China Halts Bank Cash Transfers

http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash-transfers-2/

by pmorici • 12 years ago

52 25 12 years ago

Alex39172• 12 years ago

This is why I'm starting to put money into Crypto. If there is some exploit and the whole thing drops to zero overnight then at least it affects everyone more or less equally, which seems better than Obama and his Goldman Sachs buddies deciding how much our dollars are worth on any given day.

panarky3• 12 years ago

It's fun to talk about the value of the dollar being manipulated by dark forces, and to hear people talk you'd think the dollar must have lost a lot of value recently.

Not really.

In the last year, the US dollar actually increased in value 10% against the Canadian dollar, increased 12% against the Japanese yen, and increased 20% against the Australian dollar. It decreased 1% against the Euro, decreased 3% against the Swiss franc, and decreased 4% against the pound.

In gold terms, the US dollar is 39% more valuable today than it was a year ago.

I also put some money into crypto-currencies, though not because I fear the imminent collapse of the dollar. The dollar's value has been pretty stable even through the financial collapse.

Dollars seem perfectly fine for transactions, though no currency is suitable as a store value for decades or generations.

Alex39172• 12 years ago

The reason the dollar is increasing in value is because the stock market is increasing in value, and the reason the stock market is increasing in value is because it was previously decimated by a group of wall street insiders working together with government regulators to crash the economy.

retrogradeorbit• 12 years ago

It's being manipulated, not by dark forces, but by sovereign nations in the open market.

https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932...

kolev• 12 years ago

You really believe Bitcoin will survive decades?

otoburb• 12 years ago

Growing up it used to be common to hear the refrain that when the USA sneezes, Canada catches a cold. This aphorism was meant to highlight Canada's heavy dependence on the USA back in the 70s and 80s.

I am not in finance and don't appreciate nor understand the full implications or consequences of China's PBOC behaviour citing nationwide system shutdowns, but I feel that we could s/USA/China and then s/Canada/USA to get the same gist and sense of uneasiness.

fredgrott• 12 years ago

Basically, China props up its banking system just as the USA does..

The problem is they do not do it through normal banking reserve controls..

This is or might be the canary in the coal mine for the China banking system as Banking reserves should not have to be adjusted by removing access to cash as that indicates a bigger problem..

This could be related to some toxic assets on the China Banking system books

panarky3• 12 years ago

I heard a slightly different version of that saying: "When the US sneezes, the rest of the world catches a cold."

Funny how when the US credit rating was lowered, the prices of US Treasury bonds actually increased, and their yields fell. When US financial institutions went bankrupt, the value of US government securities went up.

When the Federal Reserve printed money to buy bonds, the value of the dollar actually increased. And when the Federal Reserve stopped printing money to buy bonds, the value of the dollar still increased.

Maybe the rumors of the death of America are premature, and maybe the old saying is still true.

fennecfoxen• 12 years ago

China's central bank makes Ben Bernanke look like a do-nothing.

jrockway• 12 years ago

So my choices here are to believe that it's:

a) Some strange conspiracy that nobody understands.

b) A software bug.

As a long-time user of software, I'm betting on option B.

klawed• 12 years ago

As writer of software, I'm also betting on option B.

austinz• 12 years ago

Gordon Chang is a professional China skeptic with a rather unimpressive track record. As he's a blogger on Forbes, you can check out his article history for a variety of predictions he's made in the past that haven't panned out, or the book he talks about in his profile.

jsm386• 12 years ago

Yes. via http://www.marketwatch.com/story/china-bank-transfer-halt-on...

"While banks in China have suspended some interbank transfers and other systems for several days, the move only covers some Internet transfers and those for small amounts, according to a statement on the People's Bank of China website. Meanwhile, state-run Beijing Times said customers can still conduct small-scale transfers via ATMs. On Sunday, Forbes contributor Gordon Chang, author of "The Coming Collapse of China," said that Citibank had halted bank transfers for three days, calling the move "ominous" for the Chinese banking system. However, the central bank had flagged the move earlier this month, saying the move was due to system maintenance and would occur once a month for the rest of the year."

blazespin• 12 years ago

No, There Is No Stoppage Of Cash Transfers In China

snip…

“Earlier today, Forbes managed to spook readers with a bombastic report that China’s commercial banks had been instructed by the PBOC to halt cash transfers – something which would have dire implications on China’s banking system ahead of its new year holiday, and send the banking system into a tailspin just as China is desperate to avoid all turbulence ahead of a potential shadow banking default.

Leaving aside the fact that one should typically rely on official PBOC advisories, posted quite clearly on its website (where one finds no mention of this notice), one could simply keep track of interbank liquidity indicators such as repo and SHIBOR, both of which dropped, indicating that liquidity actually improved.

Anyway, here is what really happened, as reported by China Compass. “Forbes columnist Gordon Chang claimed in a much-quoted item today that the Peoples Bank of China had instructed commercial banks to halt cash transfers. Chang’s column, entitled “China Halts Bank Transfers,” specifically refers to Citibank’s Chinese branches. The report is entirely misleading.” Our advice – focus on the real “weakest links” in China’s banking system, of which there are many and are backed by facts, not the least of which is the potential upcoming shadow banking default. Ignore groundless rumors and speculation.

China Halts Bank Cash Transfers

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