Video: China's Creative Accounting

Comments

[John]

Lawmakers stay largely silent over Chinese takeover of US bank branches

http://thehill.com/blogs/global-affairs/asia-pacific/227035-lawmakers-largely-silent-on-chinese-takeover-of-us-bank-branches

[snip]

U.S. lawmakers have been unusually silent about federal regulators' decision to allow a Chinese bank to take over 13 bank branches in New York and California, suggesting that they think American banks have much to gain...

...The decision came days after Treasury Secretary Tim Geithner met with top Chinese officials for annual talks in Beijing. China agreed during those talks to allow foreigners a greater stake in Chinese brokerage firms.

[John]

Read my last post above (May 14th, 6:11am) then this...

http://www.zerohedge.com/news/china-can-now-monetize-us-debt-directly

[John]

Now for a follow up.

http://www.zerohedge.com/news/guest-post-china-really-liquidating-treasuries

[snip]


Is China Really Liquidating Treasuries?

The news that China has become the first sovereign to establish a direct sales relationship with the U.S. Treasury (therefore cutting out the middleman and bypassing Wall Street ) raises a few interesting questions...

...Which begs the question for some analysts — was China really selling? Or was China stealthily buying direct from the U.S. Treasury (unrecorded) and selling back into Wall Street (recorded)?

Well, according to the Treasury, the Treasury International Capital data seeks to record foreign holdings of U.S. securities, not just the flows, and given that the Treasury was the seller in these direct transactions (and so obviously was aware of them) there’s no reason to believe that they wouldn’t include any such direct outflows in the data. That suggests very strongly that yes, China really was selling.

And maybe the real reason that the Treasury offered China direct access (thus cutting out the middleman and offering China cheaper access than ever) was precisely because China was selling, and because the Treasury was concerned about the effect on rates, and wanted to give China some incentive to keep buying...

...And it isn’t like the Treasury would have taken this move lightly — cutting Wall Street out of the equation is a slap in the face to Wall Street.

This raises a much more interesting question — now that the PBOC has effectively been upgraded to primary dealer status, would the Fed start buying treasuries directly from the PBOC in order to manage rates downward and prevent a spike in Treasury borrowing costs should China choose to quicken the pace of a future liquidation, potentially bursting the treasury bubble?

[S. Gompers]

Something you may find interesting.

http://endoftheamericandream.com/archives/45-signs-that-china-is-colonizing-america