Naysayers and Doctors of doom were busy stating that all Hell was breaking loose in China. What many of these penguins failed to understand or even realise is that there are many reasons China’s reserves were dropping.
- The reserves are in worthless Dollars; China wants to diversify so it was moving money out of dollars and into Gold and other tangible assets. They don’t want to hold onto worthless paper that the Fed can create whenever it so wishes
- China could have been paying down debt; another way to put this money to good use, instead of holding it while the U.S continues to inflate the supplies of dollars at a mindbogling rate
- Finally, Money was being deployed into new infrastructure projects. Again this is another way to put this money to use. Improving a nations infrastructure creates Jobs and provides a great rate of return over the long run. look at the U.S the infrastructure is falling apart. With the passage of each it looks more like a 3rd world country and this is costing the economy billions of dollars.
Despite all this noise, reserves rose to $3.21 Trillion, that is $3.2 trillon more than bankrupt US has or will ever have. all the U.S is good at is doing nothing but printing boatloads of money to support its gestapo regime.
“The flip side is if we see the dollar strengthen again later this year in anticipation of a Fed rate hike, capital outflows could return,” Hu said. “This year will be very choppy.”
[color-box color=”orange”]Mr Hu, you are on crack, there is no way in Hell the Fed is going to raise rates, in fact they are going to lower rates at some point as the world has now embraced the era of negative rates.
Must Read: Negative rates here to stay; Currency wars explode [/color-box]
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