China's Rise, America's Fall

Via Golem XIV's blog,

Will the rise of China mean the fall of America?  In a word, yes. Although decline might be more accurate.

Why do I think this?  Because China is about to launch the PetroYuan and when it does the demand for dollars and for dollar denominated debt will shrink. When it does, I question whether the world will be so sanguine about the level of debt that America carries. If that happens then the value of the dollar is in question.

At the moment no matter what level of debt America carries, other countries need dollars. Dollars to pay for oil, since oil is traded in dollars.  Dollars for their financial system so their banks can settle contracts for goods and services traded in dollars.

But over the last few years China has been systematically putting in place everything it needs to launch the Yuan as not only a rival to the dollar in trading and settling oil contracts but as a rival to the dollar as the world’s reserve currency.  At the moment the only rival to the dollar is the Euro. I think it fair to say the relationship between the two currencies and their issuing powers, has been… ‘delicate’.  The news that Sadam Hussein was going to start trading his oil in Euros came just a few months before America and its lap dog GB, decided Sadam was a threat to world peace and went to war with him.  Something similar happened to Colonel Qaddafi.

Under Qaddafi Libya’s currency was backed by the country’s large holdings of gold and silver. This had allowed Qaddafi to finance, for example, the entire construction of the Great Man Made River without going to Western banks for a single loan. Libya was debt free and owned its own resources and infrastructure. Obviously a very unsatisfactory state of affairs for any third world country to get ideas so far above their station.  Worse, he had a very public plan which he had laid before the Pan African Congress, to create a pan African currency backed by gold and silver to be launched by 2023. It was not too long before Hilary Clinton arrived in a freshly bombed Libya and crowed to CBS, “We came, we saw, he died.” Charming woman. I was only surprised she didn’t say “Mission accomplished.”

Libya and Iraq were small enough, that their pretensions to threaten the hegemony of the dollar and have the jumped up arrogance to think they could trade their own resources in their own currency or a currency of their choice, could be dealt with by shock, awe and death. I think China might not be so easily dealt with.

China’s plans for the replacement of the dollar and the positioning of their own currency are very like Libya’s. China too has had the idea to back its new settlement and perhaps one day its reserve currency, with gold.  And China is not alone. Russia has been a part of the BRIC group with an interest in the plan. Russia, like China has been a very large buyer of gold.

As reported just a few weeks ago by the Irish Independent,

…the Bank of Russia has more than doubled the pace of gold purchases, bringing the share of bullion in its international reserves to the highest of Mr Putin’s 17 years in power, according to World Gold Council data.

In the second quarter alone, it accounted for 38pc of all gold purchased by central banks.

The article goes on to explain how purchasing gold has meant that Russia has not had to buy foreign currencies.  For foreign currencies think Dollars.

The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years.

China and Russia have very large holdings of gold between them. China actually produces 12% of the world’s gold and keeps much if not most of what it produces. The new Petro Yuan will be backed by Gold,  Something the IMF decades ago, said no paper currency should have.  A clear break with the Bretton Woods Dollar-world agreement.

Who will use this new currency?  Over the past few years a network of bilateral agreements has been created around China and Russia. Back in 2012, in an article called   A new Reserve currency to challenge the dollar – What’s really going on in The Straits of Hormuz, I pointed out that not only had China and Russia agreed to bypass the dollar and trade direct in their own currencies but that,

the India Times reported that India was talking to Iran about moving out of dollar settlements so as to be able to buy Iranian oil despite a US embargo. India said it was discussing settling in Gold. Remember, India has just signed a settlement agreement with China to use the Yuan.

Remember also, Russia recently eclipsed Saudi as the number one supplier of China’s oil. And if I remember correctly Angola was number two. Promoting perhaps the recent state visit this year of Saudi’s King Salman to see Mr Putin. As The Guardian put it,

Saudi king’s visit to Russia heralds shift in global power structures

 

King Salman agrees new areas of cooperation with Vladimir Putin on first official trip by Saudi monarch to Moscow

In addition Japan and China have agreed to trade in Yuan, by-passing the dollar, as has Iran. They are now trading their oil in Yuan or euros, but not the dollar. Ever wondered why Iran is ‘the axis of evil?  It’s because they don’t use the dollar.

