Busted: Bankers and The Global Economy

January 31, 2008

China Government Financing Antsy

Filed under: banking, federal reserve, politics — Tags: , , , , , , , , , , — digitaleconomy @ 3:47 pm

China Eview Week 1/31/08

In my research I have noticed that China, like most countries, often denies bad news before it hits even when that news is already in action. So it is not surprising that when the press started talking about China being hit with huge subprime debt that the China government leaned on their commercial banks and cooled their heels briefly. Two days ago, with what the news said and with what China denied last week, they readily admitted one of their commercial banks had huge losses. I have no doubt that with a nation full of greenbacks and a booming economy, the Chinese have plenty that could be invested in the ailing world banking system. The Chinese are taking care of themselves first. Now China is rounding up their gold and putting the eye of scrutiny on gold shipments and travel of any gold-based product. Since the government and central banking relationship is different than in most countries, the Chinese are protecting what they have. The Chinese are cautious and as the second leading gold producer, don’t plan on letting the gold leave the country without good cause and without their knowledge. The Chinese government knows that when the rubber meets the road, the fiat currency of the central bank doesn’t have the strength and power of gold. Unlike the United States, the Chinese aren’t going to willingly give all their wealth away to the bankers or to large corporations. ~ E.M.

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