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9 Signs That China Is Making A Move Against The U.S. Dollar

Tyler Durden's picture




 

While 20-year highs for the CNY may be enough for many to question the USD's ongoing reserve status, it is clear that there are many other plans afoot that undermine the dominance of the greenback.

Submitted by Michael Snyder of The Economic Collapse blog,

On the global financial stage, China is playing chess while the U.S. is playing checkers, and the Chinese are now accelerating their long-term plan to dethrone the U.S. dollar.  You see, the truth is that China does not plan to allow the U.S. financial system to dominate the world indefinitely.  Right now, China is the number one exporter on the globe and China will have the largest economy on the planet at some point in the coming years. 

The Chinese would like to see global currency usage reflect this shift in global economic power.  At the moment, most global trade is conducted in U.S. dollars and more than 60 percent of all global foreign exchange reserves are held in U.S. dollars.  This gives the United States an enormous built-in advantage, but thanks to decades of incredibly bad decisions this advantage is starting to erode.  And due to the recent political instability in Washington D.C., the Chinese sense vulnerability.  China has begun to publicly mock the level of U.S. debt, Chinese officials have publicly threatened to stop buying any more U.S. debt, the Chinese have started to aggressively make currency swap agreements with other major global powers, and China has been accumulating unprecedented amounts of gold.  All of these moves are setting up the moment in the future when China will completely pull the rug out from under the U.S. dollar.

Today, the U.S. financial system is the core of the global financial system.  Because nearly everybody uses the U.S. dollar to buy oil and to trade with one another, this creates a tremendous demand for U.S. dollars around the planet.  So other nations are generally very happy to take our dollars in exchange for oil, cheap plastic gadgets and other things that U.S. consumers "need".

Major exporting nations accumulate huge piles of our dollars, but instead of just letting all of that money sit there, they often invest large portions of their currency reserves into U.S. Treasury bonds which can easily be liquidated if needed.

So if the U.S. financial system is the core of the global financial system, then U.S. debt is "the core of the core" as some people put it.  U.S. Treasury bonds fuel the print, borrow, spend cycle that the global economy depends upon.

That is why a U.S. debt default would be such a big deal.  A default would cause interest rates to skyrocket and the entire global economic system to go haywire.

Unfortunately for us, the U.S. debt spiral cannot go on indefinitely.  Our debt is growing far, far more rapidly than our GDP is, and therefore our debt is completely and totally unsustainable.

The Chinese understand what is going on, and when the dust settles they plan to be the last ones standing.  In the aftermath of a U.S. collapse, China anticipates having the largest economy on the planet, more gold than anyone else, and a respected international currency that the rest of the globe will be able to use to conduct international trade.

And China is not just going to sit back and wait for all of this to happen.  In fact, they are already doing lots of things to get the ball moving.  The following are 9 signs that China is making a move against the U.S. dollar...

#1 Chinese credit rating agency Dagong has downgraded U.S. debt from A to A- and has indicated that further downgrades are possible.

#2 China has just entered into a very large currency swap agreement with the eurozone that is considered a huge step toward establishing the yuan as a major world currency.  This agreement will result in a lot less U.S. dollars being used in trade between China and Europe...

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

"It's a way of promoting European and Chinese trade, but not doing it with the U.S. dollar," said Brooks. "It's a bit like cutting out the middleman, all of a sudden there's potentially no U.S. dollar risk."

#3 Back in June, China signed a major currency swap agreement with the United Kingdom.  This was another very important step toward internationalizing the yuan.

#4 China currently owns about 1.3 trillion dollars of U.S. debt, and this enormous exposure to U.S. debt is starting to become a major political issue within China.

#5 Mei Xinyu, Commerce Minister adviser to the Chinese government, warned this week that if the U.S. government ever does default that China may decide to completely stop buying U.S. Treasury bonds.

#6 According to Yahoo News, China has already been looking for ways to diversify away from the U.S. dollar...

There have been media reports this week that China's State Administration of Foreign Exchange, the body that handles the country's $3.66 trillion of foreign exchange reserve, is looking to diversify into real estate investments in Europe.

#7 Xinhua, the official news agency of China, called for a "de-Americanized world" this week, and also made the following statement about the political turmoil in Washington: "The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized."

#8 Xinhua also said the following about the U.S. debt deal on Thursday: "[P]oliticians in Washington have done nothing substantial but postponing once again the final bankruptcy of global confidence in the U.S. financial system".  The commentary in the government-run publication also declared that the debt deal "was no more than prolonging the fuse of the U.S. debt bomb one inch longer."

#9 China is the largest producer of gold in the world, and it has also been importing an absolutely massive amount of gold from other nations.  But instead of slowing down, the Chinese appear to be accelerating their gold buying.  In fact, money manager Stephen Leeb says that his sources are telling him that China plans to buy another 5,000 tons of gold.  There are many that are convinced that China eventually plans to back the yuan with gold and try to make it the number one alternative to the U.S. dollar.

So exactly what would happen if the Chinese announced someday that they were going to back their currency with gold and would no longer be using the U.S. dollar in international trade?

It would change the face of the global economy almost overnight.  In a previous article, I described some of the things that we could expect to see happen...

If China does decide to back the yuan with gold and no longer use the U.S. dollar in international trade, it will have devastating effects on the U.S. economy.  Demand for the U.S. dollar and U.S. debt would drop like a rock, and prices on the things that we buy every day would soar.  At that point you could forget about cheap gasoline or cheap Chinese imports.  Our entire way of life depends on the U.S. dollar being the primary reserve currency of the world and being able to import things very inexpensively.  If the rest of the world (led by China) starts to reject the U.S. dollar, it would result in a massive tsunami of currency coming back to our shores and a very painful adjustment in our standard of living.  Today, most U.S. currency is actually used outside of the United States.  If someday that changes and we are no longer able to export our inflation that is going to mean big trouble for us.

The fact that we get to print up giant mountains of money and virtually everyone around the world uses it has been a huge boon for the U.S. economy.

When that changes, the word "catastrophic" is not going to be nearly strong enough to describe what is going to happen.

According to a Rasmussen Reports survey that was released this week, only 13 percent of all Americans believe that the country is on the right track.  But the truth is that these are the good times.  The American people haven't seen anything yet.

Someday people will look back and desperately wish that they could go back to the "good old days" of 2012 and 2013.  This is about as good as things are going to get, and it is only downhill from here.

 

 

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Fri, 10/18/2013 - 20:12 | 4070798 Zer0head
Zer0head's picture

and the sign says:

$O

Fri, 10/18/2013 - 20:13 | 4070805 slotmouth
slotmouth's picture

Is this buzzfeed or zh?

Fri, 10/18/2013 - 20:20 | 4070823 Xibalba
Xibalba's picture

one for them, one for us

 

 

works for Hollywood

Fri, 10/18/2013 - 20:49 | 4070882 knukles
knukles's picture

Easy to see what's going on.
Chinese tired of Uncle Sam's push, meddle, mess things up for everybody, world wide military adventures, hypocritical prognostications, etc.
What's the best way to get rid of Uncle?
Get the dollar off center as the reserve currency.
Then there'll be nobody left taking it by default (yuck yuck)
Other currencies take its place.
Which means demand for dollars falls.
Which means the US cannot finance its massive budget deficits.
Meaning it cuts back its global economic/military hegemony

No more problems from Uncle.....

Now that, my friends is the REAL Currency War.
Not the piddling and tweaking about the corners about devaluations, etc., etc., etc

And nobody in DC gets this... at least in the current power base or things'd be one hell of a lot different (Sane... Hell even Cruz's folks would be centerists... cut the spending because you got to becomes real time here and now....)

 

Fri, 10/18/2013 - 21:16 | 4070937 SafelyGraze
SafelyGraze's picture

"9 Signs That Democratic Freedom-loving Constitution-driven Open-market Faith-tolerant Rule-of-law China Is Making A Move Against The U.S. Dollar"

you gotta be kidding

only nine?

