China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings

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?

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:

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.

Are you aware of the GOP congressman recently calling on all who can to get out of the cities?

I need to track that down and post it . . .

Don’t recall if I have before or not:

http://www.shtfplan.com/emergency-preparedness/congressman-warns-those-who-can-should-move-their-families-out-of-the-city_05272011

Congressman Warns: “Those Who Can, Should Move Their Families Out Of the City”

Mac Slavo

May 27th, 2011

There are a whole host of events that can bring the world as we know it today to its knees. From a hyperinflationary economic collapse to an electro magnetic pulse originating from the sun or a nuclear weapon , there exists a real and present danger that our system may, in the near future, experience unrecoverable shocks to the power grid and clean water infrastructure, a halt to just-in-time agricultural transportation systems and a collapse of the currency exchange mechanisms that make the economy function.

US Representative Roscoe Bartlett (R-MD), lived through the great depression, so he’s seen how bad things can get. In a new documentary, Mr. Bartlett and others discuss the dangers posed to those living in cities and ways that your family can survive if the worst were to ever happen.

Roscoe Bartlett:

We could have events in the future where the power grid will go down and it’s not, in any reasonable time, coming back up. For instance, if when the power grid went down some of our large transformers were destroyed, damaged beyond use, we don’t make any of those in this country. They’re made overseas and you order one and 18 months to two years later they will deliver it. Our power grid is very vulnerable. It’s very much on edge. Our military knows that.

…

There are a number of events that could create a situation in the cities where civil unrest would be a very high probability. And, I think that those who can, and those who understand, need to take advantage of the opportunity when these winds of strife are not blowing to move their families out of the city.

Source: Urban Danger Movie

http://www.urbandanger.com/Watch-It-Online.html

Congressman Warns: “Those Who Can, Should Move Their Families Out Of the City”
Mac Slavo
May 27th, 2011

Roscoe Bartlett:

…

Source: Urban Danger Movie

We realize that for most people this may be decried as fear-mongering and crazy survival talk. We can’t help but point out, however, that it’s not just Representative Roscoe Bartlett, economist Marc Faber, and trend forecaster Gerald Celente that are recommending you prepare and head for rural areas. The US Pentagon and Military are very much aware of these possibilities and they’re preparing for exactly the scenarios described in this documentary.

The threat is out there, and just because it hasn’t happened in our modern-day society up until now doesn’t mean it won’t happen in the future. In fact, it has happened through history – strife, poverty, depression, economic collapse, war. You name it and somebody in history has lived it. The government spends hundreds of billions of dollars on emergency preparedness, disaster planning, continuity of government and war gaming these scenarios. There’s a reason for that. We recommend our readers take a queue from them and others who are warning of these outlier possibilities.

For a taste of what’s in the movie you can view the first 20 minutes of Urban Danger below:

[at original link above]

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