Chinese bank run?

[aja8888]

Quote:

Originally Posted by flyingaway These are likely scams, not systematic banking problems. These rural banks, about five, (sponsored by one formal bank), used higher interest rates to attract online customers for CDs. It is likely that some people inside these banks used fake software to lure customers to "buy" CDs from these banks, but the money never went into the banks, but to somewhere else. These customers never went to the banks, they just used third-party platforms and software. Because the CDs are not immediately accessible, they did not know the problem until the CDs are due in April. The banks could not pay because they do not have the money in the first place.

The age old question....Where did the money go?

Crypto is going thru this now.....stable coins not having any "funds" (Woops!)....where did the money go?

[NW-Bound]

Quote:

Originally Posted by NW-Bound It did! It sent riot police with shields and batons to beat up and kick the people, then drag them to jail.

Ugh!

I just saw a video where they sent plain-clothes police in white shirts or black polos to beat up and arrest people.

[aja8888]

Quote:

Originally Posted by NW-Bound Ugh! I just saw a video where they sent plain-clothes police in white shirts or black polos to beat up and arrest people.

This is not as bad as what's going on in Sri Lanka right now.

[Gremlin]

Quote:

Originally Posted by aja8888 This is not as bad as what's going on in Sri Lanka right now.

I know it won’t come anywhere close to solving their country’s problems, but at least the people of Sri Lanka have a small sliver of satisfaction of running their leader out of his palace and swimming in his pool. Even if only for a moment! Hopefully they get access to fuel, food, and medicine soon.

[NW-Bound]

Hah, it's a long time before Chinese people get to invade Xi JinPing's palace, and tour his residential quarters.

Sri Lanka's armed forces are not as well armed as the Chinese People's Liberation Army, and most likely nowhere as brutal.

Heck, the Chinese gummint so far only had to send thugs in white shirts, and they could easily chase the protesters away, or captured some to lock up for an example.

Have people forgotten what happened at Tiananmen Square in 1989?

[copyright1997reloaded]

Quote:

Originally Posted by jebmke I was in BA when Argentina unpegged the peso from the dollar. The US news showed the usual "chaos" footage. I was sitting in a cafe when my wife called to check in on me because of the "chaos in Buenos Aires." "Well, I'm sitting in a café across the street from one of the banks. There is a long line of people waiting to get their money out. But a waiter with white gloves just delivered an espresso on a silver platter to someone in line so I think it will be OK."

When pegged to the US dollar, Argentina was able to reduce its inflation rate to 3.4%. Since the peg was lifted, the Argentina peso has fallen from parity and is now officially worth .0079 US$, and the inflation rate is now around 73%.

Perhaps there should have been more chaos - the smart ones understood what was to come.

[Gremlin]

I’ll never forget the image of the man standing in front of the tanks at Tiananman square. I have a picture of my two daughters (both adopted from China) standing in the square. They were only 7 years old then and we’re less than impressed at the time lol. All they wanted was to escape the heat and go to McDonalds!

[ER_Hopeful]

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Originally Posted by NW-Bound Hah, it's a long time before Chinese people get to invade Xi JinPing's palace, and tour his residential quarters. Sri Lanka's armed forces are not as well armed as the Chinese People's Liberation Army, and most likely nowhere as brutal. Heck, the Chinese gummint so far only had to send thugs in white shirts, and they could easily chase the protesters away, or captured some to lock up for an example. Have people forgotten what happened at Tiananmen Square in 1989?

The sad truth is that most younger generations have never even heard of the June 4 '89 massacre due to extreme censorship. Most older generations , including my dad and in-laws, now denounce that student protest (their line of thinking: "young people influenced by evil America/West to overthrow the CCP", "had China turned into a democracy then, we wouldn't have the economic miracle today", "Authoritarian is good because we can accomplish things fast ", etc, etc) Even though they're living in America now but still heavily influenced by CCP propaganda thru Wechat. I totally understand why the Trump administration wanted to ban that app.



People in the mainland have a very different mindset ("what is democracy good for when you have no food or drink? what do you need democracy for when you have food and drink!"). This generally does not apply to the people in Taiwan or Hong Kong though.

[ncbill]

Quote:

Originally Posted by jebmke I was in BA when Argentina unpegged the peso from the dollar. The US news showed the usual "chaos" footage. I was sitting in a cafe when my wife called to check in on me because of the "chaos in Buenos Aires." "Well, I'm sitting in a café across the street from one of the banks. There is a long line of people waiting to get their money out. But a waiter with white gloves just delivered an espresso on a silver platter to someone in line so I think it will be OK."

Sure, but that someone had probably been smart enough to keep most of their assets offshore in US dollar accounts.

Before 9/11 the USA was a great tax haven for foreigners.

[almost there]

"Today, the existing communist states in the world are in China, Cuba, Laos, and Vietnam. These communist states often do not claim to have achieved socialism or communism in their countries but to be building and working toward the establishment of socialism in their countries." And some people still think its a great idea...............

