Saturday, December 22, 2012
U.S. Dollar Dethroned. China new game plan-----By Shan Saeed
Welcome to China. Enter the new great country called China. China holds more U.S. government debt than any other country in the world. They currently hold more than one trillion U.S. dollars. Beginning in 2007, China began to get worried.
What if the U.S. collapsed? What if dollars suddenly became worthless? Could they really afford to hold onto $1 trillion forever? If China was worried in 2007, they were downright panicky in late 2008, as it seemed a total financial collapse was imminent in America.
China held massive amounts of U.S. dollars, but they couldn’t sell them without causing a huge drop in the dollar’s value. What’s more, China still needed dollars to buy oil. Yet, China understood it was extremely risky to continue buying and holding dollars, so they began to diversify by buying up massive amounts of GOLD and other precious metals like SILVER. China bought 520 tons of gold in 2011—twice the amount they bought in 2010.
And their gold-buying binge doesn’t seem to be letting up any time soon. In the first six months of 2012, they’ve already bought 383 tons of gold. At that pace, they’d acquire 766 tons of gold by the end of 2012. More importantly, China is following in Iraq’s footsteps. Just as Iraq had planned to trade oil in euros, China began to explore the idea of bypassing the dollar by trading oil directly with oil-producing countries.
You see, while the U.S. was willing to attack a small country like Iraq, I don’t see any way that the U.S. would attack a country as large and powerful as China, especially when you consider that China produces most of the consumer products purchased in the U.S. However, USA is trying to play games in South China Sea through Australia, Japan and Philippines. USA has stationed 2500 troops in Australia and Naval ships in Philippines. I have shared this with Pk Biz, Philip Sigglekow, Rola Ezzedine,Umaer Abid, Kate Otto Swann and Shaun Rein.
CHINA AND RUSSIA'S NEW GAME PLAN FOR THE MARKET
Let me be clear: China’s plans are no longer just plans. They are now reality. As of October 2012, China and Russia reached an agreement and formally announced that they would begin trading oil directly. Russia will provide oil to China, and China will pay for the oil—not with U.S. dollars—but with yuan. By trading directly with oil-producing countries, China would then be able to off-load dollars before they became worthless—and still have access to as much oil as they want.
While this announcement has not been widely publicized or came in the main stream newspapers LIKE Wall Street Paper, Financial Times, New York times or Washington post, it spells the end of the petrodollar. In other words, the U.S. dollar is the world’s reserve currency in name only for the next 25 to 30 years . Now that China and Russia have abandoned the petrodollar, other countries like Iran, India, Argentina, Jordan, South Korea, Venezuela, Luxembourg and Brazil are expected to soon follow China’s lead. And there is nothing the United States can do to stop it!... But it will get pretty severe going forward.
Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.
Posted by Shan Saeed at 6:22 AM