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China's 1929 Moment
Submitted by Alasdair Macleod via GoldMoney.com,
Anyone with a nose for markets will tell you that the Chinese government's attempt to rescue the country's stock markets from collapse is far from succeeding.
Bubbles collapse, period; and government interventions don't stop them. Furthermore, we are beginning to see a crack widen in the foundations of China's capital markets that could end up undermining the whole economy.
Since the government owns the banking system, some of the knock-on effects will doubtless be concealed. A consequence for China is that domestic financial instability could threaten her current plans for the international development of her currency. Here the timing couldn't be worse, because in a few months the IMF is due to announce its decision about the inclusion of the renminbi in the SDR. The odds were in favour of China succeeding in this quest, on the basis that China was deemed to have fulfilled the necessary conditions, and the IMF itself has been supportive.
A 1929-style collapse in China's stock markets would change this delicate balance. In mainstream macroeconomic theory, the only way China can resolve her excessive financial imbalances is to devalue the renminbi against other SDR currencies, hardly a good start for a new member. The IMF, probably egged on by the Americans, could be forced to defer its decision again, reviewing it in 2020.
This would be a bad outcome, given China has set her sights on joining the IMF's top table. There can be little doubt that the recent announcement increasing her gold reserves by only 600 tonnes was made in the context of her desire for the currency to be included in the SDR. If she is rejected, China could swing the emphasis more firmly towards gold, which she owns and mines in abundance.
If Plan A fails, it is time for Plan B. It is almost certain China has substantial undeclared holdings of physical bullion. The enabling regulations for China's gold accumulation programme go back to 1983, and the State will have acquired the bulk of its bullion before it permitted its own citizens to buy from 2002 onwards. Western analysts seem generally unaware that the bulk of China's acquisition of gold was in the late twentieth century, the last time the west was dishoarding huge quantities of bullion into a prolonged bear market, and she had massive capital inflows followed by trade surpluses to offset. This was the basis for my speculation last October that Government holdings could have grown to 20,000 tonnes by 2002, which explains why public ownership was then permitted.
The Chinese government almost certainly views gold as the ultimate money. The time is approaching for Plan B when a higher gold price would serve her interests better than membership of the SDR. It would reduce China's debt levels expressed in the ultimate money, without currency intervention. And it would also boost the personal wealth of her people. In short, it would be popular with ordinary people, at a time when the authorities' credibility is threatened by internal financial developments.
It must be tempting. The effect on western capital markets, having been drained of physical bullion and left with uncovered gold liabilities, could be very interesting. After all, the Chinese curse was for us to live in interesting times.
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A nice jump in gold to 1400 would be a great ending of the summer of 2015 :)
I hope you are right but I don't think it will. I have come to term that there is a severe deflation pressure which will depress commodities even more. More shorting to the mining companies until a good portion of them file for bankruptcy. Meanwhile the housing and living cost continues to climb higher.
China's 1929 explained in 2 videos.
http://www.planbeconomics.com/2015/07/china-1929.html
Couldn't have happened to a nicer centrally planned empire. Heartwarming stuff
TBT or not TBT
Yes, and their ability (or lack of) to change their convertability of the Yuan would probably be dimly viewed by the IMF.
China does have to accomodate itself, at least some, to the rest of the world. They want a seat at the Big Table, time for them to grow up...
Gold is important, but it is not everything.
yes, deflation will continue to drag commodities down. But in precisely times like these, gold has a foot in the camp of non-commodities, and many who are divesting their remaining commodity exposure could swing it gold's way, and if enough do that to get some momentum she'll pop.
But of course, thats talking about organic demand, which means absolutely nothing when TPTB can just slam it back onto the mat with paper rehypothecation
Yes, you are right:
But "aren't times like these," hardly a dime a dozen.
Aren't these times sui generis?
but...beneath the central planner...is a billion people who work hard, believe in taking care of themselves because they don't want to be parasites. That's the reason to feel bad for them. because the Central Planner who screwed things up...will see to it that they themselves never suffer. Kinda like Washington DC.
China's 1929 explained in 2 videos.
China's 1929 explained in one statement:
You thought china's economy was solid & built to last?
It was Made In China ffs
Yeah. I thought that the Chinese economy was at least as good as the $60 trillion worth of subprime mortage backed securities Wall Street sold 'round the world.