Fri, 10/18/2013 - 22:06 | 4071043 markmotive
markmotive's picture

Go one step further and you could say that China is trying to 'De-Americanize' the world.

http://www.planbeconomics.com/2013/10/china-to-de-americanize-world-coll...

Fri, 10/18/2013 - 23:05 | 4071152 FMR Bankster
FMR Bankster's picture

Chess and us checkers? Actually they are playing go.

Sat, 10/19/2013 - 01:20 | 4071273 PP
PP's picture

I can tell you most Chinese common citizens are critisizing (not wondering) that Government own so much US debt, even though they don't know what is US debt and how it functions. You can see numerous negtive comments followed with EVERY US dept news on Internet. 

We severely think that it is essential to lower US debt holding in China, otherwise when US defaults of depreciation dollar, there will be a war between two countries.

Sat, 10/19/2013 - 02:04 | 4071307 Thought Processor
Thought Processor's picture

China holding US debt is smart at this point.  It gives China both a seat at the big table and it gives them leverage.  Leverage that can be used at any negotiating table China sit's at.  

And with leverage comes power.  Just as a bank has power over a borrower so China has power over the US.  

Perhaps a worthwhile investment when looked at in that context.

 

Sat, 10/19/2013 - 02:29 | 4071319 fockewulf190
fockewulf190's picture

Not for nothing but this play by the Chinese has been obvious for some time already. China has not officially updated their gold holdings for years, even though thousands of tons have headed east.

Regarding the threat of war if the US defaults, the Chinese are quite aware of the track record for fiat currencies. They all fail. Every single fiat currency that ever existed has eventually devolved into extiction. 100% batting average. Why they believe it won't happen to the dollar, is beyond me. Actually, many of the Chinese public may not know what the deal is, but the Chinese government knows for sure that the dollar is doomed...which is why they are buying all the phyzz they can so that they can be the next reserve currency. They do not need war to become the strongest economic power in the world. They need gold...and they are getting it.

Sat, 10/19/2013 - 03:06 | 4071336 Lost My Shorts
Lost My Shorts's picture

When gold was $300 per ounce, the Chinese were piling up paper.  Now they are trading the paper for gold at a 75% discount.  Better late than never, but this is not exactly the crescendo of a brilliant strategy.

Everyone hates the Bernank like Satan himself, but poor Ben was dealt a bad hand.  Sort of like a 2-3-4-5-7 after his predecessors had lost all the chips already.  If he had allowed a brutal deflation to occur, raising the value of all the Chinese paper, the Chinese would have licked their chops and more or less bought the USA.  They would have loved that.  Among all the bad choices Ben had, he decided the least bad was to trash the dollar, cut the value of the Chinese paper stack by two thirds, and force them to liquidate their dollars at a deep discount.  They hate that, and so they bitch non-stop.

The classic IMF advice to a banana republic that spends its way into a currency crisis is to devalue.  Not really advice; more like a command.  The USA is a banana republic that spent its way into a currency crisis, so ... devalue.

Sat, 10/19/2013 - 09:04 | 4071533 Sean7k
Sean7k's picture

Zionists are never dealt a bad hand, they are the holders of the deck. There is no battle here, there is merely a manufactured means to an end: global slavery through debt, held by zionists. Bernanke is just another whore of babylon. 

Sat, 10/19/2013 - 12:57 | 4071805 jbvtme
jbvtme's picture

much ado...chinese and american yellow and white rothschild sock puppets. the only question is whether the genetically modified melamine milkshakes will be priced in dollars or yuan

Sat, 10/19/2013 - 02:39 | 4071325 Lost My Shorts
Lost My Shorts's picture

Not sure about that ... I thought the joke was:  borrow a million and the bank owns you; borrow a trillion and you own the bank.

On the other hand, dollar reserve currency status has been on balance a curse, not a blessing to the US.

-- shipping all our jobs to china while they pile up T-notes has been a curse, not a blessing

-- enabling the run-away government deficit has been a curse, not a blessing.

-- enabling costly perverse global empire has been a curse, not a blessing.

Ending dollar reserve status will be a blessing, not a curse.  Our government will need to stay within its means.  We will get our jobs back.  No more boondoggle foreign wars.  Please bring it on.  The problem is really the opposite -- it won't happen soon enough.  Think about it.  Would you trust the Chinese government to redeem your yuan for gold?  Big nose have small brain if big nose fall for that one, ha ha.

Sat, 10/19/2013 - 12:38 | 4071784 flapdoodle
flapdoodle's picture

It may be a blessing longer term, but there is a horrendous woar between there and where we are now... as for being a curse now, not so for TPTB, as it has enhanced their power and fortune, while creating a false sense of plenty in the US and the sheeple contented.

Sat, 10/19/2013 - 14:26 | 4071987 Marco
Marco's picture

It's not a pure curse for competetiveness/jobs ... the cost of wages is higher due to the overvalued dollar, but the cost of physical inputs is actually lowered.

A lot of the most productive industries in the US rely on the latter, when it dissappears it's going to cause pain.

Sat, 10/19/2013 - 07:35 | 4071447 Wahooo
Wahooo's picture

Exactly right. China has no interest in defeating the U.S. and pushing it into economic oblivion. There is a lot of negotiating leverage they will gain by strengthening their currency.  So as we approach the Yuan Hour, expect the U.S. to give away Taiwan and to have a few words with Japan about those silly islands, not to mention opening up our domestic assets to M&A approval.

Sat, 10/19/2013 - 17:55 | 4072287 jerry_theking_lawler
jerry_theking_lawler's picture

the .fed will be wanting to buy this debt very soon.....at a nice premium with freshly minted bennie (i mean jannie) bucks....

Sat, 10/19/2013 - 02:18 | 4071295 Thought Processor
Thought Processor's picture

The dollar will continue to decline in value.  No surprise there.  Simple supply and demand.  There is an oversupply of dollars sloshing around the world at the moment.  One theory of the FED's actions says that they are simply an effort to soak up excess dollar supply via debt purchases with the ultimate objective being the retirement of that debt outright at some point.   If so FED bond buying will continue uninterrupted.  

They have no choice.  Too many dollars on the market would throw everything out of whack.  That said this article hits it on the head, in that when others around the world decide en mass to move out of the USD the FED will have a real problem on its hands.  The trickle will become a flood.  

The US has its back up against the wall.  And is cornered as well.  The US exported inflation to the rest of the world for decades and printed enough US Dollars for all major countries to use.  Now its simply pay back time.  A rebalance of sorts.  Only problem is that when the dollar homecoming comes (already begun), it will not take decades.   There in lies the problem and the real issue at hand-  Sharp adjustments in economic status breed instability.  Instability fosters unrest.  Unrest fosters upheaval.  Hence all the talk of the great reset shock to come (mostly for the US).

Look at the balance sheets of the world's key players and it becomes clearer:  The balance sheets of the US, Europe, and Japan (Leading western economies) are all in the danger zone, having used up their resources and having squeezed all the blood from their longstanding monetary regimes all of which are at the end of their lifespans.  All need a reset war badly.  Conversely China, Russia, and Iran all have stellar balance sheets and as a group perhaps even have resources to spare.  Their economies, while certainly not perfect are in much better shape than the Western Ruling powers.

The US has it's military.  A certain advantage in any reset war.  It remains the big dog on the block as long as it is funded amply.

This is the game table as it stands.  

To those with means (real money) the currency game is a sideshow.   The true elite of this world could care less who's countries money their assets are denominated in, they only want stability of exchange for major currencies around the world so that they are free to move where needed, when needed.

Almost all Central Banks around the world report to the BIS and those that run the BIS will do anything to maintain the stability of currency exchange at the international banking level.  The real elite do not care who wins this in the end.  Real assets will always be assets.  Money will go to wherever it needs to go to acquire assets that maintain their value or provide a return.  Money doesn't care what form it takes, as it is only a transitory exchange device for real assets.