Then came the news in 2015 that Qatar had opened the first and so far only financial centre in the Middle East, for trading and clearing oil, gas and anything else, in Yuan. China’s ICBC is the central banking concern in the hub, allowing any Middle Eastern country to trade oil and gas and settle in Yuan. In the previous few years China’s trade with Qatar had tripled.  And now, guess what? Qatar has been declared by the US to be a sponsor of terrorism and US allies in the gulf , led by Saudi, have begun to blockade Qatar’s trade.  Hmm.  Any pattern emerging?

The problem for the US is how much debt is too much for any country or business? Clearly it is not any magic figure or particular debt to GDP ratio. America and China carry huge debts and no one has balked…yet. How much debt you can carry is a function of debt to the estimated future productive  capacity of the country in question. That creates the demand for its currency and the demand for the currency creates a market and demand for debt denominated in that currency.

At the moment the US can carry a huge debt load because everyone needs dollars to trade oil. And China can carry a huge debt because everyone needs yuan to buy the goods whose production was off-shored to China by our globalist leadership.

 

But what happens to demand for Dollars and dollar debt when, not if, oil starts to be traded less and less in dollars?  I suggest the world’s appetite will diminish quite quickly. As it does so, the world will start to see US debt in a different light.  While the opposite will happen to China. And this is what interests me and makes me think China has a plan.

At the moment China also has a very large debt load. I have argued that the Central Chinese authorities have not got the control they would like to have over the growth of that debt. Of course I have no inside information. But the on again/ off again attempts of the Chinese central authorities to deflate its housing-debt bubble and its quite out-of-control shadow banking lending suggests, to me at least, that the central authorities have not and can not control the level of debt being accumulated by provincial governments, their off-book, arm’s length financial vehicles, regional banks, property developers and the vast, largely unregulated trade in wealth management vehicles.

Chinese debt already overflowed once back in the 90’s. Four companies were created to take the debt off the banks’ books and trade it away. Decades later these companies still exist and still have the bad debts from the 90’s hanging around. You will see headlines telling you how those companies have been doing well, making money. Suggesting their trade in bad chinese debt has been going well. The reality, if you dig a little deeper, is that those companies lobbied for and were given permission to engage in ‘proper’ banking activities. Which meant they began to make their own loans – to property developers.  As the property bubble continued to inflate over the last decade and a half they have ridden it and that, not trading the old bad-debt, is why they have made a profit.  But now those ‘bad’ banks, have themselves started to find some of their own loans going bad. In any hard-landing or financial paroxysm the ‘bad-banks’ will need to be rescued by a new bad banks. Bad banks for bad banks is not really a solution.

I think the Chinese authorities can see this. It doesn’t take a genius after all.  What can they do?  Well if you already have a huge debt problem and know many of them are going to go bad and will do so overnight in the event of another global banking crisis, and know you are not able to reign it all in, then a very tempting alternative would be to get the world to agree that you can carry  more debt – a lot more.  And what could help convince the world? Well if your currency could become far more sought after, that would be peachy.

And so I think the long standing Chinese goal of making the yuan an important international currency which China, and Hong Kong in particular, have been working towards for years, has now taken on a far greater import and urgency.  I think the Chinese central government’s  best way of avoiding a politically disastrous  domestic debt implosion is to get the Yuan to be used as a settlement currency for oil and not long after that to become a de facto rival to the dollar as the world’s reserve currency.

Recently I argued at length with a military analyst who disagreed that China would risk such a break with America. Too dangerous he felt. China, he pointed out has such huge holdings of American debt. He argued that the Chinese would prefer to work alongside the dollar.  I feel that even if the Chinese would prefer to ‘work alongside’ the dollar, this  will prove very difficult if not impossible. Once a flow of countries and trade moves away from the dollar there will be a momentum the Chinese will not be in control of.  Cooperation between dollar and Yuan as clearing and reserve currency, especially for oil, will be like trying to dock two super-tankers in a high sea.  In theory possible. In practice – not going to work.

