Saturday, January 25, 2014

Monopoly Money, "IOUs" and Where's the gold anyway?

D's on a roll! More interesting data and perspectives to review!
- Justin

Source - Removing the Shackles

Time for another episode of "As the world Turns... its stomach!"

In our last episode, we saw the Federal Reserve making up new magic tricks to try to save their asses by inventing $200 Billion for their bankrupt cousins, the Tobigtofail Family.  .....

This week, just so that our viewers don't think that this is just an Americancentric  show, we introduce you to the Chinese kingpins that also seem to of lost their checkbook!!!!

.... ok enough with the cheesy 80's TV!!!


............ although seriously?  It kinda is like watching a really terrible 80's Soap Opera!!!

Bill posted this article yesterday which brings the spotlight over to Asia and the Chinese Banksters.

  China’s $23 Trillion Rothschild Credit ‘Debt’ Bubble Is Starting To Collapse ~ China Hanging Bankers: While U.S. Is $6 Trillion Less At $17 Trillion.


Did you know that financial institutions all over the world are warning that we could see a “mega default” on a very prominent high-yield investment product in China onJanuary 31st? Transparency From China Coming To America: Half Of U.S. Stocks Are Counterfeit! We are being told that this could lead to a cascading collapse of the shadow banking system in China which could potentially result in “sky-high interest rates” and “a precipitous plunge in credit“. In other words, it could be a “Lehman Brothers moment” for Asia. And since the global financial system is more interconnected today than ever before, that would be very bad news for the United States as well. Since Lehman Brothers collapsed in 2008, the level of private domestic credit in China has risen from $9 trillion to an astounding $23 trillion. That is an increase of $14 trillion in just a little bit more than 5 years. Much of that “hot money” has flowed into stocks, bonds and real estate in the United States. So what do you think is going to happen when that bubble collapses? The Big Dogs On Wall Street Are Starting To Get Very Nervous: Coming To America? China & Iran to Execute Bankers On Fraud Charges! The bubble of private debt that we have seen inflate in China since the Lehman crisis is unlike anything that the world has ever seen. Never before has so much private debt been accumulated in such a short period of time. All of this debt has helped fuel tremendous economic growth in China, but now a whole bunch of Chinese companies are realizing that they have gotten in way, way over their heads.

 Read more: http://americankabuki.blogspot.com/2014/01/chinas-23-trillion-rothschild-credit.html#ixzz2rG8ytgyd


A little bit more info on this China financial fiasco: 

China’s $23 Trillion Rothschild Credit ‘Debt’ Bubble Is Starting To Collapse ~ China Hanging Bankers: While U.S. Is $6 Trillion Less At $17 Trillion. Read more: http://americankabuki.blogspot.com/2014/01/chinas-23-trillion-rothschild-credit.html#ixzz2rG8fKvVH

American Kabuki is licensed under a Creative Commons Attribution 4.0 International License.
You may copy, quote, and redistribute this material so long as you do not alter it in any way, and you include this link: http://americankabuki.blogspot.com

Chinese Stocks Tumble On Contagion Concerns From First Shadow-Banking Default

Tyler Durden's picture


 
While manufacturing and services PMIs disappointed, the big problem in big China remains that of an out-of-control credit creation process that is blowing up. As we previously noted, instead of crushing credit creation, the PBOC's liquidity rationing has forced distressed companies into high-interest-cost products in the shadow-banking world. Investors on the other side of "troubled shadow banking products" had assumed that 'someone' would bail them out but this evening Reuters reports that ICBC has confirmed that it will not rescue holders of the "Credit Equals Gold #1 Collective Trust Product", due to mature Jan 31st with $492 million outstanding......

.......As Reuters reports, 

Industrial and Commercial Bank of China, the world's largest bank by assets, said on Thursday that it has no plans to use its own money to repay investors in a troubled off-balance-sheet investment product that it helped to market.

ICBC's shares have fallen this week amid speculation that the bank would be forced to help repay investors in a 3 billion yuan ($496.20 million) high-yield investment product issued by China Credit Trust Co Ltd but marketed through ICBC branches. The product is due to mature on Jan. 31.