Change is coming.  How fast is anyone's guess.  

Those with enough funds to bank internationally will simply move their chips around and trade one asset for another.  Same as it ever was.

We the people will certainly feel it though.  For we long ago gave up control of our own affairs.  And that control was given to those who care not for people, but for assets.

And therein lies the irony.

 

Sat, 10/19/2013 - 03:07 | 4071322 zhandax
zhandax's picture

There is an oversupply of dollars sloshing around the world at the moment.

Is there really?  If that were true, the DX wouldn't keep hanging around 80 during the largest dollar debt expansion in history.  I agree with the oversupply of dollars, but sloshing around excess reserve accounts, shadow banking, ICE, and nasdog is not immediately or exactly the same as 'around the world'.  I will agree the US has its back against the wall and is cornered, but not for the same reasons.  The US has to provide a sufficient supply of dollars to meet the funding needs of a bankrupt European banking system.  This is accomplished by either supplying new dollars, or allowing the existing dollar stock to increase in value.  The US no longer produces enough real output (goods) to allow (or afford) for the dollar to strengthen.  And it can no longer grow GDP fast enough to keep up with new dollar supply via debt.

Add in that the largest single US GDP contributor now is the FIRE industry and bankers don't make much money by allowing a stronger dollar to grease the global wheels of commerce; they make their killing from debt (collecting interest on it, trading it, re-hypothecating it, etc).  So the US is well and truly screwed, but it is an entirely self-inflicted wound.  The Chinese understand this and are making all possible moves to allow the victim to bleed out and be ready to fill the void.

Sat, 10/19/2013 - 13:13 | 4071850 Bioscale
Bioscale's picture

The interest rates are fake and too low, they cannot fix this, they are going to increase, rather sooner than later for some reason.

They can play the game about dollars scarcity for some time, but not for long. They have shown all their cards. Maybe I'm wrong but I think that a lot of people around the world have got it, beside american people. They will suffer the most.

Sat, 10/19/2013 - 10:41 | 4071665 dtwn
dtwn's picture

+10, well articulated.

Sun, 10/20/2013 - 01:05 | 4071403 Dubaibanker
Dubaibanker's picture

The case for Chinese Yuan as an Alternate Currency to the USD.

There are many more signs......You can have a look here...http://www.slideshare.net/mnathani/understanding-the-coming-domination-o...

A snapshot of what the Chinese have accomplished over the last 2-3 decades. It is really mindblowing if we add everything together.

Fri, 10/18/2013 - 21:19 | 4070943 Milestones
Milestones's picture

Knukles-well thought out post.My lords the when this happens (not if) it will hit like a 9.5 quake in this world. Thank Gawd I'm getting long in the tooth but I am pissed for my grandchildren. Time to redo the Joan of Arc thingy.               Milestones

Fri, 10/18/2013 - 21:30 | 4070959 Milestones
Milestones's picture

Knukles-well thought out post.My lords the when this happens (not if) it will hit like a 9.5 quake in this world. Thank Gawd I'm getting long in the tooth but I am pissed for my grandchildren. Time to redo the Joan of Arc thingy.               Milestones

Duplicqte post-sorry

Fri, 10/18/2013 - 22:36 | 4071108 Antifaschistische
Antifaschistische's picture

I have an idea...who said the world needs a Reserve Currency!   Using any rationale purely economic concept, why would storing pieces of paper to store wealth be a good plan?

Sure...I understand why every counterfeiter has an incentive to keep people interested in that which they create.  So, governments will continue to want to replace the US Counterfeit Fiat Dollar with their own Counterfeited Fiat Currency.  I can't blame them for that of course...but the world does not need paper storage wealth

Sat, 10/19/2013 - 00:21 | 4071238 BeanusCountus
BeanusCountus's picture

Who says the world needs a reserve currency? Well that would be the USA. As long as its the US dollar. And we will protect it at any cost. Because without it, we cannot spend beyond our means and continue to buy more from the rest of the world than we produce. Self preservation at this point. Can't say when it will end, but it will.

Sat, 10/19/2013 - 02:57 | 4071332 zhandax
zhandax's picture

Only for the last 75 or so years.  And think of it more as a habit as a need.  For much of history, there was one currency or other that, during that time period, was commonly accepted by a large number of other country's merchants for trade.  So if supplier X in one country wanted to sell to buyer Y in another country and neither country did enough business with each other for there to be a supply of the others currency available, they used a common currency to facilitate trade.  Since that common currency was so prevalent, it is now regarded as the reserve currency of that era.  Witness Tyler's chart the other day of how long a reserve currency typically lasts.  The term 'reserve currency' is a fairly recent addition to the vernacular.  But the custom, or habit, has been around for centuries.  It has become superfluous in the last 10 or 15 years, but old habits die hard, and since the US walked out of Breton Woods as the reserve currency, and later got Saudi commitment to the petrodollar, the US has done everything in their power to insure that one habit is harder to kill than Bronx cockroaches.

Sat, 10/19/2013 - 02:35 | 4071323 Socratic Dog
Socratic Dog's picture

I think you missed a key point, that when the yuan becomes the reserve currency, it won't be fiat, it will be gold-backed.  That means you can freely exchange your currency for gold at a fixed rate.  Same as it once was for the $US.  As I understand it, anyway.

Sat, 10/19/2013 - 07:39 | 4071452 Wahooo
Wahooo's picture

Well, you can trade Yuan for gold, of course the US dollar will be so devalued that you won't be able to afford gold. Might be a good time to buy some Yuan.

Sat, 10/19/2013 - 09:15 | 4071540 Sean7k
Sean7k's picture

The Yuan will NEVER be gold backed. That is a bad strategy and even China knows it. Countries merely bleed your supply to the point where you end gold payments ( think Nixon). Zionists make money from leverage,hypothecation and debt interest. This is not possible with gold backing. 

Taking advantage of a global slave force requires paper money, controlled media and entertainment, and political division. Much like this silly argument.

Sat, 10/19/2013 - 14:45 | 4072019 layman_please
layman_please's picture

jim willie has a take on it by which you are right about renminbi not being backed by gold but according to him there will be gold trade settlements.

Sat, 10/19/2013 - 16:39 | 4072186 Sean7k
Sean7k's picture

There already are gold trade settlements (Iran, Pakistan, India, etc) whatever it takes to get around sanctions (black markets).

I would suggest gold will be part of a basket of resources that back the SDR as a global reserve currency. Gold will either be seized as part of the national treasure needed to guarantee access to trade or forced collateral through windfall tax agreements that allow you to make a guaranteed return.

Zionists will never let goyim get wealthy through gold appreciation. Since most people have zero gold, what will it matter to them? People still believe markets matter- the central banks have clearly destroyed that argument.

Lacking a revolution that terminates the currency systems and central banking, recreates free media and decentralizes power structures, the chains will just get stronger and lighter- benevolent slavery.

Tyranny is pretty basic stuff.

Fri, 10/18/2013 - 23:08 | 4071145 q99x2
q99x2's picture

I think Washington D.C. globalists plan to make money by attacking the US. That is what they have been doing. Why would they stop?

I mean they made China what it is today. I started out in life as a machinist. Then a network engineer. I finally took up dog walking because I didn't see how they could ship that job to China. Then competition became so severe from laid off Hispanic construction workers and illegal immigrants that I went back to college.

Now I go to college for a living.

Fri, 10/18/2013 - 23:31 | 4071201 DeadFred
DeadFred's picture

You clearly lacked in marketing skills. How many people want a dog with a spanish accent? That alone should have kept you and your pooper-scooper active. My wife's boss once took her young child to work but the child seemed pretty dull. "Caroline, come over here" got no response, just a blank look. That's until one of the workers (who had met the nanny) got her to respond with "Caroline, venga aqui".

Sat, 10/19/2013 - 02:38 | 4071324 Socratic Dog
Socratic Dog's picture

When the reset comes you'll be back as a machinist.  A skill that will be very sought after when we can no longer import anything and everything.