As for Chinese holdings of US debt – I think the advantages of avoiding a domestic debt implosion and projecting the Yuan to world centre stage, will outweigh the losses. I also think, If I were the Chinese, I would imagine a scenario where the dollar does begin to look vulnerable. Its value begins to be questioned, nations holding dollars and dollar debt will feel America’s profligate indebtedness is a global danger. They will blame America. How wonderful then, for China to arrive and say to a worried world, on the edge of a huge crisis, “Fear not, we have thought ahead and can offer you the use of a new currency – one backed by GOLD not paper debts. We are here to save you. To offer a ride on a sound ship as an alternative to the rotten and leaking ship you have been riding on.”  China will be able to position their rise not as an aggressive act, not as trying to destabilise the world, but as trying to save it, from the collapse of an internally divided, corrupt, aggressive and indebted America.

America’s decline will be both financial and political. Financial due to the recalibration of what the world thinks of America’s debt load, and therefore their confidence in and need for the dollar. Political, because America has got used to being able to enforce its foreign policy through sanctions and embargoes. But once oil and other goods and the nations trading in them, no longer need the dollar for their trade, and do not have to use US clearing or custodial banks, then this power evaporates.

Try to imagine the shift in power when Wall Street’s banks are no longer guaranteed top position as the world’s custodial banks and Manhattan’s Southern District Court (Wall Street’s court)  is no longer in a position to dictate to whole nations via decisions upon Wall Street Custodial banks, what debts those nations and their custodial banks must pay and to whom.  The whole edifice of Bilateral Investment Treaties and the trade agreements they sit inside, depends for enforcement upon the US banks being the custodial banks and the Southern District court’s rulings being able to tell those banks what they must do.  Take that power away, which will happen if the dollar is no longer pre-emininent, and America will no longer be able to enforce its foreign policy or world view via economic sanction.

I think the main US banks will be positioning themselves to try to bridge this decline by having a major presence in Hong Kong. They are all already there but will be working to be part of the new Yuan-world of trade and clearing.

Of course this is speculation. But it seems to me the underlying evidence of the previous decade makes it worth thinking about.

If I am in any way correct then I think other things follow.

 I think the House of Saud knows it’s future is in question. I have written a lot about how I see Qatar rising to rival Saudi. Qatar not Saudi has the Yuan clearing house.  Saudi is late to the party.  Can Saudi risk being seen to move away from its traditional ally, America?  If it does, too quickly, and signs yuan trade deals it risks falling as soon as Americal turns its back.  If it doesn’t move quickly enough it risks being completely eclipsed by Qatar,  having to go to Qatar cap in hand to trade its oil with Russia and China.

I see the political changes within the House of Saud as signs of the internal struggles to decide which way to go.  I personally think the House of Saud will fall.

I also think the position of Israel under its present leadership is also very fragile.  Israel needs Saudi.  While they may seem to be on opposite sides, in many ways they are on the same side.  If the House of Saud falls or changes allegiances from America to Russia/China then Israel will become even more isolated than it is.  And of course if America is eclipsed and does enter a period of decline, then Israel will go with it.

If any of the above is near the mark, will it mean the end of America? Of course not. American’s will still work and sleep and raise their children like everyone else.  But the pre-eminence of the dollar and American finance will decline as the stock of dollar denominated bonds and debt agreements expires, and with it the power and wealth of many of America’s elite. How that decline will sit alongside America’s still overwhelming military power I don’t know.

Of course what I have suggested above is merely speculation but  personally I think another debt crisis will happen, because never ending QE and Central Bank debt buying cannot go one for ever, and what China does in the next few months could very well destabilise the whole unstable system.   Many people will suffer and lives will be blighted. But I wonder if, when we all look back from a decade or a generation after, if we won’t think it lucky the crisis did finally come and the system we have been slaving under since 2007 as well as those who have forced it upon us for their own enrichment, were called to account.

It is difficult to accept that such historic changes could occur.  But history has not ended despite what some have claimed.

Rumours of History’s end have been, in my opinion, greatly exaggerated. History is very much alive and happening to us, now. We are, as the Chinese saying goes, living in interesting times.

Comments

sam site Oct 26, 2017 1:54 PM Permalink

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The real advantage of the Chinese yuan over the US dollar is the new gold backing of the yuan.  America could head off that stampede to the yuan, by making the dollar redeemable in gold also.

