Thanks for sharing this Taansen....
We keep hearing about funds being released through bond redemptions in preparation for the global currency reset and the prosperity programs. Now a source has informed us that this Bloomberg article publicly confirms the hidden influence of the multi-thousand-year-old Dragon Family, beginning to release its funds. There is no way such huge funds could be infused into the global economy without major media coverage, but apparently its being done through established publicly known channels, so as to look as ordinary as possible, and to continue concealing the true source. Other sources saying everyone will have all their debts forgiven and become millionaires overnight obviously cannot be understood or believed by the average person on the street, but news like this Bloomberg article can be more easily believed, even if it is rather historic . . .
With $21 Trillion, Chinas Savers Are Set to Change the World
by Enda Curran and Jeff Kearns
by Enda Curran and Jeff Kearns
June 25, 2015 3:00 PM PDT
Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.
With Chinas leadership aiming to scale back the role of investment in the domestic economy, the nations surfeit of savings -- deposits currently stand at $21 trillion -- will increasingly need to be deployed overseas. Thats also becoming easier, as Premier Li Keqiang relaxes capital-flow regulations.
The consequences ultimately could rival the transformation wrought by the Communist nations fusion with the global trading system, capped by its 2001 World Trade Organization entry. That stage saw goods made cheaper across the world, boosting the purchasing power of low-income families at the cost of hollowed-out industries.
Some changes are easy to envision: watch out for Mao Zedongs visage on banknotes as the yuan makes its way into more corners of the globe. Chinas giant banks will increasingly dot New York, London and Tokyo skylines, joining U.S., European and Japanese names. Property prices from California to Sydney to Southeast Asia already have seen the influence of Chinese buying.
Other shifts are tougher to gauge. International investors including pension funds, which have had limited entry to China to date, will pour in, clouding how big a net money exporter China will be. Deutsche Bank AG is among those foreseeing mass net outflows, which could go to fund large-scale infrastructure, or stoke asset prices by depressing long-term borrowing costs.
This era will be marked by China shifting from a large net importer of capital to one of the worlds largest exporters of capital, Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., the citys stock market, wrote in a blog this month. Eventually, there will be fund outflows of historic proportions, driven by Chinas needs to deploy and diversify its national wealth to the global markets, he wrote.
The continuing opening of Chinas capital account will also promote the trading of commodities in yuan, and boost Chinas ability to influence their prices, according to an analysis by Bloomberg Intelligence.
As was the case with Chinas WTO entry, where many of the hurdles had been cleared in the years leading up to 2001, policy makers in Beijing have been easing restrictions on the currency, the flow of money and interest rates for years. Whats making 2015 notable is the International Monetary Funds once-in-five-year review of its basket of reserve currencies. China wants in, and is accelerating reforms to get there.
Recent steps to promote its currency have included setting up five offshore yuan centers, a new link between the Shanghai and Hong Kong stock exchanges and letting the tightly controlled yuan trade against the dollar in a wider band. It has promised to remove a cap on interest paid to savers.
The integration of China - the worlds second-largest economy with the highest saving rate but still a low per capita income - into the global capital markets is an unprecedented event, China International Capital Corp. economists led by Beijing-based Liang Hong wrote in a note this month.
There are already signs of that potential. Chinese buyers topped Canadians to rank as the biggest foreign purchasers of U.S. homes by sales and dollar volume in the year through March, accounting for more than a quarter of all international spending.
Lenders are speeding up their ambitions: Bank of Communications Co., Chinas fifth-largest lender, is making its first overseas acquisition by buying a lender in Brazil, while China Construction Bank Corp. plans to open branches in Europe, Southeast Asia and Africa.
The global community is watching. U.S. Treasury Secretary Jacob L. Lew said after meetings this week between U.S. and Chinese officials that China is committed to pushing through necessary reforms to liberalize interest rates, open capital markets and open up more to foreign enterprises. The U.S. wants more access to the worlds second-biggest economy for its financial firms, something thats been elusive since Chinas WTO entry.
Few expect the yuan to soon threaten the dollars role as the global reserve currency, with a wave of domestic reforms needed first up to reassure international investors -- such as bolstering liquidity in the local bond market.
While U.S. policy makers are betting that a more open China will ease currency tensions between the two nations, any rapid depreciation in the yuan could trigger large-scale capital outflows, prompting intervention and new restrictions from Chinas policy makers.
If theyre going to be gradually opening up to be like the U.S., then vast amounts of money are going to flow overseas, said David Dollar, who served as U.S. Treasury attache in China and is now a senior fellow at the Brookings Institution in Washington. I would speculate that it favors the U.S. over everything else.
Other nations, from Argentina to South Korea, have suffered whiplash from volatile capital flows after they eased restrictions. While China is unlikely to tear down the barricades altogether, the opening of the nations capital borders will reverberate across the world.
I dont think you can find any significant economic system where deposits in the banking system are twice GDP, said Nicholas Lardy, who has studied China for more than three decades and is a senior fellow at the Peterson Institute for International Economics. Thats the potential.