nudity, six minutes
Definitely the gonzo attitude that could fix the global financial crisis ...
http://www.liveleak.com/view?i=7af_1318741319
Found via a chain of links from the Drudge Report ...
Moral of the Story.
The parachute fails to open signifying Greece fucking the rest of Europe to death.
American proverb: If at first you don't succeed, try try again.
Greek proverb: If at first you don't succeed, skydiving is not for you.
@knukles hahahah
+1 so true
and i thought that was bird shit on my shoulder....
Surely they can find an "all will be fine" at G20 meeting rumor....
There will probably be a move to up the pickings by announcing expansion of G20 to G40. To join, new Members must promise 3 billion euro to the EFSF which they will leverage at 10 times and that will give them their 600 billion they are short. I think that sort of rumour might keep us going until next Monday.
Maybe the should consider importing Opium to dull the pain in Europe in exchange for PMs. Return the favor after alll these years.
Who says they're not?
Well lah-de-fucking-dah.
Deus ex machina incarnate diminimus
Oh great, so the "China to the rescue" story can now be recycled at least one more time. That should good for a strategic pop in the markets when our wise overlords deem it necessary.
I had the same sad thought. Whether or not china ultimately participates, im quite confident that the possibility of chinese participation will cost me thousands (more) sometime this month.
Europe asking China for a bailout is like a Wall Street Banker asking a homeless begger
for $6 to buy his morning latte.
no Chinese take-away for Van Rompuy and Burosso
...you can always 'Eat Cake' boys
We can always eat Chinese, plenty to go 'round
nah, i'll pass. too much lead in chinese peeps.
There has to be some positive way of spinning this for the markets though. How about: China State Media Says Europe Fine Without Chinese Support.
At some point, the Chinese will say, "ship us all of your gold and we'll write you a really big check."
Agreed ..
or Hard landing on sand paper with your pants down
If China won't bail, bernanke will. Have you seen his forearms? Motherfucker can bail out anything you throw at him.
Yep, followed by another bloody civil war in the U.S. Fucking brilliant. Bring it.
There is 120 trillion in the world, roughly, in somewhat liquid investments, the total stock and bond markets: Private wealth, pension and insurance funds, et cetera ... a lot of institutional funds, but you also have the wealth holdings of the oligarchs around the globe.
Of that, 20 trillion plus in the EU, 20 trillion plus in America ...
As Nomura's Richard Koo points out, the game is really to recycle - squeeze - push some of that investment capital that is always floating around, into sovereign debt. There is always a lot of capital looking for a place to park.
Really, Europe mostly owes its debt to itself, and should find or solicit any needed new 'investment' contributions from its own private wealth stock, if these programmes are really going to be viable and appealing to anyone ... not from China or Brazil. Ditto the USA.
'Really, Europe mostly owes its debt to itself, and should find or solicit any needed new 'investment' contributions from its own private wealth stock, if these programmes are really going to be viable and appealing to anyone ... not from China or Brazil. Ditto the USA.'
Um...what? Put away the pipe until trading begins.
There has to be more than that - I've got 500 trillion in Zibabwe dollars alone.
Best post of the week!!!!!!
Is all that "wealth" marked to market or unicorns shitting skittles? I call bullshit.
Correction, that $120 trillion is what the Rothschild's, their cohorts and lackies let you know about. Tel Aviv is the new center of world money laundering and general crime!
got, 'Amdocs?'
"show me da monay"
Meanwhile, the REALLY DUMB MONEY has now dumped nearly all of thier silver holdings.
Look for the next silver rally to be one for the ages, because Nearly All Remaining Silver is Now Held in STRONG HANDS!
http://silverdoctors.blogspot.com/
Rutt Row
My dumb money won't go either. It likes my pocket.
...And now a short scene from stereotype theater:
EU: Come on China, don't be like that Baby - we just need a few trillion. We love you long time...
China: No, we no pay...you pay. YOU PAY NOW!
No tickee, no bailee
Maybe it's just me but every Chinese person I have ever done business with has been a PAIN IN THE ASS.
This looks like the same thing. Europe is gona' get jerked around several more times if they are really serious about this Chinese bailout BS.
i do biz with chicoms. one of the most dishonest groups of people i've ever dealt with. they'll totally screw you over for literally pennies.
so in addition to copying american tech, they also copy jewish business practices?? does that mean war?
