Socio-Economics History Blog

Socio-Economics & History Commentary

China Sells US Bonds To ‘show concern’ . FedRes Buying Treasuries.

  • The treasuries end game has started. The casualty will be the USD. China has begun selling treasuries and announcing it publicly. The FedRes will have no choice but to increase its treasury purchase by 10 fold. Uncle Sam need US$2-3T for the next 12 months. On top of this amount, the FedRes will have to absorb treasuries that existing holders sell. So, the earlier announced US$300B of QE is insufficient. US$3T of debt monetization is the more realistic figure. This will spark massive inflation. AFP reports :
      
    A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday.
     
    The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.
     
    “China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar,” He Maochun, a political scientist at Tsinghua University, told the Global Times.
     
    According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March. It was the first month since June 2008 that Beijing failed to purchase more US T-bills.
     
    Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China’s move showed a more cautious attitude. “It is unclear whether the reduction will continue because the amount is so small. But the cut signals caution of governments or institutions toward US Treasury bonds,” Zhang told Xinhua news agency.
     
    China’s foreign ministry said Tuesday that its purchases of US Treasuries remained based on “security, liquidity and value preservation”.
     
    For Zhao Xijun, deputy director of the Finance and Securities Research Institute of People’s University, China may have reduced its holding of US Treasuries simply because it needed the money.
    Zhao said the sell-off could have been in order to pay for its own economic stimulus package.

       
  • Reuters reports :
      
    The Federal Reserve is buying Treasuries maturing May 2016 through May 2019 on Wednesday, the New York Federal Reserve said on its Website.
     
    The purchase, which started at 10.16 a.m. (1416 GMT) and ends at 11 a.m. (1500 GMT), is part of the U.S. central bank’s emergency effort to keep long-term interest rates low. The Fed said in March it would buy up to $300 billion in U.S. government bonds over six months.

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June 18, 2009 Posted by | Economics | , , , , , , | Comments Off on China Sells US Bonds To ‘show concern’ . FedRes Buying Treasuries.

Russia, China to Promote Ruble, Yuan Use in Trade

  • The attacks on the American USD financial hegemony are getting louder. BRIC and SCO countries are smelling blood. I suspect they have resigned themselves to some significant losses to their USD denominated holdings. Bloomberg reports :
      
    The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar a day after they took part in the first summit of the so-called BRIC countries.
     
    “We agreed to take further steps in this direction, including, perhaps, by adjusting contracts and laws that already exist,” Russian President
    Dmitry Medvedev told reporters in the Kremlin today after talks with his Chinese counterpart Hu Jintao.
     
    Russia, the world’s biggest energy supplier, wants to start selling oil to China in rubles, said Deputy Prime Minister
    Igor Sechin, who is also chairman of OAO Rosneft, Russia’s biggest oil company. Energy sales in rubles are a “strategic” issue for Russia, he said, adding that oil exports to China over the next 20 years will surpass $100 billion.
     
    Brazil, Russia, India and China agreed yesterday to push for more clout in global financial institutions during what Medvedev called BRIC’s “historic” first summit in the Ural Mountains city of Yekaterinburg. China and Russia have called for a more diversified financial system to give emerging economies a bigger say in economic affairs, including the creation of alternatives to the U.S. dollar as a reserve currency.
     
    ‘Symbolic Value’
    “Expanding the use of national currencies in mutual settlements is a separate, important task,” Medvedev said. China has the world’s biggest foreign-currency reserves, almost $2 trillion, while Russia is third with more than $400 billion.
      ….
    The dollar’s status has come into question as leaders of the BRIC nations consider substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the U.S. dependent on foreign financing. China alone owns about $744 billion of U.S. Treasury bonds among its $2 trillion of foreign- exchange reserves.
     
    Russian central bank First Deputy Chairman
    Alexei Ulyukayev’s comment on June 10 that Russia may sell some of its U.S. bonds to buy International Monetary Fund notes helped push 10-year yields on Treasuries to the highest level since October.

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June 18, 2009 Posted by | Economics | , , , , , | Comments Off on Russia, China to Promote Ruble, Yuan Use in Trade

Obama’s “Financial Regulatory Reform Plan” is Banksters Consolidating Their Power!

  • Obama is just a mouth piece for his corporate sponsors: Wall Street Banksters. See: Wall Street is investing heavily in Barack Obama. Jonathan Weil comments, Obama Stakes His Fortunes on Failed Banksters :
      
    The Obama administration’s “strategy,” for lack of a better word, is to keep plying broken financial institutions with as much taxpayer money as the government can print. And so the government will keep subsidizing failed mega-banks indefinitely, rather than placing any into receivership or liquidating them.
     
    Taxpayers at Risk
    The latest iteration of this policy is the Treasury Department’s Public-Private Investment Program. In short, struggling financial institutions will be encouraged to swap their most toxic mortgage-related assets with one another at inflated prices. The purchases will be financed by big government loans, so that taxpayers are at risk for the bulk of any losses.
     
    If the government wanted transparency, it would force financial institutions to write down their bad assets now, and figure out afterward which companies deserve taxpayer support. Instead, the Treasury plans to recapitalize them first, keep their current financial condition hidden, and let their failed managers stay in their jobs.
     
  • So what about Obama’s new financial reforms? Kurt Nimmo opines:
      
    Obama’s misnamed “Financial Regulatory Reform Plan” is a brazen attempt by the bankers to consolidate their power. Obama — or rather, the bankers who own Obama — has devised something called a “Financial Services Oversight Council” to be chaired by the bankster dominated Treasury Department. This uber-council would call the shots for every financial firm in the country and supposedly refer “emerging risks to the attention of regulators with the authority to respond,” even as Obama plans to call for the U.S. Office of Thrift Supervision to close under the direction of the Federal Reserve.
     
    Instead of independent bank regulators, Obama proposes a “National Bank Supervisor” who would have “separate status within Treasury and be led by a single executive,” according to Clusterstock. The NBS czar would occupy a centralized post in enemy territory and “take over the prudential responsibilities of the Office of the Comptroller of the Currency, which currently charters and supervises nationally chartered banks and federal branches and agencies of foreign banks.”
      ….
    Wall Street and its international offshore banker overlords are addicted to derivatives. “These derivatives now amount to a total worldwide notional value that can be estimated between 1 quadrillion and two quadrillion US dollars. This sum is so large that it dwarfs the total value of the entire planet earth and all those who live here,” notes
    Webster G. Tarpley.
     
    If you think Obama and crew plan to do something about this massive black hole, I have a bridge to sell you on Krypton.
     
    Obama’s “Financial Regulatory Reform Plan” is but another bankster scam. It is an obvious plan to grab up more industries and goodies under the guise of “regulation” and (ack) “consumer protection.” So contemptuous of you and your family are the bankers they don’t even attempt to make this threadbare nonsense plausible. It is thievery right out in the open.
      
    Our only hope at this point is the Federal Reserve Transparency Act, HR 1207, now up to 232 co-sponsors. It needs a two-thirds vote with 290 members on board so the bankster tool Obama will not veto it.
     
    On that day of its passage there will be a short cry of hosanna — and then we will open the Fed’s books and begin the process of delivering the criminals to justice and closing down the Federal Reserve Crime Syndicate once and for all.

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June 18, 2009 Posted by | Economics | , , | 3 Comments

Kucinich: ‘Another $106 billion and all we get is a lousy war’

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June 18, 2009 Posted by | GeoPolitics | , | 5 Comments

Baxter Expects To Deliver A/H1N1 Vaccine To WHO By July

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June 18, 2009 Posted by | Medicine & Health | , | 7 Comments