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Why China Is Dumping The Dollar - And Why You Should Read Up on the Weimar Republic
As ZH posted today, China is systematically dumping the dollar (and beginning to set up other agreements). CNBC assures everyone, however, that things are fine. Don't read those anonymous financial blogs.
China has a long way to go in turning itself into more of a consumption based economy, so the dumping of USD has to be rather gradual (as to not rock the boat too much, the U.S. still needs to be supplied the funds to purchase Chinese goods, and also most trades are settled in USD for now), but it is happening.
One major reason for this action by China is due to the fact that the United States Government has loaded up on so much debt that it's not possibly sustainable - and the Federal Reserve knows that unless they want to see the house of cards the Keynesians have built come crashing down, they have no choice but to completely monetize the debt. As the dollar continues to be devalued (more in a second), the more yuan China has to print in order to buy dollars to keep their fx target. So not only is China on the hook to pay higher commodity prices (priced in dollars), they're stuck with creating more domestic inflation as well - which is something they don't have time to deal with at the moment, as their housing market is on the verge of collapsing.
Today ZH also pointed out that Greece has 107 Billion Euro in hidden liabilities that oops, they forgot to disclose to anyone. Which made me think, hey, how about the unfunded & if not hidden, largely swept under the rug liabilities the United States has.
Alas, the Treasury doesn't use GAAP accounting when they put out their debt figures, they use cash accounting. This means that all of the social programs we have in place (medicare, pensions, social security, etc) are left out of the debt calculation. China is not stupid, they realize that not only are we going to be 100% of GDP soon on our reported debt, we're going to be well over 100% of GDP on total debt if we are being honest & including our unfunded liabilities. Over $80 Trillion in debt, or over 500% of GDP, accordng to Shadow Stats John Williams.
Here is a chart showing our Gross Debt to GDP, along with Total Debt to GDP if we were being honest (via John Williams, Shadow Stats)
That's pretty isn't it? So what options does that leave the Federal Reserve if they want to continue the global ponzi? You guessed it, monetize the debt, all of it. And as the Fed buys over 100% of the net treasury offerings, the Dollar begins to lose even more purchasing power. This is what puts China in a tough spot, for reasons mentioned above.
And Yes, Monetize the Fed Will:
So, as you can see this is the house of cards we're dealing with right now. China is not being fooled, and they will inevitably leave the dollar behind at some point in the future. Which means less buyers for US Debt, which means more money printing by the fed, and dollar devaluation - you see where we're going here. As this cycle picks up steam, we can expect more inflation than we're already seeing (be it "core" calculated by the Government, or "real" calculated by Shadow Stats).
Here is a nice chart showing how happy we can be that the A. The Federal Reserve was put in place to facilitate this ponzi, and B. That we went off the Gold standard
Pretty soon we can start using money that looks like this -- I reserve the right to be the Battleship.
And finally, the Federal Reserve would like to let the Congress, and the American public know, that no matter what Zero Hedge says about them, they will "not monetize the debt"!
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As a New Englander transplanted to the south, I used to laugh when "good ole boys" would say
"..the south will rise again" in the same sentence as "...Roll Tide."
Not so much anymore.
It is an easy map to draw, and it looks alot like it did 150 years ago.
PS I'm no economist but it looks as if China is positioning itself as the new global reserve currency. They will bleed (u)(s) out. They will back the new currency with commodities and a strong military. Either a currency crisis for us or WWIII.
Possibly China is part of NWO. I believe how they work it is that they use nations as a concept to control populations within certain geographical areas. If citizens of any country don't go along then the NWO instills nationalism as a method to silence those citizens. Don't know for certain but that basic idea is being played out in the US and it has certainly worked in China in the past.
Chinese elite may see participation in NWO as a means to an end other than WWIII.
The thing that is different during this attempt at world dominance is that most of the world's population are aware of the few families behind the current shakedown. They have odds of a million to one against them but temporarily control the militaries. The attempt at world dominance has happened over and over again in history and the results have been tragic at best.
For one thing where does it stop assuming that world dominance is possible. It doesn't because those that would make it to the top are the kind of people that will naturally kill each other.
Order out of chaos breeds more chaos.
The human psyche may have that type of higher consciousness (war - peace - war - peace) mechanism built within it or it may spontaneously arise out of the psyche after peacefully incubating for hundreds of years.
Whatever. we're on a roll.
Great question as to will China see NWO participation as a means to an end other than WWIII.
But NWO participation will entail them joining the NWO Central Banking cartel, which I have serious doubt about, considering their initiation of the Shanghai Cooperation Organisation.
I think they play the current game as it's the only game going but they are starting another game as alternative universe - they remember well the humiliating opium war and the British OverLord and are probably scheming to avert a replay of this by the World Banking Cartel.
What we see as important (avoiding WWIII) may not be as important to them, saving face by being over-lorded by another yang quay dz (foreign devil) - losing 335million people in a war will hardly put a dent in their GDP but by the same numbers, we'll be completely out of biz.
There are no China-experts as China surprises everyone, including themselves. But let's see what happens with Syria and Iran.
I think the only sure bet is the ever expanding power grab by the World Banking Cartel and their drive to debt-enslave all nations and all people with more wars and world-wide consummerism.
Maybe you China commentators may want to do a little research.
There is Heaven,the middle kingdom (China) and everyone else is a barbarian.
