Capital flight

Re: Capital flight

Postby Saz » Wed Mar 26, 2014 2:24 pm

jimmyz wrote:
Shooter Mcgavin wrote:Meh, they can have it. I have a well diversified portfolio and invested the max I could comfortably lose. Not looking at it ever again unless I see some news story indicating some crypto has exploded in price.


But but... you were scamming credit card offers for $50 and $100 last year. You now have a "well diversified portfolio"?? How did you do that on your pre-paid VISA card that your parents put into your birthday card?


"Input visa card number here"

*Inputs pre-apid VISA card number*

"Click here to purchase bit coin"

*Clicks*

Have you thought about applying for the Citi AA executive card? 100k AA miles for for only 495 annual fee. It's not a scam, it's a great deal. Although...you probably wouldn't be the sort to ever travel internationally so I could see why you wouldn't be interested.
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Re: Capital flight

Postby jimmyz » Wed Mar 26, 2014 4:33 pm

Shooter Mcgavin wrote:
jimmyz wrote:
Shooter Mcgavin wrote:Meh, they can have it. I have a well diversified portfolio and invested the max I could comfortably lose. Not looking at it ever again unless I see some news story indicating some crypto has exploded in price.


But but... you were scamming credit card offers for $50 and $100 last year. You now have a "well diversified portfolio"?? How did you do that on your pre-paid VISA card that your parents put into your birthday card?


"Input visa card number here"

*Inputs pre-apid VISA card number*

"Click here to purchase bit coin"

*Clicks*

Have you thought about applying for the Citi AA executive card? 100k AA miles for for only 495 annual fee. It's not a scam, it's a great deal. Although...you probably wouldn't be the sort to ever travel internationally so I could see why you wouldn't be interested.


So you're a globe trotting thousandaire Bitcoin mogul squirreling away in-flight peanuts. That's cool brehhhhhh
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Re: Capital flight

Postby Philly » Wed Mar 26, 2014 5:15 pm

don't knock the hustle
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Re: Capital flight

Postby Saz » Wed Mar 26, 2014 5:33 pm

jimmyz wrote:
Shooter Mcgavin wrote:
jimmyz wrote:
Shooter Mcgavin wrote:Meh, they can have it. I have a well diversified portfolio and invested the max I could comfortably lose. Not looking at it ever again unless I see some news story indicating some crypto has exploded in price.


But but... you were scamming credit card offers for $50 and $100 last year. You now have a "well diversified portfolio"?? How did you do that on your pre-paid VISA card that your parents put into your birthday card?


"Input visa card number here"

*Inputs pre-apid VISA card number*

"Click here to purchase bit coin"

*Clicks*

Have you thought about applying for the Citi AA executive card? 100k AA miles for for only 495 annual fee. It's not a scam, it's a great deal. Although...you probably wouldn't be the sort to ever travel internationally so I could see why you wouldn't be interested.


So you're a globe trotting thousandaire Bitcoin mogul squirreling away in-flight peanuts. That's cool brehhhhhh


Nah breh, but I will be traveling a bit this year so always good to fly for free. PROTIP: Rather than squirreling away peanuts, buy a bunch of mini liquor bottles for the flight. They are small enough to go through TSA, are 1/5th of the price of drinks on the flight, and you get as many as you want.

You can't bring your guns though.
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Re: Capital flight

Postby Kane » Thu Mar 27, 2014 12:35 am

The Dharma Bum wrote:Fears of capital flight in the developing world are so strong that people there are desperate to find ways to hedge against the loss of their savings that they are turning to a burgeoning "shadow banking" industry and other examples of the emergent dark economy in order to protect against the state imposed devaluation of their currencies and seizure of wealth to fund state obligations..

How rumor sparked panic and three-day bank run in Chinese city

By John Ruwitch

YANCHENG, China Wed Mar 26, 2014 11:19am EDT


(Reuters) - The rumor spread quickly. A small rural lender in eastern China had turned down a customer's request to withdraw 200,000 yuan ($32,200).

Bankers and local officials say it never happened, but true or not the rumor was all it took to spark a run on a bank as the story passed quickly from person to person, among depositors, bystanders and even bank employees.

Savers feared the bank in Yancheng, a city in Sheyang county, had run out of money and soon hundreds of customers had rushed to its doors demanding the withdrawal of their money despite assurances from regulators and the central bank that their money was safe.

