China orders retreat from risky assets (dollar reserves limited to T-bills or Freddie Mac)
Posted on 02/10/2010 10:28:09 PM PST by BIOCHEMKY
A Communist Party directive leaked to the Chinese-language edition of the Asia Times said dollar reserves should be limited to US Treasuries or agency mortgage debt such as Freddie Mac that enjoys Washington's implicit backing.
BNP Paribas said the move has major implications for global risk assets. "The message from Beijing is that we don't like this environment," said Hans Redeker, the bank's currency chief.
"When the world's biggest investor turns risk-averse, that is something you take notice of. We think this could become the new theme for the markets in the medium-term," he said.
The directive covers both the State Administration of Foreign Exchange (SAFE) and China's state-controlled commercial banks. Together they have an estimated $3 trillion (£1.9 trillion) of foreign holdings.
The exact break-down of China's holdings are a state secret but it is understood that SAFE bought large amounts of corporate debt as well as municipal and state bonds during the boom years of 2006 and 2007. Any move to liquidate holding of California debt at this crucial juncture could have serious implications.
The exact motives for China's shift of strategy are unclear. Analysts say the authorities may fear that the end of quantitative easing by the US Federal Reserve could cause risk spreads to widen sharply, triggering heavy losses. The shift in policy appears unrelated to the US spat with China over Taiwan.
(Excerpt) Read more at telegraph.co.uk ...
--------------------------------------------------------
Can you say KI$$ your A$$ goodbye?
Washington has not listened to pleas for fiscal responsibility from it’s own citizens, maybe they’ll listen to foreigners who hold the purse strings instead.
China orders retreat from risky assets (dollar reserves limited to T-bills or Freddie Mac)
The motives are unclear, they said.
Who would buy sh*tty mortgage backed securities?
We need to start tarring and feathering politicians, people who run fannie and freddie, hedge fund pirates and people at a certain investment bank.
I just hope the people who voted for Obama get screwed more than those who did not. This is going to get even worse than it is now.
“This is going to get even worse than it is now.”
Uh, yeah.....
(pssssst buy GOLD, buy a lot of it, buy it today, do not keep it in a bank, any bank...)
and what are you going to do with all that gold once it becomes illegal to own/transport/exchange/etc?
And those $50 gold coins you’re buying for $1000+ each... guess how much money you’ll get for them when the government confiscates them?
From the posts on this thread it looks like a better option is to buy food. Stockpiles of it.
“...buy food...”
Yep. One cannot eat gold. Remember that you can trade stuff, too: ammunition, razor blades, toilet paper, bars of soap, and toilet paper.
Can you blame them?
Think China needs any wheat? Maybe we can sell some of ours to them for the right price.
"Rotating sovereign crises" is a good description of the current situation.
Any move to liquidate holding of California debt at this crucial juncture could have serious implications.
Could CA be the next one? They're on the brink of bankruptcy now. If they cross the brink, what will Obummer do?
We are living in interesting times...
Those little airplane size bottles of scotch.
and what are you going to do with all that gold once it becomes illegal to own/transport/exchange/etc?
If it gets to that point, what's "legal" ain't gonna matter. Ever hear of underground economy?
“and what are you going to do with all that gold once it becomes illegal to own/transport/exchange/etc?
If it gets to that point, what’s “legal” ain’t gonna matter. Ever hear of underground economy? “
If it gets to that point (and I think it will) an underground economy won’t have much use for gold. As said before, “you can’t eat gold”
I think the best solution is own a little gold, a lot of “junk” silver, food, water, bottles of Jack Daniels, toilet paper, guns and ammo. Go buy yourself a few acres in the country so you can self sufficient.
“...bottles of scotch...”
I hadn’t thought of that. I’m allergic to Scotch, so there would be no sipping of my investment :-)
No soap! Hmmm...you’ll smell like bee-oh and Jack Daniels!
I’ll buy your gold off you. Ten dollars an ounce ok?
It’s a terrific price - after all, don’t forget gold will be ‘worthless’
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.