China's Central Bank says: No Longer in China’s Interest to Increase Reserves

[differential350]

http://www.bloomberg.com/news/2013-11-20/pboc-says-no-longer-in-china-s-favor-to-boost-record-reserves.html

The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.

China’s foreign-exchange reserves surged $166 billion in the third quarter to a record $3.66 trillion, more than triple those of any other country and bigger than the gross domestic product of Germany, Europe’s largest economy. The increase suggested money poured into the nation’s assets even as developing nations from Brazil to India saw an exit of capital because of concern the Federal Reserve will taper stimulus.

Yi, who is also head of the State Administration of Foreign Exchange, said in the speech that the yuan’s appreciation benefits more people in China than it hurts.

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[Lethn]

And so it begins this is one of the warning signs I was waiting for.

[Carlton Banks]

And so it begins this is one of the warning signs I was waiting for.

Apparently, it began ages ago, and we're only just finding out about the fullest extent: http://www.zerohedge.com/news/2013-11-26/chart-day-how-five-short-years-breakneck-liquification-china-humiliated-worlds-centr

The above story basically explains how Central Bank of China has been creating far more extra currency than the rest of the Central Banks combined, and that they've been doing this for the 5 years since the 2008 crash. All the demonising of the Federal Reserve and ECB Seems a bit unfair in view of all this, they've been forced to at least try to keep up with the Chinese cheapening their currency the whole time.

This latest news that the dollar is no longer being accepted for settlement with China is just the latest in this battle, and the Chinese government have outplayed everyone. And as long as they increase the ringfencing of their economy with Bitcoin, I think it could turn out well for everyone in the World. Well, all the Bitcoin users anyway.

[Lethn]

Oh yeah, I knew about this ages ago as well, the difference is now it's going to be showing up all over the news, it's the same with inflation and Bitcoin, we all knew it was happening it's just that nobody wanted to admit it and now they're being forced to because of the effect its having.

[Coma]

Consequences will never be the same.

[niothor]

Yi, who is also head of the State Administration of Foreign Exchange, said in the speech that the yuan’s appreciation benefits more people in China than it hurts.

Can I laugh?
Leave the yuan roam free and we'll see China exports crumble.

[beetcoin]

so basically now china wants the strengthen its own currency, which will drive out foreign investment right?

[Lethn]

so basically now china wants the strengthen its own currency, which will drive out foreign investment right?

It will drive out weak and debt based investment, if other countries want to trade with them they're going to have to fix up their economies and make their currency worth something to others. Not only that, we have Bitcoin ffs, it's worth $1000 right now, I'm pretty sure that any of us who have half a brain are going to be entirely capable of trading with the Chinese.

The people who complain about a rising Yuan are the ones who benefit from the previous system of money printing.

[niothor]

so basically now china wants the strengthen its own currency, which will drive out foreign investment right?

It will drive out weak and debt based investment, if other countries want to trade with them they're going to have to fix up their economies and make their currency worth something to others. Not only that, we have Bitcoin ffs, it's worth $1000 right now, I'm pretty sure that any of us who have half a brain are going to be entirely capable of trading with the Chinese.

The people who complain about a rising Yuan are the ones who benefit from the previous system of money printing.

Are you insane?
A strong yuan will kill 90% of the chinese exports. Why the hell do you think they keep the price in check and only allow small fluctuation.

[Lethn]

They're getting fuck all in return for those exports, paper money is debt, so all those western countries who are 'helping' China grow are really just in a parasitic relationship, it's the equivalent of someone staying in your house, eating your food and sleeping in your bed forcing you to work for longer hours because of the higher bills and then having the balls to tell you that they're giving you extra employment by making you work longer for them. The only difference is this is happening with entire countries.

The same thing is happening with other resource/production based countries in Europe as well, Germany, Norway etc. are feeding the habits of all the other countries like Italy, Greece and Spain who don't produce anything or trade things in equal value and all they're getting is the 'promise' these countries will pay them back in return at a later date.

[niothor]

They're getting fuck all in return for those exports, paper money is debt, so all those western countries who are 'helping' China grow are really just in a parasitic relationship, it's the equivalent of someone staying in your house, eating your food and sleeping in your bed forcing you to work for longer hours and then having the balls to tell you that they're giving you extra employment by making you work longer for them. The only difference is this is happening with entire countries.