The panic in a corner of the coastal Jiangsu province north of Shanghai, while isolated, struck a raw nerve and won national airplay, possibly reflecting public anxiety over China's financial system after the country's first domestic bond default this month shattered assumptions the government would always step in to prevent institutions from collapsing.

Rumors also find especially fertile ground here after the failure last January of some less-regulated rural credit co-operatives.

Jin Wenjun saw the drama unfold.

He started to notice more people than usual arriving at the Jiangsu Sheyang Rural Commercial Bank next door to his liquor store on Monday afternoon. By evening there were hundreds spilling out into the courtyard in front of the bank in this rural town near a high-tech park surrounded by rice and rape fields.

Bank officials tried to assure the depositors that there was enough money to go around, but the crowd kept growing.

In response, local officials and bank managers kept branches open 24 hours a day and trucked in cash by armored vehicle to satisfy hundreds of customers, some of whom brought large baskets to carry their cash out of the bank.

Jin found himself at the bank branch just after midnight to withdraw 95,000 yuan for his friend from a village 20 kms (12 miles) away.

"He was uncomfortable. It was late and he couldn't wait, so he left me his ID card to withdraw his cash," Jin said.

By Tuesday, the crisis of confidence had engulfed another bank, the nearby Rural Commercial Bank of Huanghai.

"One person passed on the news to 10 people, 10 people passed it to 100, and that turned into something pretty terrifying," said Miao Dongmei, a customer of the Sheyang bank who owns an infant supply store across the street from the first branch to be hit by the run.

Claiming to be a Yancheng resident, one user of Sina Weibo's Twitter-like service repeated the story on Monday about the failed 200,000 yuan withdrawal, adding that "rumors are the bank is going bankrupt."

When later contacted by Reuters online, he said he had heard the rumor from his mother when she came back from town.

Huanghai and Jiangsu Sheyang banks declined to comment.

China's banks are tightly controlled by the state and bank bankruptcies are virtually unheard of, so the crisis has baffled many outsiders.

Yet in Sheyang, fears of a bank collapse resonate.

In recent years, this corner of hard-strapped Jiangsu province has experienced a boom in the number of loan guarantee, or ‘danbao', companies and rural capital co-operatives.

These often shadowy private financial institutions promised higher returns on deposits than banks, but many have since failed.

Qu Guohua, a spiky haired former migrant worker in his 50s, nearly lost 30,000 yuan in a credit guarantee scheme that went up in flames.

What saved him one day in January 2013 was a tip-off from a friend at a rural co-operative just down the street from the loan guarantee company where he had his money.

"He told me the other one was going to go out of business and I better go get my money quick," he said.

Qu managed to get his cash, but others behind him in line were not so lucky, he said.

That helps explain why lines formed so quickly once the rumors started circulating this week. Luck has it, he deposited the cash in a bank next door: Sheyang Rural Commercial Bank.

Banks are different than credit co-operatives and guarantee companies in that they are regulated by China's banking watchdog and subject to strict capital requirements.

On Wednesday, officials' painstaking efforts to drive that message home were in full swing.

Bank managers stacked piles of yuan behind teller windows in full sight of customers to try to reassure them that they had plenty of cash on hand. Local officials used leaflets, radio and television to try to calm nerves.

Near one of the troubled banks, a branch of the China Commercial Bank - one of China's ‘Big Four' state-owned banks - was running a ticker message on an electronic board over the entrance stating: "Sheyang Rural Commercial Bank is a legal financial organization approved by the state, just like us".

While small groups of depositors still gathered at several bank branches in and around this part of Yancheng, some arriving by motorbike, others by three-wheeled motor vehicles common in the Chinese countryside, there were signs that the banks' efforts were bearing fruit.

Jin said he did not panic when the rumors were spreading and on Wednesday, like many others, he made a deposit.

Others, like Qu, are holding their nerve.

On a visit to see his hospitalized daughter, he decided to nip into a local bank where he still has about 10,000 yuan - just for a look.

"I'm not nervous about my money in the bank. It's protected by national law."

(Additional reporting by Adam Jourdan, Gabriel Wildau and the Shanghai Newsroom; Writing by Pete Sweeney: Editing by Tomasz Janowski and Neil Fullick)


http://www.reuters.com/article/2014/03/ ... 2H20140326


I don't understand how this qualifies as "capital flight?" This is emblematic of a tragedy of commons of sorts, a bank run, and a society not well adjusted to the realities of capitalism/neoliberal economics. But not capital flight. Capital flight is capital leaving the country and going somewhere else...fast. Those people were worried about capital being gone altogether...Russia's a good example of Capital Flight right now. $70 Billion in the first quarter. It's impressive. Not sure about the state imposed devaluation though, the Rouble has lost significant value due to market concerns on Russia acting stupid. Russia just acted stupid.