Sat, 10/19/2013 - 03:24 | 4071343 zhandax
zhandax's picture

For about three weeks and then he will have 100 people to train.

Sat, 10/19/2013 - 10:33 | 4071595 Winston Churchill
Winston Churchill's picture

Only if he is a toolmaker.

Mass repitition machinists died with cnc machines.

Many lifetemes ago I made my own tools for my engineering biz. when I had the time.

Like all skills unfortunately, they atrophy over time and cannot be be book learned..

Sat, 10/19/2013 - 07:41 | 4071455 Wahooo
Wahooo's picture

Forget the college. At this point go hire 20 of those immigrants and market yourself as the 7x24 dog sitting/walking agency. Be the boss.

Fri, 10/18/2013 - 23:03 | 4071149 10mm
10mm's picture

People in D.C. get this. They just perpatrate a fraud. A collaboration of many.

Sat, 10/19/2013 - 00:20 | 4071237 Gamma735
Gamma735's picture

The currency war is always just a prelude to world war.

Sat, 10/19/2013 - 08:11 | 4071474 Keyser
Keyser's picture

It's not as if China is doing anything to cause the USD to die. The numpties in Washington are doing a fine job of that without any outside assistance. 

 

Sat, 10/19/2013 - 09:02 | 4071531 DanDaley
DanDaley's picture

And nobody in DC gets this... at least in the current power base or things'd be one hell of a lot different.

Unless Obama and Co. think that its better to serve in hell (rule a Zimbabweian POS banana republic) than to serve in heaven (follow the Constitution and do what's right to your own citizens and other countries).

 

The Obama Doctrine looks like this: Drive a beat up old Cadillac, just make sure that everybody else is running around in ox carts.

   

Sat, 10/19/2013 - 09:22 | 4071547 Eeyores Enigma
Eeyores Enigma's picture

"...and when the RADIOACTIVE dust settles they plan to be the last ZOMBIES standing."

FIXED IT

They will pry reserve currency status from our cold dead hands.

Just saying!

Fri, 10/18/2013 - 20:49 | 4070884 unununium
unununium's picture

Optimists, don't make the mistake of thinking that dethroning of the US dollar means anything bad for the American and European elite.  China and the USA are both pawns, ref. Tyler's chart for the long and regular line of globar reserve currencies, played out like so many stages of a booster rocket.

And don't take your eyes off bitcoin.

Fri, 10/18/2013 - 22:22 | 4071077 zorba THE GREEK
zorba THE GREEK's picture

Some day soon, the biggest holiday in the U.S. is going to 

be Chinko De Mayo.

Sat, 10/19/2013 - 03:29 | 4071348 zhandax
zhandax's picture

Damn, zorba, I almost choked on that one

Fri, 10/18/2013 - 20:16 | 4070814 Demonoid
Demonoid's picture

Gold is money.

FRNs are currency.

As with a man, only crisis can reveal the true character and worth of each.

Fri, 10/18/2013 - 20:43 | 4070836 kevinduhand
kevinduhand's picture

Just No. China is never gonna blow up the system

Fri, 10/18/2013 - 20:46 | 4070877 runningman18
runningman18's picture

How many ways do the Chinese have to say they are going to dump the dollar before people listen?

Fri, 10/18/2013 - 21:03 | 4070904 kevinduhand
kevinduhand's picture

90% of Chinese officials takes money from Chinese peasants and send it overseas to their family who hold green card/EU passport or whatever.

Take Chairman Xi JinPing as an example:

His eldest sister Xi Cao Cao holds Canadian passport.

His 2nd sister Xi An An holds Australian passport and lives in Australia.

His brother Xi Yuan Ping holds Australian passport.

His daughter has a green card and is studying Harvard. You'd also assume his wife holds a green card.

http://i.uwants.com/u/attachments/day_120704/20120704_912a901ad8c1d7cc5b...

 

Now even the Communist Chairman has sent all his relatives(note: and money) overseas, think about all the other Chinese officials.

Why in the world would Chinese officials make their family's USD/EUR/CAD/AUS cash and assets worthless?

 

Fri, 10/18/2013 - 22:32 | 4070926 kevinduhand
kevinduhand's picture

If China and the world really start dumping the USD, then it would be good for everybody on the planet since there'd be a reset and we will no longer be debt slaves to the big banks.

But I highly doubt that will happen since the elites of the world are all still reliant on USD and its ponzi scheme.

Fri, 10/18/2013 - 22:45 | 4071117 NidStyles
NidStyles's picture

Except you are ignoring tha tthey have been using what's left of that 3 Trillion in treasuries they had 5 years ago to grab up real estate and other hard assets.

 

Like the dude before you said, why is it so hard when they keep saying what they are doing?

Sat, 10/19/2013 - 09:38 | 4071572 AnAnonymous
AnAnonymous's picture

Buying hard assets where?

In 'american' controlled turf?

Private property does not exist in 'american' societies. 'Americans' are thieves at heart.

Funnily enough, the chinese might manage to beat the Indians here.

It is well known that 'americans' built their 'american' mecca on Earth the US by thieving the Indians as much it could. Right now, they are forcing the Indians to buy back what is legitimately theirs.

So the Chinese:

-they get thieved by selling things to gain USD.
-they buy hard assets using those USDs.
-those hard assets are waiting to be thieved by 'americans'
-Chinese will have to buy once again back those hard assets once thieved.

'Americans', always improving on schemes to extort the weak, farm the poor...

Sat, 10/19/2013 - 10:24 | 4071638 TheFourthStooge-ing
TheFourthStooge-ing's picture

Chinese citizenism citizens and their fabled past. It is heavy. Cultural endoctrination and a specific genetic make up accomplish wonders.

Chinese citizenism bends everything and deprive human beings from the capacity of thinking straight. But lieing always comes at a cost for somebody somewhere. People who makes a living by projecting fallacies have done harm.

No answer when confronted to the exposure of fabled past.

Now, fabled future.

Sat, 10/19/2013 - 02:07 | 4071305 palmereldritch
palmereldritch's picture

The posturing is just a Paper Tiger to herd the globe into SDRs as an incipient world currency that will be heavily weighted in yuan denominations.  A reset would flush their investment.  What good is a DIP if you can't liquidate them?

Nah...what am I thinking?....One World Government and a Global(ist) Currency is conspiracy theory....


Sat, 10/19/2013 - 05:52 | 4071349 zhandax
zhandax's picture

Bingo!  Here is your hint:

warned this week that if the U.S. government ever does default that China may decide to completely stop buying U.S. Treasury bonds.

May decide to completely stop?  "Every thing is show biz"   http://www.youtube.com/watch?v=u6G3xXrRN50

Theater to them.  Reality to us; who has skin in this game and what can we do to insure it is at risk?

Sat, 10/19/2013 - 03:50 | 4071353 kevinduhand
kevinduhand's picture

USA still needs to lose the petrodollar status for the global currency to happen though, something like losing control of Egypt or doing something to piss off Saudi Arabia will definitely help.....

Sat, 10/19/2013 - 08:16 | 4071479 Keyser
Keyser's picture

You mean like not invading Syria? 

And Egypt? you must be kidding. The US has lost all control in the ME. 

 

Sat, 10/19/2013 - 09:10 | 4071537 DanDaley
DanDaley's picture

Here again the Chinese demonstrate their intentions to economically and technologically subvert a superior power (the US): 

http://en.wikipedia.org/wiki/Unrestricted_Warfare

Fri, 10/18/2013 - 23:09 | 4071162 Diogenes
Diogenes's picture

They will be tipped off and change all their money into gold or yuan the day before the US dollar gets shot down. Duh.

Sun, 10/20/2013 - 09:33 | 4073243 zhandax
zhandax's picture

Been a couple of years since you tried to sell a $trillion of bonds in a day?