Ricki13th Oct 26, 2017 9:49 AM Permalink

2018 is setting up to be be one hell of a year. F*** the midterm elections. I think this is the global reset that everyone has been talking about on ZH for years. It so happens to come on the 10 year anniversary of 2008 reset. But this time no amount of QE will work because the dollar will be just a piece of paper. Those who got gold will have the wealth IMO.     

redmudhooch Ricki13th Oct 26, 2017 9:58 AM Permalink

As long as AIPAC/Zionists are still there to bribe blackmail or murder anyone who steps out of line, elections DO NOT matter.Steve Bannon/Breitbart are Zionists, so don't trust ANYTHING they say.How soon can we get AIPAC owned traitors out of Congress ?https://www.veteranstoday.com/2015/10/29/how-soon-can-we-get-aipac-owne… is it such a serious matter to get these signers of the AIPAC Loyalty Oath out of Congress? The reason is obvious, without these Traitors who are sellouts to AIPAC and Israel, America could not have been transformed into a virtual province of Israel.Right now the traitors inside the beltway are meeting frequently and desperately trying to come up with a sneaky way to censor and restrict the Alternative media of the Internet. It is unlikely that the American people will allow this and such a move could result in a new American revolution fought in the street of America by millions or armed Americans against the USG and its stooges and Traitors.We now know for certain beyond any reasonable doubt that Israel attacked America on 9-11-01 as a very crafty, deep cover Gladio-style False-flag attack. They were assisted by Stateside Israeli-American “Israeli-first” Dual Citizens, PNACers, top NeoCons and other traitors in the high US Administration, Congressional Intel committees, the JCS, the USAF, NORAD, the FAA and FEMA as well as the major of NYC Rudolf Guiliani.Nor could America have been transformed into an Israeli slave-state, provider and war-fighter for Israel with an endless supply of American Soldiers to use as Israeli cannon-fodder in their quest to expand and create “greater Israel”.Very few Americans know of this treasonous betrayal by all but one Member of Congress. This betrayal is a very serious, grievous violation of their Oath of Office and also American espionage laws and it constitutes Treason. Why do we know for certain this signing the AIPAC Loyalty Oath is Treason?The US Congress and the high USG Administration is filled with AIPAC owned Traitors, they refuse to identify this AIPAC “elephant in the living room” and do their job and get rid of it. Allowing Israeli espionage fronts inside America especially after they were involved in the 9-11-01 attack on America is absurd.

In reply to by Ricki13th

aldol11 Oct 26, 2017 9:18 AM Permalink

we have subsidiary in China since 2005, these people are serious workers, intelligent, dedicated, well versed in sciences, on the contrary in the US the quality of the work force has declined to  third world levels . 

truthalwayswinsout Oct 26, 2017 8:52 AM Permalink

It's deja vu all over again.Replace China with Japan and go back in time to the 1980's.  Japan was going to rule the world....blah blah blah blah.Now it is China is going to rule the World blah blah blah blah.You cannot rule the world if you are corrupt beyond any acceptable level which is around 2%. Right now our estimates are that the U.S. is around the 1.98% level and if it passes that level all hell will breah loose. You already see some of it right now with all of a sudden out of no where, Hillary is being looked into along with all the crimes the Half-Breed Muslim Nigger perpetrated.China is corrupt into the 30-40% level. They have 30,000 BMBs ready to go off at any momment. (Those are Bernie Madoff Bombs). They have no hope of reform. They still have 400 million plus peasants who can barely feed themselves and on and on and on.FYI: Japan failed because it is about 4% corrupt.If you want to know how to guage the corrupt factor we have a CPI index; Corruption Price Index. It is extremey accuate and tells you how much money you need to bribe your way to success. 

Batman11 Oct 26, 2017 8:13 AM Permalink

The idea:If the wealthy are taxed less they will invest and create jobs and wages.The reality:This is exactly what happened.BUT:The jobs and wages were created in the East, which is far more dynamic, wages are lower and profits are higher.The investor gets the best returns on his investments almost anywhere apart from the West due to its high costs of living with rent, healthcare (US) and student loan repayments. A high cost of living necessitates high wages.The Consequences:The hard work of the West produced profits that were taken by the wealthy and invested in the East.The balance of power shifted from West to East.The West started to worry about the powerful China Western investors had created (commonly known as “shooting yourself in the foot”).Western capital had created a new multi-polar world (more “shooting yourself in the foot”).In the hollowed out and decaying West the populists started to rise and social unrest followed (we have now blown the other leg off).The Solution:Get the money off the wealthy before they can invest it in the East and further shift the balance of power away from the West.  

