Top Chinese official signals move away from dollar
Published: September 7, 2009
Updated 5 months ago
Update (below): Gold spikes above $1,000 an ounce on fears of sinking US dollar
The Chinese are becoming increasingly wary of the growing supply of U.S. dollars, leading the head of the nation’s green energy initiatives to signal a move away from dollar reserves and toward, gold, euros and yen, according to a published report.
“We hope there will be a change in monetary policy as soon as they have positive growth again,” said Cheng Siwei, former vice-chairman of the Standing Committee, according to The Telegraph.
He added: “If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies.”
Siwei also noted that China is especially interested in purchasing gold, but will move methodically in that arena so as not to agitate the market.
“To the degree that they sell dollars and buy gold, Yen or Euros, there can only be downward pressure on the U.S. dollar,” noted Edward Harrison with economic analysis publication RGE Monitor.
“One cannot rely on the words of one Chinese official to represent policy makers in China,” he added. “And Cheng never said the Chinese are now actively diversifying away from the U.S. dollar. Nevertheless, Chinese officials have been talking along this dollar bearish line for months now and I tend to believe their words will lead to action.”
However, some believe China has already begun this diversification.
“[Siwei's] comment captures exactly what observation of gold price action suggests is happening,” opined Ambrose Evans-Pritchard in a Telegraph op-ed. “Every time it looks as if the bullion market is going to buckle, some big force steps in from the unknown.
“Investors long-suspected that it was China. We later discovered that Beijing had in fact doubled its gold reserves to 1054 tonnes. Fait accompli first. Announcement long after.”
Business Insider added: “It’s going to be slow, and the country is loathe to buy too heavily, else it distorts the market more than it would like, but over time it will keep accumulating the shiny metal.”
On Monday gold exchange rates hit a six-month high at $995.19 an ounce, with some predicting the metal may appreciate over and above the $1,000 mark very soon.
“The underlying factor is still the dollar,” said Dan Smith, a UK-based Standard Chartered Plc analyst, according to Bloomberg News. “If we do see a break in the dollar, it could be one of the triggers to take gold higher.”
Sunday, central bank supervisors from all the world’s most powerful nations agreed, at America’s behest, to strengthen the “Basel II” framework for international commerce and increase currency liquidity in all member nations. They also agreed to empower “global supervision” of financial industries, which they said will ultimately result in markets with greater resistance to economic stress.
China has over $2 trillion in U.S. dollar reserves.
Update: Gold spikes above $1,000 an ounce on fears of sinking US dollar
Tuesday morning Bloomberg reported that gold prices on the New York Mercantile Exchange’s Comex division hit $1,000 per ounce — a six month high — after pronounced fears of a weakening U.S. dollar surfaced in comments by a top Chinese official and a United Nations conference report which recommended a new global currency to replace the dollar as the world’s reserve.
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And here we GO!!! Now the dollar will begin its collapse in earnest. If you are still holding dollars, if you haven’t taken the advice of those who have been proven right over and over(Peter Schiff, Gerald Celente, Dr. Ron Paul, Lew Rockwell, Ludwig Von Mises, that gnawing sensation in your gut.), and haven’t turned ALL of your cash and cash valued assets into gold and silver and lead in the form of bullets.. YOU ARE NOW OFFICIALLY DEAD. You will starve and die of exposure.
Prices will now begin to skyrocket. The chinese have had ENOUGH of washington shenanigans, when will you? Not that it will matter, within 24 months the U.S. population will drop a good 15 to 20 percent.. I expect this clown of a gubbermint will continue to hand out blivets, and you dopes to keep swallowing them down with an idiotic smile on your ignorant faces..
I see massive moves to the downside right now in the USD index, the word is out, serious capital flight has now begun. China is now acutely aware of how much trouble the dollar is for them. They are now making responsible moves towards the exits, but even this little movement is more than enough to start a full scale panic movement out of the dollar, as the free-fall USD index chart indicates. Don’t worry, the chicoms won’t walk away from this clean, they will be dragged out to the lampposts by their rioting population soon enough. It is too late for the chinese government as well. You fools! Now you shall taste the bitter fruit of your willful ignorance and hubris.
Baa! BAAAAAA! Little sheeple, have you any meat to pay the wolves?
You kill the dollar we kill WALMART! ya heard?
“The chinese have had ENOUGH of
washingtonWall Street shenanigans, when will you?”there, fixed.
