Saturday, May 21, 2016

About China being in DEEP DOO DOO

In answer to a post elsewhere about China being in DEEP DOO DOO.

It's true. China is in a mess. And the leading lights of the global financial system are telling it straight. There is more to it though. As 'binmehere' has already commented, China has LOTS of gold. The y have been buying in gold, and mining HUGE quantities too. The USD (US Dollar) is 'fiat' money: ie. a 'promisory note' not worth anything in itself. This promisory note is linked to a currency that USED TO BE linked to the GOLD STANDARD: ie. you could change hard cash for gold at a set price. Since the US (Federal Reserve) took the USD off the gold standard, the dollar has really floated and values can go ANYWHERE! Because the USD has become the 'Petro Dollar' (a deal that the US would protect Saudi Arabia in return for them making all oil trade based on the US Dollar), it has become the default for world trade.

Things have been getting really shaky for quite a while. The 'stimulus packages' pushed by the World Bank / UN during the GFC have put countries into further debt. But hang on, if we are ALL BORROWING, WHO ARE WE BORROWING FROM? The answer is the global banks. I don't mean retail banks, I mean banks well behind the scenes and well protected whilst retail and national banks take the fall. The CENTRAL BANKS are a feature of globalisation and this trade arrangement. There are only TWO COUNTRIES left without a Central Bank at this stage. Can you guess? Iran and North Korea! China got one just when things took off for them.

So IF THE 'GLOBAL DOLLAR' / USD fails, who gets hurt? Anyone owed money will; and China is owed huge sums of money by the good ole USA! See from my blog See also

Then read and

Basically, if China suffers because of its HUGE debt, it may just write it all off and start again. They have already announced a new GOLD BACKED currency. I think this also has to do to some extent with BRICS ( If it all goes pear shaped, ande China can't pay its debt, it will FORCE CHANGE. The USA has enormous debt too. The repayments are the 3rd biggest item in its budget!

See a few more posts for context:;;;

So YES, China is in DEEP DOO DOO! So is the USA. So is the global system. It will probably collapse in the not too distant future. What's the replacement? There are several in the wings; but that's another story!