baldknobber Oct 26, 2017 8:00 AM Permalink

If China actually had a currency that was truly convertible to gold ,all those trillons of dollars sloshing around the world would flood to China causing their currency to skyrocket killing their export based economy. They would slam that gold door shut so fucking fast it will make your head spin, and then the money would go back to a place that was at least politically stable and some what honors the rule of law

conraddobler Oct 26, 2017 7:03 AM Permalink

China is the poster child for all that is wrong with the world.The point of life is to live, not to dominate the planet, just live.  What made America great was that for a time we balanced this better than it's ever been balanced before, then came modern psychology based marketing and the result is the planet we now live on.Quality of life is the goal.  Mao would be spinning in his grave, utterly defeated, they have unleashed forces they have no idea what to do with.All they have discovered is how to unleash greed, it's not really even a new discovery.Greed is all consuming when it gets going though, this leason could not be clearer through all of history.The best thing that could possibly happen to America is to get knocked down a few pegs and not be top dog anymore, lot's of fleas on the top dog.

Brazen Heist Oct 26, 2017 6:54 AM Permalink

The empire is indeed declining. Just look at the level of "debate" going on in America, worthless shysters at the helm.China at least doesn't get bogged down with dumb shit.

Fireman Oct 26, 2017 5:20 AM Permalink

It's already over as China's gold backed Yuan brings the Saudi Barbarian oil peddlers under its wing. Now that the USSAN banksters have stolen back all that "treasury" debt owed to the feudal crypt of Saud and tried to frame them for 9 11  (the "28 pages" meme). Kiss the IOU Petroscrip (no longer) I$I$ backed Saudi Mercan toilet paper free loader dollah goodbye. Jim Wille's Scheiße dollah is coming home to Slumville in a tsunami of toxic derivative shit after all the lost judaic wars and bananas republic debt splurge and it's going to guarantee overnight Third World status for 98% of USSANS, already on the edge of ruin. No one likes a slacker and a hustler and the "exorbitant privilege" reserve currency gig is over as the Pentacon mob fizzle out in a swamp of hubris. China's Korea and China's "big, beautiful" South China Sea "resort" islands are bristling with big sticks and USSA can do NOTHING, and the rest of humanity knows it and enjoys seeing the snaggle-toothed, drug-addled, big mouth dumb a$$ mutt get kicked in the face. Ya'll had a good run as long as the anglozionazi abomination lasted but now it's high time to get out while you're still ahead. Dump the petroscrip and prep before the big flush washes you down the Wall St bankster sewer in the imploding shitter of the Potemkin Village idiot "economy" of misery and carnage for the Zero 1% scum that own US.  https://kingworldnews.com/china-is-getting-ready-to-unleash-its-plan-fo…

Panic Mode Oct 26, 2017 5:03 AM Permalink

For people don't believe China will overtake, simply travel to China and see for themselves and make judgement. I recently went to China technology expo, all I can say is "FUCK ME". I travel to the east at least couple times every year. Everytime I come back, I'm more despair that we are further behind.China has its flaws (especially enviornment) but it is progressing in lightning speed in technology, economy, social structure, science, aviation, etc. Their IT infrastructure is the most scary thing.Remember, Adam Smith said: "The wealth of nation is the productivity of the people"Look at us, we have full of libtard fuckers all day long arguing anything promoting whiteness, Anitfa, transgender bandwagon, gender neutral BS, endless shits 

fangulos Panic Mode Oct 26, 2017 8:42 PM Permalink

Can't get the sentiments over here in zh, what readers bases are those bonker heads coming from? Cold-war era boomers? Just went to hk and shanghai this august, I certainly applaud chinese achievements there, don't think anyone (from low class farmer to upper class investor or intellectuals) interested in 'taking over merikwa', for what good then? 30 mil. mexican wetbacks? shitholes like Shitcago and Baltimore?

In reply to by Panic Mode

desertboy Oct 26, 2017 4:50 AM Permalink

An article of puffery, re-plowing an over-farmed field of investigation, full of platitudes and cliches, all for the sake of narcissistic self-aggrandizement.

