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Posted on 01/26/2014 2:56:28 PM PST by Errant
The People’s Bank of China , the central bank, has just ordered commercial banks to halt cash transfers.
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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 given—“system maintenance” at the central bank—is preposterous. It is not credible that during the highest usage period in the year—the weeklong Lunar New Year holiday beginning January 31—the central bank would schedule an upgrade and shut down cash transfers.
A better explanation is that the country’s 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 coming—it occurs every year at this time—and 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....
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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.
Thank you.
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.
Done
Thanks,
I hope you’re right.
Elementary... ;)
No worries, Obama will be able to reassure everyone during the State of the Union address.
And then there’s this:
http://www.cnbc.com/id/101364477?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=101364477|Asian%20stocks%20set%20for%20loss
“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.
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