There is a new (What? Again?) financial scandal underway in that capitalist paradise, the People’s Republic of China. Apparently someone has been issuing duplicate Yuan. Specifically the Chinese minting companies. See news item below.
Corruption is so endemic that the Mint’s management have been printing one set of banknotes for the public, then another with identical serial numbers for kickbacks to CCP officials. Estimated impact; several Trillion dollars. Finds of cash by the authorities aren’t being counted, but weighed.
Just as a thought experiment, how much is a ton of Chinese 100 Yuan banknotes? That’s in tonnes, multiples of 1000 Kilo’s. Given the Chinese habit of not trusting banks and using cash as a direct commodity, literally stuffing it under their mattresses and floorboards, what is this doing to the ordinary Chinese persons financial security?
The authorities have two main choices. Seeing as it’s their officials who have been taking large kickbacks of genuine duplicate currency, they can arrest those found with large hoards of bribes under existing anti-corruption laws and destroy the duplicates. Alternatively they can brush it all under the carpet for a while, but as this scandal is going mainstream right now, the value of personal savings in China will be turned into a haunted wasteland.
The thing is; the Chinese mint, under it’s ‘belt and road’ initiative, prints currency for countries as far afield as Brazil. Now this isn’t in the report above, but any currency that has their currency printed by China may, and I say this advisedly, may be subject to the same duplicate banknote problem, where Chinese officials, paying with ostensibly kosher duplicate cash, buy up property and all manner of commodities in the local currency, thus undermining the cash value of same and create large inflationary bubbles anywhere these corrupt Chinese officials and their families are financially active. The property market all around the Pacific rim for one, and all the major trading centres around the world. Anywhere that does large cash transactions. They all have to ask themselves “Did I just get taken?”
Yeah, yeah, okay, you might say, Bill, all this may be true, but what’s it got to do with us on the other side of the world? My response to that is, so was SARS/COV-2 back in 2019.
Sometimes I feel like a fisherman far out at sea, who, hearing a submarine rumble and feeling the gentle lift of his boat, recognises the sound of a big undersea earthquake and the beginnings of a tidal wave racing off toward land. He does know what will happen when the wave arrives, if it ever does, but he will warn, he can radio the shore so they may prepare, but that is all he can do.
That is, if anyone is listening.