1) If China has fake collateral to go along with their fake cities, what will this mean for their Communist central committee?
2) Does this affect other commodities in China?
3) What about the mining concerns in places like Australia which have an export economy of raw goods TO China?
4) Does this have anything to do with Xi Jinping or with Gu Kailai / Bo Xilai (murder of British bag man)? (Longer term, of course -- the party royalty may have known of the vapor-collateral and been trying to move money to safe havens).
5) See also Ann Barnhardt on rehypothecation.
6) What does this have to do with increasing tensions between China and Japan?
7) Oh yes. What if China implodes and stops buying our bonds?
Cheers!
What do you know? Chinese corporations are run by crooks just like ours. How do you say Corzine in chinese?
I think the “stolen” syrup in Canada was a similar situation. Lots of money was at stake and the commodity never existed. It and the Chinese steel pale in comparison to the nonexistent $16 trillion the feds loaned to foreign and domestic banks.
http://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144
We’re in deep doo doo boys and girls and the only way out is through a total collapse. Personally it couldn’t come too soon. The longer we wait the worse it will be.
Rehypothecation is a practice that occurs principally in the financial markets, where a bank or other broker-dealer reuses the collateral pledged by its clients as collateral for its own borrowing.
They will have to move to Monterey Park.
Much of their vaunted economic growth and growth rates were FICTION
Everyone is worried about China. What repo company would they use to get back their stuff from us? And who will buy their goods if we don’t? We’re the largest consumer market in the world.
I like zh poster Ralph Spoilsport’s comment yesterday, “Sum ting wong?”
Thanks for posting. Very, very interesting. I read it and the comments yesterday at zh. Thanks to all of the great posters at zh.
“Everything about socialism is sham and affectation.” - Bastiat 1801-1850
Thanks for the ping. Will try to force my brain into submission and understand this.
Thanks for the ping.
OK, see if you can explain to me, if you will please, how having less of something than originally thought makes it worth less?
Isn’t the fall in prices due to over supply and finite demand?
http://www.businessinsider.com/by-2015-hard-commodity-prices-will-have-collapsed-2012-9
The rest of this ponzi scheme is fractional banking come to its logical conclusion when all the loans default at the same time. When you make too many loans (too low a reserve ratio) you only increase that risk and hasten the day when one or more default totally. They played the odds that only some acceptable portion of their loans would go bad and not all at the same time and only after they had made enough to cover the losses. They lost. Just as they lost the bets on CDS where a statistical failure is a total failure.