“The Renminbi Hub”: Chinese Banks Acquire Stakes in US and Canadian Banks. Is There a Hidden Agenda?
Global Research, November 06, 2014
Url of this article:
http://www.globalresearch.ca/the-renminbi-hub-chinese-banks-acquire-stakes-in-us-and-canadian-banks-is-there-a-hidden-agenda/5412316
http://www.globalresearch.ca/the-renminbi-hub-chinese-banks-acquire-stakes-in-us-and-canadian-banks-is-there-a-hidden-agenda/5412316
Very big news on the banking front, the Federal Reserve is now apparently allowing Chinese banks to take stakes in U.S. banks. North of our border, Canada is contemplating becoming one of the many, recent, “renminbi hubs”.
Why would this be happening? Why would it be happening now?
First, why is China setting up shop all over the world?
This is an easy one, for business, for trade, for
relations. China knows exactly where the U.S. and the dollar stand,
they also know fairly well where and how the U.S. and her dollar will
fall. China is merely preparing the groundwork to trade with Western
entities in either local currency or the yuan. In the case of Canada,
China sees a very large energy source along with the mining of many
necessary resources they will need in the future.
The thing is, China doing a deal with Canada like this hits
very close to home. Actually, Canada doing a deal like this is almost a
slap in the face of the U.S.. Don’t get me wrong, Canada doing a deal
with China is good for Canada for all of the right reasons but this is
certainly an action of distancing themselves from the U.S.. Should the
monetary hub deal be consummated, trade will be facilitated in a win/win
fashion for both Canada and China. I believe this can be viewed as
another straw on the U.S. camel’s back and a preparation by Canada for
what is about to come. You must look beneath the surface here, not only
will their trade volumes increase, they will actually get paid in a
currency issued by an industrial powerhouse where there is no question
as to whether or not there is any gold in the vault. If this deal goes
to fruition, it will be clear proof that Canada is attempting to break
the leash and no longer being a U.S. lap dog.
As for China’s banks now being allowed to purchase stakes
in U.S. banks, this is VERY interesting from both sides of the coin.
Why would China want to do this and why would the U.S. allow it? The
other and even bigger question is “why now”? Why not five or 10 years
ago? Why not in a “few years”? I have my opinions on this which is all
they are, opinions and not fact but this is a topic that needs to be
thought about because it is very curious indeed!
Why would China want to do this if she thinks the U.S. is a
bankrupt entity which she surely must? Could this only be a “toe hold”
or an avenue to picking up the pieces later and profiting while doing
so? Yes, probably. Is this a way to be able to look inside our banks
to see how bad it really is? Again, probably. Remember, with any
“percentage” stake comes the ability to be represented on the board of
directors. Is this a way to put a “spy” on the inside, in plain sight
and legally? I think yes. Also remember, the way to “control” the
masses throughout time has been to control the currency and the banks.
Owning large swaths of the U.S. banking industry in the future can only
lead to knowledge, eventual profits and at least some control on our
home turf.
On the other hand, why would the Federal Reserve allow
China into our banking system? Off the top of my head, maybe because
the banks need the capital? Or worse, maybe China has told the Federal
Reserve to “do it or else”? The “or else” part could be anything at
this point. If China still owns all of the Treasury debt claimed by the
Fed as custodian, maybe they are threatening to dump? Maybe they are
threatening to upset the gold, silver or any multitude of commodity
markets? …which of course would knock the legs out from under the
dollar itself. If you recall, it was about 10 years ago when China
wanted to buy out Unocal and were rebuffed for “national security”
reasons, why would the Fed agree to this…now?
As I mentioned, one of the reasons may be because “we”
collectively need the capital. I say “collectively” because even though
we are told our economy is growing, it is not growing in real terms,
only nominal terms because of inflation. The economy is not generating
enough income (savings) for future growth. We are and have been eating
our seed corn rather than saving. The Fed has “printed” money to
sustain and “prolong” the economy but this is not real capital. It is
liquidity only rather than real hard capital (unencumbered) for future
use, let me explain just a little. You see, when the Fed injects
dollars into the system it boosts the amount of dollars outstanding
…but, eventually those dollars must be paid off. It is like borrowing
money from your credit card to start a business that only breaks even
…the day will eventually come when the credit card must be paid off but
the asset (your business) never really grew and really wasn’t worth
enough to pay off the debt.
This is the American situation and why I believe we are at
this point in time allowing China into our banks, we need some real
outside capital to shore up our balance sheets. Of course we are
forgetting one other possibility as long as we are talking about balance
sheets.
Maybe the Fed’s own balance sheet which is levered at
nearly 80-1 needs some help? Maybe they realize their “assets” are not
worth nearly what they originally paid and their “true” leverage ratio
is who knows, 200-1? You see, the Fed took all of the crappy assets on
to their books from the banks so the market participants would never see
“trade prices” of .40 cents on the dollar… .20 cents on the dollar or
even worse. Maybe the Fed threw Bernanke’s 1, 2, 3 punch (QE’s) and we
didn’t get the hoped for reflation? Maybe this is only the Fed
screaming “help”?
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