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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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March 11, 2013

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By Brandon Smith

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.  This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, and consumer hub, and currency powerhouse.  In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar.

For the past decade, China has been slowly but surely issuing Yuan denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency.  This process has gone mostly ignored by the mainstream financial media.

If China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, why did they feel the need or desire in 2005 to begin issuing Yuan denominated debt?  Why begin borrowing capital from foreign creditors?  They certainly didn’t need the money.  Why were they moving away from export dependency and building a consumer base?  And why attempt to proliferate their currency?  Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation?  Didn’t the Chinese want their currency cheap so that they could maintain export superiority?  What did the Chinese know in 2005 that we didn’t?

Well, apparently they were either psychic, or someone gave them advanced warning.  They knew that there would be a crisis in American consumption and that this would lead to severe reduction imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves.  They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long term Treasury holdings to short term Treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting special drawing rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket of currencies.  In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar.

China is flooding the system with Yuan!  This means only one thing; Chinas is no longer seeking to maintain the traditional trade relationship it has had with the U.S.  To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest buyer, recently surpassing India.  Official estimates place Chinese gold purchases in 2012 at around 800 tons: an astonishing increase in their stockpile.  China is being groomed as an alternative economic engine in opposition to the U.S., and this will lead to an eventual dump by them of the Greenback.  To put it simply, the dollar is going to lose its world reserve status very soon.