Not exactly confidence-inspiring

The purported defection of China’s chief central banker would not appear to bode well for the so-called recovery:

Rumors have circulated in China that People’s Bank of China Gov. Zhou Xiaochuan has left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBOC, including Zhou.

I doubt it’s going to help the animal spirits much either if he quietly turns up dead. Of course, if he did defect to Panama or some other offshore center, one has to wonder if Ben Bernanke is giving some thought to joining him soon.

UPDATE – STRATFOR says Zhou hasn’t defected after all:

People’s Bank of China governor Zhou Xiaochuan has not defected from China to the United States, authoritative sources have informed STRATFOR. The Washington Post has also spoken with unnamed officials who said there was no indication that Zhou had defected, that he was not in U.S. custody and that the rumors on Chinese internet discussion forums should be ignored.

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