Monday, October 07, 2019

Speaking of Chinatown

Things aren't looking so good for the global financial system:
China banks are running out of cash in HKD and USD. Maximum withdrawal limit drop from USD1300 to USD38. A drop of 34 times. China financial doom day coming.
Can you say "bank run"?



Blogger James Dixon October 07, 2019 1:38 PM  


Blogger CF Neal October 07, 2019 1:44 PM  

Hitting them where it hurts!

I'm watching here:

Blogger Brett baker October 07, 2019 1:45 PM  

Thomas Friedman, Godfree Roberts, and Fred Reed will all explain how this is proof of China's superiority.

Blogger American Spartan October 07, 2019 1:54 PM  

Maybe this is why they raided that Mayor'' house, Need to float things with found money

Blogger Azure Amaranthine October 07, 2019 2:00 PM  

Whoa shit. Anyone got a grasp of the repercussions outside China?

Blogger Lukas Brunnor October 07, 2019 2:07 PM  

The clown car is about to crash with no survivors. Good luck friends.

Blogger Wraithburn October 07, 2019 2:08 PM  

The funniest thing is all the people yelling "Switch to bitcoin!" with no understanding that having your money sit in a bitcoin exchange is less safe than the bank.

Blogger Brick Hardslab October 07, 2019 2:17 PM  

So how does Chinese bank failures effect us? Are they big enough we'll need to bail them out?

You don't really think we'll avoid giving bankers money if that's the plan do you.

Blogger ar10308 October 07, 2019 2:39 PM  

Given the situation in Hong Kong, which is escalating daily, this could be either an attempt to defend/preempt from HKers taking such an action to harm the Mainland or HKers have already begun doing it and they're trying to stop the bleeding.
I suppose it could be unrelated, but that would be very coincidental.

Blogger KPKinSunnyPhiladelphia October 07, 2019 2:40 PM  

Hey, that social credit shit isn't going to do much for you when all your rich people have worked REALLY hard to get all their dollars out of country in anticipation of just such an occasion.

Been to Vancouver lately? The guy next door has these slit eyes, an impassive expression, and a nice bank account in the Caymans -- and it's not in Canadian dollars, doncha know.

Blogger Up from the pond October 07, 2019 3:07 PM  

> Can you say "bank run"?

I can say bank lun.

Blogger Rick October 07, 2019 3:13 PM  

Putting in my request for a Darkstream on this one.

Blogger Dr Caveman October 07, 2019 3:33 PM  

Great news. China is already taking drastic measures to cope with the trade war fallout, while the God Emperor hasn't even touched the big guns yet

Blogger Korbin Ransley October 07, 2019 3:43 PM  

@5 The news in the blog post is striking enough but this reaction out of Azure has got me thinking this is major. Wonder what DC Sunsets would make of it.

@12 Definitely would love to hear Vox discuss what this may mean, what could have led up to it, and what future implications it may have.

Blogger Up from the pond October 07, 2019 3:53 PM  

"China banks are running out of cash"

Let them eat social credit.

Blogger Newscaper312 October 07, 2019 4:13 PM  

@9 My first take on this was also intentional restrictions on withdrawals to put the squeeze on HK and not any actual underlying problem.

Blogger Tanjil Bren October 07, 2019 4:15 PM  

Only the willfully blind haven't been able to see this coming and for years now.
The literal stampede of Chinese people and their cash into the West over the last few years has been just one of the harbingers.

Blogger Tanjil Bren October 07, 2019 4:20 PM  

"The funniest thing is all the people yelling "Switch to bitcoin!"
Amusingly, even a fiat currency gives you a nice little piece of paper to hang onto...

Blogger justaguy October 07, 2019 4:24 PM  

I don't think that Chinese banks in today's system can run out of cash-- they create it. China can run out of foreign currency to trade with other nations-- but it has had such a surplus for so long that it is unlikely to actually run out.

Now for political reasons it can be restricting the mere populace from getting cash-- I don't think that China's reserves of other countries currencies-- meaning bonds-- is getting low.

Blogger Tanjil Bren October 07, 2019 4:29 PM  

"China financial doom day coming."

Can anyone say 'war economy'?
The South China Sea buildup (among a raft of other actions) has strongly suggested they've been planning for this contingency for quite some time now.

Blogger Azure Amaranthine October 07, 2019 4:30 PM  

"Now for political reasons it can be restricting the mere populace from getting cash--"

However, that sharply? That's like the reaction to stem the bleeding after severing a leg just below the knee.

"I don't think that China's reserves of other countries currencies-- meaning bonds-- is getting low."

Doesn't mean there won't be impact, just means the force is diffused down those avenues, which is one of the ways we get repercussions....

Blogger Tanjil Bren October 07, 2019 4:46 PM  

"they create it."
They can't create (print) foreign currency reserves; they must buy those (one way or another). And if they proceed to inflate their money supply, particularly with decreasing demand from the US, then they devalue the currency even further.

