China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings
Submitted by Tyler Durden
on 04/24/2011 11:05 -0400
Translation by Autumnson Blog
All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?
所有那些基於一荒謬謠言中國會將人民幣升值10％，明天希望全球股市劇升的人將不得不等待；相反，中國已決定為世界帶來另一個驚喜。繼上週中國人民銀行行長周小川（瓦爾多在哪裡）的宣布，國家的過度儲存美元儲備要被急促多元化，今天我們得到一個感覺，來自“購買美國債券”納什均衡將會是多麼大即將來臨的中國不履行義務。毫不奇怪，中國似乎準備削減它的美元儲備，大約是最近美聯儲印製的美元金額，或二萬億美元左右。並認為這出現正值消息指日本的養老基金將會很快傾倒，誰知道什麼。所以再一次，“量化寬鬆結束”怎麼樣？
From Xinhua:
來自新華社：
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:
Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
必看：一切爲了搞亂中國----制造詭異事端 ；張宏良：逼老百姓跳牆
IMF 說：下一任美國總統將是最後去指揮世界的
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