Aww, Man, this week end I was thinking out loud about some of those so called predictions set to come about on DEC of 2012 as predicted by The MAYANS, The BIBLE CODE and last but not least Nostradamus. A funny thought occurred to me, that the Fire predicted to come from the heavens could be a massive solar Corona that reaches us on or about 40 months time. As some of you know our SOL has been unusually quiet well past its low cycle. This massive electrical storm will wipe out communications, all computers running at the time including factories ECT, ECT. The other thing that occurred to me is that due to the massive drum beat from the media outlets, staring on JAN 2012 about the predicted impending doom. The talking heads will be on a frenzied orgy, the magazines, books, articles, the experts and charlatans/opportunist will also feed on this end of time predictions. This will cause a run on bank funds fueled by massive hysteria. There will be banks that will not give out any monies within its vaults. Some banks will place daily limits on the amount allowed to be withdrawn. Because of this, there might even be a massive selloff on the world markets. If both of these scenarios happen we just might have to start all over again.
The combined Greenspan and Bernanke policy for the creation of money far in excess of underlying growth in the US economy has guaranteed that the dollar will fall far in the coming months and years. This has to be the official policy of the country since it has been going on now for more than a decade. The consequences of the over creation of dollars has been hard to detect upon until now, however are now reaching the tipping point where the dollar will drop precipitously very quickly and its drop in value will be dramatically felt by regular Americans.
—snippet—
Fred Bergsten, a US Treasury official and founding member of the Trilateral Commission and subversive Peterson Institute, accurately conveyed the ramifications of abandoning national currencies:
“The adoption of a common currency is by far the boldest chapter of European integration. Money traditionally has been an integral element of national sovereignty . . . and the decision by Germany and France to give up their mark and franc . . . represents the most dramatic voluntary surrender of sovereignty in recorded history. The European Central Bank that will manage the euro is a truly supranational institution.” –C. Fred Bergsten, 1999 [6]
Bergsten rightly acknowledges that, “money is an integral element of national sovereignty.” Therefore, the private ownership of one global currency strips all countries of their national sovereignty in one broad stroke and what better way to shorten the process than to engineer the ‘disintegration of the world financial system,’ with a global derivatives Ponzi scheme.
Bergsten’s euphoria over European loss of national sovereignty is an expression of victory, the triumph of subversion. European nation states did not voluntarily surrender their national sovereignty. They were forced to surrender, just as Americans are being stripped of their national sovereignty, piece by piece. . . .
Source: http://onlinejournal.com/artman/publish/article_5096.shtml
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The US was formed with some of the smartest Americans who knew how to offer success to all Americans. UK and King George had taxation without representation and wealthy educated men left and came to the new land we call America. Now with other countries learning how did the US succeed things have changed. Bush and others made Greed and lies the new way America works as even parents don’t wont their kids to go back to honesty and education. It’s now an America that is following the new King George W. Bush of America. As President Obama tries to correct the criminal acts we see how the GOP/KKK/parents/Wall Street/Big Business is fighting tooth and nail. China and other Asian countries have learned how the US became successful and will now take over.. The Middle East got wealthy by using Bush Senior and GW as even Iraq Government has a surplus of 800 billion dollars while the US is in debt. Greed took over the US and pretty much destroyed it, but it was those who used God’s Name for evil and greed that really did us in. Obama and Biden can’t protect those who used God’s Name and hurt US citizens and those people all over the World. We see criminals like Bush, Cheney and others laugh as they are not charged with their evil hateful crimes but God will take care of that.
wrong airjackie obama is one of there stooges i mean the rothschilds (city of london blood suckers
we are soo fucked this is what happens when we have a central bank controlled by the money cartel
This blip has been on the radar before and will get larger on the radar because the U.S. does not think, it only feels (invincible).
China, the next superpower.
All is well. Now our plethora of Manufactured goods will be cheaper overseas. Think of the container ship’s filled to the gills with ‘Happy Meals’ & cheesy crust pizza. That is unless you believe the General Electric lies about their ONE manufacturing plant (Erie, PA) & their Super Duper Train Engines.
Forget about the clunker program, you that bury your fat asses in the sand, grab your “rick shaws” and hope you will get $4500 for them. This premise has been coming down the hiway for 4 years. Whoopee!