McDuff71 Oct 26, 2017 3:53 AM Permalink

...what a f*cking joke right?? - China at the head of the pack? - don't make me laugh..."me love you long time" - they don't realise that THEYhave been played by the good ol USofA ... creditors and debtors - the world she goes a swinging wildly around...

Batman11 Oct 26, 2017 3:43 AM Permalink

The West came up with a cunning plan to shift the balance of power to the East; they called it “economic liberalism”.If we leave capitalism uncontrolled, the profit motive will hollow out the West and turn China into a super power due to the difference in labour costs.They left capitalism uncontrolled, and Western bankers, businesses and investors got to work off-shoring jobs to the East and building Asia and China up at the expense of the West.The plan is going like clockwork. The architect of this cunning plan?A chap who goes by the name of Baldrick. https://www.youtube.com/watch?v=ACnqI1l4I9s  

Ghordius Oct 26, 2017 3:39 AM Permalink

excellent article. indeed, interesting times

in the 70's, Nixon did two things that leads us all to this. I remember very well the debates about the future consequences. interestingly, most forecasters that "got it right" were too impatient, they all expected events to follow up faster

remember the "Wolfowitz Doctrine": each region as separate, with a regional balance maintained by Washington. this, too, is passing... slowly. the world is getting smaller, the regions more interconnected. again... slowly. balances still matter, though

decline is the correct word, imho. the telltale sign might not be FX reserves, but a rearrangement of alliances for those balances, like the UK did with Japan, "retreating" to Singapore. only that the US is still "pivoting to Asia", so it's "retrenchment" in Africa and Europe that is in the cards

More US in Asia, less elsewhere. More China... everywhere, from Africa to Pakistan and the "Great Game" Central Asian region... with railroads, note. (those railroads... in 10 years people will ask why nobody saw them coming). A Russian influence that looks rising, there and in the ME, but fraught with risks of reversals, as for Turkey, the "old/new/returned kid in the bloc"

where the UK wants to be in all this, I still don't know. China would love it to aquire Britain as client and enjoy some British Navy cooperation and naval know-how

where the Visegrag countries want to be in all this, I also don't know. the US would love it to put them together with Ukraine in a bloc vs Russia, IF relations with western europe go awry (on a limb, here)

as always, I am full of... cynical optimism. the last 40 years confirmed me right, in this

gold returns, regularly. betting on it? nah. gold is for saving. for a rainy day you wish it won't come, in a psychological way the opposite of investing, which is taking risks for a likely and wished-for future. this is both valid for rational people as for countries looking after their national interests

Hkan Oct 26, 2017 3:16 AM Permalink

WOOW!Fantastic article! Good job!Power balance act avoiding nukes will be no 1 issue.This is HUGE.....HUGE.....mind blowing perspective. So many things to go wrong so much to gain from a PAINFUL reset moving toward more equal distribution of wealth and oppertunities. Hopefully.Somehow I think China understand importance of middleclass. Key. U.S power establishment don't care killing middleclass.....GREED no 1 priority and no 1 reason going down. EU greed-copy....not Europe having differentiated structure.U.S Middleclass gonno fight their way back crushing old power structures....or ...stay political system prisoners. Who and how middleclass frustration anger disappointment will be picked up and guided will set U.S future. Can go any direction...any direction.Keeping GOLD bars.... safety net.

IronForge Oct 26, 2017 3:13 AM Permalink

CHN don't need to worry much.IIRC, they're buying T-Bills and no more Notes and Bonds.  Easily sold off.Also, they'll grow their way out of most Economic Problems.

rtb61 Oct 26, 2017 1:50 AM Permalink

China did rise but make no mistake, they did nothing to the US, the US's collapse is all 100% self inflicted, nothing but pure greed driven stupidty, "I got mine now, screw everyone else I can afford to live on a tropical island some place else, who cares how many you die, in fact more power to me the more I can cause to die". Those power mad US corporate control freaks are decidely dangerous to everyone and still enourmsly dangerous to China, right along with everyone else.Can't help but feel the rest of the world wants the US to just quitely crawl into a corner somewhere and kill itself, likely taking Canada and Mexico with it, maybe even the entire contenent of South America but it looks to be getting eased out of elsewhere, fighting all the way out the door.

