China Dumps Record $143 Billion In US Treasurys In Three Months Via Belgium

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When the latest Treasury International Capital data was released yesterday, many were quick to conclude that not only had China’s selling of US Treasury ceased, but that with the addition of $7 billion in US government paper, China’s latest total holdings of $1270.3 billion were the highest since May of 2014. And if one was merely looking at the “China” line item in the major foreign holders table, that would be correct.

However, as we have shown before, when looking at China’s Treasury holdings, one also has to add the “Belgian” Treasuries, which is where China had been anonymously engaging in a record buying spree via the local Euroclear, starting in late 2013, which however concluded with a bang in early 2015. Continue reading

Yes, It’s Possible For A Gold-Backed Renminbi To Dethrone The US Dollar

“Mutually assured destruction” was a doctrine that rose to prominence during the Cold War, when the US and the USSR faced each other with nuclear arsenals so populous that they ensured that any nuclear exchange between the two great military powers would quickly lead to mutual overkill in the most literal sense.Notwithstanding the newly dismal relations between the US and Russia, “mutually assured destruction” now best describes the uneasy stand-off between an increasingly indebted US government and an increasingly monetarily frustrated China, with several trillion dollars’ worth of foreign exchange reserves looking, it would now appear, for a more productive home than US Treasury bonds of questionable inherent value.

Until now, the Chinese have had little choice where to park their trillions, because only markets like the US Treasury market (and to a certain extent, gold) have been deep and liquid enough to accommodate their reserves. Continue reading

The Alliance of the Threatened

BERLIN/WASHINGTON/MOSCOW (Own report) – The EU and USA have expanded their sanctions against Russia and – in addition to individuals – have now also placed important Russian companies on their lists. Washington has restricted dealings, for example, with Rosneft and the Gazprombank. Brussels has announced the possibility of preventing EU companies from doing business with Russian companies and is planning to list them by the end of July. German business circles are protesting. They have already suffered billions in losses. Experts are warning that, with its sanctions against Russia, the West may experience, in the economic arena, an overreach similar to that experienced by the US in the military arena with its war on Iraq. With the power of the West obviously waning, it has already become noticeable that even close allies are defecting. Observers explain this with the Crimea conflict: NATO countries had been unable to retain the Crimea within the reign of its allied Ukrainian government; therefore it seems that an alliance with NATO countries would no longer be a reliable assurance against ones enemies. Defections can be noticed in Asia and Latin America, not least of all because of the recent founding of the BRICS development bank, rivaling the US-dominated World Bank. Russia and China are among the founders of this bank. Continue reading

US Economy Is A House Of Cards — Paul Craig Roberts

The US economy is a house of cards. Every aspect of it is fraudulent, and the illusion of recovery is created with fraudulent statistics.

American capitalism itself is an illusion. All financial markets are rigged. Massive liquidity poured into financial markets by the Federal Reserve’s Quantitative Easing inflates stock and bond prices and drives interest rates, which are supposed to be a measure of the cost of capital, to zero or negative, with the implication that capital is so abundant that its cost is zero and can be had for free. Large enterprises, such as mega-banks and auto manufacturers, that go bankrupt are not permitted to fail. Instead, public debt and money creation are used to cover private losses and keep corporations “too big to fail” afloat at the expense not of shareholders but of people who do not own the shares of the corporations.

Capitalism has been transformed by powerful private interests whose control over governments, courts, and regulatory agencies has turned capitalism into a looting mechanism. Wall Street no longer performs any positive function. Wall Street is a looting mechanism, a deadweight loss to society. Wall Street makes profits by front-running trades with fast computers, by selling fraudulent financial instruments that it is betting against as investment grade securities, by leveraging equity to unprecedented heights, making bets that cannot be covered, and by rigging all commodity markets. Continue reading

Beijing suspected of hiding US$700bn in US bonds

Liu Mingkang, the chairperson of the China Banking Regulatory Commission, has accidentally revealed that China may hold US$700 billion more in US bonds than it has previously stated, reports Japanese newspaper Nikkei, which said the disparity shows the country’s mistrust of the US.