But not to worry, neighbor, all the PBOC has to do is what the Fed did and the Shanghai Composite will be making new all time highs in 6 or 7 years.
Life is wonderful :o)
the bizzarre irony here is that until the market 'clears' the debt away ( the debt being the very foundational structure of the banking system) -------------there cannot be an end to the deflationary pressrue.
gold might bounce, but even if it does it's irrelvent. golds 'market' price in paper terms cannot begin a long term upward trend until a full scale printing of money occurs again.
full scale necessarily means much bigger than the previous amount of printing. by about an order of magnitutde.
and I'M NOT TALKING YUAN. I'M TALKING DOLLARS.
as much as gold might cease to trade. it matters not. the price cannot go 'up' if it ceases trading in dollars even if it's value and scarcity skyrocket. the dollar price only goes up when the dollar crisis ends for china and others.
Two things most often misunderstood about gold and deflation.
The first point is that the financial sector will be eviscerated should deflation of assets, primarily real estate and equities occur. No institution in the financial sector will be safe. Even the central banks that oversee the credit money creation will come into question. Cash will look real good initially but it won't take long for it to be questioned as central banks scamble to get debt free currency into the system. Gold prices may fall initially as well but those in the know will be buying hand over fist. I suspect that we may see a failure to deliver and cancellation of booked retail gold orders while the quoted price for gold falls. Point is... you want to have your gold in hand rather than trying to buy it at a lower price as this occurs.
The other issue is that the only way we will see a gold revaluation is in an deflationary environment. Consider that the CFR has already put a call out to members to come up with a means of getting debt free cash into circulation. By pegging gold prices at 10 or 15 fold it's current price you would guarantee a wave of selling to central banks that have merely to print the paper needed to buy the gold.
There would be few buyers and the revaluation would ensure that gold that would be difficult to confiscate such as semi rare coins, dental material and jewellery would be freely offered to cash in. The banks may even peg their respective currencies to gold (at the vastly higher price) to restore a waning confidence. People would have their gold crowns pulled to cash in. By the time that folks realized they ought to be buying instead of selling, the redemption window would close. A revaluation will serve as a defacto confiscation as well as a massive helicopter drop of debt free cash. Most gold in the West would certainly find it's way out of private hands and into central bank vaults. Any saver of gold who sells into the revaluation is not likely to hide their new cash under the mattress. They will be out spending it on real and tangible goods such as real estate, capital equipment or even equities in companies well enough run to prosper in such an environment.
Those are the reasons I continue to make in savings in gold while a deflationary outcome seems more likely.
>>Cash will look real good initially but it won't take long for it to be questioned as central banks scamble to get debt free currency into the system.<<
You've been had. Debt-free money is NOT for the serf class. At least not until they've been fully asset stripped and the Banksters have fully gone to hard assets (as in stolen SOCIETY'S assets via debt-money fraud.
The end will likely be hyperinflation, but only to balance the books and hide the real culprit - fraudulent debt-based money.
If you think Banksters or their political quislings are going to bail out the schmuck public at their own expense (the Banksters own the cash and the debt paper!!!) then you are in for a rude awakening which, BTW, is exactly what has been planned for the masses.
im hoping for 1650
I have a couple AGEs I paid that much for. The only deflation I am seeing is gas/diesel (temporary most likely) and the size of products we buy.
You are going to sell for a 40% ROI and do what with the profit...invest in Blockbuster video?
Great article
"The IMF, probably egged on by the Americans, could be forced to defer its decision again, reviewing it in 2020".
"Probably" ? The IMF is the USSA!
Nice try, the IMF is a couple eschelons above the states, goin by the books and all.
This is exactly correct. The IMF is a creation of the Debt-Money Monopoly, a supra-national cabal of criminals who created and control the corporate fronts that run debt-money monetary around the globe.
I have an insight that so many seem to lack, yet it is a simple insight.
The ultimate rulers of any given society control the money. Period.
Why? Because if they didn't then those who controlled the money would use it to seize control of society.
If someone actually ruled society then the first thing they'd do is seize control of society's money power.
It is elementary.
I can't put it more succinctly than did Napoleon when he was fighting the Debt-Money Monopoly controlled British Empire...
