Posted on 06/08/2009 9:39:27 AM PDT by Centurion2000
Top China banker calls for U.S. sales of yuan bonds
Sun Jun 7, 2009 4:06pm EDT
By Martin Howell
NEW YORK (Reuters) - A top Chinese banker on Sunday called on the U.S. government and the World Bank to sell yuan-denominated bonds in Hong Kong and Shanghai to encourage the development of debt markets in those centers and to promote the yuan as a major international currency.
(Excerpt) Read more at reuters.com ...
By way of historical comparison foreign denominated debt was what crushed the Weimar Republic of Germany in the 1920's with hyperinflation.
Issuing bond in a foreign currency? That worked out well for Argentina and for Weimar Germany.
The scary thing is that to even float this idea is to send a giant middle finger to the Administration from the Chicoms.
Cue some shmuck on the Obama financial team to say they “are considering it” before they realize the damage they’ve caused and backpedal like crazy.
Ping.
The point of this is to prevent Obama from monetizing the debt. They know he plans to print his way out of debt, and they are cutting him off.
The point is going to come pretty quickly that we won’t be able to sell treasury bonds in US currency.
It was only a matter of time before this happened. Maybe it’s a good thing it is happening now instead of 3 years from now.
Yes thanks for that I forgot about that article...lol old age creeping in.
What a disaster they have led us into and I just read Russia wants to have precious metals be the new currency I have to find that piece. Have you read this?
http://www.bloomberg.com/apps/news?pid=20601087&sid=axq3ToKyUXnE
I think there is a large bond sale this week -- it will be interesting if no one shows up to buy.
Here is the piece...
Russians Considering Issuing Palladium Coin
Boris Gryzlov, the speaker of the Russian Parliament, the State Duma, said that the participants of the Economic Forum in St. Petersburg would discuss a possibility of making ruble coins from precious metals, reports Pravda.ru.
“We could offer the world the Russian ruble made of palladium. It would be a very strong currency. One may recollect the golden ruble, which Russia had during the tsarist times. It was a freely convertible currency and was circulating very well,” Gryzlov told reporters Thursday.
The President of the Association of Russian Banks, Garegin Tosunyan said that the coins made of precious and semi-precious metals would obviously be in demand on the market. “It has little to do with convertibility, but it would be quite normal as a measure against inflation and devaluation. Why not?” he said.
Palladium, along with platinum, rhodium, ruthenium, iridium and osmium form a group of elements referred to as the platinum group metals (PGMs). Platinum group metals share similar chemical properties, but palladium has the lowest melting point and is the least dense of these precious metals. The cost of one gram of palladium makes up about $8.
http://www.economicpolicyjournal.com/
IMO, the best thing that could happen for us right now is if the next bond sale goes down as an outright no-bid failure.
Didn’t they have less than expected demand with the last bond sale?
Latvia and some other Eastern European nations are currently finding out why this is a bad idea. They took on debt denominated in Euros and Swiss francs that is now killing them.
Latvia and some other Eastern European nations are currently finding out why this is a bad idea. They took on debt denominated in Euros and Swiss francs that is now killing them.
The thing is the Chicoms are basically saying after an investment we want our money back, plus interest. However, we don’t want to deal/trade/hold dollars. We don’t trust it. We trust our paper money/our socialists elite more than your paper dollar/your socialist elite.
And who can blame them?
Now the Chinese are getting desperate - their BS is becoming transparent to anyone with a brain:
NEW YORK (Reuters) - A top Chinese banker on Sunday called on the U.S. government and the World Bank to sell yuan-denominated bonds in Hong Kong and Shanghai to encourage the development of debt markets in those centers and to promote the yuan as a major international currency.
Baloney.
The intent of such a sale would be to make The United States subservient to China and its currency.
This, by the way, is how both Weimar Germany and Argentina were forced into hyperinflation.
See, if your currency declines when you have issued debt in a foreign currency then the principal value of that loan has just gone up. This in turn causes your credit rating to decline (your debt-to-income goes up) which in turn forces your currency lower, which makes the principal value go up again, which.....
Got it? Good. This is called a "death spiral" and is how you destroy a nation's economy, right before you come in and destroy its government - either politically or, in the extreme case, with guns, soldiers and, nowdays, nuclear weapons.
Gee, you don't think that a nation that is a "currency manipulator" might force such a spiral to initiate once they have suckered us into selling RMB-denominated debt, do you?
Such a step as selling RMB-denominated debt would be suicidal for The United States..
Question is, what is the response out of the administration?
Iceland, too.
Anyways, that is what happens when you can not get money, or you are so delusional you think the market doesn’t know you better than you do.
Did I say delusional? As in ‘sick’, ‘warped’, ‘unattached to reality’, ‘living in a dream world, as if surrounded by decades by boot licks, coat holders, bum kissers’?
I should of said, “our government”.
I’m all for it. We could have some Obummer Bonds to go along with the infamous Carter Bonds from the late 70s. Those worked out well for us - by helping us get rid of Carter...
http://www.opednews.com/maxwrite/linkframe.php?linkid=76369
Of course, the destruction of the US economy is exactly what the Kenyan wants to accomplish, making it somewhat likelier that the bastard will proceed with some sort of misbegotten programme such as this.
Even worse, the Chinese deliberately keep the value of yuan low compared to the dollar and other currencies. (If the yuan were allowed to float, China’s massive trade surplus would shrink.) The Chinese could decide tomorrow to greatly increase the value of the yuan, counterintuitively, by not subsidizing the dollar.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.