Here is the biggest bombshell of the week, maybe of the year. Everybody was focusing their attention on what the Federal Reserve did not even say, they were pretending that the Fed said they were going to taper, even though they did not. So while everyone was focusing on stuff the Federal Reserve did not say, nobody paid attention to what China actually did say.
Because China announced the mother of all tapering. China finally came out and admitted that a further expansion of their foreign currency reserves is no longer in China`s interest. Now, expanding their foreign reserve currency reserves has not been in China`s interest for a long time, it is just that now they finally came out and publicly admitted it. Now, what does it mean?
If China isn`t going to expand its balance sheet anymore because its not in their interest, it means it has to stop buying Treasuries. It has to stop buying mortgage backed securities, the same securities the Federal Reserve is buying and is threatening to taper off.
Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.
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