Sat, 10/19/2013 - 09:39 | 4071574 AnAnonymous
AnAnonymous's picture

90% of Chinese officials takes money from Chinese peasants and send it overseas to their family who hold green card/EU passport or whatever.
______________

Sometimes, some 'americans' lose themselves and tell it like it is.

Nobody is perfect, not enough 'americans'.

Sat, 10/19/2013 - 10:28 | 4071643 TheFourthStooge-ing
TheFourthStooge-ing's picture

Ah, Chinese citizenism citizens, dancing around facts because facts indict them.

Nobles were of the old dynasty, dynasty the Chinese Citizenism Communautist Party destroyed. Nobles used to do noble things. Now Chinese citizenism citizens are doing Chinese citizenish things and those are not noble.

And as usually, hijacking a large human condition to justify themselves in their very peculiar course of actions.

Fri, 10/18/2013 - 21:49 | 4071000 aardvarkk
aardvarkk's picture

Yeah, it's remarkable, isn't it?  Both that our politicians can be THAT obtuse (even for them, this is something special) and also that such a formal and circumspect people as the Chinese would be so direct and forceful in basically saying "don't make us put you over a barrel and have our way with you".  I wouldn't blame them, but that's really just not the Chinese way.

And yet, in everyday life whenever I tactfully bring up the possibility of maybe buying some gold, or even some extra supplies to keep in the basement, people think I'm nuts.  Or worse, a terrorist or something.

Our society is in quite a pickle.  And I guess I'm going to have to quit trying...I've already compromised opsec more than I care to, and I think the time is starting to draw near when that will become more important.  May even have to quit commenting on the internet, or even using my own connection to visit places like ZH.  That makes you a terrorist, you know.

Fri, 10/18/2013 - 23:04 | 4071150 Chief_Illiniwek
Chief_Illiniwek's picture

Given today's closing exchange rates on the USD, at least ONE MORE way...

Sat, 10/19/2013 - 11:30 | 4071718 Flagit
Flagit's picture

whats up with your name?

Fri, 10/18/2013 - 20:31 | 4070847 Haus-Targaryen
Haus-Targaryen's picture

I have TP.  Lots of it.  I want to buy a new Beemer.  Do you think I could take a 16 pack of Scharmin Ultra Soft and pick up just an entry level 3 series?  I'm thinking like a 320i? 

Fri, 10/18/2013 - 21:55 | 4071013 monad
monad's picture

Is it clean?

Fri, 10/18/2013 - 20:33 | 4070849 Ivanovich
Ivanovich's picture

Just curious, but let's think this through.  The Yuan is released from it's USD peg.  They supposedly back it with gold.  It soars.  What, then happens to Chinese production and manufacturing?  What happens to all their people who work in manufacturing?  What happens to Chinese unemployment and the politburo's power hold?

 

 

Fri, 10/18/2013 - 20:39 | 4070865 Tinky
Tinky's picture

Much more likley to be a basket of currencies.

Fri, 10/18/2013 - 20:46 | 4070875 Singelguy
Singelguy's picture

In the past 10 years, China has created a middle class of 450 million people, much larger than the US market. China's economy is shifting from an export driven one, to manufacturing for domestic consumption. As such, they are becoming less dependent on exports to the USA. A strong yuan will allow them to import raw materials at a much lower cost. They will also build stronger trade relations with Africa and South America. Just as the USA did after WWII, China will create multinational corporations and shift manufacturing to lower cost labor countries. The USA might be one of them once the US dollar is worthless.

Sat, 10/19/2013 - 11:40 | 4071725 Flagit
Flagit's picture

 

Just as the USA did after WWII, China will create multinational corporations and shift manufacturing to lower cost labor countries

GOOD!

then those fuckers can spend their saturday driving back and forth to harbor freight 3 times to get tools replaced that were mismatched, improperly milled, or absolutely not worth a fuck.

Fri, 10/18/2013 - 20:50 | 4070886 RafterManFMJ
RafterManFMJ's picture

Perhaps, Ivanovich, the Chinese have been clued in that all fiat will be shifting to a gold backing, and all will in turn be simultaneously devalued against gold.

Properly warned they are racing to stock up on gold to participate; using the threat of mass dump of Treasuries, they compel the US to keep the gold price low while they accumulate.

But who knows.

Fri, 10/18/2013 - 22:03 | 4071030 Pareto
Pareto's picture

You et al hold the incorrect idea that a higher exchange rate on one's currency is a bad thing - that it cripples its exports and leaves their domestic population standing around.  But this outcome hinges on you holding everything else constant.  First input prices of both domestic and imported inputs become incredibly less expensive as a result of an appreciated currency.  Add to this that it encourages (and NOT Forces - big difference) increased productivity in operations.  One only needs to look around to see employment challenged everywhere to understand how those with a job will be encouraged to work more efficiently to keep their job - and where management will continue to seek out new processes to remain competitive.

At its zenith and the several years leading up to it, US dollar strength has generated the most wealth for EVERYBODY ever.  Since its massive decline in value starting 2001 or thereabouts, standards of living have diminished rapidly in the United States (save for the 1% - and while related, is not what I want to talk about here),  depreciating the real value in purchasing power and increasing tax burdens to most citizens.  Its been a steady decline in prosperity, security, and production.  Its on its 4th trip to the lows of the last 10 or so years.  Cheap currency does not lead to growth because it raises the price of everything in the country that's doing the debasing.

A strong currency provides flexibility in operations and affords options and encourages innovation and efficiency.  How is this a bad thing?

Fri, 10/18/2013 - 22:40 | 4071114 dark pools of soros
dark pools of soros's picture

the game since ZIRP has been to use up all the cheap debt you can on real assets and sit and wait for inflation so you pay it off pennies on the fiat  (or get in and get out of the stock market for the quicker grab)

 

problem is you might have to earn your money from globalist means since wages will stagnate which in turn keeps inflation at bay (low velocity)

 

 

 

Fri, 10/18/2013 - 22:47 | 4071119 NidStyles
NidStyles's picture

"Velocity" has no bearing on Inflation. It has bearing on prices, but not inflation. You can measure inflation by tracking prices, but that does not mean it's always accurate or even accurate enough to have a clear idea of what inflation is actually at.

Sat, 10/19/2013 - 07:00 | 4071425 Bay of Pigs
Bay of Pigs's picture

Exactly, its assholes like dark pools that confuse newbies here.

They will also tell you that Ted Cruz and his wife are honest and leading the way for the Tea Party.

Sat, 10/19/2013 - 07:24 | 4071437 Teddy Tenpole
Teddy Tenpole's picture

 

 

Hey dumbo, just so you know, there is no velocity right now.  Don't know that this will help you until you actually learn what the relationship between inflation and price is.

Fri, 10/18/2013 - 22:26 | 4071088 dark pools of soros
dark pools of soros's picture

Hilarious that people here say dollar is junk..  so worthless.. but then also say, omg what will China do without all our wonderful fiat that feeds their whole nation!!! 

 

So a gold backed money is bad, saeth the ZH readers??? China will die if they back their money with gold and not worship the dollar?

 

which is it folks?  one country has wealth, the other debt.. and you think the wealthy one should worry?  This place is braindead

 

 

Fri, 10/18/2013 - 22:49 | 4071127 NidStyles
NidStyles's picture

Says the idiot that still believes velocity is what drives inflation....

 

The problem is that you have this idea that everyone here is on the same level. Your posting clearly demonstrates that we are not all on the same level. That is why you should actually read more and learn to shut the fuck up.

Sat, 10/19/2013 - 06:15 | 4071402 falak pema
falak pema's picture

the fact that an idiot like you picks up greenies in ZH forum just goes to prove his point; there are a lot of wishful thinking, prejudiced deniers here.

Sat, 10/19/2013 - 06:50 | 4071418 Bay of Pigs
Bay of Pigs's picture

You know what? You do a great disservice to Tyler and ZH falak. You're a dead brain idiot spewing nonsense. (blue/red, left/right garbage )

FUCK YOU. I will counter your trollish bullshit as long as I'm around here.

