China Halts Bank Cash Transfers
forbes.com
forbes.com
snip…
“Earlier today, Forbes managed to spook readers with a bombastic report that China’s commercial banks had been instructed by the PBOC to halt cash transfers – something which would have dire implications on China’s banking system ahead of its new year holiday, and send the banking system into a tailspin just as China is desperate to avoid all turbulence ahead of a potential shadow banking default.
Leaving aside the fact that one should typically rely on official PBOC advisories, posted quite clearly on its website (where one finds no mention of this notice), one could simply keep track of interbank liquidity indicators such as repo and SHIBOR, both of which dropped, indicating that liquidity actually improved.
Anyway, here is what really happened, as reported by China Compass. “Forbes columnist Gordon Chang claimed in a much-quoted item today that the Peoples Bank of China had instructed commercial banks to halt cash transfers. Chang’s column, entitled “China Halts Bank Transfers,” specifically refers to Citibank’s Chinese branches. The report is entirely misleading.” Our advice – focus on the real “weakest links” in China’s banking system, of which there are many and are backed by facts, not the least of which is the potential upcoming shadow banking default. Ignore groundless rumors and speculation.
More from China Compass:”
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http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppag...
Though this "maintenance period" coinciding with liquidity drying up in chinese markets naturally has people wondering if this can be the straw that brakes the camels back. But if it is, with all the tongue-in-cheek tones floating around on this, do people really think an event like that will be contained to just chinese markets?
I can only think of the people behind the all cash real estate purchases in us markets thinking they need to now flip their recently acquired properties in order to cover a shortfall only to see that everyone else will be trying to do the same…
I never said anything about "trading tips," just that ZH has proven itself to be built upon a pile of rumor mill excrete.
…that everyone from cnbc reporters, economists, peeps at nanex and billionaires have felt the need on occasion to participate with to varying degrees. So now that's out of the way, what do you really want to add to topic at hand?
I think the take on ZH's reporting seems rather correct. If the controls only apply to Citibank then the phrasing of the the article's headliner is a bit much. As for the meat of the subject Citibank has been a laggard[0] entity for some years, after the great recession and all.
"While banks in China have suspended some interbank transfers and other systems for several days, the move only covers some Internet transfers and those for small amounts, according to a statement on the People's Bank of China website. Meanwhile, state-run Beijing Times said customers can still conduct small-scale transfers via ATMs. On Sunday, Forbes contributor Gordon Chang, author of "The Coming Collapse of China," said that Citibank had halted bank transfers for three days, calling the move "ominous" for the Chinese banking system. However, the central bank had flagged the move earlier this month, saying the move was due to system maintenance and would occur once a month for the rest of the year."
Not really.
In the last year, the US dollar actually increased in value 10% against the Canadian dollar, increased 12% against the Japanese yen, and increased 20% against the Australian dollar. It decreased 1% against the Euro, decreased 3% against the Swiss franc, and decreased 4% against the pound.
In gold terms, the US dollar is 39% more valuable today than it was a year ago.
I also put some money into crypto-currencies, though not because I fear the imminent collapse of the dollar. The dollar's value has been pretty stable even through the financial collapse.
Dollars seem perfectly fine for transactions, though no currency is suitable as a store value for decades or generations.
https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932...
Bitcoin doesn't have enough of a track record to make predictions about how long it will last.
I bought Bitcoin and other crypto-currencies not as a long-term store of wealth, but for their other valuable qualities.
https://web.archive.org/web/20140127024857/http://www.forbes...
a) Some strange conspiracy that nobody understands.
or
b) A software bug.
As a long-time user of software, I'm betting on option B.
I am not in finance and don't appreciate nor understand the full implications or consequences of China's PBOC behaviour citing nationwide system shutdowns, but I feel that we could s/USA/China and then s/Canada/USA to get the same gist and sense of uneasiness.
The problem is they do not do it through normal banking reserve controls..
This is or might be the canary in the coal mine for the China banking system as Banking reserves should not have to be adjusted by removing access to cash as that indicates a bigger problem..
This could be related to some toxic assets on the China Banking system books
Funny how when the US credit rating was lowered, the prices of US Treasury bonds actually increased, and their yields fell. When US financial institutions went bankrupt, the value of US government securities went up.
When the Federal Reserve printed money to buy bonds, the value of the dollar actually increased. And when the Federal Reserve stopped printing money to buy bonds, the value of the dollar still increased.
Maybe the rumors of the death of America are premature, and maybe the old saying is still true.