Zhou Xiachuan Sightings

Amid heavy speculation that China's central banker, Zhou Xiachuan, has "defected" to the U.S. following a trillion in central bank losses,  Bloomberg is reporting that Japan's Financial Services Minister, Shozaburo Jimi, met with Zhou yesterday. Toshiharu Mashita, public relations director at Japan’s Financial Services Agency  confirmed that its Jimi met with Chinese central bank governor Zhou Xiaochuan in Beijing yesterday.

The People’s Bank of China posted a photograph of Zhou meeting Jimi on its website yesterday. Another picture of the Zhou meeting former Italian Finance Minister Tommaso Padoa Schioppa was also posted on the website.


Paola Paderni, a spokeswoman for the Italian Embassy in Beijing, said she couldn’t confirm the meeting as it wasn’t arranged through the embassy, according to Bloomberg

Two unidentified U.S. government officials said Zhou was not in U.S. custody, according to WaPo.

Stratfor, the original source of the rumors in the U.S. said in a posting today that Zhou hadn’t left China for the U.S., without identifying the source of its information.

Thus many elements of the rumor appear inaccurate, however, the legs that this rumor has and the coverage given to it by among others, WaPo and Bloomberg, hints at the very delicate global nervousness. In a strong economy, no one would pay attention to this type rumor.  Such fragility has a lot to do with the very low U.S. interest rates. People are nervous and want their funds close to them in Treasury securities and the like, not in speculative vehicles. That Treasury securities aren't a very stable investment given the debt overhang suggests that this economy could blow at any time.