The same thing is happening with other resource/production based countries in Europe as well, Germany, Norway etc. are feeding the habits of all the other countries like Italy, Greece and Spain who don't produce anything or trade things in equal value.

The thing is that without their low price yuan they won't be exporting anything and getting anything in return.
I'm not going to get into a paper money debt debate with you. Just the facts. Valued currency bad for exports good for imports. China needs the opposite.

[Lethn]

The reason other countries' currencies are low is because they are being continuously devalued or countries hardly produce anything and trade it, it's fraud, plain and simple, why should China just keep letting itself get conned out of it's exports for nothing? That's all that's happening here, sure they could lower the price but they'd have to make sure that they were actually getting something in return.

Also, paper being debt is a fact and not something you can just brush off whenever you debate currencies/economics.

[niothor]

The reason other countries' currencies are low is because they are being continuously devalued or countries hardly produce anything and trade it, it's fraud, plain and simple, why should China just keep letting itself get conned out of it's exports for nothing? That's all that's happening here, sure they could lower the price but they'd have to make sure that they were actually getting something in return.

Also, paper being debt is a fact and not something you can just brush off whenever you debate currencies/economics.

That's not the problem! You're saying the opposite.
China is keeping the yuan undervalued so their products could be sold cheaper. They don't want to lower the price of their currency.

[Carlton Banks]

The reason other countries' currencies are low is because they are being continuously devalued or countries hardly produce anything and trade it, it's fraud, plain and simple, why should China just keep letting itself get conned out of it's exports for nothing? That's all that's happening here, sure they could lower the price but they'd have to make sure that they were actually getting something in return.

Also, paper being debt is a fact and not something you can just brush off whenever you debate currencies/economics.

That's not the problem! You're saying the opposite.
China is keeping the yuan undervalued so their products could be sold cheaper. They don't want to lower the price of their currency.

But they are doing it anyway. And it is their plan, I think. They have focused on building up the best reserves of truly valuable capital, production and manufacturing. And now they're flushing the old monetary system down the toilet, and promoting a new monetary system while buying lots of gold to hedge. It's a smart game plan. If a little high-wire.

[differential350]

Is the US dollar a worldwide ponzi scheme? Yes, there are no doubts. I predict the collapse in less than 10 years.

[niothor]

Is the US dollar a worldwide ponzi scheme? Yes, there are no doubts. I predict the collapse in less than 10 years.

Yeah , the same was said for the EU , in 2007, 2008 and .. so on.
Less than 10 years?  You must be joking.

[Lethn]

Stop being in denial Niothor, that kind of thing doesn't work now

[niothor]

Stop being in denial Niothor, that kind of thing doesn't work now

It will collapse , that's is certain. But 10 years?
Common , search for papers that we're saying the same in 2004 and guess what.
Things like this don't happen overnight. And for a country and a currency 10 years it's overnight.

[Lethn]

Have you seen the rate that we're printing money and how the federal reserve is acting exactly like you while also bluffing about tapering at the same time? I think 10 years is a real possibility, 5 years could also happen depending on how desperate they get. The financial crisis in 2008 - 2009 practically happened overnight as well, you're going to be in denial about that too or are you going to claim nothings going to happen still? America and Europe's biggest creditor is getting ready to abandon it, that's actually one of the biggest signs I've seen so far and leads me to believe western economies will end up collapsing far sooner than 10 years depending on how eager China are to get rid of the government treasuries they hold.

We won't know for sure the exact timing but with how desperate all our leaders are getting I'm not sticking around to see if they do anything sensible.

[niothor]

Have you seen the rate that we're printing money and how the federal reserve is acting exactly like you while also bluffing about tapering at the same time? I think 10 years is a real possibility, 5 years could also happen depending on how desperate they get. The financial crisis in 2008 - 2009 practically happened overnight as well, you're going to be in denial about that too or are you going to claim nothings going to happen still? America and Europe's biggest creditor is getting ready to abandon it, that's actually one of the biggest signs I've seen so far and leads me to believe western economies will end up collapsing far sooner than 10 years depending on how eager China are to get rid of the government treasuries they hold.

We won't know for sure the exact timing but with how desperate all our leaders are getting I'm not sticking around to see if they do anything sensible.

There were lots of people who new the 2008 will happen. There were lots of signs in the air.
Also you already said that 10 years it's a possibility. It means you don't see this as certain. That's enough for me.
Also as an European , I really don't care too much about Europe's debts since it looks like this:



Nor , do I give a F*** , about the dollar.