Tag Archives: China

Blame It On China…

Nothing is ever the fault of the “exceptional” United States.  It’s not our fault that we have to spend trillions containing the evil terrorists in the Middle East while we steal their oil and occupy their countries.

And of course it’s China’s fault that the U.S. stock market is all of a sudden finding the gravitational pull of economic, financial and political fundamentals.

BlameChina

China must be the reason that the U.S. stock market has been bought up the highest p/e ratio in history.  Note:  I’m using a p/e ratio based on the way earnings were calculated using GAAP 20 years ago – not today’s garbage GAAP which enables companies to manipulate their accounting to an extreme degree.

I guess it’s China’s fault that almost every public and private pension fund in the U.S. is extraordinarily underfunded.

It’s probably even China’s fault that U.S investors and pensions gobbled up shale oil industry junk bonds like they were going out of style on the assumption that oil would stay above $100/barrel forever.

It’s China’s fault that student debt and auto loans have hit an all-time high in this country.  When housing prices crash again that will be China’s fault too.

I guess when it comes right down to it, it’s China’s fault that Hilary Clinton is being hounded by problems with her use of her personal email to sell U.S. foreign policy decisions to the highest bidder while she was Secretary of State.  Hell, I guess it was China who took a paper towel and wiped clean the hard drive on her personal server.

The fact of the matter is that there was indeed a series of big asset bubbles that formed in China.  But they are no different or more severe than the same asset bubbles that have formed all over the world, including and especially in the United States.  But at least China is trying to address its bubbles.  It was the first to throw its cards on the table and try to let some air out its asset bubbles.  Meanwhile the U.S. continues to defend and inflate its bubbles.

I mean, c’mon on – triple C-rated junk bonds in this country were trading at 4% at one point.  A triple C rating means that the company which issued that debt has a very high probability of going bust.  Triple C-rated paper in the 1990’s traded at yields in the high teens or higher.  More than likely CCC- rated bonds become the new equity of a company when it files for bankruptcy reorganization.  Or it becomes worth pennies on the dollar if the company liquidates.   Triple C-rated paper trading at 4% implies an extreme bubble in the junk bond asset class.  But that’s China’s fault, I guess.

UntitledThis will not end well for the United States.   The problem with forcing the “blame China” propaganda on the U.S. public is that it inevitably will lead to a scenario in which the U.S.Government’s neocons who run the Department of Defense will justify starting a war with China.  A war with Russia is being started in Syria as I write this.  But that’s China’s fault too…

Message From Jeff Brown In Beijing To Readers:

Thank you Rory and Dave, for a great show. China is just too important, actually always has been, to be ignored on the world’s 21st century stage. I am not saying that the Chinese government is angelic. All governments are inherently power hungry and evil. But after 4,000 years of continuous history, to understand China, you must be able to accept alternative definitions of democracy, rule of law, society and culture. All Xi Jinping and every Chinese leader since 1949 have said and are saying is, “We choose to develop our society, economy and culture based on Chinese terms, not on Western notions. And we resent you trying to shove your versions down our throats”. I invite Rory’s and Dave’s fans to learn more about China, in audio and writing, at http://www.44days.net. Looking forward to the next show with Rory and Dave soon! Jeff in Beijing.

Here is our Shadow of Truth interview/podcast with Jeff Brown:

This is a must-listen interview. It is the pilot interview for a series of interviews the Shadow of Truth will be doing with Jeff. We consider Jeff to be “our eyes and ears on the ground in Beijing.” These are reports from China that are unfiltered by western media.

Reader response: Very insightful stuff and quite heartening in his conviction that the leadership of China is not in on some frightening back scenes new world order deal with our oligarchs. I agree with you, Dave, that it never made sense in simple psychological terms.

Here are the people who *forced* opium on your people to get silver, who fought two wars with you over this, who dumped India’s silver on the market in the late 1920’s and early 1930’s and destroyed your economy and who have shown zero human connection to their own western countrymen. You should go in with *these* people in any kind of deal?! – “Fred H”

A Crumbling Empire – A New World Order

CrumblingEmpireNWO

Yes, the New World Order theorists are correct.  Only they have the wrong players in the line-up.  The picture on the left speaks for itself.  The photo on the right emphasizes this:

Russia and China Conclude several Important Agreements Today

Russian President Vladimir Putin today, May 8th, will hold talks in Moscow with President Xi Jinping. The president’s aide Yuri Ushakov told reporters that the Chinese leader is in Russia for several days on an official visit at the invitation of Putin.

