Spot China’s “Hot Money” Time-Bomb [zerohedge]

Over the weekend, FT noted that China’s central bank reported that companies and individuals sold RMB 684 billion ($109 billion) worth of foreign exchange and bought an equivalent amount of Chinese currency in January, a record for a single month. On the chart below, please point out the Chinese “hot-money” inflationary ticking time bomb (hint: highlighted).

Why “time bomb”? For the answer, we go to the simplest definition of inflation, which is as follows: “when too much money chases too few goods and services.”

In January, the money in domestic circulation via FX conduits just soared by a record amount, without a comparable increase in goods and services. All else equal, this is called the “hot money” effect, and manifests itself in a surge in Chinese inflation usually with a 3 month lag to whenever the Chairsatan starts experiment with the US monetary base.

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China Central Bank Says It Is “Fully Prepared For Looming Currency War” [Zerohedge]

Just in case Lagarde (and everyone else except for the Germans, who have a very unpleasant habit of telling the truth), was lying about that whole “no currency war” thing, China is already one step ahead and is fully prepared to roll out its own FX army. According to China Times, “China is fully prepared for a looming currency war should it, though “avoidable,” really happen, said China’s central bank deputy governor Yi Gang late Friday.” We look forward to the female head of the IMF explaining how China is obviously confused and that it is not currency war when one crushes their currency to promote “economic goals.” Of course, that same organization may want to read “Zero Sum for Absolute Idiots” because in this globalized economy any attempt to promote demand (by an end consumer who has no incremental income and stagnant cash flow) through currency debasement has no impact when everyone does it. But then again, this is the IMF – the same organization that declared Europe fixed in 2009, 2010, 2011, 2012, 2013 and so on.

More on China’s FX troop deployments:

Yi, vice governor of the People’s Bank of China, made the comment amid widespread concerns that the world’s major economies would drive down their units to gain a trade advantage through monetary easing policies. 

A currency war could be avoided, Yi said, if policymakers in major countries observed the consensus, reached at the recent G20 meeting, that monetary policy should primarily serve as a tool for domestic economy.

G20 members promised that they would not wage a currency war, but none have shown signs of scaling back monetary easing that has injected a flood of cash into global markets. They worry that removing the stimulus will plunge their economies into another recession.

“China is fully prepared,” Yi said. “In terms of both monetary policies and other mechanism arrangement, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.”

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Ecobank sees more benefits in China-Africa trade [xinhuanet]

NAIROBI, Feb. 6 (Xinhua) — Pan-African commercial bank Ecobank Group is positioning itself to play a bigger role in facilitating the growing trade links between China and Africa, the head of the bank’s operations in Kenya said on Wednesday.

Ecobank opened a representative office in Beijing in December 2012 and has a strategic partnership with the Bank of China.

The intention is to make it easier for businesses easily settle their transactions by using integrated banking infrastructure in different countries.

“There is a growing interest by Chinese and African business people to use a financial provider with presence in many countries because this makes it easier to settle transactions,” Ecobank Kenya MD Tony Okpanachi told Xinhua in Nairobi.

He said there has been sustained increase in foreign direct investments from China to Africa in the last few years and this is bound to continue, underlying the bank’s plan to upscale its operations to benefit from the high volume trade.

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Chinese companies to make larger investments in Iran: Ambassador [presstv]


Chinese Ambassador to Iran Hu Hongyang (file photo)

Chinese ambassador to Tehran says his country’s companies are prepared to make greater investments in infrastructural and economic sectors of the Islamic Republic.

Yu Hongyang told IRNA on Wednesday that the illegal moves by certain countries in imposing unilateral sanctions against Iran will not shake Beijing’s determination to invest in the country.

He added that 70 Chinese companies are currently active in various infrastructural projects in Iran.

Yu further noted that Chinese firms are offering their services to Iranians in the fields of railroads, dam construction, and drip irrigation.

The Chinese ambassador stated that the determination of the Chinese and Iranian governments and nations to expand bilateral relations has led to ever-increasing trade exchanges between the two Asian countries.

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Huge gold imports into China/Japanese Pension funds eyeing gold for first time/Unemployment in Spain rises to 26.6%/ [harveyorgan]

Gold closed up $16.00 to finish the comex session at $1661.50  Silver also followed gold rising by 39 cents to $30.42. Today we saw gold and silver actually strength as the Dow fell deeper into the red.
Demand for physical continues to strength despite the crazy antics of our bankers. Today we witnessed a huge increase in physical imports into China through Hong Kong to the tune of 91 tonnes of gold last month. Also silver imports are rising as well.  The USA mint saw a big rise in silver eagle sales. The Shanghai physical exchange continues to show huge strength with a total monthly sales of 19.5 tonnes of gold turnover.
The bankers will have massive trouble shorting gold as turnover sales continue to strengthen each and every month.

With gold shares performing poorly despite gold/silver’s rise, expect more of the same raiding by the bankers as they try and quell these two precious metal’s demand!!

In other news, Greece again is in need of cash.  Today, the Greek banks announced that due to the Greek haircut on the bonds it held, its income was curtailed badly.  Thus the Greek banks have a non performing problem coupled with a lack of income.  The EU set aside 50 billion euros and already the banks need more than that.

Unemployment again rises in Spain, this time a record 26.6% and all of Europe has an unemployment level of 11.8%.


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Why the Chinese Demand US Gun Control [thedailybell]

Chinese State Media Demands US Citizens Be Disarmed …The official Chinese government news agency, Xinhua, has demanded the US immediately adopt stricter gun control measures to reduce the number of firearms the US populace is permitted to possess. The Chinese state-controlled media’s statement, titled “Innocent Blood Demands No Delay for US Gun Control,” is primarily focused on the Newtown tragedy in which 26 Americans were killed by a mad gunman. Twenty of the victims were young children. The Chinese government stated, “Their blood and tears demand no delay for the U.S. gun control.” – Breitbart

Dominant Social Theme: The Chinese are rightfully concerned with US violence.

Free-Market Analysis: The Chinese have weighed in … Breitbart is reporting that the Chinese government is concerned about US gun violence (see above excerpt). This is notable because it tends to support certain dominant social themes we have noted before.

We do believe that the Chinese, like the Russians and the rest of the BRICs, are part of an effort to create global governance. The British – the City of London being an integral part of this larger effort – virtually ran China and India once upon a time.

While British influence has eroded among the civilian population, chances are the power elite behind past depredations remains quite influential with the political and military class.

There are suppositions that Western powers wanted communism to come to China in the form of Mao because that helped crush China’s unique culture and set the stage for the current quasi-capitalism that now engulfs China.

And as we have pointed out recently, both China and the US are converging on a new kind of sociopolitical and economic system that may mimic Germany’s National Socialism more than any other political paradigm.

For this reason, we’re not surprised top Chinese officials are calling for more gun control in the US. This suits the Chinese system, which is intended, we have no doubt, to more closely merge with European and North American systems over time.

The availability of guns is an impediment to totalitarianfascism or whatever else the power elite has in mind. Here’s more from the Breitbart article:

The Chinese government states:

“The past six months have seen enough shooting rampages in the United States. Just three days ago, three people were shot dead at a shopping mall in Oregon. Two weeks ago, a football player shot his girlfriend dead and then committed suicide. Five months ago, 12 people were killed and 58 wounded in a shooting spree at a midnight screening of a Batman film in Colorado.”

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How the Chinese press sees Gold reserves kept in U.S.

Link to original article translated by Google


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