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Well that "industry" could start to use cryptocurrencies.

by etaty 11y ago

halviti 11y ago
Anyone foolish enough to put 64 billion dollars into cryptocurrencies does not need to be in charge of 64 billion dollars.
- reitanqild 11y ago
  I'd just assume they move a limited amount at a time and wait for it to be exchanged for "real" money on the other side before they "send" the next transfer.
- iheartmemcache 11y ago
  Yeah. Cryptocurrencies are not on the radar of anyone transacting even a few orders of magnitude less than this. I'm not sure why the Party chose to expose this ring right now but someone up-to-date on PRC politics certainly will be able to fill us in on what triggered this event. Undoubtedly, this has been going on for a long, long time. My friends wife made a ton of money selling "old money" houses to the Chinese-New-Rich in affluent suburbs of New England. I'm sure those on the West Coast heard similar stories re: Vancouver and it's property boom as a result of the same demographic. This is just like any 'raiding the coffers' situation by an incumbent power. A destabilizing event occurs (the fall of the USSR, the laxer economic policies within the PRC, the overthrow of the Shah, the US profiteering off cocaine for arms, etc). The fall of the USSR led to a few, well-connected dozen families getting rich off the oil money to the point of casually buying UK football teams. You can be 100% assured that there will be some scapegoats taking a fall, a fewer number of people in the party will be asked to fall on the sword. I'd bet money that this is just another orchestrated sacrifice to business-as-usual. We'd have to get access to all those MNC-bank records to really figure out how much expatriated yuan left for other markets. For the time being, they'll just effectively tender IOUs until the dust settles[1]. It's been happening since before the modern economies emerged (Dutch coffee shops and Lloyds Underwriting ship insurance is arguably that point). Investment banks still trade amongst themselves in a similar fashion. [1]https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
  - derefr 11y ago
    Maybe a TPP side-deal with one of the places the money is being moved to?
abandonliberty 11y ago
You're right - the yuan trades at a discount in bitcoin.
- Animats 11y ago
  Right. The main use of Bitcoin is now getting money out of China. That's why the Bitcoin exchanges in China do so much volume. The PBOC cracked down on this once, and Bitcoin fell from over $1000 to $250. Now, as of November 2015, it's apparently possible to do yuan transfers within China to at least one Bitcoin exchange, which is pushing the price back up. There was a brief spike to $500 when that suddenly became possible, but the price dropped rapidly back to $320 or so. Unclear why the PBOC hasn't plugged that hole yet, but they probably will. Bitcoin mining is also a way to get yuan out of China and into another currency. Bitcoin mining doesn't violate China's capital controls; it's considered manufacturing and exporting. That's encouraged in China.
  - justincormack 11y ago
    The main use of bitcoin in China is getting into the MMM Ponzi scheme,which is a huge fraud. Getting money out of China is done by other means, like $64bn underground banks.
modeless 11y ago
The combined value of all bitcoins is only $4 billion. It would be impossible for this to happen unless the price of Bitcoin increased something like 100x.
- jsprogrammer 11y ago
  Bitcoin may float to any valuation.
  - modeless 11y ago
    Certainly. And if you believe Bitcoin will become a major way that Chinese evade capital controls, then you should invest in Bitcoin for a 100x return. Clearly the market doesn't currently believe that this will happen or the price would already be much higher.

Well that "industry" could start to use cryptocurrencies.

by etaty 11y ago

Well that "industry" could start to use cryptocurrencies.

Anyone foolish enough to put 64 billion dollars into cryptocurrencies does not need to be in charge of 64 billion dollars.

reitanqild 11y ago
I'd just assume they move a limited amount at a time and wait for it to be exchanged for "real" money on the other side before they "send" the next transfer.
iheartmemcache 11y ago
Yeah. Cryptocurrencies are not on the radar of anyone transacting even a few orders of magnitude less than this. I'm not sure why the Party chose to expose this ring right now but someone up-to-date on PRC politics certainly will be able to fill us in on what triggered this event. Undoubtedly, this has been going on for a long, long time. My friends wife made a ton of money selling "old money" houses to the Chinese-New-Rich in affluent suburbs of New England. I'm sure those on the West Coast heard similar stories re: Vancouver and it's property boom as a result of the same demographic. This is just like any 'raiding the coffers' situation by an incumbent power. A destabilizing event occurs (the fall of the USSR, the laxer economic policies within the PRC, the overthrow of the Shah, the US profiteering off cocaine for arms, etc). The fall of the USSR led to a few, well-connected dozen families getting rich off the oil money to the point of casually buying UK football teams. You can be 100% assured that there will be some scapegoats taking a fall, a fewer number of people in the party will be asked to fall on the sword. I'd bet money that this is just another orchestrated sacrifice to business-as-usual. We'd have to get access to all those MNC-bank records to really figure out how much expatriated yuan left for other markets. For the time being, they'll just effectively tender IOUs until the dust settles[1]. It's been happening since before the modern economies emerged (Dutch coffee shops and Lloyds Underwriting ship insurance is arguably that point). Investment banks still trade amongst themselves in a similar fashion. [1]https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
- derefr 11y ago
  Maybe a TPP side-deal with one of the places the money is being moved to?

abandonliberty 11y ago

You're right - the yuan trades at a discount in bitcoin.

Animats 11y ago
Right. The main use of Bitcoin is now getting money out of China. That's why the Bitcoin exchanges in China do so much volume. The PBOC cracked down on this once, and Bitcoin fell from over $1000 to $250. Now, as of November 2015, it's apparently possible to do yuan transfers within China to at least one Bitcoin exchange, which is pushing the price back up. There was a brief spike to $500 when that suddenly became possible, but the price dropped rapidly back to $320 or so. Unclear why the PBOC hasn't plugged that hole yet, but they probably will. Bitcoin mining is also a way to get yuan out of China and into another currency. Bitcoin mining doesn't violate China's capital controls; it's considered manufacturing and exporting. That's encouraged in China.
- justincormack 11y ago
  The main use of bitcoin in China is getting into the MMM Ponzi scheme,which is a huge fraud. Getting money out of China is done by other means, like $64bn underground banks.

modeless 11y ago

The combined value of all bitcoins is only $4 billion. It would be impossible for this to happen unless the price of Bitcoin increased something like 100x.

jsprogrammer 11y ago
Bitcoin may float to any valuation.
- modeless 11y ago
  Certainly. And if you believe Bitcoin will become a major way that Chinese evade capital controls, then you should invest in Bitcoin for a 100x return. Clearly the market doesn't currently believe that this will happen or the price would already be much higher.