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
? Napoléon Bonaparte
When is the USD going to peg to the Renminbi?
Jan. 2017 is my guess.
If China (supposedly the cash king) can't even rescue their stock markets, wait and see how the eagle flies.
So what does China do?
Sell or use the gold to pay for stuff it wants & needs?
What good is the ultimate money if you can't spend it?
Wouldn't you think that using the gold to buy stuff would drive the price of gold down?
What am I missing?
Gold will be absolutely the last thing they sell.Gold is the only currency in war.
If their SDR inclusion is rejected this fall, expect a huge dump of USTs,
followed quickly by WWIII.That or revalung gold,followed by WWIII.
The result will be the same either way, unless there really is something in Ft.Knox
apart from lots of spiders.
One way or another, this is going to be tha Fall of change.
Ft. Knox Gold Hole. Sucks everything in, nothing ever comes out.
Winston Churchill
Agree re gold being the last thing China would sell (it's the last thing I would hope to ever sell). Also if the IMF tells China to take a hike (rejects Yuan in the SDR), yeah, selling off Treasuries might be expected.
Also agree re the Fall. I am reading that a lot could change... Disclaimer: I have been looking at Doom & Gloom since Jimmy Carter...
* * *
Disagree re WWIII. I doubt it will happen. Neither China nor the USA wants a another war. Note that I said I doubt that it would happen, stupidity and events can override good judgement...
Neither China or Russia want WWIII.Patience will work well for them.
There is a growing segment of DC that thinks WWIII is winnable.Instead of
being locked up in a hospital for the criminally insane, they hold many levers of power.
They've rooted out the saner heads in the Pentagram as well.A relative term to be sure.
I wish I shared your optimism about the Deep State not wanting WWIII.
I don't.
History says you're wrong as well.
Heres hoping you are right, but planning on you being wrong.
Any WWIII would be a disaster. Even the lunkheads in DC *ought* to know this.
And the worse the war, the worse for everyone. If DC burns up the world, they lose too.
* * *
Planning on me being wrong, planning for the downside, is just plain smart.
The Debt-Money Monopoly doesn't care what anyone wants. They will finance and control WHAT THEY WANT!
So gold is the ultimate currency that you can never spend.
a diaper changer?
yes, do it.. my GDP needs a boost too!!
They'll go SDR or those mushroom clouds will fly.
What China does will be out of necessity and/or desperation. China does not wish to rock the boat.
China wishes to sink the boat.
They've built their own boat while no one was looking.
There is not enough gold in the world for it to be a substitute currency for a country the size of China. And they like dollars right now. So it sure don't seem like the reversal going to be coming soon. But who knows, a major player may push things the other way. But this will be through manipulation, not fundamentals.
That's like saying there's not enough money for money to be money. Proper valuation of all "assets"will sort this out.
Yes, OneTinTrooper apparently does not realize that $20,000 gold helps sort out that "shortage of gold" problem.
$50,000 even more so.
That won't occur until society has been asset stripped of all their indebted assets. In short, $50,000 gold isn't going to help the majority of Americans who will be homeless and jobless.
The deflationary spiked pit is orchestrated to asset strip the debtors. It is a FEATURE, not a bug. Of course, the criminals running the con aren't going to tell you the truth - you have to ratiocinate it out for yourself based on basic economics of psychopathic self-interest at play.
China's gold need not be a 'substitute' - in fact, that is not the intent at all... At this late stage of Western banking dominance (and vulnerability), all that need be shown is that your nation has not only a substantial amount of Real Money in possession, but an amount that thoroughly exceeds (Trounces) your 'enemy/s'... At that point, all eyes shift to who has a currency that is trustworthy, backed by something real, as opposed to a currency that is backed by a perpetual state of 'communication' and 'data-dependency' towards a mighty .25% interest rate hike which definitively (with Sound and Fury...) shouts to the world that the $USD market will remain 'king'...
Western Democracies are busy trying to convince the masses that gold is nothing more than a shiny rock that can only be used for jewlery. They are manipulating the price of gold down to convince us. They are in for a big surprise. Let the Big Reset Begin!!
The Jewish Federal established thinks ZIRP and NIRP works. Meanwhile, Windows 10 is a disaster. It reminds me of millieium /vista OS release series.