"Regarding this unsubstantiated rumour, a situation completely does not exist in which ICBC will assume the main responsibility (for the trust product)," an ICBC spokesman told Reuters by phone on Tuesday.

The trust product, called "2010 China Credit / Credit Equals Gold #1 Collective Trust Product", used the funds it raised from wealthy investors in 2010 to make a loan to unlisted coal company Shanxi Zhenfu Energy Group Ltd.

But in May 2012, Zhenfu Energy's vice chairman, Wang Ping Yan, was arrested for accepting deposits without a banking licence.

http://www.zerohedge.com/news/2014-01-16/chinese-stocks-tumble-contagion-concerns-first-shadow-banking-default 



...... But it's not a Soap Opera!  No Really it isn't!


But wait!  There is MORE!!!


While most of the attention in the Chinese shadow banking system is focused on the Credit Equals Gold #1 Trust's default, as we first brought to investors' attention here, and the PBOC has thrown nearly CNY 400 billion at the market in the last few days, there appears to be abigger problem brewing. As China's CNR reports, depositors in some of Yancheng City's largest farmers' co-operative mutual fund societies ("banks") have been unable to withdraw "hundreds of millions" in deposits in the last few weeks. "Everyone wants to borrow and no one wants to save," warned one 'salesperson', "and loan repayments are difficult to recover." There is "no money" and the doors are locked.
The locked doors of one farmers' co-op...



Via China CNR,......

.....Rough Google Translation:

Salesperson: ...the money has been slowly falling and in the end is difficult to ask for money, right? And now there is no money coming in, now people don't want to save money, and take all the money.

Reporter: But it's their money, they should be able to...

Salesperson: I know I should [given them money]; however, when the turn started, their is no money, we get cut off and lenders and borrowers took off...
One depositor blames the government (for false promises

http://www.zerohedge.com/news/2014-01-23/china-bank-run-beginning-farmers-co-op-unable-pay-depositors 


Mac Slavo outlines what I've been saying for a while- never mind the cash, there ain't no gold either!

Fed’s Dirty Little Secret: “The Gold Isn’t There… Exists as Paper IOU’s”

Mac Slavo
January 21st, 2014
The assumption by global depositors who have entrusted their national savings with the Federal Reserve and US Government has always been that when they request to repatriate their holdings the Fed would simply open the vault, access said assets and ship them back to where they belong.
That’s exactly what Germany expected would happen last year when the country requested that the Federal Reserve return about one-fifth of their gold reserves. But that’s when things got really dicey. The Fed announced that Germany’s gold would be returned… but it would take seven years to get back home.
The response to Germany’s request turned heads all over the world and raised concerns that the Federal Reserve had squandered its gold holdings. But this isn’t the only red flag that was raised. Public pressure reached such levels that the Fed was forced to take steps to maintain confidence in its operations, so it started shipping gold to Germany. Except it turns out that the gold being sent back to the Bundesbank wasn’t actually German gold. It contained none of the original serial numbers, had no hallmarks, and was reportedly just recently melted.
The implications are earth shattering and hit the very core of the problems facing America today. The whole system as it exists is just one big paper IOU.....

Continue reading HERE 

But then, isn't that what a fiat dollar is? Just an IOU?  hmmmmmmm

So when companies like HSBC make a boo boo like this:

SAN FRANCISCO (MarketWatch) -- Shares of HSBC Holdings PLC HSBC -1.52% fell on Thursday following a report that the banking giant may have overstated assets by as much as $92 billion.
... over stating that you have $92 Billion in fiat currency IOUs for gold that doesn't exist.....  isn't  that kinda like telling the other players that you have Park Place and Boardwalk with 4 hotels on each, when in fact all you have is Mediterranean Avenue and Baltic Avenue?  And then you realize, that it's just a giant game that they are playing anyway, and this one might not have any "Get out of jail free" cards.

Source: 

http://removingtheshackles.blogspot.com/2014/01/monopoly-money-ious-and-wheres-gold.html

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