The Chinese official said during a speech delivered in Washington DC on April 16 that over half of China’s foreign reserves have been invested in US bonds and that as of the end of March this year, around US$2 trillion of the country’s US$4 trillion in foreign reserves are in US dollars. Continue reading

Russia ‘planned Wall Street bear raid’

For anyone who, or knows someone who, naively thinks Russia doesn’t have both the capability and the guts to pull the trigger, this is a must-read. It also goes to show you that the Cold War had never died, but had simply gone into a new phase. The phase of which America is going through, and is almost finalized. The US is now stuck with a leader who draws a new line in the sand, or makes a concession, every time another is breached. The Russians smell blood and they, along with the Chinese, won’t stop capitalizing on the opportunities until America is reduced to a third world country. They, who know America lives by an honor system, do not, which makes it even more easier to keep hammering away.

There is a cynicism in the relationship between Russia and the US, being played out in the Crimean crisis, which is deep, rooted in history and shows that the triumph of capitalism over communism wasn’t the end of the power game between these two nations.

The depth of mistrust between the two was highlighted in the interview given by Hank Paulson, the former US treasury secretary, for my recent BBC Two documentary, How China Fooled The World.

The excerpts I am about to quote never made it into the film, because they weren’t relevant to it. But they give a fascinating understanding of the complex relationship between Washington and Moscow. Continue reading

US could start defaulting on debt ‘very soon’ warns Lew

US Treasury Secretary Jacob Lew warned Monday that the US is on course to hit its so-called debt ceiling, the limit to which it can legally borrow, by the end of the month.

He called on Congress to raise it immediately to prevent the issue from harming the economic recovery, adding that the government would start defaulting on its debt “very soon” if it failed to act.

“Time is short. Congress needs to act to extend the nation’s borrowing authority, and it needs to act now,” Mr Lew said in a speech on Monday. Continue reading

White House openly threatens US default as debt fight escalates

US Treasury Secretary Jacob Lew has issued a categorical warning that the United States will default on its $16.7 trillion debt and throw the world into turmoil unless Congress agrees to raise the legal debt ceiling by October 17.

Mr Lew said the treasury had already exhausted its normal funds in May and has been “creating room” by resorting to one-off tricks, but these, too, have run dry. The government will have just $30bn by October 17, half what is needed to cover immediate needs over subsequent days. Continue reading

US ‘seriously’ considering $1 trillion coin to pay off debt

The US is “seriously” considering creating a $1 trillion platinum coin to write down part of its debt to stop the world’s largest economy defaulting as early as next month, according to financial analyst Cullen Roche.

“I know it’s been spoken about at the White House and a number of prominent people, including congressman [sic], are talking about it,” he said. Continue reading

The Death of the Dollar

Most people don’t even realize we have an actual war being fought — one that has been ongoing for over a decade. Most people also believe that our economic downturn is part of the usual economic cycle and will return to normal. This couldn’t be farther from the truth. Fact of the matter is, the US Dollar’s days are numbered and America is doing very little to defend it.

In late 2008, when the U.S. Treasury bond seemed the safest investment in the world and the dollar once again reigned supreme as a safe haven, we predicted a Phase Three attack. At the time, we said that the way things would play out, so-called experts would say that it was just a natural and inevitable result of global events. Never mind that these would be the same people who dismissed the concern only a short while earlier. We have documented all of this repeatedly in our final report for DoD (Economic Warfare: Risks and Responses published in June 2009), our book Secret Weapon (www.secretweapon.org) and in this Blog. We explained well in advance that the BRIC nations would call for the end of the dollar as reserve currency, piling on to similar expressions from the IMF and UN. We stated without hesitation that the US Treasury would lose Triple-A status even as Timothy Geithner said it could never happen.

Now, the alarm bells are ringing louder than ever before. But, the policymakers are ignoring the handwriting on the wall, lulled into complacency by lower interest rates paid by our Treasury. Let’s be clear. This is not an “all clear.” Just today, we received some powerful research by Citigroup titled The “Frozen Hell” of a High Deficit, Low Rate Environment. Here are some of the insights that support our concerns:

“As was the case for a decade in Greece, low government bond yields delayed recognition of a problem. The effects on investment spending, employment and income never produced are more difficult to measure than any obvious interest rate spike related to large deficit

Greece’s budget and external imbalances went undisciplined by markets for a full decade. For how long could the U.S.?”

Full article: The Death of the Dollar (Kevin Freeman / Global Economic Warfare)