WINDOWS 10 PARODY - Remember the Children! http ://m.youtube.com/watch?v=Fl7RWnPVvE8
Broken link, at least from the U.S.
Is this it?: https://www.youtube.com/watch?v=Fl7RWnPVvE8
ZIRP and money created from ether has allowed the U.S. to enrich China and the 1% in the U.S. at the expense of the U.S. citizenry and the future.
It does work very well - to achieve their covert agenda. Schooling in America is extremely effective at its true goal... it is just the average person is 100% clueless as to what that real goal is.
"Every man has to reasons for doing something: the good reason and the real reason."
~JP Morgan
We need to stop being so gullible and believing the propagandistic real reason.
We have brains for a reason.
War. Sure, they bought a lot of our Treasuries, which are paper promises.
They turned those promises into productive capacity, arms, and Gold.
If things get bad in China they start a War of territorial acquisition.
Who is going to stop them?
OMG, are you kidding with that question? Amerika, of course. We have strategic oil reserves, a massive build of arms, willing combatants. There is no way that the USA would lay down arms and negotiate a pay back plan. Death follows.
"They turned those promises into productive capacity, arms, and Gold" Yeah, with the tremendous help of what were originally American companies firing their American workers and moving shop there.
Yes, as part of the Class Warfare being waged by the rich to turn the American People into debt slaves and/or outright paupers.
Nah. It was the main part of the plan by the zios to be the next world empire. We got (intentionally) shafted from within. The total ignorance of the vast majority of the electorate made it that much easier.
Those fuckers have backdoors into all the military software (instance: 9/11 clusterfuck where nobody had a clue what was real, what was exercise, what was total simulation). We will nuke ourselves whenever they want. Or start a MAD exchange with Russia.
Thanks, dual-citizen neocons.
China is in big shit. But don't call it a collapse.
It could just revert to a dictatorship until everything is sorted out. Easy!
If you are measuring turd size, you are going to need a yardstick when looking at the state of
the US economy.Its growing pains vs. death throes.
Ray Charles could see the difference. The Chinese will get thru;,albeit with a lot of well deserved pain.
The prognosis for patient in intensive care unit for the last seven years, after his organs
were already sold and shipped to China, isn;t so rosy.
+++
Stated perfectly.
molon labe
Are there any other bubbles bankers can lend money into?
Debt has been around for 5,000 years but bankers still don't understand their product.
“What is wrong with lending more money into the Chinese stock market?” Chinese banker before last month
“What is wrong with lending more money into real estate?” Chinese banker last year
"What is wrong with lending more money to Greece?" European banker pre-2010
"What is wrong with a NINA (no income no asset) mortgage?" US banker pre-2008
“What is wrong with lending more money into real estate?” US banker pre-2008
"What is wrong with lending more money into real estate?" Irish banker pre-2008
"What is wrong with lending more money into real estate?" Spanish banker pre-2008
"What is wrong with lending more money into real estate?" Japanese banker pre-1989
"What is wrong with lending more money into real estate?" UK banker pre-1989
“What is wrong with lending more money into the US stock market?” US banker pre-1929
Banking, a job for every nation's half-wits.
We thought Japanese bankers were the stupidest in the world when they created the mother of all real estate bubbles that burst in 1989.
Japan has not recovered since.
But Wall Street was determined to outdo them in the stupidity stakes using derivatives and complex financial instruments to magnify up the losses from a housing boom. The bubble burst in 2008 and the global economy hasn’t recovered since.
James Rickards in Currency Wars gives some figures for the loss magnification of complex financial instruments/derivatives in 2008.
Losses from sub-prime - less than $300 billion
With derivative amplification - over $6 trillion
"It’s nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" (pg 404, “All the Presidents Bankers”, Nomi Prins)
Japan only managed to cripple its own economy through crazy lending into real estate, Wall Street crippled the global economy.
Perhaps Chinese bankers are now looking to steal Wall Street's crown?
The competition is fierce with European bank lending into Greece as another contender.
A merit award for Spanish and Irish bankers who have destroyed their nations finances with unconditional state bailouts after reckless lending into real estate.
More idiot bankers:
Icelandic bankers
Cypriot bankers
"Only lending to people who can pay you back?
Are you sure?
No one told me" a typical banker
Payday loans, sub-prime, student loans, sub-prime auto loans ..........
