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BEIJING — It's hard to get your head around a figure like $1.4-trillion. Dai Zhi Ping, who makes $500 a month selling the Beijing News from the back of his motorbike, looks perplexed when he is told that China has that much money in its foreign exchange piggy bank.
Pausing at his post outside the State Administration for Foreign Exchange, the faceless state agency that manages all that money, he says he doubts any of it will find its way into his pocket. It makes him feel good all the same.
“It proves that the country is getting richer and stronger,” he says. “The more we have, the better it is.”
A third of China Investment’s portfolio is to be invested in Central Huijin Investment Company, a purchaser of bad loans from the Chinese banks, and another third will recapitalize China Agricultural Bank and China Development Bank, to shape them up for privatization. $3 billion of the fund was invested in the private equity manager Blackstone in May – that may have bought China useful political contacts, but it is now worth $2 billion. And the remainder is being invested very carefully, primarily in US Treasury securities – which are also losing money steadily in yuan terms.
When you add it all up, according to Das' research, a single dollar of "real" capital supports $20 to $30 of loans. This spiral of borrowing on an increasingly thin base of real assets, writ large and in nearly infinite variety, ultimately created a world in which derivatives outstanding earlier this year stood at $485 trillion -- or eight times total global gross domestic product of $60 trillion.
Originally posted by HimWhoHathAnEar
Russia's latest deployment of a carrier group into the Med is some what ominous as well.
Originally posted by MuLongQun
Ｉfinished reading a book called “ the coming collapse of china” it detailed