The dollar has to fall at some point. Otherwise the trade deficit will destroy the country. It can not be sustained at current level. The dollar’s fall will also help the fiscal deficit because the US can repay debts with cheaper dollars than it borrowed.
As the dollar falls imported foreign goods will become more expensive, but US exports will become cheaper. Expect US manufacturing to go up and a corresponding growth in manufacturing jobs. Also, a moderate rate of inflation will help with the mortgage crisis and credit card debt as debtors will be able to repay debts with cheaper dollars.
If the dollar falls, or even threaten to fall, plan on seeing “end of the world” stories in the press. Inflation tends to hurt lenders and creditors and help debtors. No inflation or outright deflation favors lenders as their dollars are more valuable and debtors must pay debts with hard to come by valuable dollars.
So yeah, any threat of inflation will have big lenders screaming bloody murder and since what they have to say gets a lot of media coverage expect to see a lot of “it’s the “end of the world” type coverage.
A cheaper dollar and a moderate rate of inflation may not sit well with the big lenders, but it is a good thing for the country and for the rest of us.
Inflation won’t help debtors, at least average citizens. Inflation is more of a top down type of thing and it takes time to spread throughout the economy. The people at the bottom, middle to working class and elderly, are the last ones to realize any gains from inflation, in fact they bear the brunt of the burden usually never realize gains. There is already talk of rising interest rates.
weaker dollars and inflation increase the gap between the “haves” and the “have nots”.. when it takes $10 to get a gallon of milk, where it took $3 a year ago, the poor just lost 70% of their purchasing power.. That means the middle class just got shoved down to the new poverty line.. and the only people that can afford to buy stuff are those that had excessive amounts of dollars to begin with.
and while a debt might remain static (for an individual), that more of someone’s income is spent on living expenses (takes more dollars to do the same thing), that means less available to pay back those debts..
And in all of this, the lower classes (read: non-top-10%) aren’t getting raises and bonuses to keep up.
I fail to see how that’s better for America.
And our exports can’t cost less unless the overall cost of manufacturing is less. Since China already undercuts us by far, we’re going to have to give up a LOT to get competitive. .. doesn’t sound like that’s “good for us”… But it sure does sound like we’re seeing the proof that “economic theory” is a bunch of bullshit.
By all means, let’s keep pumping funny money into the system so we can achieve “true social justice”. Wait until the Boomers go on Social Security and medicare.
And this people is what a global economy gets you. The bastards in DC that have sold our country to the highest bidder are now wallowing in our misery. We’ve been sold a bill of goods, the all consuming ignorance and prejudiced of the American people is finally coming home to nestle at their feet. This is what believing in the flim-flam man will bring you, this is what basing your vote on gay marriage and abortion gets you, this is what ignorance and hatred for your fellow man has wrought. We have elected people that feed on the ignorant to get reelected, they have prospered off their bigotry. We have brought this on ourselves, ………….enjoy.
Dear government.
Go to hell.
- Yours truly, Civilization.
Doom and gloom, doom and gloom.
Aww, Man, this week end I was thinking out loud about some of those so called predictions set to come about on DEC of 2012 as predicted by The MAYANS, The BIBLE CODE and last but not least Nostradamus. A funny thought occurred to me, that the Fire predicted to come from the heavens could be a massive solar Corona that reaches us on or about 40 months time. As some of you know our SOL has been unusually quiet well past its low cycle. This massive electrical storm will wipe out communications, all computers running at the time including factories ECT, ECT. The other thing that occurred to me is that due to the massive drum beat from the media outlets, staring on JAN 2012 about the predicted impending doom. The talking heads will be on a frenzied orgy, the magazines, books, articles, the experts and charlatans/opportunist will also feed on this end of time predictions. This will cause a run on bank funds fueled by massive hysteria. There will be banks that will not give out any monies within its vaults. Some banks will place daily limits on the amount allowed to be withdrawn. Because of this, there might even be a massive selloff on the world markets. If both of these scenarios happen we just might have to start all over again.
Ben Judea
A moderate amount of inflation absolutely helps debtors. It’s basically Economics 101. It’s also simple arithmetic. Nothing mysterious about it. In a simplified case, suppose you borrow $100 today, but you don’t pay it back for, say, five years. Given a steady 6% per year inflation the $100 you return to your lender five years hence would be worth $70 in today’s money.