This is still Chinese thinking today ,as is has been for a thousand years.
The only NWO they are interested in is their own.
Damon Vrabel did a good series on this "Debunking Money". The is exactly what he say, China is now being dragged into the jaws of the NWO "Global Capital Machine".
http://www.youtube.com/playlist?list=PL88A96F7C0370118F&feature=plcp
I get the exact opposite feeling. The key to the ponzi is keeping commodities down, since they are going out and buying everything in sight I am of the opinion that they are going off the CB reservation. OTOH, I do think they want to be the world's reserve currency, squashing us in the procees would be a bonus.
Right. The Asians see right thru the Jews. No way Soros and BanksterGlobalist Inc. are going to control that part of the world they way they do the Euro/Anglosphere....which is itself about to come to serious grief in the Middle East. All good.
They'll use the bankers just the way the did US politicians.
That's what I would do. I doubt will involve the Yuan, however.
if it's "funny money" then it has to be funny debt. A confidence game needs players and they are catching on. Someone is going to lose an eye before it's over.
In the end calling it funny money is child's play. Will we be able to call the debt odious and declare it as illegite or do we die a thousand cuts like Greece?
Forget unfunded liabilities for a moment. Think deeper...the real cost of the Banker Bailout is estimated between 12.8-16 TRILLION dollars. This money is EXCLUDED from our REAL/OWED NOW debt. Just as the losses of Fannie and Freddie are exclueded. Makes you wonder, what else is excluded. I would say that our real debt is closer to 30 trillion dollars, not the reported 15.3 trillion.
If you believe our debt is 15.3 trillion dollars then you also believe that unemployment is at 8.3%, and inflation is at 2%.
In Aug 2010, maybe 2009, Laurence Kotlikoff who is/was then tenured prof of economics at Boston Univ published his "findings" that The USA Actual Debt on Federal level including unfunded liablilities was $207 Trillion.... This was reported widely and published in the WSJ....
About 5-6x that level for the collective nation on personal and all govt & quasi-govt entity basis; but that is MY Projection...
You are not even close.
The debt is a wash with GDP ... actually a couple percent higher than GDP.
http://www.usdebtclock.org/
Then take the $40+ Trillion gap on the bottom, netting all assets against the unfunded liabilities for the socialist entitlement programs.
While we celebrate 3% fudged GDP, the entitlement programs, particularly the medical portions, inflate at what ... 8% annually?
3% fake growth #s don't hold a candle to the entitlement growth rates.
TOAST. TOAST. and TOAST.
I know, I know
but still, I cannot believe it
Is this the real world
or only a mere dream?
Is any of this real? om
Row row row your boat
Gently down the stream
Merrily merrily merrily merrily
Life is but a dream
Dream? I think most rational folks would consider it a nightmare.
To be or not to be, is that the question? For if we can ask the question it means it is real. However, this existence may be one radioactive permeation out of billions or more.
The cycle of the producer is 40 years. The cycle of the robber is 40 years. One human lifespan of 80 years. You have seen the extremes of both cycles, or a least I think you have. And after 80 years the world is in another supercycle of debt deleveraging where the robbers still run the system. But not for much longer.
Peace to you Oldman, take comfort you're still contributing wisdom. We cannot save ourselves from evolution, only evolve forward inch by inch. God bless you Oldman and thank you for the wisdom.
Old Man, your post ran though my head and I found myself singing Bohemian Rhapsody. All I ended up with is this. "nothing really matters, anyone can see, nothing really matters to meeeeeeeeeee"
Anyway the wind blows
Double post
"China is settling more and more in Yuan, this is happening faster than anyone could have imagined" Bob Pisani CNBS 3/9/12
fuckin assholes letting us know at the last minute.
"I'm worried about oil one of these weekends between now and Fathers day really worries me" Jim Cramer CNBS
How long will it take for this to happen? Same article, new day. include Gold in your portfolio.
I picked up a couple 100 trillion Zimbabwe notes a while back, I keep one in my wallet. The look on people's faces when I pull it out, priceless...
I got a couple of 10 trillion Zimbabwe notes in late 2009 (I prefer the green color).
Then kids of good friends, all in the age range of 5 to 14, each received one in a Christmas card with an explanation along the lines:
"[...] Yes, this is real money! It's a gift for you, you can now say you're a trillionaire. Unfortunately, you will not be able to buy much more then one chewing gum with it..."
I hope I have sowed the seeds of very critical thinking on fiat currencies within them.
The look on people's faces when I pull it out, priceless...
I carry 2 coins...one has cccp on it and the other is Yugoslavia or something...as tangible as they look they are still failed currencies...it happens.
Dropped by a coin shop, they had some on display, $9 a piece. Wow. 100T:$9
Funny, I get the same reaction with PM's.
One of the major obstacles of a pure MMT system is that you have to convince everyone else it's a good idea to jump aboard the suicide express when it's really the case that you're the one that's out of options ... and the others aren't.
$USD rose to global dominance after WWII when the US suddenly had no serious global-level challenger (conventional, or nuclear).
Remember when those anti-capitalist commies in B-grade 1950s propaganda movies wanted bribes, blackmailings, betrayals and kickbacks paid in $USD ...what's the bet they would want gold, and other stable commodities* today?
* NOTE: The CIA stranglehold on production and delivery of cocaine and opiates means these 'commodities' will remain priced in $USD for a while longer, which may help with US exports.