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China Prepares To Bailout Russia

OWoN: This is an important issue. While the Illegal Usurping Chicago Con Man holidays and parties like the fool he is in Hawaii, the so many good people of the United States, have their nation plunged into a new high risk economic war, while this narcissist imbecile, parties like Nero in the fall of Rome. The world is in perilous trouble economically. Citizens, REAL PEOPLE, are mass struggling. Nations need to be led by Statesmen, not this Chicago Bath House Barry, and dialogue needs to bridge differences. It's disgusting for the Plunge Protection team to be carrying out new economic warfare subterfuge against this emerging nation. It needlessly will hurt vast millions and will bring the EU and America closer to real conflict. But, it also brings China and Russia to a new level of Fiscal Union.

So, this inexperienced, illegal ex-Union Organizer, has managed to set the world on a whole new course of direction, which history will judge as the seriously STUPID move where the Evil Empire lost it.

What the West does not realize is that Russia has a total of at least 290B of support from China and the other BRICS members in addition to their own resources who will only be more determined than ever not to let the manipulative and hated America win a currency war with Russia. In the end all that will happen is that isolation will be more greatly felt with no helping hand for the debts present. The West is far more indebted than Russia and is more dependent on Global indulgence. The spectre of war of one against many is a fool's errand in a world that has moved on and has no time for such behavior. 

The race to dump the West is being accelerated and the EU will be the first to fall as a casualty. America will follow with incalculable consequences. If America implodes, 300M people will be trapped inside a melt down of Mad Max epic proportions. Innocent people in a world gone mad. This is no time to holiday Whoopy when led by a seriously inadequate Wookie. Why did no one ever do a psychometric test on this Clown? He is NOT Constitutionally Eligible! Bite the bullet on that first before trying to suck on a Russian one. This is a blundering move by a Buffoon not up to the job.




China Prepares To Bailout Russia


Zero Hedge
By Tyler Durden
17 December 2014

Earlier this evening China's State Administration of Foreign Exchange's (SAFE) Wang Yungui noted "the impact of the Russian Ruble depreciation was unclear yet, and, as Bloomberg reported, "SAFE is closely watching Ruble's depreciation and encouraging companies to hedge Ruble risks." His comments also echoed the ongoing FX reform agenda aimed at increasing Yuan flexibility which The South China Morning Post then hinted in a story entitled "Russia may seek China help to deal with crisis," which which noted that Russia could fall back on its 150 billion yuan ($24 billion) currency swap agreement with China if the ruble continues to plunge, that was signed in October. Furthermore, two bankers close to the PBOC reportedly said the swap-line was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

As Bloomberg reported, earlier in the evening, China's Wang Yungui noted

  • *CHINA IS CLOSELY WATCHING RUBLE'S DEPRECIATION: SAFE'S WANG
  • *CHINA ENCOURAGES COS. TO HEDGE RUBLE RISKS, SAFE'S WANG SAYS
  • *REAL IMPACT OF RUBLE DEPRECIATION UNCLEAR YET, SAFE'S WANG SAYS

Adding that China plans sweeping reforms to promote FX flexibility.

And then The South China Morning Post hints,

Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge.

If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.

"Russia badly needs liquidity support and the swap line could be an ideal tool," said Bank of Communications chief economist Lian Ping.

The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the US dollar.

Two bankers close to the People's Bank of China said it was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

China has currency swap deals with more than 20 monetary authorities around the world. Swaps are generally used to settle trade.

"The yuan-rouble swap deal was not just a financial matter," said Wang Feng, chairman of Shanghai-based private equity group Yinshu Capital. "It has political implications as it is a sign of mutual trust."

The rouble has lost more than 50 per cent against the US dollar this year, pushing Russia to the brink of a currency crisis, though measures announced by the central bank helped it recover some ground yesterday.

Li Lifan, a researcher at the Shanghai Academy of Social Sciences, said the swap would not be enough for Russia even if it is used in its entirety. "The PBOC might agree to extend something like 15 billion yuan initially as a way of showing China's commitment to Russia."

