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A flurry of headlines out of China suggest global macro-economic volatility may be ready to take it to the next level. We discussed last week how China's oh-so-generous offer of help to Europe was merely a veiled threat playing US against Europe in a game of who-gets-the-funding. Well, tonight, it seems, they are making good on some of those threats. Aggravated by EU's lack of market economy recognition, they pull trading lines with French banks, express concern at the EUR's safety (preferring US Treasuries), and indicate a clear preference for bonds over stocks - all the while warning of growing trade tensions - consider the sabre-rattled.
A big market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, two sources told Reuters on Tuesday.
The European banks include French lenders Societe Generale , Credit Agricole and BNP Paribas.
"Apart from spot trading, all swaps and forwards trading (with the European banks) have been stopped,"
China, the largest foreign holder of U.S. government debt, will keep buying U.S. Treasuries, the official People's Daily, the ruling Communist Party's mouthpiece reported on Tuesday, citing government researchers.
Wang Chaocai, a Ministry of Finance researcher, was quoted as saying that "what else we can buy if not U.S. Treasuries? It's more risky to buy into equities."
U.S. trade officials will announce a major trade enforcement action against China on Tuesday, according to an advisory from the U.S. Trade Representative's office.
The advisory, which was obtained from a business group, said U.S. Trade Representative Ron Kirk "will hold a press conference to announce a major trade enforcement action against China." It gave no other details.
Originally posted by Vitchilo
Uh oh.
You said a mouthful brother... that sums it up beautifully. The last thing we need is a corporate war, because we all know where that leads. This will be a major cross road in this new world that is changing and growing right in front of us, it is the first time in my life anyway that this much financial political civil and esoteric chaos has been happening all at once. One thing is for sure, TPTB have never quibbled about their bottom line and anything that effects it...how far will they cut the cord to protect their investments in each other?
Originally posted by watcher3339
I cannot help but be struck by the relatively recent parity between the Canadian and U.S. dollar and the Euro's inevitable decline to match. Will there ever be an easier time to introduce a single currency or "basket exchange" than when the major economic players are on equal footing? All engineered if you ask me. Which, of course, does not at all rule out an increase in trouble on the China front for the entire western world. But, there is an upside to that too. All of us are likely guilty of despising the situation while still purchasing our cheaply made foreign goods. I know I am... Jobs back to the U.S. will be the outcome. And, we need them.
I just really hope that there isn't a big shocker on the horizon. Whether I say there will be depends on which day of the week you ask me. The indicators are all there but I am trying to stay positive.
Originally posted by watcher3339
I cannot help but be struck by the relatively recent parity between the Canadian and U.S. dollar and the Euro's inevitable decline to match. Will there ever be an easier time to introduce a single currency or "basket exchange" than when the major economic players are on equal footing? All engineered if you ask me. Which, of course, does not at all rule out an increase in trouble on the China front for the entire western world. But, there is an upside to that too. All of us are likely guilty of despising the situation while still purchasing our cheaply made foreign goods. I know I am... Jobs back to the U.S. will be the outcome. And, we need them.
HONG KONG (MarketWatch) -- An unidentified Chinese state-run bank has halted foreign-exchange swaps with several European banks, with the suspension believed to include BNP Paribas SA and and UBS AG according to reports citing unnamed sources. The Chinese bank involved is the "most active" in the market for trading those products according to Dow Jone Newswires, which reported that the halt began Monday. Societe Generale SA is also included in the ban along with BNP and UBS, according to Reuters.
Originally posted by greenCo
Now that´s the real meaning of downgrading the credit rate for France. The global melting is on its way right in front our eyes right now. China will keep buying US treasury bonds but till when?
Read some weeks back about US companies that "discretely" had been pulling out of EU for about a year, today the Australians declared they have pulled out, and have no exposure to EU and now,... Chinas trading desk...This still doesn't take away China as a possible bond buyer, and China may very well have more channels to buy and sell the EUR currency, you don't necessarily have to have an office in Europe to do that...but...they're pulling back, as well as other investors.
What's left...************whirling drums******* .
France will have 53 Billions....ladies and gentlemen..yes...that's with a B,... 53 Billion EUR worth of exposure to Greece. Or put it in another perspective.....about 30% of France GDP...all at stake. Germany will "only" have 34 Billions in the hole, if Greece goes down.
What we're seeing is the rats leaving the ship.
The players are folding one by one, and the desperate guys, that knows they have a losing hand, can't do anything else other than continue the game...raise the bet, raise the bet....just to keep the game going. The hand France and Germany, especially France is sitting on, is terrible. The scope of this, it's not only Greece, the way this will go around in the EU will be like a bull in a porcelin shop.
Originally posted by greenCo
I´m reading some interesting opinions like this...
Read some weeks back about US companies that "discretely" had been pulling out of EU for about a year, today the Australians declared they have pulled out, and have no exposure to EU and now,... Chinas trading desk...This still doesn't take away China as a possible bond buyer, and China may very well have more channels to buy and sell the EUR currency, you don't necessarily have to have an office in Europe to do that...but...they're pulling back, as well as other investors.
What's left...************whirling drums******* .
France will have 53 Billions....ladies and gentlemen..yes...that's with a B,... 53 Billion EUR worth of exposure to Greece. Or put it in another perspective.....about 30% of France GDP...all at stake. Germany will "only" have 34 Billions in the hole, if Greece goes down.
I'm not sure where you got these figures from, but while €53bn is a lot of money, it's nowhere near 30% of France's GDP - which is over $2trn...
Originally posted by Vitchilo
If Europe-US-China were to collapse tomorrow, I think China would come out faster of the chaos because of the political system they have.
Democracies in crisis is not too good.