Skip to comments.China Halts Bank Cash Transfers
Posted on 01/26/2014 2:56:28 PM PST by Errant
The Peoples Bank of China , the central bank, has just ordered commercial banks to halt cash transfers.
In short, there will be a three-day suspension of domestic renminbi transfers. There will also be a suspension, spanning nine calendar days, of conversions of renminbi to foreign currency.
The specific reason givensystem maintenance at the central bankis preposterous. It is not credible that during the highest usage period in the yearthe weeklong Lunar New Year holiday beginning January 31the central bank would schedule an upgrade and shut down cash transfers.
A better explanation is that the countrys banking system is running dry. Yes, there is an increased need for money in the run-up to and during the Lunar New Year holiday, but that is only a small factor. After all, central bank officials knew this spike in demand was comingit occurs every year at this timeand a core function of central banks is to manage seasonal liquidity fluctuations. Moreover, the holiday has not started yet, and the PBOC, as that institution is known, could have added more liquidity to meet cash needs.
(Excerpt) Read more at forbes.com ...
And then we have the HSBC in Britain preventing large cash withdrawals. Hmmmm....
Isn’t HSBC a Chinese bank, anyway.
Coming out of China, this makes you wonder about the soundness of the Chinese system. Of course looking at our own nimrods, you can’t be too hard on China.
Isn’t it marvelous how our brain-trusts devalue sound perceptions of the international economic system.
Please add me to the BitCoin group.
I don’t know. Something’s going on, though.
HSBC does not prevent large checks written only cash withdraws without some safeguard procedures. Unlike Cyprus where all types of withdraws are limited to 300 Euros per day. I would not read into the HSBC policy YET. If HSBC limits all types of withdraws and demand reasons for it, then I would be alarmed. I can see what they are doing as precaution against ID fraud for large cash withdraws.
I hope you’re right.
No worries, Obama will be able to reassure everyone during the State of the Union address.
“Asian equity markets are expected to kick off the week with losses after a sharp sell-off in emerging-market currencies last week spooked investors.”
EM stocks and assets are way over valued and if they crash they will take down the banks again, since its mostly Western banks that have puffed them up using QE leverage.
Chinese situation is similar to US crisis of 2008. Here are the difference, it involves only 10 percent of GDP, Chinese gov has surplus to cover crisis, Chinese gov may not bail out the loans made by rich people done outside of the banking system. Many of these loans were made to go around the official bank system when they raised rates to cool off the real estate bubble several years ago. If borrowers made reckless loans that endanger their businesses that will impact the national economy these borrowers may face capital charges of intentionally sabotaging China’s economy and undermining national reputation. Penalty is hard labor or firing squad. Unlike US, reckless businessmen who cause a national economic turmoil are not bailed out, they are put on trial, found guilty and shot. That is something we can learn from China.
Crap. Spring Festival isn’t for several days, and this will spill over into that. Banks closed for a couple weeks.
This is sure getting curiouser and curiouser!
I don't know but I been told, JPMorgan done transferred gold.
In a HUGH AND SERIES way.
To China, I think.
Let me find the story, its laying around here some place.
My wife just Western Union’ed $700US to her mother and sister in China. She is now perusing the Chinese websites to see if there will be any problem for them when they attempt to convert this money to yuan.
The conversion rate is about 6:1. So, $700.US, is equal to about 4200 yuan...a nice New Years sum...
The Chinese websites are silent...
Thanks Fee, and I take the admonition that we learn from China to heart, as it relates to these matters.
I must say that when your federal government demands lending institutions make unsound loans and those lending institutions get creative to avoid the down side of complying with it and the courts, I have a very dim view of thinking we should back the government and the courts as they try to make a case against the lending institutions.
This government is very good at pitting us against Capitalists, and making us think they’re doing us any favors along the way.
Nice scale on that axis. Now do one for percent.
I think I read somewhere that one of these managers has already been jailed. Here, JPM gave one of theirs (Jamie Dimon) a huge raise even though the bank is now libel for 20+ Billion in penalties. Course if you follow the money, a large portion of those penalties will wind up in the accounts of O’s cronies, buddies and supporters.
Found that stinker!
Have NO IDEA how credible this news source is, (caveat emptor.)
OTH, if it is accurate, something evil this way comes.
oh oh....this may be a warning sign
Me too... Hmmmmm!
All that stuff you just wrote, it was GOOD STUFF.
And I agree with you!
What’s really going on.
$3 may not be much for now, but just keep watching gold. What I’m wondering is if Chinese government bales them out, will they liquidated some of the gold they’ve bought to do so?