And the yuan/renmimbi has been steadily appreciating. It's only been the beginning of this year, as growth has continued to moderate, that those gains have ceased. But that makes sense with the Fed cutting back on QE and easy money not being so easy anymore - political instability is rife in developing economies right now.
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Re: Capital flight

Postby The Dharma Bum » Thu Mar 27, 2014 9:06 am

The point is more that they are afraid of capital flight, and are seeking ways to preserve their wealth. The result is the emergence of the shadow banking sector and stuff like bitcoin. They are desperate to preserve their wealth and will take great risks to do so. The reasons for this development can be analyzed.

China normally keeps the yuan undervalued in support of it's export sector but has yielded to international pressure and let it appreciate recently. There has been a gain of 2.5% against the dollar so you are correct in saying that. But overall the forces that create this pressure on the market are still fundamental to China's economic situation and the devaluation of our own currency must be taken into account as well.

http://fordhampoliticalreview.org/china ... imbalance/
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Re: Capital flight

Postby The Dharma Bum » Thu Mar 27, 2014 9:14 am

The bank that had the bank run wasn't a state regulated financial entity, it was among the growing number of services offered by the new "shadow banking" industry. There is a new "dark economy" emerging because people are finding a need to hide their assets.

And as you know, if there is a need a service will arrive to serve it, and then scams will coalesce around that. There are some new global financial realities emerging and people are reacting to local pressures coming from that.
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Re: Capital flight

Postby The Dharma Bum » Thu Mar 27, 2014 10:10 am

Dependency theory is the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system."


Basics

The premises of dependency theory are that:

1. Poor nations provide natural resources, cheap labour, a destination for obsolete technology, and markets for developed nations, without which the latter could not have the standard of living they enjoy.

2. Wealthy nations actively perpetuate a state of dependence by various means. This influence may be multifaceted, involving economics, media control, politics, banking and finance, education, culture, and sport


http://en.wikipedia.org/wiki/Dependency_theory

I think this is among the best way ways to analyze the global system
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Re: Capital flight

Postby gla22 » Fri Mar 28, 2014 2:55 pm

The Dharma Bum wrote:
Dependency theory is the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system."


Basics

The premises of dependency theory are that:

1. Poor nations provide natural resources, cheap labour, a destination for obsolete technology, and markets for developed nations, without which the latter could not have the standard of living they enjoy.

2. Wealthy nations actively perpetuate a state of dependence by various means. This influence may be multifaceted, involving economics, media control, politics, banking and finance, education, culture, and sport


http://en.wikipedia.org/wiki/Dependency_theory

I think this is among the best way ways to analyze the global system


This is why free trade is such a scam for developing countries. Industries with high paying nice jobs, (tech, finance, ect) can't develop because new businesses in developing countries can never compete with existing businesses in developed countries so the developing countries end up being giant open pit coal mines.
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Re: Capital flight

Postby The Dharma Bum » Fri Mar 28, 2014 3:42 pm

gla22 wrote:
The Dharma Bum wrote:
Dependency theory is the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system."


Basics

The premises of dependency theory are that:

1. Poor nations provide natural resources, cheap labour, a destination for obsolete technology, and markets for developed nations, without which the latter could not have the standard of living they enjoy.

2. Wealthy nations actively perpetuate a state of dependence by various means. This influence may be multifaceted, involving economics, media control, politics, banking and finance, education, culture, and sport


http://en.wikipedia.org/wiki/Dependency_theory

I think this is among the best way ways to analyze the global system


This is why free trade is such a scam for developing countries. Industries with high paying nice jobs, (tech, finance, ect) can't develop because new businesses in developing countries can never compete with existing businesses in developed countries so the developing countries end up being giant open pit coal mines.


Exactly, probably the solution lies in import substitution industrialization rather than the traditional trade-and-export orientation. Note this system was developed by economist Frederich List and is related to his National System of economic theory, which influenced both the American System and National Socialism.

The thrust of the argument is to develop industrial production in developing nations as a way of fostering national independence. Since this economic reasoning enabled Germany to overcome the devastating economic effects of the Treaty of Versailles and the development of the economic engine that built the unprecedented American Empire there probably some basis for his ideas.

In this context they represent a positive use of nationalism. The idea is to protect the nations' production from foreign competition and therefore control.
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