China Banking Camel In U.S. Tent?

By: Ian Campbell | Thu, May 10, 2012
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Why read: You should know about this - Chinese banks entry into U.S. banking could prove to be important.

A May 9 article reported that the U.S. Federal Reserve has agreed to let three Chinese government controlled banks set up U.S. branches and invest in U.S. banks. The piece references U.S. Federal Reserve statements that:

The referenced article, typical of many, simply reports on these U.S. Federal Reserve decisions. It is the only article of over 2,500 overviewed in the past two days that makes mention of these decisions.

Consider the implications of these Federal Reserve decisions in the context of the proverbial 'Camel in the Tent'. The question now is not whether the Camel is in the tent, the question is only whether, when, and over how long a period of time it will take the powerful Camel, whose head (the part it thinks with) is now in the tent, to take the tent over.

Further comments and some possible consequences:

What appears to be a comparative 'passing news item', may prove over time to be what future commentators may come to reference as a 'land-mark' economic event similar to President Nixon's August 1971 declaration of a floating gold price.

This is something to think hard about, and to discuss with your investment advisors and financially astute friends.

Federal Reserve allows Chinese-controlled banks to take stakes in US banks
Source: The Telegraph (from Reuters), May 9, 2012
Reading time: 3 minutes, thinking time much longer

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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