The same is true of mortgages. If you have a fixed mortgage with a monthly payment of $1700, each and every month that $1700 is worth less and less as you pay back the loan with dollars that aren’t worth as much as the dollars you borrowed.
There is nothing top down about it. I don’t see where working people and the elderly should be particularly hurt by it. Wages traditionally keep pace with inflation and Social Security payments must by law automatically increase with the cost of living and have done so every year since 1975, although 2010 may be the first year seniors won’t see an increase. But, that’s due to declining prices, mainly fuel prices, and a reduction in the cost of housing as house prices declined. Additionally, if the working people or elderly are paying back a loan they’ll be helped by it.
Don’t sweat the US experiencing a really high rate of inflation. The big finance houses and banks would drive the unemployment rate to 25% first. And if that didn’t work they would drive it to 50% and trigger a full blown depression before they would let that happen. That’s the worry, not the inflation, but what the big money guys would do to look out for their interests.
“Wages traditionally keep pace with inflation and Social Security payments must by law automatically increase with the cost of living and have done so every year since 1975, although 2010 may be the first year seniors won’t see an increase.”
If you think wages keep pace with inflation, then you’re not paying attention. “real wages” for the middle class have been falling for decades, and in the past 8 years, have been almost stagnant.
“The big finance houses and banks would drive the unemployment rate to 25% first. And if that didn’t work they would drive it to 50% and trigger a full blown depression before they would let that happen.”
Except, we’re at near 25% NOW.. it just doesn’t seem that way because of how they doctor the numbers (and have been for.. uh.. decades). Your Wall Street types have been doing their best to keep this game rigged for as long as they could.. and now it’s going to blow up in their faces, just like all the other bubbles.
“but what the big money guys would do to look out for their interests.”
which is why sane people don’t let monied interests hold the levers of power.. Government mandates are what keep these problems from happening, but our government is fully owned by those monied interests at the bidding of the right-wing monied interests. Or, in other words, America isn’t being run by sane people, it’s being run by right-wingers. (and yes, I realize there are plenty of them with a D behind their name)
China has pegged its currency to the dollar unfairly. In addition, they have used high traiffs to keep out American products what few are left.
But the dollar won’t collapse, not if the U.S. imposes high revenue tariffs and protective tariffs on the Chinese which will force many American corporations back to their homeland (the traitors they are) to produce here since the cost of doing business in China will break their back.
A 40% revenue tariff on ALL IMPORTED GOODS would generate about 800 billion bucks a year, paying off our debt in just a few years. We did it this way for over 120 years if you read economic history.
Greetings,
I’ve got a neighbor that invests in gold because he believes that it is a hedge against inflation and that it will protect his savings. He is very smug about his paper wealth. This is what I told him:
1. Is the gold in your house? No? How do you plan to get this gold when society collapses? Does “your” gold even exist? Have you seen it?
2. Few, if any, of us have ever used gold as a currency. What makes you think the gas station and grocery story will accept gold? Gold and silver only work if EVERYONE is using it.
3. If the dollar collapses then people are going to barter in useful things like seeds, ammunition, food, clean water and medication. Cut off access to medication and 10-15% of us will be dead within a year. Who, exactly, is going to trade with you for those things because you have a computer printout that says you have some imaginary gold in some far away place?
My neighbor gave me a long patronizing look as if to say “you just don’t understand how these things work”. We’ll just have to see how it all works out.
Kind of ironic too that the nice Fed Reserve has stolen and sold off all of the gold held at Fort Knox. Check the site GATA.org, it’ll show you that the fort is empty.
“But the dollar won’t collapse, not if the U.S. imposes high revenue tariffs and protective tariffs … We did it this way for over 120 years if you read economic history.”
Erdgeist, you are right. High tariffs were exactly how the US built the domestic economy in the first place. You know your history.
A decline in the value of the dollar has exactly the same affect as a tariff. Just like a tariff it makes imports more expensive. A devalued dollar will also drive manufacturers back to the US as they will find they can no longer find foreigners willing to work for the equivalent of $7 a day. The decline in the dollar also has the beneficial affect of making US produced goods more competitive on the world market.
The dollar has been held artificially high for many years because their are powerful forces that benefit from it, but it produced a ruinous balance of trade gap that promises to destroy the country and drive us into third world status. It has also hollowed out much of our industry. One way or another the dollar must be more reasonably valued or we’ll all be ruined. It’s just a matter of time and arithmetic.