[Bdroc]

Quote:

Originally Posted by Closet_Gamer So this is an interesting -- and disconcerting -- article. Apparently a few Chinese banks have gotten themselves in a bad spot and are refusing to allow customers to withdraw money. Led to protests and an ugly clash with the police. Small banks but still disconcerting. Particularly as two sizeable Chinese real estate firms have now defaulted on loans. China has many tools to paper this over and won't have concerns about moral hazard, etc but bank runs can spread like a grass fire. If you're a citizen in Beijing and you start hearing that people can't get money out of the bank and the government just literally beat them into submission, may you starting quietly withdrawing some of the money from your bank... A Chinese debt/bank crisis would have huge global ramifications. https://us.cnn.com/2022/07/10/china/...hnk/index.html

They can always sell a $trillion of US treasuries to recapitalization their banks.

[almost there]

Lets just hope they never try to collect. As we owe them $1.08 trillion...............

[NW-Bound]

Quote:

Originally Posted by almost there "Today, the existing communist states in the world are in China, Cuba, Laos, and Vietnam. These communist states often do not claim to have achieved socialism or communism in their countries but to be building and working toward the establishment of socialism in their countries." And some people still think its a great idea...............

I don't know about Cuba and Laos, but China and Vietnam are absolutely no longer communist or even socialist. Instead, they adapted the worst practices of capitalism.

Businesses can do anything to make money, with no regards for the environment, or consumer safeties. Oh, they have laws, but the enforcers can be easily bribed to look the other way. Or the government officials are already invited to join the company as investors or directors.

Back on the economy in China, because the populace cannot invest their money abroad, about the only thing they can do is to buy homes to flip. And in contrast to the Western world where the home buyer or his morgagee bank only releases the money in exchange for a home ready to move in, Chinese home buyers make payments on the home as it is being built.

And Chinese home buyers are smelling something fishy, and are stopping payments on the homes in construction, because they are thinking the homes will never get finished.

There's little protection for the consumers in these countries. And that's why these fake Communist countries are anything but. If they were true Communist, there would not be any billionaire. These countries have plenty of the latter.

See: https://www.cnn.com/2022/07/14/econo...hnk/index.html

[copyright1997reloaded]

Quote:

Originally Posted by almost there Lets just hope they never try to collect. As we owe them $1.08 trillion...............

Easy...just give them a federal reserve note for$1.08 trillion. What's a little monetary stimulus going to do?

[almost there]

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Originally Posted by copyright1997reloaded Easy...just give them a federal reserve note for$1.08 trillion. What's a little monetary stimulus going to do?

You are right. The inflation today has nothing to monetary stimulus / devaluing our currency. Things will be fine any minute now. Just turn on the TV. They will think of something.

[MichaelB]

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Originally Posted by almost there Lets just hope they never try to collect. As we owe them $1.08 trillion...............

They can’t. They have no other option with that money. They aren’t doing us a favor by buying US Treasury bonds, we’re doing them a favor by letting them recycle their trade surplus.

If China were to collect the maturing bonds and exchange them for Chinese currency, and allow exporters to sell their surplus currency on the open market, the Remembi would appreciate substantially and make the Chinese export economy much less competitive. It would kill Chinese employment. The global economy would be better off, and certainly the US economy would be as well. That’s why it’s not going to happen.

[CardsFan]

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Originally Posted by NW-Bound I don't know about Cuba and Laos, but China and Vietnam are absolutely no longer communist or even socialist. Instead, they adapted the worst practices of capitalism.

I would argue that China has taken the worst of all 3 (Communism, Socialism and Capitalism) and combined them into a system of government that is involved in every facet of your life.

The small office we have over there (had to me since I am FIRE) was required to have a Communist Party Committee of three. All were party members. All business dealings were reported the "higher" committee on a regular basis.

[NW-Bound]

It's actually Fascism.

From Merriam-Webster Dictionary:

Fascism: A political philosophy, movement, or regime (such as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.

[NW-Bound]

Quote:

Originally Posted by MichaelB They can’t. They have no other option with that money. They aren’t doing us a favor by buying US Treasury bonds, we’re doing them a favor by letting them recycle their trade surplus. If China were to collect the maturing bonds and exchange them for Chinese currency, and allow exporters to sell their surplus currency on the open market, the Remembi would appreciate substantially and make the Chinese export economy much less competitive. It would kill Chinese employment. The global economy would be better off, and certainly the US economy would be as well. That’s why it’s not going to happen.

So, they are manufacturing things for us for peanuts, in exchange for keeping their people employed and busy?

Seems to me we get a better deal out of this exchange.

[ncbill]

Quote:

Originally Posted by Gremlin I know it won’t come anywhere close to solving their country’s problems, but at least the people of Sri Lanka have a small sliver of satisfaction of running their leader out of his palace and swimming in his pool. Even if only for a moment! Hopefully they get access to fuel, food, and medicine soon.

One pf the issues there is the enormous debt that country has run up with China.

China kept rolling it over...laissez les bon temps rouler.

IMHO, China's about to get a lesson in sovereign default.