The Kremlin has said the Chinese leader is in the Russian capital at the invitation of Putin. More than 40 agreements ranging from security to the economy and energy are expected to be signed by the two leaders as they are poised to boost Sino-Russian ties…In addition, Russia’s largest gold mining company “Polyus Gold” plans to sign an agreement with the Chinese gold mining corporation on a number of projects, including the Natalka deposit in the Magadan region.   LINK

My colleague Rory Hall and I will be releasing an interview on the Shadow of Truth with someone who has been living in China for many years.  He will be our “eyes and ears” on the ground in Beijing.  He’s currently working on the diaries of China’s President,  Xi JinPing.

When I asked him what his view was of the NWO theories about the U.S. and China cooperating behind the scenes to orchestrate a one world Government, he responded with an amused chuckle:  “The Chinese HATE the United States.”   By “Chinese” he was referencing Chinese leadership.

Are Chinese Gold Imports Really Down This Year?

Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong.   – Ayn Rand

The answer is, we don’t know.  And we don’t know because we can’t know.  Reuters ran a story this morning which asserted that China’s gold imports had dropped to a 16-month low in May.  But the truth is, we don’t know what China’s total imports in May were.

We do know that the World Gold Council’s 2013 tally of China’s gold imports was egregiously inaccurate:   China To WGC:  “HUH?”   Not only that, according to the general manager of the precious metals department for the State-run Industrial & Commercial Bank of China, the ICBC  is not meeting the demand for gold by the market.  Hmm…

In fact, it’s been impossible to track China’s total gold imports since late April, when China began to allow gold imports into the mainland through Beijing:   China Opens Beijing To Gold Imports.

While Hong Kong publishes monthly reports on the amount of gold supplied to China, mainland China does not release trade data on gold.  Prior to this, we could track China’s gold imports from data reported by Hong Kong and the Shanghai Gold Exchange.

The move to make China’s gold import volume opaque is intentional:   “The bulk of gold bought by China used to flow through Hong Kong, making its export data a useful proxy for Chinese demand as Beijing treats data about imports of the precious metal as a state secret”  (LINK).

I bring this up because I’ve seen several reports and blog commentaries which suggest that China’s demand for gold is declining this year.  The conclusion is that the gold is headed for another down-leg.

Seemingly, the current action in the gold market is contradicting the premise that gold is headed lower…If I were U.S. policy-makers, I would be worried about the reasons China has decided to go “cloak and dagger” on their gold imports…

 

This Is Why I Believe Rickards Is Wrong About The IMF SDR

James Rickards has been quite vocal in his view that the price of gold is headed much higher.  Yet, in the same breath he aggressively promotes the  idea of using the IMF SDR to replace the dollar as the world’s reserve currency.

There’s two reasons for this.  First, if you study Rickard’s background going all the way back to his role in the Iran hostage crisis, you’ll see that he’s been lifetime “front man” for the most powerful interest groups that control this country behind the scenes.  First and foremost he’s a front-man for the Pentagon.

I’ve been told separately, independently from two different sources that the elite insiders in the Department of Defense know that the demise of the dollar is inevitable.   That there’s nothing that can be done to prevent it.

Which brings us to the second reason that Rickards is trying to pimp the IMF SDR like a magic elixir snake-oil salesman.  The U.S. dollar currently represents 61.2% of the IMF SDR:   SDR Currency Basket.

If the U.S. Government can persuade the world to accept the IMF SDR as a replacement for  the dollar, the U.S. Government will still have de facto control over the world’s reserve currency and therefore can continue to defer the systemic collapse of the U.S. into the future.   Please note the absence of Chinese yuan or Russian rubles from the IMF SDR basket.

I have always believed that China and Russia would never accept an IMF SDR as the global reserve currency, even if the U.S. and EU were willing to put those two respective currencies in the basket.  The biggest clue for me has been the rate at which both China and Russia are accumulating gold in their currency reserve accounts and working to eliminate the use of the dollar in their trade agreements.