The Chinese have some huge liquidity and credit issues about to hit the fan at the end of January. Have to run for now, but look for the story on the net. Later...
|Free Republic 1st Quarter Fundraising Target: $85,000||Receipts & Pledges to-date: $24,042|
|Woo hoo!! And the first 28% is in!! Thank you all very much!!|
The run has begun!
drudge posted that? any follow up? ‘exit plan’ such as when the shtf?
Basic carry trade. Borrow cheap yen or dollars and pump up some tinpot country bubble and watch the currency and profit rise. When it bursts, head for the exit and hope to make it. There are hedge funds on both sides of the trade so some people want it to crash.
Thank you. I appreciate it.
As I have held for several years now, the only safe place for savings are cash, in your “hot little hands”, in some variety of lock box in your home.
The bottom line is that something, somehow, will disrupt the electronic transfer system, so only physical cash will retain the ability of transaction. And just by itself, right now, it is 95% deflated. So a nickel could be worth a dollar instantly.
The big banks are leveraged up again and mostly in EM assets. For instance look at Philippine stocks and land prices the last few years, no way they reflect the real economy there. And that is only one tiny country in terms of economic weight.
According to terroristic propaganda in opinions, China has collapsed nearly every day since 2007. Meanwhile, the real behaviors of U.S. markets on Friday inspired horror in investors for Monday. Those were reactions to all of the talk for months of a U.S. Fed tightening up that never happened. And also meanwhile, several U.S. trading partners—”partners”
that we have huge trade imbalances and balance of payments deficits with—have acted, signaling currency wars against us. Unnaturally high dollar in the global debacle means fewer jobs and eventually, no jobs. There’s also the big propane ripoff.
Look behind the curtain at a possible run on selling U.S. bonds.
And so it begins.
The news that we’re seeing reactions to.
Will Fed Pause on Jittery Financial Markets?
Wall Street Journal
By Cynthia Lin
Jan 24, 2014
“If tensions across financial markets intensify, could it throw a wrench in the Feds tapering plan?”
Gov required bankers to make subprime loans to people of color that were discriminated against in the past by red lining. Fed had a good case during Clinton admin. Black guy with same income, credit history and assets were denied loans. If charge is untrue, bankers should have taken the case to court, but they did not. Clinton advocated subprime loans as a solution, but problem with subprime is it is financially unsound and high risk. Dems screwed up the system by trying to bend rules on lending to make up for past social injustice. Pres Clinton offer to mitigate bankers mortgage risks by offering Freddie Mac and Fannie Mae buy all the mortgage notes after the banks held the notes for six months. Here is where the bankers are guilty of economic sabotage. Freddie Mac and Fannie Mae did not carefully review the mortgage notes they brought from the mortgage bankers. When the mortgage bankers discovered this gov oversight, they decided to earn as much points and fees from loans they originate in the six month period and they did this by waiving conventional safeguards and encouraging borrowers to borrow more then they can afford by making up borrowers credit history, income and asset data. Larger the loans, larger the fees and points, aned in six months dump it on the gov (and you the taxpayer). In essence bankers encouraged liar loans. Here is the difference between liar loans and subprime loans. Subprime loans are marked so the investor knows it is high risk if they chose to buy the note at discount. Liar loans are packaged as good AAA rated conventional loans when they were actually junk financial investments. These toxic assets played a major role in imploding the US as well as the world financial system. We are lucky the world has not held the US responsible for the mess. Fed gov is responsible for the unsound subprime loans but lying bankers were responsible for the more damaging liar loans. Too many freepers have too much faith and trust in capitalists. Who sold military technology to China - Lora (corporate capitalists), who loves Obamacare - five major Healthcare Management and Insurance companies who even made sure they get a bailout clause wrote a law forcing Americans to buy their products (looks like corporate capitalists to me), US has real unemployment of 17 to 23 percent, guess who is advocating legalizing illegal immigrants and more H-1B workers (countries normally cut down immigration during recessions) - Chamber of Commerce (corporate capitalists), who advocate unconditional raising of US debt limit - Wall Street bankers (corporate capitalists). I think by now you get my point. Big gov and big business is the enemy of America.
So..when does the US start to bailout Communist China?
Woudn’t read too much into this, yet...
There has been a flood lately of minor party functionaries skipping town with what one assumes is money skimmed from fraud and/or corruption. Could be the Chinese gov’t getting ready to round up a few people before they can skate. Or it could be they’re getting ready to introduce stricter capital controls.
Or it might be a liquidity crisis.
Too soon to say.
Yep, selling their U.S. bonds is another possibility, if they need the cash.