The Chinese Yuan has now surpassed the Euro as a trade currency, and the U.S. Dollar is in its sights. China is methodically implementing its long-term strategy to replace the U.S. Dollar. It is no longer buying U.S. Treasuries. The current ratio of Dollar to Yuan trade transactions is 10 to 1. The global oil sales in Dollars keeps the demand for USD so high. Once Saudi Arabia firmly decides to accept other currencies, the ratio will move rapidly.
“The escalation of military tensions between Washington and Beijing in the East China Sea is superficially over China’s unilateral declaration of an air defense zone. But the real reason for Washington’s ire is the recent Chinese announcement that it is planning to reduce its holdings of the US dollar.” See: http://www.presstv.ir/detail/2013/12/01/337686/china-plan-to-quit-dollar-infuriates-us/
Central Planners like to use military intimidation to keep countries in line. What war has the U.S. truly won since WWII? Trillions of dollars have been spent and the world is not safer, more peaceful, and the U.S. is less popular than ever before. Americans have exported their debt overseas and have allowed the major banks to effectively bet the future generations’ money in the derivative market. Former and “future” bankers have been placed in strategic political positions to promote their agenda of greed. Meanwhile, many Americans look forward to the next episode of “Duck Dynasty” or “Storage Wars” on cable TV.
Gold, silver, and related stocks have been beat up in recent weeks and months, simply providing additional buying opportunities for those who believe that the illusion of fiat currency cannot last forever. Based on world history, it is not a question of “IF’, but “When”. As usual, men will not know the day or the hour that the Black Swan event arrives, but it will.
The Bubbles in the financial arena continue. The 3% decline in sales on Black Monday are an indicator that can’t be easily manipulated by the government… yet. This suggests that the economy is moving quickly into the second dip of the recession I spoke about in past blogs. Based on raw government numbers, we never really experienced a true recovery, only an orchestrated one by the use of massaged statistics. Government assistance of the unemployed continues to run at record levels. The Federal Reserve has vastly expanded its balance sheet but failed to positively impact the economy. Since the spring of 2010, our national debt has increased 46%, from $8.4 trillion to $12.3 trillion today. Also, the inflationary increase in the money supply, which is based on the Fed’s balance sheet, has increased from $2.3 trillion to $3.9 trillion today, a 70% increase. Let’s face it, their monetary policy isn’t working, and there is a lot of debt to be paid back. Someone is going to be on the losing end of this huge problem. China knows it, the U.S. knows it. Ultimately, the bully goes home with a black eye.