Sat, 10/19/2013 - 07:44 | 4071453 falak pema
falak pema's picture

by saying you will troll me you don't do me a disservice; you do yourself a disservice.

Vigilante is as vigilante does.

Throw some substance instead of throwing prejudice. 

Not my fault if my logic befuddles your limited comprehension of events. 

How about trying to dissociate prejudice and ad hominen from reasoning; if you can reason.

Sat, 10/19/2013 - 10:39 | 4071664 Bay of Pigs
Bay of Pigs's picture

Here you go fucktard. A google search takes around 5 seconds to demolish your "arguments" on the Tea Party leader Cruz. Quit talking out of your ass and expecting any critical thinking ZHer to buy into your twisted MSM worldview.

http://www.dailypaul.com/300348/senator-ted-cruz-and-wife-heidi-nelson-c...

Sat, 10/19/2013 - 12:02 | 4071746 falak pema
falak pema's picture

Cruz, who is Cruz...lol.

Its the Gop that has imploded; its civil war. Don't mention names of guys who don't mean anything. You are looking for a bogey man to hang your coat on.

Its the whole TP political movement which is in tatters all on their own initiative, singing Mises and Rothbard like as if these closet economists were the new messiahs of deterministic economia. Grow up and don't hide behind names nobody has heard of.

Go hang your coat on something substantial like what does it TAKE TO MAKE an about turn to Pax Americana profiglacy and warmongering. And it ain't the piddling TP agenda of Sarah Palin and all those others that has the answer.

Tea Party WHO? is the question, as that guy Spiro found out at his expense. Remember him?

No party, no program, no leader...good luck with that! 

So rant away at ZH as if this forum was where the world future is decided. Dream on. 

Its a good place to learn about financial shenanigans of WS. Period.

Now go take a shower you smell of stale leaves.

 

Sat, 10/19/2013 - 07:21 | 4071434 Teddy Tenpole
Teddy Tenpole's picture

 

 

There are a lot of boomer doomer douche bags on here.

 

Fixed it fer ye.

Sat, 10/19/2013 - 07:19 | 4071432 Teddy Tenpole
Teddy Tenpole's picture

 

 

Having a point of view is great -- having an incredibly stupid point of view is great.

Sat, 10/19/2013 - 22:33 | 4072798 monad
monad's picture

Where 2 fight a 3rd wins. ls -d trillionaire

Fri, 10/18/2013 - 20:33 | 4070851 shovelhead
shovelhead's picture

We float you dollah down river with pig.

Sat, 10/19/2013 - 01:29 | 4071281 akak
akak's picture

And dump it on the roadside, with all the other turds.

Sat, 10/19/2013 - 07:25 | 4071440 Teddy Tenpole
Teddy Tenpole's picture

 

 

haha, ya --- dump it, just like that.

Fri, 10/18/2013 - 20:37 | 4070860 Atomizer
Atomizer's picture

The game is called, who’s first to blink & the last to hold the party bag.

Fri, 10/18/2013 - 20:37 | 4070861 NoDebt
NoDebt's picture

Everyone is playing Chess compared to us now.  They didn't get any better at the game, we finally just decided to go full-retard so they look like geniuses compared to us now.

This era will be cited in the history books as the clear downward-turn in the US as a global superpower.  Obama is having his "Mission Accomplished" banners printed up as we speak.

Fri, 10/18/2013 - 21:49 | 4070999 monad
monad's picture

The traitors are acting dumb to use it as a defense for whats coming. 

Sat, 10/19/2013 - 10:04 | 4071609 css1971
css1971's picture

The Chinese play Go, not Chess.

You should try it. The game and rules are dead simple, far simpler than chess, but as the board size increases the complexity and strategy required to play well increase geometrically.

http://govsgo.com/

http://www.youtube.com/watch?v=gECcsSeRcNo

Fri, 10/18/2013 - 20:42 | 4070868 Yen Cross
Yen Cross's picture

   If you think the Fed. is corrupt. The PBOC is you're worst nightmare!

  I do however, welcome a second player to the game. Absolute power corrupts...

Fri, 10/18/2013 - 20:43 | 4070869 enloe creek
enloe creek's picture

I see a problem with china's currency if the dollar should face a sudden decline, how will the chinese deal with all the lost trade. guess they intend to enslave the world? guess that could work.  they need to feed quite few mouths so probably a great farmland buying spree while americans stand by and starve. good times. wonder what all those unemployed chinese will do in thier spare time?   they live for trade as they can't self sustain so what happens?  

Sat, 10/19/2013 - 03:12 | 4071340 Amagnonx
Amagnonx's picture

As the yuan appreciates, that means more domestic wealth.  If this occurs overnight, then they will be crushed by the loss of export wealth, but if it happens relatively gradually - then the rising wealth of their population creates a domestic market that can offset losses to exports.

Fri, 10/18/2013 - 20:43 | 4070870 Smartie37
Smartie37's picture

Critical math for China:

Will the upward revaluation in gold offset the decline in UST holdings?  

My guess is Yes-- for example if gold goes to $5,000 - $10,000 / oz while the value of dollar/USTs drops by 30% - 50%--

the Chinese are just waiting to accumulate the necessary amount of gold to back the Yuan before they pull the trigger on the dollar...

Check and mate ?

Fri, 10/18/2013 - 21:22 | 4070950 duo
duo's picture

if they have 8000 tons of gold, and gold goes to $5500, they make back the $1T  they will lose if treasuries go to zero.

Fri, 10/18/2013 - 22:45 | 4071116 Tall Tom
Tall Tom's picture

Verified your figures.

 

 If Gold rises to $5500 then a Gallon of Gas will be oh...about $15.

 

Yeah...We can handle a 350% Inflation Rate. Yeah. No sweat.

Fri, 10/18/2013 - 22:50 | 4071130 NidStyles
NidStyles's picture

Except gold is not a measure of inflation. Especially when it's been surpressed for so long.

Sat, 10/19/2013 - 18:06 | 4072303 jerry_theking_lawler
jerry_theking_lawler's picture

so, you need 1 1/2 oz of gold to travel 10,000 miles. figure that into you planning and all is well....but you gotta think this way too....if all of this takes place 1)demand will decline sharply (demand = prices) 2)where in the hell would you wanna go? it would probably be chaos.

Sat, 10/19/2013 - 14:55 | 4072029 DanDaley
DanDaley's picture

Duo, that's 1/2 of Rickards analysis, the other half being that if the US gets its act together (which it wont), then they would be good to go with their treasuries. Heads China wins, tails we lose.

Fri, 10/18/2013 - 22:23 | 4071079 joego1
joego1's picture

I think they have some ammo to burn keeping the price of gold low.

Fri, 10/18/2013 - 20:45 | 4070873 digi
digi's picture

I might also add that the state run media in china has been broadcasting positive introductory segments on bitcoin.

Fri, 10/18/2013 - 20:47 | 4070878 eclecticskeptic
eclecticskeptic's picture

"Suspicion towards a currency, once awakened, develops insomnia"...James Dines

Fri, 10/18/2013 - 20:50 | 4070885 are we there yet
are we there yet's picture

China needs to export goods and import resources to employ and feed the masses. A strong Yuan kills both. Gold is good for national 'face' and quiet power without a military. Hilliard already stated in the wikileaks-manning release that she found it hard for the US to dictate terms to their banker (china).

Sat, 10/19/2013 - 10:18 | 4071632 Winston Churchill
Winston Churchill's picture

Why would China back the Yuan with gold ?

What if they are backing gold with gold ?

Everybody needs to start thinking outside the box of cog. dis. a little more.

Right now the world will not accept another derivative of gold as grc, and the exhorbitant priviledge

it bestows.

I think Wiley has it right.Gold as GRC, and everybody keeps their own fiat system.