ThinkAgain Oct 26, 2017 1:38 AM Permalink

It's simple: each rise grows the seeds of decline too:http://www.planck.org/publications/Global-West-Economic-Adulthood http://www.planck.org/publications/Global-East-Driven-Globalization-2-0… huge windfall for China is their business mind. While the USA thinks only in terms of power, for China trade is the core of everything: it's a thoughtput economic system: only focused on high production. China has the high production focus of young capitalism: even in foreign affairs: build baby build. The USA lost that: in the USA the main drivers are Washington and New York.http://www.planck.org/publications/Secular-Stagnation-as-Denial-Term http://www.planck.org/publications/Financial-QE-vs-Productive-QEhttp://… capitalism is an end phase of development: as it poisoning the soil it growns on. Productive Capitalism is wealth distribytion by the market. Financial capitalism is wealth concentration by the 'market'.

deev Oct 26, 2017 1:33 AM Permalink

What will come first, the electric car or Dumping dollars for Oil, seems to be a foregone conclusion either way. bye bye "greed is good" 1% ers America/Wall St

Rebelrebel7 Oct 26, 2017 1:08 AM Permalink

WELL THIS SURE AS HELL WILL NOT WORK!IT IS A PHYSICAL IMPOSSIBILITY!THIS IS SHEER FRAUD!THIS IS SO UNWORKABLE, THAT IT'S DOWNRIGHT INSULTING!If every person on earth had an equal amount of gold, it would be the equivalent of 5 gold rings, per person.Central Banks and governments throughout the world possess 18% of all of the gold in existence.http://www.numbersleuth.org/worlds-gold/The World Bank, BIS, and Chinese government are evidently setting up a giant rip-off plan! The oil futures, gold, yuan system is an economic impossibility! World oil consumption is 35 billion barrels a year!NO BANKERS REALIZED THIS?! KURODA DIDN'T SPOT THIS?! JPM THAT SIGNED UP FOR THIS WITH THE INE DIDN'T NOTICE THIS?! PUTIN, SALMAN, AND KHAMEHNEI DIDN'T NOTICE THIS?!Even with the fractional reserve ratio of 1/10 , it still doesn't work! All of the gold in existence is worth about $6.785 trillion dollars! Governments own only 18% of that! The world consumed $1,75 trillion of oil last year, and global GDP is $80 trillion! If China were to become the new currency leader for the entire world, there still is not enough gold on earth with fractional reserve banking convertible to physical gold!I KNOW HOW YOU PEOPLE THINK!THAT EVERYONE IS DUMBER THAN YOU ARE, AND YOU WILL CONVERT YOURS TO GOLD BEFORE EVERYONE ELSE DOES!NO PROBLEM IF YOU DESTROY THE ENTIRE GLOBAL ECONOMY,NO PROBLEM IF PEOPLE STARVE!YOU'RE ALL SICK AS HELL!SORRY! CAT'S OUT IF THE BAGA debt based monetary system under the ownership of privately owned central banks is also an economic  impossibility. Their rationale,  fuck everyone else, as long as I get mine. Compounded interest is The 8th wonder of the world- those who understand it earn it, and those who do not pay it.- Albert EinsteinIf America has a capitalistic economy, we must really suck at creating capital with a $21 trillion national debt and $500 billion trade deficit in 2016! Where is the capital?!Life under The Federal Reserve Act of 1913:Watch "HELTER SKELTER THE BEATLES NO COVER VIDEO ORIGINAL" on YouTubehttps://youtu.be/ntUIjp6yxj8The central banking third-way, triangulation strategy of the neocons and neoliberals,  is to unite the country ( and the world ) around perpetual war, the anhialation of the Bill of Rights and the constitution, globalist free-trade policies in a race to the bottom, pitting US workers against those earning $2 a day, through a  central banking debt financed money supply which enslaves virtually everyone in the world with only a few notable exceptions, North Korea and Venezuela who have rejected privately owned Central banks!  The false flag against communism and socialism is nothing more than that, with communist China and socialist EU countries to varying degrees as proof! We must do the opposite! We outnumber them on a scale of 1,000 / 1!We must repeal the Federal Reserve Act of 1913 and abolish the Federal Reserve.  IT IS NOT A COINCIDENCE THAT FEDERAL  INCOME TAXES ALSO BEGAN IN 1913! Congress must resume its responsibility and coin money and regulate its value as granted to Congress in Article 1 Section 8 Clause 5 of the constitution.The fundamental flaw in main stream economics is that it begins by accepting  the validity of the Federal Reserve Act of 1913, the IMF, BIS,  and World Bank which are all part of the privately owned banking cartel charging interest to sovereign nations which is nothing more than a bank tax on citizens for which they have no right to claim, therefore making it a circular argument based on a logical fallacy!If we continue down the yellow brick road of the Federal Reserve Act of 1913 and privately owned international central banking cartel:1.)We will destroy the economy  when we  reduce the national debt,  because the money supply is based on debt.2.) There will  be an endless boom bust cycle because when the banks issue loans, they create money in the equivalent of the principal of the loan, but do not create the money required to pay the interest on the loan, leaving a shortfall in the money supply of the interest payments required.3.) We will go deeper into debt or destroy the economy because the only central bank solutions are  to issue more debt or destroy the economy.If Congress were to resume its responsibility as stipulated in Article 1 Section 8 Clause 5 of the constitution and coin money and regulate its value debt free, and if other nations would do the same:1,) The budget would automatically balance.2.) There would be no need for income taxes, estate taxes, capital gains taxes, and corporate taxes.3.) There would be no need to reduce spending.The rise of cryptocurrencies has litigated and won the case before the world, precisely how easy it is to get rid of the central banks! I prefer cash, which would not use the gold standard because history has proven that every time that it has been implemented,  most of it ends up in the hands of a few wealthy families, and it and they destroy the nation!If every person on earth had an equal amount of gold of the 165,000 metric tons of gold in existence, it would be the equivalent of 5 gold rings, per person for each of the 7 billion people. Central Banks and governments throughout the world possess 18% of all of the gold in existence.http://www.numbersleuth.org/worlds-gold/During the middle ages in England, King Henry 1st implemented the tally system and the bankers and goldsmiths did not control the economy, the average man provided everything necessary for his family by working 16 weeks a year! The rest of the time was spent learning, traveling,  on the arts, and volunteering for the church! For more on this topic please read The Web of Debt and the Shocking Truth About Our Money System And How We Can Break Free by Ellen Hodgson Brown J.D.