No, it means the jooz will continue to play both sides and will continue to cheat and swindle everyone. Look at some of the people in the 99% protests. They see all these joo names on all sides of the problem.
But if anyone dares breathe the word "joo,"they will scream "anti-Semitism" and bringing out their heavy propaganda words like "canard."
There is a Polish saying, "The joo cries out in pain as he hits you." Let's look at where the REAL problem is!
old country sayings ring truth of 1,000's of years
A friend, who at this point is quite sensible, and realizes far better deals are to be had down the line if one merely waits.
Excellent point. Why should they buy the farm when they will eventually get the milk for free. Of course, the market will ignore any and all information until a market event transpires, such as bonds relentlessly rising for Italian, Spanish, Portugal, France or even German debt; a sudden bank run due to recaps taking too long, or social unrest growing far faster than even debt issuance needs.
At this point, I just don't think the market wakes up to reality until a market event happens. It will. The question is only "when."
If you need alpha, buy silver heavily with stops far enough away you don't get intraday stopped out. If the market continues to run, expect silver to outperform substantially.
No beef with you silver/gold bugs, but i think that bitch hits 37 in the SLV then re-tests back down to 27. But shit, fibs don't always work.
@ bob_dabolina
maybe it's just me but every Chinese person I have ever done business with has been a PAIN IN THE ASS.
right on right on !
+ 1
Regime change will have to be required in Beijing since those Yo-Yos refuse to go along with the NWO program. Warz will have to be required to purge those countries that refuse to conform
Socialism no work. Chop Chop!
bet the Chinese didn't say no quite like Sharon Stone sez no in this clip. http://www.youtube.com/watch?v=xtv6HA7dd70
Maybe China has it's own problems to deal with. This has not become headline news yet because Wall street needs more fools piling into China before it rushes for the exits. Either way, the US and European economic woes will soon be sung from Asia. It's Japan all over again.
http://www.macrobusiness.com.au/2011/10/chanos-china-slowdown-just-begin...
good I dont want Poodles and Noodles anway.
The only way either the EU or the US will solve their problems is by putting up trade barriers and stop buying cheap goods from China.
But the bankers don't want that as it will mean not making 300 bucks profit per iphone if iphones had to be made in the US or the EU with workers paid decent wages.
The snake is eating itself but it just can't stop devouring.
"It is advisable that at the summit European leaders take heed of the voices of emerging economies, whose remarkable contribution to world economic recovery and growth deserves better understanding and reciprocal treatment."
http://www.reuters.com/article/2011/10/30/us-eurozone-idUSTRE79R1LG20111...
Wow... and Europe thought the whole world saw it's new vision of a global circle jerk. Oh well .
European Bailout Fund Could ‘One Day’ Issue Bonds in Yuan, Regling Says
http://www.bloomberg.com/news/2011-10-29/european-bailout-fund-could-one-day-issue-bonds-in-yuan-regling-says.html
This is just more of the pushing of China into a corner, I foresee China speeding up their flight from western paper into precious metals.
So as the saying goes "Keep stacking" because this won't end well in the west.
Green tea brewing, about to boil over on property prices. Remind us of anything recent..
http://globaleconomicanalysis.blogspot.com/2011/10/shanghai-homeowners-s...
http://www.shanghaidaily.com/article/?id=485501&type=Business
china is being coy and wants to be courted with productive assets
like debt slaves
or is it just slewie thinking they protesteth too much, here?
“China will only participate in a global program that is defensible to the Chinese people."
This line says it all to me. It says something like: "let them go the way of Argentina. We'll see them on the other side and help pick up the pieces when the valuations are better".
imo, the last time the chinese told the truth
moses had not yet been born
and the europeons are almost as bad!
I think the same slewie .. I think that china is playing a great game . coy They know the paper game is going to bust.
China is buying gold and silver as aggressively as they can without letting the world know...they certainly find that preferable to bailing Europe with new and risky debt....
ahhh Grass-HOPE-R Timmy Qhoi Chang- you are FU! Time for you to go...
Then I guess NATO needs to invade/occupy China. Gold back Yuan? Gahdaffi wanted a gold back dinar. Just saying....
That would be suicide.
Then NATO can say bye bye to the world