A two tier system is would not even a new idea.Gold for international trade,and fiat for

domestic.ie the system pre the Nixon shock.

The you show me yours,and I will show you mine moment will be fun,as Germany already found out.

Fri, 10/18/2013 - 20:51 | 4070887 All Out Of Bubblegum
All Out Of Bubblegum's picture

Another tell point: China is also tacitly backing Bitcoin. Bitcoin itself is a threat to fractional reserve banking and Western banks, as the ECB has admitted. baidu.com, the biggest website in China and 5th busiest in the world, announced that it will accept Bitcoin for its services.

China is moving against the entire Anglo-American power structure by moving against the Federal Reserve Note.

Fri, 10/18/2013 - 23:11 | 4071139 TGR
TGR's picture

Don't do a Simon Black though and equate one NASDAQ-listed company (i.e. Baidu) to some non-existent 'government directive' and backing of bitcoin. Baidu also accepts visa, paypal, qq payment and a host of other mediums etc. An american company seeking profits via bitcoin does not a tacit acceptance of bitcoin in 'China' make.

 

//
Fri, 10/18/2013 - 23:43 | 4071215 All Out Of Bubblegum
All Out Of Bubblegum's picture

That Baidu accepts Bitcoin is proof enough that the Chinese government supports the use of the currency. They know it's a threat to the Fed. Or at the very least, they know that the Fed doesn't like it, so all the better.

Sat, 10/19/2013 - 03:34 | 4071346 TGR
TGR's picture

That an American company uses bitcoin in China does not extrapolate to tacit encouragement of bitcoin by the government. True, there is no ban or discouragement of it, but no doubt if the masses suddenly started turning to bitcoin in lieu of yuan in obvious numbers, then bitcoin would be banned in the PRC. The proof if there ever was any such support for currency is the government's push to use yuan in increasingly more forex exchange agreements internationally. The Chinese government supports RMB, not bitcoin.

Fri, 10/18/2013 - 23:45 | 4071218 digi
digi's picture

It's not that the government directly tells comapnies what to do; but it is in the best interest of large companies to not do things that their government might frown upon. Regardless, pro bitcoin segments being aired on the chinese government run news certainly seem to point towards some kind of acceptance.

Sat, 10/19/2013 - 03:43 | 4071352 TGR
TGR's picture

Yeah but is it a big deal? Not really, not by any shot. You can say the same thing about US govt acceptance of bitcoin because it is infinitely more widely used in the US commercially than it is in China.

//
Sat, 10/19/2013 - 13:07 | 4071831 digi
digi's picture

Considering that the US is actively trying to seize and regulate bitcoin out of existence (good luck btw), while China is attempting to educate their populace about anything that could even have the remote chance of poking the US and it's reserve currency in the eye, I am not seeing why it is such a stretch to say that TPTB in China have a more favorable outlook than TPTB in the USA. Not only by their actions but just by definition of what's at stake for both parties.

Sat, 10/19/2013 - 09:47 | 4071583 css1971
css1971's picture

If bitcoin makes it beyond niche status (which I doubt due to it's broken architecture) the big banks will buy out or implment some bitcoin systems and begin offering credit based on bitcoins. You will be able to pay with Visa Bitcoins. There is absolutely nothing in the fundamental nature of Bitcoins which would prevent this happening. i.e. Bitcoin does not solve the problem.

 

Sat, 10/19/2013 - 11:55 | 4071743 Flagit
Flagit's picture

it was hovering at the $150 mark, but since that announcment, its bounced between 160-190.

but at the same time, litecoin is dropping, so there could be a shuffel taking place taking place. lots of litecoin sell orders.

Fri, 10/18/2013 - 20:56 | 4070893 Atomizer
Atomizer's picture

This article is a few days old. Have a look. The comments are very interesting.

British exporters need to look beyond the Brics, says Hague

Fri, 10/18/2013 - 20:57 | 4070895 bigrooster
bigrooster's picture

I call BS on this crap!  Google just hit $1000 today and Obobobobo said not to listen to stupid blogs like this website.  Everything is fine, just take another pill.

Fri, 10/18/2013 - 23:27 | 4071193 Meat Hammer
Meat Hammer's picture

And eat your damn peas!

Fri, 10/18/2013 - 21:02 | 4070901 Osmium
Osmium's picture

"So exactly what would happen if the Chinese announced someday that they were going to back their currency with gold and would no longer be using the U.S. dollar in international trade?"

My guess is that FRN's only use would be to wipe your ass with.

Fri, 10/18/2013 - 23:28 | 4071197 Meat Hammer
Meat Hammer's picture

So does that mean I pay off my house with a couple of Kruggerands?

Sat, 10/19/2013 - 11:59 | 4071749 Flagit
Flagit's picture

by that time you would most likely see the building go up in flames in your rear view.

Fri, 10/18/2013 - 21:09 | 4070916 grunk
grunk's picture

Mob bosses fighting for turf.

Fri, 10/18/2013 - 21:09 | 4070922 GOSPLAN HERO
GOSPLAN HERO's picture

Comrade Obombya will save the USSA.

Muhahahahaha!

Fri, 10/18/2013 - 21:10 | 4070923 ILikeBoats
ILikeBoats's picture

No one is paying attention to China's demographics, which look crappier all the time.  They have an aging population and this means lower ability to consume, lower ability to consume means less ability to serve as the world's consumer.  The USA also has this problem, of course.

Fri, 10/18/2013 - 22:03 | 4071031 Overfed
Overfed's picture

Fourth Turning, bitchez!

Fri, 10/18/2013 - 21:11 | 4070924 robertocarlos
robertocarlos's picture

Expect nickles to be the new dollars.

Fri, 10/18/2013 - 21:15 | 4070932 unununium
unununium's picture

Expect $100 cnotes to be the new dollars.

Fri, 10/18/2013 - 21:28 | 4070957 Ned Zeppelin
Ned Zeppelin's picture

All a joke, as bad as we are, the Chinese are far worse. Chinese economic statistics are pure fantasy, ours about 50/50.

Who writes this crap? Next story.

Sat, 10/19/2013 - 04:05 | 4071362 TPTB_r_TBTF
TPTB_r_TBTF's picture

Mouse over on the links shows, the writers are CNBC, CNN, Yahoo, ...

 

hopefully Mikey Snyder paid the Tylers to be able to post here.

 

"Next story."

Fri, 10/18/2013 - 21:44 | 4070989 Aknownymouse
Aknownymouse's picture

What you are describing will mean the begining of WWIII. The US will not just go away with all their arsenals just watching everything collapse.

Fri, 10/18/2013 - 22:28 | 4071092 mrpxsytin
mrpxsytin's picture

I'd like some level-headed opinions on the following...

Something that seems to be missed is that the country with the reserve currency must be able to offer a cultural experience that cannot be found anywhere else in the world. And by that I mean a positive cultural experience. The USA offered a culture based on liberty and the pursuit of happiness. Prior to that, the British offered a culture of modernity, and law and order. So someone anywhere in the world could amass British pounds (in the 1800s), or US dollars in the 1900s, with the knowledge that at some point in time they could take that wealth and start a new life in those respective countries. This decision could be made with the confidence that life would be relatively better in Britain or the USA. You could imagine a person thinking like this: "Yes, I can buy stuff with this stable currency, but more importantly if things take a turn for the worse in my native country I can pack my family up and escape to Britain (or the USA)". 

So in my mind, the most important indicator that China is going to establish the new reserve currency, is to see a shift towards offering a better society than the USA. We know that the USA is making China's job a lot easier, but still it seems that the Chinese powers are afraid to open a free society. At this time, I just don't see Westerners in general thinking that China will be a great place to take the wife and bring up the kids. Can anyone here see mass migration from the USA and Europe to China in the near future? 

Unless China can establish a society that has something to offer everyone then I don't see it being able to establish the reserve currency. Please let me know your thoughts. 