OutaTime43 Oct 26, 2017 1:01 AM Permalink

China has serious environmental problems, looming resource limitations and an inability to feed its people without imports.  Not so sure they are rising while the US is falling. 

Justin Case Oct 26, 2017 12:52 AM Permalink

US leads the world in child abuse, lead the world in divorce, lead the world in teen pregnancy and they lead the world in drug addiction.  The basic building blocks of society that tie them together and help keep them grounded (such as the family) are breaking down, but they still seem surprised that they have hordes of "lone wolf individuals" running around doing crazy things.  Ah DECAY?

Justin Case Government nee… Oct 26, 2017 1:40 PM Permalink

Merica went to Africa to bring Negros to work in merica as slaves. The tribal fighting in Africa promoted this. The winning tribe wanted to kill all the survivors of that tribe that lost, but the white man from merica offered the winning tribe to remove them from the continent rather than slaughter them. Those of the losing battle, prefered to go with whitey and live, even if it was labour they had to perform.History bites.

In reply to by Government nee…

PitBullsRule Oct 26, 2017 12:42 AM Permalink

"Hey we got a new currency for you!""Oh yeah?  What's it called?""Yuan?""What?""Yu-Wan""No I don't want it, I was just wondering what its called""Yu-WAN!""NO! I don't want any.  I just wanted to know the name""YU-WAN!""No I DON'T!""Yeah!  YU-WAN!!""NO! Fucker!  Get away from me!""YU-WAN!  YU-WAN!"NO! I DON'T!! Get FUCK AWAY FROM ME YOU CRAZY CHINESE BASTARD!!"

Idaho potato head Oct 26, 2017 12:37 AM Permalink

It is my hope that as VVP so eloquently put it, USA needs to become a 'normal' country. Which hopefully means getting rid of the overwhelming corruption and become honest working stiffs again.