But this article, reinforces my view – BRICS To Form Their Own “IMF:”

The BRICS nations — Brazil, Russia, India, China and South Africa — are reportedly close to finalizing their long-awaited development bank and currency reserve, each valued at $100 billion, in what has been billed as a historic challenge by the world’s emerging economies to a global financial architecture that has been dominated by the U.S. and Western Europe since its post–World War II inception.

The BRICS nations first announced their plans for the bank in March 2013 but struggled to reach an agreement over China’s desire to hold a greater stake in the institution. But a Brazilian government official told Reuters last week that the five members were ready to split funding and control equally, clearing the last major hurdle for a launch in 2016.

To economists in the developing world, who have long criticized the World Bank and IMF as anathema to the countries they purport to help, the New Development Bank holds tremendous promise. Critics say the West has taken advantage of its monopoly in international lending to wield outsize influence in the economic and political affairs of developing countries, dictating development models that further entrench these countries’ subservience to the West.

But unlike the U.S. and Europe, who are in lockstep on most things, the BRICS countries have little in common but a shared ambition to rebalance the global economic order.

I would suggest that anyone who wants to see the issues clearly should place a little less “faith” in the information being disseminated by people like Jim Rickards.  I would also suggest that the  unwillingness of Russia/China to cooperate with the U.S. on the matter of the U.S. dollar is the reason recent military aggression by the U.S. toward Russia and China…

Meanwhile…

…while Obama goes on a rampage threatening every country and region of the world economically and militarily, China continues to forge and expand its relationships with all of the U.S.’ former allies.   Here’s another one:   China/Kuwait Meet Up.

Rest assured, any economic agreements will not include using the U.S. dollar to settle trade activities between the two countries.   While Obama struts his stuff, China quietly and methodically is working to make the U.S. dollar irrelevant…

Putin Concerned About The Security Of Russia’s Gold Reserves

Putin says Russia and China need to secure their gold and currency reserves

Russia and China need to ensure their gold and currency reserves are secure, Russia’s President Vladimir Putin told foreign journalists at the St Petersburg International Economic Forum.

Read the short article here:   Putin/China/Gold

As a colleague points out Putin’s remarks:  “he is speaking on behalf of China and that does not happen accidentally.”

Also, please note the debut of my new Youtube Video Channel.  This is the pilot episode of “Golden Truth,” which will feature short videos that expose the truth behind the headlines and other topics.  I’m collaborating with John Titus, who is an attorney and who used to have a high level patent law practice before he burned out.  His new mission is video and film production.  He has one of the best research minds I’ve ever come across. The first episode is slightly longer than what will be typical, but needed some contextual explanation which took up time and it’s very unpolished on my end:

InvestmentResearchDynamics/Golden Truth Youtube Video Channel – Episode 1

Will the REAL Chinese Gold Demand Numbers Please Stand Up

There are assumptions in this analysis that should be clear to all. But if it only serves to expose the futility of attempts in western capital markets to manage the gold price, the exercise has been worthwhile. For much of 2013 commentators routinely stated that Asian demand was satisfied from ETF redemptions. But as can be seen, ETF sales totalling 881 tonnes covered only one-quarter of the west’s shortfall against China, the rest coming mostly from central bank vaults.  – Alisdair Macleod, Renewed Estimates of Chinese Gold Demand (link)

While there has been much debate over the amount of gold that is actually, realistically being transferred from the western bank and Central Bank vaults, all of us who study this issue can say with 100% confidence that any estimates from the World Gold Council, or from WGC-derived analyses, are incorrect by a significant amount.   This much we know.

Alisdair Macleod, who is one of the few gold market analysts out there with analysis and commentary about the gold market that I believe offers accurate insight and is worth reading,  published a detail report which outlines what appears to be the most bona fide estimate of the amount of gold that is being “absorbed” by China annually.  While most of us have speculated on the size of the true amount of gold held by the PBOC, Mr. Macleod’s analysis puts together the numbers which show why the PBOC disclosure is misleadingly low.

The questions remain why, if gold is a mere ornamental asset being held out of “tradition” (per Bernanke’s testimony to Congress), are Central Banks so secretive about their gold market transactional activities?   This of course is a purely rhetorical question…

I would urge everyone who is interested in seeking truth to spend time and carefully read Mr. Macleod’s analysis linked at the top.  In that I’ve been researching and studying the gold market for nearly 14 years now, I can say with complete conviction that if Alisdair’s numbers are not 100% accurate, they’re pretty damn close to the truth.