Fri, 10/18/2013 - 23:10 | 4071164 Tinky
Tinky's picture

China won't create a Reserve currency; it will more likely be a basket of currencies.

Sat, 10/19/2013 - 03:32 | 4071335 Element
Element's picture

I agree, but there's certainly going to be a dominant currency in that basket. What backs fiat if not the national's resources and trading capacity? Japan's currency is backed by design engineering and export of its products, for others its a mix of commodities, for others it may also be gold reserves.

But I'm also with you on the notion that fiat will remain 'currency', mostly due to its trading convenience. Fractional-reserve usury ponzi schemes are what's not working, because the mechanism for fiat exchange itself works as a medium of transacting trade exchange. We do it every day. Keeping the white-collar crims from gaming it is the core problem.

Plus the egregious taxing of ordinary working people's wages and their goods and services use, should not occur when the tax can be taken from the banksters fiat-lending rorting excesses (hidden money printing and usury liability), as that's where the source of inflation and economic and financial damage and criminality is imparted to the world (so 'sterilize' it). This is how we can limit their size. If they get too bing and too stimulative of bubbles, tax the banksters, don't increase interest rates on the workers. Why should the working tax-payer chump pay for the banksters and politicians blowing bubbles? ... to hell with that, it's wrong.

As we see, it doesn't work, we can't get sustainable societies from a process of banksters bankrupting us in debt super-cycles, with interest rates and inflation, and then stealing from our pockets and refusing to be bankrupted, as well, when they are in fact bankrupt. It's crazy, suicidal, genocidal even.

So this present system can not just be reset and rerun, it's a recipe for mutually-assured global collapse and possible extinction.

Fri, 10/18/2013 - 23:35 | 4071169 Tall Tom
Tall Tom's picture

"So in my mind, the most important indicator that China is going to establish the new reserve currency, is to see a shift towards offering a better society than the USA. We know that the USA is making China's job a lot easier, but still it seems that the Chinese powers are afraid to open a free society. At this time, I just don't see Westerners in general thinking that China will be a great place to take the wife and bring up the kids. Can anyone here see mass migration from the USA and Europe to China in the near future?" ~ mrpsyxtin

 

Do you know what causes a Nation to revolt? Hunger and Famine are the leading factors that lead to Social Upheaval. This is a historical fact and is demonstrated countless times throughout the pages of History.

 

The French Revolution was brought on by hunger and famine.

The Bolshevik Revolution was brought on by hunger and famine

Et Cetera...et cetera...et cetera. I can probably find more if I took the time.

 

People will tolerate all sorts of Human Rights abuses...until they go hungry.

 

Now let's look at Nations with stable currencies compared to those without. Nations with stable currencies, whether Freedom Loving, or, Totalitarian States, can feed the people. That, and only that, is what keeps the Power Structure intact.

 

On the other hand Nations with unstable Currencies cannot feed their people, are prone to Famine, which leads to Social Upheaval and Violent Revolution.

 

People will migrate to where Food is in abundance and the means to acquire Food are less restrictive. They will leave regions, migrate from regions, where Food is not available due to crop failures, Economic Circumstances, or Political Circumstances which restrict one's ability to feed one's self and Family. Mexican Migrant workers entering into the United States is a good example of this.

 

Now when a Currency and economy become so unstable that the population is prone to famine then people will migrate away from it in order to feed their families. They could not care less about politics and cultural opportunities when starvation is staring them in the face.

 

Hunger is one hell of a motivator. Is that level headed enough?

 

 

Fri, 10/18/2013 - 23:39 | 4071207 mrpxsytin
mrpxsytin's picture

Thanks for your thoughts. So your primary indicator of a reserve currency nation would be it's ability to feed people. Do you think China will be able to do a better job than the USA? I know the USA is keeping the masses going on high fructose corn syrup (which stunts brain development), but China seems to just add industrial waste into the food supply (think melamine in the milk powder). 

If your theory is true then why isn't a country like Australia the world superpower? Over here we have an amazing amount of high quality food. 

Sat, 10/19/2013 - 03:59 | 4071359 TPTB_r_TBTF
TPTB_r_TBTF's picture

you are easily amazed.

 

Australia is not a world superpower due to its extreme weakness.

Sat, 10/19/2013 - 05:51 | 4071392 mrpxsytin
mrpxsytin's picture

Easily amazed? I don't know of any other country in the world that has the range of fresh agricultural products on offer in Australia. Obviously, you are unfamiliar with the scope of our agricultural industry. 

Australia is not a world superpower due to its extreme weakness.

That is a tuatology my friend. Usually reserved for people of low intellect. Power = strength. So you basically said, Australia is not powerful because it is weak. Go back to school. Learn your geography and how to string logical sentences together. It will do you more than a world of good. 

Sat, 10/19/2013 - 08:24 | 4071488 TPTB_r_TBTF
TPTB_r_TBTF's picture

> Power = strength.

 

DoesnT take a whole lot of intellect to understand that one.

 

Learn your geography

 

yawl are down under.

 

how to string logical sentences together

 

I basically said, "Australia is not powerful because it is weak."

Sounds logical.


You are certainly correct with your comment that only an influx of asians can raise your "national IQ".

Sat, 10/19/2013 - 05:40 | 4071390 falak pema
falak pema's picture

australia will never be a super power as it lost Harry Hopman and ended up shooting kangaroos in the outback for sport. 

You need more brain power than a "sorry mate" said to a dead kangaroo, shot in the SUV head lights 'cos you're bored.

Sat, 10/19/2013 - 05:55 | 4071393 mrpxsytin
mrpxsytin's picture

I agree. Australia is a Fool's paradise. However, we are seeing increasing amounts of Asians migrating here. One can hope that they raise the national IQ. Over time, you may find a nice fusion of cultures emerge in Australia. We definitely have the resources to be a superpower. Now we just need to develop the intellect.

Righto I'm off to shoot some roos in the back paddock! 

Sat, 10/19/2013 - 06:01 | 4071397 falak pema
falak pema's picture

so where's the new harry hopman; or must we wait for michael Chan's son to emigrate to aussi land?

Having said that you do produce a lot of talented and sexy women for Hollywood! You got that right! 

Sat, 10/19/2013 - 21:40 | 4072702 Element
Element's picture

Superpower = super-misallocation of resources to threaten the world with MAD.

No way we're doing that.

Australia's prosperous because how could you fuck it up?

It's got it all, just wish it had the Alps in the middle of it.

Sat, 10/19/2013 - 12:19 | 4071768 Flagit
Flagit's picture

high fructose corn syrup (which stunts brain development)

 

http://www.drweil.com/drw/u/QAA401152/Does-High-Fructose-Corn-Syrup-Harm...

Sat, 10/19/2013 - 03:51 | 4071355 Element
Element's picture

Your question remined me of this:

--

From:

 

"Khrushchev's son says U.S. too hot in Cold War"
 
Thursday, January 28, 1999
 
By Bill Steigerwald, Post-Gazette Staff Writer
 
 
Q: How does it feel to know your father's name [Nikita Khrushchev] was frightening to millions of American children at the height of the Cold War?
 
A: First of all, we never knew this. When you look at the Cold War and the behavior of both sides, both sides would do things which were aggressive. We had no intention to begin any strike against anybody.
 
We never thought that Americans would have any fear about us. For a long time we couldn't even physically strike you. And for the rest of the Cold War, the United States was much stronger. It's one of the paradoxes, because we really never had any intention, especially during my father's time.
 
He said there is no reason to sacrifice our lives freeing Americans from capitalism or trying to fight them because that side will win which will give better life to their people. He was sure it would be the Soviet system and sooner or later Americans will realize we live better. Then they will decide that they will join us.

 

And now the tables have turned. No one wants to join the USA system either. It remains to be seen if the former commie states can help pull that together, as the conditions are approaching a point where a great global reform can occur, to produce a mutually beneficial system for all - as it must be that.

I hope no one has to go fighting anyone to get that done.

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