Affirmative Action Barry Soetoro has sold the United States gold reserves to the masters of People's Republic of China, the Chinese Communist Party. They will make him a very, very rich Muslim. That is, assuming that he lives long enough to collect on his treachery. I think that the masters of the CCP would be happier that he not collect his "30 shekels of silver".
Lagarde has to bump China off SDR? Time for a quick nip and tuck before this one blows.
Why would China not opt for 'plan B' to begin with...? The U.S. is already 'at war' with China and Russia, and post $USD economic initiatives/relationships are already in progress, so what the hell...?
The IMF is moving more and more into the political relm rather than making decisions on an economic basis...more of an example of complexity collapse...the US is now attempting behind the scenes to add to the disruption of the China equity markets, but that market is still very small compared to currencies and the reserves....Would not be surprising at all that the US tries to use this as an excuse to block China from SDR status...then the trump card - gold will be played in stages...He who owns the gold makes the rules.....
The IMF is moving more and more into the political relm rather than making decisions on an economic basis...more of an example of complexity collapse...the US is now attempting behind the scenes to add to the disruption of the China equity markets, but that market is still very small compared to currencies and the reserves....Would not be surprising at all that the US tries to use this as an excuse to block China from SDR status...then the trump card - gold will be played in stages...He who owns the gold makes the rules.....
After all, the Chinese curse was for us to live in interesting times.
Seriously, I challenge anyone to show me how this "Chinese curse" originates in China. This is the chop suey of curses; it has nothing to do with Chinese culture or language.
Not so much a curse. More a prophecy, if we can even call it that. For lack of a better word at the moment, we will settle on that.
We can begin in or around 1772. And this was before America's official founding. What did happen in this year, that probably effects global events to this very nanosecond?
Hint 1: The court astronomer/astrologer for Emperor of House of Aisin Gioro.
Hint 2: He was not Chinese.
Hint 3: He had a second skill set aside from cosmology. [1]
Bonus hint: What is fei-chi’en ? Why is this significant for purposes of our discussion?
Cheat: All answers are found in Rulers of Evil. (1999/2001)
-----------
[1] This order is most competent at both to this very day. Especially at Mount Graham, AZ.
I guess if say for instance you owed China (PRC) something. And you agreed to make good on that promise say by or before September 7, 2006. And then reneged on that promise. Might someone like a sovereign nation that holds ~16% of GWP kinda -- lose it? Aside from the so-called cyber attacks over the last 5 years (considering they waited 4 years, that's admirable patience), reported by the NSA (but what probability is IP spoofing?)
Yes, we can all agree that the world is in global financial meltdown. But why? Has anyone here considered, despite 1971; 1963, 1933, and dare say I even mention 1913; that all this could have been avoided, prior to September 7, 2006? Yes, even post 9/11. For at this very nanosecond, every swinging penis and vagina would know the truth about that day, whether they wish to be informed or not ..
Allow me to present it simply from the horse's mouth:
The information contained in the material provided below is old… dated. It’s purpose, however, is not only genuine, it is of significant import. The material written by Christopher Story, Publisher/Editor of International Currency Review, World Reports, made clear to everyone – and all of those listed in these emails received this data – what would happen if the Wanta Plan was not implemented. As you read it, you might want to ask yourself why if Christopher Story, a journalist and editor, could see the obvious outcome if the Wanta Plan was rejected, America’s elite world of intelligence and political operatives could not. Or, perhaps there was some other agenda at hand… like the hypothecation (perhaps even re-hypothecation) of the funds I earned on behalf of myself and the American people. As you read what Christopher Story wrote, you’ll be nodding your head in agreement with him and saying, “Yes. That sure did happen. Christopher Story was right. They should have implemented the Wanta Plan and we could have avoided this financial disaster that has cost so many good American citizens their homes and their jobs.”
This is not crying over split milk. This is not water under the bridge. This is real and current. It still can be implemented. If we must suffer monetary collapse, then so be it. At this point, it is with high probability a moral imperative. Then post that, we begin real recovery. And, we have the plan to do it. Do it, and do it -- NOW!
lul, why not buy something you can trade later for 8x-100x the price. Funny none of them are smart enough to buy silver. exactly not the popfucking reason not to buy it though.