Keeping the Useless Eaters Happy and Well Media Fed . . .
Posted on 04/24/2011 9:42:07 AM PDT by library user
All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait.
Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be.
Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so.
And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?
From Xinhua:
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.
Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
Maybe I’m old fashioned but I think there will be an option 3, multi-generations living in the same house ala “The Waltons.”I don’t think we need to kill off the old people at all, although the families will have to assume more responsibilities for themselves. Just because people are old, they are not useless. You might have Mom and Dad out working while the grandparents help care for the kids and so on, to fill in the gaps the parents leave. I think maybe the period from World War II to now has been an aberration, the norm has been where the families stayed close by or in the same house with multi-generations, it was like that before World War II and during the Depression. We might be returning to that norm.
Not an option for my family, unfortunately. You see back in the walton’s day they actually hired young men and paid them sufficient to raise a family.
Now they neither hire them nor pay them.
“And we’ll have the Free Trade Uber Alles twits to thank for it, the people who thought that “free trade” with communists was a suave economic theory.”
Wrong enemy. We can thank our UNIONS, LABOR LAWS, OSHA LAWS, and God knows what else.
We did it to ourselves and WE DESERVE IT.
Everything you list there is a factor, but in the minority.
The majority factor here is the currency arb. The yuan peg allows China to make their stuff cheaper than our stuff, no matter what we do.
You’re right, we deserve it. Because the WTO regulations allow us to retaliate with tariffs against countries that engage in currency manipulation. If a peg isn’t “manipulation,” then nothing qualifies as manipulation.
I won’t argue that. It’s DEFINITELY a big factor...but it wouldn’t be nearly as effective if we unshackled ourselves our bit.
Anyway, when the Yawn actually floats, we’ll become borderline destitute as a country (i.e., everything in Walmart will triple in price, for example).
Now it’s happening, June 2011.
Lord, have mercy. We humble ourselves, we pray, we seek Your face, we turn from our wicked ways, please hear from heaven, forgive our sins, and heal our land. There is none but You, show us Your ways and help us to walk in them, we ask and pray in the Name of Jesus Christ, amen.
I've been waiting for this "hot breaking news" (LOL !) for about four years.
Everything most people know is wrong. 99% of Americans still believe in our phony two party system. Reality is that the "New World Order" was developed by Hitler and really bright people understand that Skull 'n Bones and other secretive groups run everything to get richer while most (90%) Americans get poorer -- faster -- everyday.
China knows they have many advantages over the US and now they will begin exerting pressure on our elites. But there are only about true 4,000 elites living in the US and about 2,000,000 live in Asia.
It's all a numbers game anyway -- ones and zeros. The end was predestined long ago -- because our corrupt leaders screwed the pooch when they decided to pass WS gambling debts (esoteric derivatives) off to the taxpayers. The middle class was raped to save the elites.
The time to wake up is long past . . .
Keeping the Useless Eaters Happy and Well Media Fed . . .
Blanket generalizations necessarily have plenty of exceptions . . .
Nevertheless . . . there is a shocking amount of seemingly willful blindness in our culture in the face of
brazenly screaming neon lit warnings of unprecedented devastations not that far ahead.
With China flushing American paper as fast as they can . . . who’s stupid enough to buy it?
What would the economic result of 1/3 the global population . . . or even 20% being relieved of breathing in this dimension?
I wouldn’t doubt the puppet masters are using Islam to plague other religions—particularly Christianity.
However, I’m also even more convinced that they will ultimately destroy Islam.
Scripture is clear . . . the one world religion will worship satan incarnate.
Works for me.
Particularly when we have WELL OVER
MORE THAN 400 years of our oil needs within our own borders—including accounting for increased demand.
INDEED. INDEED.
Of course.
They decided a long time ago that they MUST destroy this country virtually utterly in order to make estabilshing the global government easier and faster.
I think it’s otherwise—that they planned exactly that.
Though you could be right in the sense that they may not have believed they’d actually achieve it so successfully so fast.
Reportedly some of the billionaires were not QUITE ready to head to the bunkers.
-——NOW while these libtards can take full responsibility-——
China needs a strong America and sound money. It is to the advantage of the Chicaps to destroy Obama et al.
. . .
They came first for the trade unionists but I didn’t protest because I wasn’t a trade unionist . . .
. . .
. . .
And finally, they came for grandpaw . . . and I realized I was the grandpaw.
Useless eaters they call us now.
For the good of society . . . and global warming . . .
/sarc
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