Blogger Dave W. October 07, 2019 5:04 PM  

Huh. I wonder what this will do to all the countries that are up to the gills in debt from the China Belt & Road Initiative?

Blogger Tanjil Bren October 07, 2019 5:08 PM  

"other countries currencies-- meaning bonds"

And what do you think is going to happen if they start signalling their intention to cash those on a sufficiently large scale?

Blogger John Bradley October 07, 2019 5:09 PM  

Amusingly, even a fiat currency gives you a nice little piece of paper to hang onto...

When BitCoin becomes worthless you won't even be able to wipe your butt with it. Same can be said for all that "cashless society" idiocy. Smartphones make terrible toilet paper.

Blogger Karen took the Kids October 07, 2019 5:28 PM  

Can people with a higher social credit score withdraw more than 38USD? Interesting times ahead.

Blogger Jason the Gentleman October 07, 2019 5:57 PM  

I believe this is the part of the story where friend and ally Shapiro would say,
'See our friends over at Birch Gold! Promo Code: Shekels'
Did I get it right?

Blogger Aeroschmidt October 07, 2019 6:16 PM  

So put it in your own wallet...

Exchanges are for funds that you plan on trading.

Blogger Boaty Bear October 07, 2019 6:32 PM  

At least most phones are waterproof these days....

Blogger fluxtheory October 07, 2019 7:34 PM  

The fact that this phenomena is limited entirely to HK should let you know this is a nothingburger story. Most likely this is an attempt to kill the riots by cutting off the ability for the glowniggers to pay the assclowns rioting.

Blogger Doktor Jeep October 07, 2019 7:34 PM  

Hong Kong has a lot of money in it. I remember a documentary about exotic cars where in Hong Kong, one guy wrecks his expensive car on the way to a meetup for other such car owners, and simply goes back home, and gets into another one. And he had more to spare.
So possibly a bank run in Hong Kong is going to have an impact. This is unlike the USA where the plan overall is to make sure we can't trigger any problems with a bank run through ensuring that nobody has any money saved to withdraw.
BTW for anybody wanting to have a huge sum of money on them, perhaps after taking it out of the bank, remember those metal strips in the larger dollar bills, all laid up against each other, will be detected by an automatic tool booth system. They comprise an RFID of sorts, or an "echo box" as we called it in the military often used for Mode 2 identification systems in aircraft. This is why you occasionally see a news report that goes like this:
"A car was pulled over for failing to signal a lane change and 20K in cash was found."
Then with our "oooh you must be bad guy so we take your money no judge no jury laws" that money gets used to pay for the next trip to Vegas for the local police. OK they don't say "trip to Vegas". The special "tactical school" that they send the "task force" or whatever they call it just so happened to be in Nevada.
Come to think of it, I'm reminded of how so easily like moths to a flame the boomers have been when it comes to corruption, gotcha games, screwing people, etc. This is one of those areas.
And why the lock box in my truck is shielded.

Blogger JovianStorm October 07, 2019 8:01 PM  

When your entire economy is predicated upon exports, other countries own your economy.

The much ballyhooed billion-person market isn't worth much if domestic industry is ignored in favor of high priced exports. Watching their economy crash will be very interesting.

Blogger wreckage October 08, 2019 1:47 AM  

A war economy would be suicide. The archetypal example of a nation trying to borrow its way out of depression, then war its way out of debt, is Nazi Germany. Here's the hot tip: ultimately everything is just resources and energy, pushed through intelligence and systems. War economy, regular economy, no difference, except that war gets people focused and sees impediments removed that otherwise might have too much inertia.

So, a grand but decayed imperial economy like the UK or USA will grow its economy in wartime as it sloughs off all the parasites and necrosis, but an economy already running lean or in a fast growth phase will just burn out.

China is a growing economy fueled by debt. USA is a established imperial economy with a parasitic financial class skimming resources. Global financial collapse has very different implications.

Blogger Paul M October 08, 2019 3:03 AM  

Bank runs don't happen when money can just be printed as needed. Hyperinflation, however …

Blogger Monotonous Languor October 08, 2019 4:10 AM  

There's a difference between printing money used only for internal consumption, versus conversion into currencies required to support international trade.
Kyle Bass has been consistently warning about this for at least a year:
“The Tipping Point for China's Economy (w/ Kyle Bass and Raoul Pal)”

He's interesting and understandable, since he presents the issues in a straightforward manner.

Blogger SciVo October 08, 2019 4:12 AM  

Azure Amaranthine wrote:Whoa shit. Anyone got a grasp of the repercussions outside China?

None, AFAIK. Except maybe our wages go up.

Blogger Daniel October 08, 2019 5:35 PM  

Argentinian here.

Blogger Greg Hunt October 08, 2019 8:18 PM  

What are the big guns?

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