Stunning Perspective: China Money Creation Blows US And Japan Out Of The Water

binford xlWhile everyone focuses on the breakneck money creation by the Fed and the BOJ, what happened in the past month is that China quietly created some 20% more money. Perhaps most impotantly, between these three entities, nearly $400 billion in liquidity was created de novo in one month! Because when the entire world is a credit-fueled ponzi scheme, these are the kind of numbers that matter.

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Click here for more from Zerohedge on China’s massive 20% increase in its money supply in the past month:

Comments

  1. China better be very careful.  We tried credit creation here in the United States and it destroyed gold prices and demand!!!!  </sarc>

  2. Which one is created out of debt and interest? And which one is created interest free?
     
    Who hold the debt in the US scheme and who holds the debt in the Chinese scheme?
     
    Which one can be forgiven by the government and which one is held by private Western Banking hands?

  3. All the major countries have to this print money so there dollar indexes don’t move its all stailmated out. The dollar index has been around 78-81 for how many years now? Its all good all countries have more cash then they need.

  4. race to the bottom

  5. copy that Mary B  Currency wars are always races to the bottom

    • @AGXIIK
      The big difference however with the Chinese credit creation is that they spend the money directly into their OWN economy in order to build something that causes the Labor force to be employed, and they have shifted from real estate to infrastructure which just aids industrial investment in being more sustainable domestically thus attracting more overseas capital.
       
      When the US prints up some fresh credit it hands it to US TBTF Banks that lend it straight on to US owned uber-capitalists that invest it straight into Multinationals that then chase foreign acquisitions, so none of it fuels the US Labor Force at all … except partially the MBS purchases which only prop up an unsustainable domestic real estate bubble (ie, construction workers, and an artificial requirement for Real Estate Brokers and salesmen that will have no jobs after the credit injections into MBS’s dry up) … but none of it is spent on US National Based Industry (Detroit; case point, ghost town semi-living memorial of US Industrialism … RIP).
       
      So what this article lacks is contextual perspective, even though the headline states “Stunning Perspective…”, a little poor if you ask me.
       
      What is most important about Money Printing is what it is spent on IMO, not necessarily on how much is being printed, not that the printing is in itself a healthy indicator (we all know this) but unless the Chinese are printing to keep up with the US then their Exports will get hammered and cause more unemployment than they can simply avoid by printing and spending it straight into their economy, their only caution should be to spread the investment thin to avoid concentrated bubbles in single sectors. They are still Communist at heart, so this is no different to their historical values, and does less damage to the confidence of their usual business partners (who are used to dealing with this paradigm) than the US Govt and Fed is doing to its own business reputation based on US Capitalism historically… this is the real perspective IMO, not the amount that is being printed … everything is relative to the localized past in different parts of the world.
       
      If the Yuan is adopted as the new World Reserve Currency with a Gold Backing (etc) then it will really not matter if the Chinese ramp up the printing because they will need to do this in order to supply foreigners with foreign reserves, whilst all the USD’s already remaining in the worlds banks will flow back … thus comparing USDs and Yuan entirely by qty printed is kind of a moot point if indeed the Yuan is replacing the USD as WRC and other countries and foreign investors are accepting this and dumping USDs and ceasing US Treasury purchases and loading up with Chinese Panda Bonds or Chinese stocks etc in preparation for a possible Chinese announcement about a gold backing and WRC pledge.

  6. willnotbeaslave  point well taken 
      The currency wars are being fought by most major GDP countries.  Japan is one of the biggest offenders; the Euro right along with them.  China has a longer view than just beggaring their neighbor though they are printing vast amounts of currency and would use this as just one more weapon of war. Currency wars are a major cog in the machinery of conflict
    Their currency M series is equal to ours, but divided by total population, its about 25% of our M supply per person.  Their GDP may be 35% of ours, or maybe 50%. No one knows for sure—what our GDP really is. 
    China is relatively opaque as to their GDP.  The shadow banking level is something on the order of $25 trillion, top heavy and subject to control problems by the central government.  Currency printing was, I think, an attempt to stabilize that enterprise, along with interest rates. Twice this year the banking enterprises were vulnerable to a near-Lehman crash. Trillions were shoved into the topbanks. Shibor ramped up quickly due to the fear the banks had of each other since the top 4 banks were very shaky.  The biggest crunch took place in June 2014 or thereabout. Maybe their printing and stimular programs were to stabilize their own internal problems

    China is stockpiling vast resources, not least of which is gold, silver and basae metals. We know that means they have the metals to better back their currency in the future.  They wrote the book on paper currency. That has to moderate their thinking.  With these huge stacks of Yuan, and a  globe-girdling plan of business and commercial investments, with $3 trillion in external reserve currencies, they are poised for some substantial gains given their stockpiles.  If there is a currency war, it’s my belief they will be planning it and not just being at the effect of someone elses programs to debilitate another currencies, unless that is part of their plan to reduce their adversaries ability to counter their advances.
    China must look inwards, using their currency to help create the industries that building the goods and services pipelines the Chinese economy needs; something more stable than just exports. They have great probems with water and clean air, a looming birth dearth and their banking enterprises still have to function, balancing on tens of trillions of dollars worth of currency.
    It’s not unmanageable but if they tip over, and that could be being planned for due to the probably tipping over of the western banking system and economies, they will be well set to handle it. If the various world wide scenarios of banking collapse happens, their banking empires have to be bulwarked against the worst of that event.
    Food, water and life sustaining commodities are foremost.  They are building and buying up hundreds of billions worth of companies that serve that need. It appears to be one huge conveyor belt of consumables directed to China.
     It will be a very interesting 5-10 years since Jinping is only 1 year into his reign.  He and his people, corrupt as they are, see that China is restive with large populations, very diverse in ethnicity and hungry for more, hard to manage without harsh measures in many cities, but they are, at least for now, ascendant.
    Besides which, bankers in China know they face some penalties if caught with their hands in the cookie jar:  Death sentence or a trip to prison.
    Prison in China is as often as not a short walk to the  Medical Tourism  Ginsu Giblet Gulag.   It makes me wonder if we had this means of punishing our criminal bankers, what parts of Dimon, Blankfein and Geithner would be served up for a person needed a new heart.  Look elsewhere maybe.

    • @AGXIIK >>> It makes me wonder if we had this means of punishing our criminal bankers, what parts of Dimon, Blankfein and Geithner would be served up for a person needed a new heart.  Look elsewhere maybe.
      ROFL … nice one. I would not want a piece of a bankster in me. They say that human organs carry with them pieces of the personality of the originator, so one might expect psychotic thoughts inherited by Dimon …
      I’d go to the shrink and it’d be like “I see dead people in my dreams!!! Detroit suicide youths, starved widows on pensions that were sucked dry, and walking dead troops covered in oil and draped in blood stained flags… they won’t leave me alone, they keep mentioning things to the effect of ‘YOU DID THIS’, I tell them they’ve got the wrong guy, but they won’t leave me alone, they keep mentioning something about a blood-price”
       
      I agree that China has its own problems, but the US and Euro are no better and on the descendancy whilst China is on an ascendancy… Detroit is our vision of the future … I’m seriously considering jumping ship, because the Zmans of the world are everywhere, my most informed friends all seem so uninformed when it comes to the realities of macro-economics. Who on Earth gets their financial advice from a television, or trusts a single word the political class has to offer? The zombie movies were all correct and visionary.

  7. willnotbeaslave. 
      Jump ship?!?!?   You can jump ship when I say you can jump ship. 
      Besides which, where would we get your sage advice.
    I don’t want to have to track you down to another site to get your intel.

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