* * *

As we discussed in October when the swap deal was signed,

...as if to assure all involved parties that there will be enough capital support on both sides, the PBOC released a surprising announcement that the central banks of China and Russia signed a 3-year, 150 billion yuan bilateral local-currency swap deal today, according to a statement posted on PBOC website. Deal can be expanded if both parties agree, statement says. Deal aims to make bilateral trade and direct investment more convenient and promote economic development in 2 nations.

To be sure, some such as Bloomberg, are skeptical that the unprecedented pivot by Russia toward China as it shuns the west, will merely harm the Kremlin. Others, however, wonder: who will be left standing: Europe, with its chronic deficit of energy and reliance on Russia; or Russia, a country overflowing with natural resources, whose economy is currently undergoing a dramatic and painful shift, as it scrambles to dissolve all linkages to the Petrodollar and face the Gas-O-Yuan?

* * *

Is 'isolated' Russia about to be bailed out by the world's largest economy China?




Perhaps, they already started...




But then again - with the BRICS currencies all turmoiling... (ZAR -22% not shown)




Perhaps it is not such a surprise as members take advantage of The BRICS Bank's $100 Billion reserve...




The punchline, however, is that using bilateral swaps, the BRICS are effectively disintermediating themselves from a Fed and other "developed world" central-bank dominated world and will provide their own funding.

We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.... The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.

Incidentally, the role of the dollar in such a world is, well, nil.

For those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.




Chart: Bloomberg

link

5 comments :

  1. How U.S. Sanctions are Backfiring on Cabalists Banks Globally

    This is just one of those factors that we mean when we said that Russia’s falling ruble is still serving Russia’s interest in the long term.
    Russian financial crisis is not really Russia’s…

    http://galacticconnection.com/u-s-sanctions-backfiring-cabalists-banks-globally/

    Russia crisis leaves banks around the world exposed by the billions
    Published time: December 17, 2014 17:49
    RIA Novosti
    Major banks across Europe, as well as the UK, US, and Japan, are at major risk should the Russian economy default, according to a new study by Capital Economics.

    ReplyDelete
  2. Hong Kong Banks Shut Down US Accounts Rather Than Deal with FATCA
    Posted on December 18, 2014 by China Briefing
    By Benedict Lynn

    Due to its geographical proximity to the mainland, modern and (until now) friendly banking system and transparent legal regime, Hong Kong has long served as a popular gateway into China for foreign businesses. Americans in particular have favored the former British colony, which retains its widespread use of the English language and Western business ideals, as a launching pad for their operations into mainland China.

    However, since the Foreign Account Tax Compliance Act (FATCA) came into effect in early July, many Hong Kong based banks have been refusing to open new accounts for, and even shutting down the existing accounts of, American individuals and corporations.

    - See more at: http://www.china-briefing.com/news/2014/12/18/hong-kong-banks-shut-us-accounts-rather-deal-fatca.html#sthash.f40QDBVB.qe6t0MZL.dpuf

    ReplyDelete
  3. John

    As ever I have to ask... when you write about the "EU", are you including Britain in that basket? You often US and EU when talking about the western world's potential to sink, but I just need to clarify that the UK is naturally included in that. I cannot see how we wouldn't be, but I just needed to clarify.

    All the best
    JW

    ReplyDelete
  4. The British Global economy is run by Industrialists, not the Cabal nor the Rothschild's.We don't need the EU, and while it would hurt, we can survive a US crash.

    ReplyDelete
    Replies
    1. Last night while searching through the net I came upon a site that had 2 different detailed conversations several years apart from high level insiders.

      One said his family was above the black knights and you would not know their name.

      The other also confirmed that you would not know their name. He said they don't live on the surface. However, they both stated that the names you hear are very low level members of the family that are just carrying out instructions.

      The conversations are highly intelligent and EXTREMELY spiritual in nature. They both claim that their purpose is to be the anti-thesis to thesis so as to elevate spiritual growth. They were both quite adamant about the physical world being a play and that they are under contract to act out these parts as much as they hate doing it. There is a strange dichotomy to these conversations.

      If you want to understand how the highest levels of the order think this is a must read.

      http://dariobusch.com/2011/10/revelations-of-an-elite-family-insider/

      Delete

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