China tells state banks to prepare for a massive dollar dump and yuan buying spree as Beijing’s prior interventions have failed to stem its currency’s worst year since 1994
If China stops buying US debt, and dumps it instead, the long-deferred financial reckoning day just drew a lot closer for the Keynesian fraudsters at the Fed and their Ponzi markets & asset bubbles. If foreign investors start refusing to buy US debt that is going to be inflated away by the Fed, then the bond vigilantes are going to demand much higher rates of interest to make U.S. bonds worth buying when real inflation – as opposed to our fake CPI numbers – is soaring.
The People’s Bank of China has told major state-run banks to prepare to shed dollar holdings while snapping up offshore yuan, which has continued to fall despite prior interventions, sources told Reuters.
The scale of this latest effort to prop up the yuan will be big and could provide a floor to the Chinese currency, according to the report.
The amount of dollars to be sold hasn’t been decided yet, but Reuters said it will primarily involve the state banks’ currency reserves. Their offshore branches, including those based in Hong Kong, New York and London, were ordered to review offshore yuan holdings and check to see that dollar reserves are ready.
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