China overtakes US as world’s largest trading country

February 21, 2013 by · Leave a Comment
Filed under: Economic News 

No surprise here.  They have over a billion people and China has taken a course to industrialized their country and increase their middle class to around the size of the entire United States population.   In contrast, we have taken the course to incentivize (through tax policy) the outsourcing of production to low wage/regulation countries and replace it with the farce called the “service economy”.   

We will be this service economy, the problem is that nobody told the people that they will need to decrease their standard of living and be settled that most people will be working jobs that service the better to do in society.  The most I take stock of what is happening, the more legitimacy people who say the social contract has been broken.   I believe if we are not there, it will be clear quite soon.    The economy does not work for the majority of people and definitely does not work for future generations.  

When you see the continue rise of China, take a moment to read some American History from 1830-1906.   I am not saying we can have the same types of opportunities, but the country seems more focused on providing them to people willing to take a risk and do some hard work.

RT - China has passed the US as the world’s biggest trading nation as measured by the sum of exports and imports in 2012. It’s a position the US has held for over six decades.

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U.S. Dollar replaced as China Oil trading currency with Yuan

September 17, 2012 by · Leave a Comment
Filed under: Currency News 

This is major news.   Lately with U.S. politics in full swing, I have not found too much worthy news for posting.  Now the summer is coming to a close, more interesting information is pouring out.    It has been covered here before about different non-dollar trading blocks being created.  This will be one of the final nails in the Dollar long-term.

The single most important aspect that has allow us to deficit spend over the decades is the fact that we have (had) the world reserve currency and most important was the Oil was traded almost exclusively in the good old greenback.   It looks like that is now changing and it is changing with the most important player in this arena other that Saudia Arabia…. CHINA.

What is so crucial is that China produces goods for basically the entire world on a massive scale.  That means there is DEMAND for Yuan, just like there is demand for Dollars.   People need to pay Chinese suppliers with Yuan and if they can do it without exchanging them for Dollars first, this can significantly decease the demand for the currency and serious strengthen the demand for Dollar.

Another serious thought for any Geo-political guys / gals that read my blog, there are far fewer options for trying to enforce compliance with the Dollar regime that exists in D.C., Langley and New York.  I believe this is China’s non-military way to force our hand to stop this massive spending spree we have undertaken since the crisis of 2007 to current.   Time will tell if China are completely serious and has the resolves to stick to this.  I thought you would find this interesting.  Please post your comments below on this.

Examiner - On Sept. 11, Pastor Lindsey Williams, former minister to the global oil companies during the building of the Alaskan pipeline, announced the most significant event to affect the U.S. dollar since its inception as a currency. For the first time since the 1970′s, when Henry Kissinger forged a trade agreement with the Royal house of Saud to sell oil using only U.S. dollars, China announced its intention to bypass the dollar for global oil customers and began selling the commodity using their own currency.

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Australia seeking to expand Australian dollar to yuan trading

July 9, 2012 by · Leave a Comment
Filed under: Currency News 

If you have been following our posts, we have covered other countries like the BRICs working on deal to do yuan-based commodity denominated deals.    This is just latest one of these deals.   Being that Australia is so geographically close this makes sense and we will see all countries in that east Asian region do the same over time.   This is a serious challenge to U.S. dollar hegemony.   China is growing and they are taking plays for the American play-book during our industrial rise that peaks after WWII.

Something has to give, I can not see how long U.S. politicians and regulator are going to allow this behavior while China basically operates a closed market and undervalues it currency.   This could even be considered economic warfare in some circles.   I think it is good that we are forced to play nice with other but at the same time, others need to be also brought forward to account for their actions.   I believe some form of protection for native markets is not a bad thing, just as I believe other countries should focus on building their local markets and consumption.

Yes, we need to develop parts of the world so they have better footing, but at a point, national interests are still very important and need to be addressed if we are going to continue this globally competitive world.   If not, we will see more conflict that could turn into more shooting wars or hardcore economic warfare.    That is not a good scenario for any0ne.    If the U.S. good just get to the fact that there is no free lunch and start making the hard choices so we are not so vulnerable to these changes like the ones mentioned in this article.

Business Day - Australia is seeking to deepen trading between the local dollar and the yuan as demand for commodities drives exports to China to record highs.  The yuan’s internationalisation “is clearly in the interests of Australian businesses and the broader Australian economy,” Treasurer Wayne Swan, who will co-host a forum on the matter in Hong Kong next week, said today in a statement. “Both governments are very keen to see us deepen and broaden this important market.”

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China sets up fund to bankroll corporate takeovers

February 22, 2012 by · Leave a Comment
Filed under: Global News 

No surprise that China is going to start being more aggressive with their large FX reserves.  This fund will be capitalized with $1.9 billion to start.  It will be very interesting to see where this fund starts deploying their cash in different markets.   If I had such a large base of reserves, I would want to hedge in a manner that protected my investment.  I think we will see this invested in productive assets like “stuff” not so much fiat.

One of the investments cited in the article is a  large water & sewer in the United Kingdom.  We will see more investments along those lines in my opinion.

DW: Boasting $3.2 trillion in foreign currency reserves, China has created a new fund aimed at financing takeover bids abroad. The fund also seeks to boost China’s currency in global financial markets.  In its drive to step up overseas investment, the Chinese government has set up a new fund worth 12 billion yuan ($1.9 billion), Shanghai International Group said in a statement Friday.

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Federal Reserve now largest owner of U.S. Gov’t Debt – surpassing China

November 17, 2011 by · Leave a Comment
Filed under: Credit News 

No surprise here, this is part of the result you receive when you do quantitative easing and try and keep it a sterile operation.  The central banks racks up your public debt and their balance-sheet explodes!  I just do not see any way this will not end in some sort of general price inflation.   We need to get serious about getting our fiscal house in order or order will be brought to our financial house.  If Europe and the Euro continue to decline, we will most likely see more stimulus and that will bring increased buying of government debt by the U.S. central bank.

CNS News (Terence P. Jeffrey) -  At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time–with the largest single owner of the publicly held portion of that debt being the Federal Reserve.

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