AND LOOK AT LITTLE TIMMY SMIRK AS HE SAYS WHAT GOT THE LAUGH:
(POOR QUALITY VIDEO, BUT YOU WILL GET THE POINT.
<<Why are the Chinese hoarding so much gold? Does China plan to back the yuan with gold and turn it into a global reserve currency? Could it be possible that China actually intends for the yuan to eventually replace the U.S. dollar as the primary reserve currency of the planet? Most people in the western world assume that China just wants a "seat at the table" and is content to let the United States run the show. But that isn't the case at all. The truth is that China doesn't just want to compete with the United States. Rather, China actually plans to replace the United States as the dominant economic power on the planet. In fact, China already accounts for more global trade than the United States does.
So what would happen one day if China announced that it was backing the yuan with gold and that it would no longer be using the U.S. dollar in international trade? It would cause a financial shift so cataclysmic that it is hard to even imagine. Most of those that write about the "death of the U.S. dollar" usually fail to point out that China is holding a lot of the cards as far as the fate of the dollar is concerned. China owns about a trillion dollars of our debt, China is the second largest economy on the planet, and nobody uses the dollar in international trade more than China does except for the United States. Up until now, China has had to use the U.S. dollar in international trade because there has not been an attractive alternative. But a gold-backed yuan would change all of that very rapidly.
In a recent note, John McCormick of RBS Group stated the following...
"'Financial crises in the US and Europe mean the world needs a new, more stable global reserve currency, and trade in RMB is growing rapidly. In the FX market, for example, our figures show that volumes are now worth around USD 5-6 billion daily – double what they were a year ago. A number of factors suggest that the Chinese authorities want to make RMB internationalisation happen by 2015.'"
2015? COULD IT POSSIBLY HAPPEN THAT QUICKLY?
DOES RAIN FALL DOWN?
Similar sentiments were echoed in a recent article in the Wall Street Journal...
"'Beijing is undertaking a long, gradual campaign to establish the yuan as a more market-oriented, international currency. China's State Council, or cabinet, said in a statement this month that the country would draft a plan to allow the yuan to become fully convertible. Meanwhile, the People's Bank of China is guiding the currency higher and set the median point of its permitted daily trading band last week at the strongest level ever.'">>
THIS ALL MAY SEEM TO BE OF LITTLE SIGNIFICANCE, MERELY SPECULATION, BUT THE 'BIG BOYS" DON'T SEE IT THAT WAY AT ALL!
Dr. Pippa Malmgren, the President and founder of Principalis Asset Management, who once worked in the White House as an adviser to Bush, is claiming that China has plans to turn the yuan into "a hard, gold-backed currency" that will have a distinct competitive edge over the rapidly depreciating paper currencies that the rest of the globe is currently using...
<<The most interesting piece of the puzzle is that the Chinese have emerged as the biggest buyers of gold, mainly off-market.They want the yuan to emerge as a hard, gold-backed currency in a world where everyone else has chosen to inflate and devalue.
The recent bilateral currency deals with Australia, France, Russia and Singapore, and many others, reflect this desire to displace the USD as the world’s reserve currency.
It may be an interesting and long race between the Chinese reaching for convertibility and the Western central banks straining credibility.>>
Dr. Stephen Leeb, bestselling financial author, wealth manager, and publisher of a family of investment newsletters, thinks this is serious stuff:
<<Countries have been battling each other in order to cheapen their currencies. The problem with a cheaper currency is that commodities cost more. So China has decided to opt for a higher currency.
The move in the yuan overnight was one of the most significant upticks I have seen. Like I said, the yuan moved to an all-time high. The yuan has advanced roughly 5% against the US dollar in just nine months. China also imported over 200 tons of gold for the most recent month. That is an extraordinary number. At that rate that’s over 2,400 tons of gold per year on an annualized basis.
This simply speeds up the point at which China will be the largest gold holder in the world. China saw gold come down and they didn’t just buy on the dip, instead they bought as much as the market would give them. And, again, you see the yuan going up so that is making the price of gold even cheaper for the Chinese.
It’s only a matter of time before the Chinese back the yuan with gold. This will push the yuan front and center as a key element in terms of being part of the world’s reserve currency basket. China gets the message. They are doing whatever it takes to establish their dominance in the world, particularly in the commodity arena. Their currency is flying and they are importing as much gold as they possibly can.>>
One recent estimate put China's gold reserves at more than 7,000 tons of gold, but China isn't about to admit how much gold they have acquired!
According to Reuters, more than 223 tons of gold was imported into China from Hong Kong in March. That smashed the previous record of 114 tons in December.
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.
For decades we have been exporting gigantic quantities of our currency.
The FED just pumps it out like cheap candy.
So what would happen if that process suddenly reversed and massive piles of dollars started coming back into the country?
That would be a nightmare come true!
So, the key is to get the rest of the world to continue to have confidence in the U.S. dollar so that will never happen, right?
Unfortunately, there are lots of signs that the rest of the world is accelerating their move AWAY from the U.S. dollar.
It was recently announced that the BRICS countries are developing their own version of the World Bank !
<<The BRICS (Brazil, Russia, India, China and South Africa) bloc has begun planning its own development bank and a new bailout fund which would be created by pooling together an estimated $240 billion in foreign exchange reserves, according to diplomatic sources. To get a sense of how significant the proposed fund would be, the fund would be larger than the combined Gross Domestic Product (GDP) of about 150 countries, according to Russia and India Report.>>
Over the past few years there have been a whole host of new international currency agreements that encourage the use of national currencies over the U.S. dollar. The following are just a few examples...
1. China and Germany (See Here)
2. China and Russia (See Here)
3. China and Brazil (See Here)
4. China and Australia (See Here)
5. China and Japan (See Here)
6. India and Japan (See Here)
7. Iran and Russia (See Here)
8. China and Chile (See Here)
9. China and the United Arab Emirates (See Here)
10. China, Brazil, Russia, India and South Africa (See Here)
STARTING TO GET THE PICTURE?
IT ISN'T PRETTY, IS IT?
AS ONE ARTICLE SAID:
"'Better start studying your Chinese math. After all, how much gold you have?'"
LASTLY, BUT BY NO MEANS LEAST OF THINGS TO PONDER...
WHY DID AMERICA DO AWAY WITH THE GOLD STANDARD, KNOWING THAT OTHER NATIONS WOULD THEN BUY GOLD?
THE INTENTIONAL COLLAPSE OF THE AMERICAN ECONOMIC SYSTEM?
SOURCES, AND DO READ THESE WELL...IT'S COMING DOWN THE OLD PIKE, SOONER THAN YOU THINK!