Wish the European writers would get back to the decimal point instead of the comma for the fractional separator.
"What are you upto, China?" Preparing for SHTF Day, and expanding her options. I am quite certain that if she could swap her US$1.3 Trillion in US Treasuries, for US$800 billion in gold, they would do that in a flash! JMO OC
Winning the next world war without firing a shot. Much more gratifying to watch your enemy self destruct without you incurring any losses.
My gut feeling is the "Cartel" is deliberately manipulating the price of gold (Driving it lower) so that the US and The Chinese can "fill-up" on gold. I reckon this is the payback for buying US debt. Chinese know The US can never payback debt, so... to smooth them over, they'll keep gold low until the Chinese have had their fill. imo...The US Fed is selling paper gold and...buying physical. It's a win...win situation for the major powers. When the big players have filled their bellies...just watch the "long-stride" of the Bull charge. H
But that's why I'm confused. I know they're doing a lot of Yuan trade deals with big countries, importing significant amounts of gold etc yet they're still holding such a huge amount in T-Bills? Do they actually need that much?
House, Because they cannot readily sell them except on the Bond markets of London and NY. They MAY be able to find a few buyers by way of swapping a Bond for a farm at an agreed, discounted, price. If they dropped $1.3 trillion of Bonds onto those Bond markets, they would get 10c in the dollar if they are lucky, and probably trigger SHTF Day in the process. OC
Ain't gonna happen. No empire went down peacefully, except passing it over to ally/successor, British Empire -> US. I believe this is what WWIII is going to be about, not the freaking "terrorists" hiding in the mountains.
No wars now and in the future are about oil. Not hard to see China is simply diversifying from paper into hard assets to hedge bets for the future.
....and I am damned if I can see a scenario that includes WW3. The repercussions are simply too horrendous, and not worth the risk. 'MAD' + 'Mutual Terror' still applies as it has since 1945, 1949, 1953, and 1964. Even 'Economic warfare' drags down all countries as we are just so inter-dependent and inter-related. China would be CRAZY to trip up the USA, she would lose just as much. Who ever heard of a shopkeeper that tells his best customer to get stuffed or worse? JMO OC
But if that best customer is buying everything on credit and the tab keeps getting bigger and bigger, at some point the shopkeeper has to stop selling to the customer.
This is where the interdependency comes in. No sales to the US means factory closures and lay-offs, which means CRANKY unemployed workers, and starving mums and dads back on the farm. Like ripples in a pond! OC
I have read somewhere that half of the Chinese population is living about the same way that they did a few centuries ago. The kids are in the big cities working on the "ghost cities" and malls growing like mushrooms all over China. The kids have little spare money and the parents have little also. The day China stops building (with borrowed money) is the day it all falls in a hole. Tienanmen Square anyone? JMO OC
It's interesting you state borrowed money. In the West the entire economy is based on borrowed money: building, maintenance, salaries all borrowed. When this fiat system crashes and we see the cracks open up, watch for the riots in other squares like Time Square. The Chinese are printing and borrowing like everyone else but they have cash in the bank and increasing gold stores. In the West we have increasing debts and dwindling gold. I don't think your China story is sound. I would be more focused on the need for 3 billion hollow point rounds and 28,000 "tanks" ordered by the department of homeland security. Bullets that can only, by the Geneva convention, be used on US soil against US citizens.
