Socio-Economics History Blog

Socio-Economics & History Commentary

China Switching Foreign Reserves from Treasuries to Industrial Metals?

  • The chess moves have started. Since end of 2008, China has been signing quite a few currency swap agreements with its trading partners. This will make them less reliant on the USD.
     
  • I have said quite a few times, China will dump/sell its USD and treasuries. But it is doing it on the quiet to protect its value. Now it appears they are buying industrial metals like copper in a big way.
     
  • The Telegraph UK reports :
     
    Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.
     
    China’s State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons. Nobu Su, head of Taiwan’s TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can. 
     
    “China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”
     
    “The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources,” he said.
     
    The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters) and praseodymium (glass).
     
    While it makes sense for China to take advantage of last year’s commodity crash to restock cheaply, there is clearly more behind the move. “They are definitely buying metals to diversify out of US Treasuries and dollar holdings,” said Jim Lennon, head of commodities at Macquarie Bank.
     
    John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. “We’re very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China’s pockets are deep.”
      ……
    One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America’s debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. “We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets,” he said.
     
    This is slightly disingenuous. China has the world’s largest reserves – $1.95 trillion, mostly in dollars – because it has been holding down the yuan to boost exports. This mercantilist strategy has reached its limits.
     
    The beauty of recycling China’s surplus into metals instead of US bonds is that it kills so many birds with one stone: it stops the yuan rising, without provoking complaints of currency manipulation by Washington; metals are easily stored in warehouses, unlike oil; the holdings are likely to rise in value over time since the earth’s crust is gradually depleting its accessible ores. Above all, such a policy safeguards China’s industrial revolution, while the West may one day face a supply crisis.
     
    Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1pc, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a “Copper Standard” as a “Gold Standard”.
     
  • There is no doubt China will buy gold. They have publicly announced they will buy something like 4000 tons for their reserves. The rumor going around is that they are negotiating with IMF on the purchase of 400 tons of gold IMF intends to sell. With US$2T to spend, I doubt they can spend it all on industrial metals. Compared to gold (at US$880/ounce), copper is about US$ 4900/ton. You have to buy alot alot of copper and have alot of storage space to use up US$2T. China’s strategy makes alot of sense. They are buying a variety of metals which they need. There is not enough gold for them if they decide to spend all US$2T on gold. Gold price will rocket when they start to buy.

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April 17, 2009 Posted by | Economics | , , , , | 6 Comments

Ex-Italian President: 9/11 Was CIA/Mossad Operation

  • Those people who follow the hard evidences, know that there is more than meets the eye when it comes to 9/11. Draw your own conclusions, AmericanFree Press reports :
     
    Former Italian President Francesco Cossiga, who revealed the existence of Operation Gladio, has told Italy’s oldest and most widely read newspaper that the 9-11 terrorist attacks were run by the CIA and Mossad, and that this was common knowledge among global intelligence agencies. In what translates awkwardly into English, Cossiga told the newspaper Corriere della Sera:
     
    “All the [intelligence services] of America and Europe…know well that the disastrous attack has been planned and realized from the Mossad, with the aid of the Zionist world in order to put under accusation the Arabic countries and in order to induce the western powers to take part … in Iraq [and] Afghanistan.”
     
    Cossiga was elected president of the Italian Senate in July 1983 before winning a landslide election to become president of the country in 1985, and he remained until 1992.
     
    Cossiga’s tendency to be outspoken upset the Italian political establishment, and he was forced to resign after revealing the existence of, and his part in setting up, Operation Gladio. This was a rogue intelligence network under NATO auspices that carried out bombings across Europe in the 1960s, 1970s and ’80s. Gladio’s specialty was to carry out what they termed “false flag” operations—terror attacks that were blamed on their domestic and geopolitical opposition.
     
    In March 2001, Gladio agent Vincenzo Vinciguerra stated, in sworn testimony, “You had to attack civilians, the people, women, children, innocent people, unknown people far removed from any political game. The reason was quite simple: to force … the public to turn to the state to ask for greater security.”
     
    Cossiga first expressed his doubts about 9-11 in 2001, and is quoted by 9-11 researcher Webster Tarpley saying “The mastermind of the attack must have been a sophisticated mind, provided with ample means not only to recruit fanatic kamikazes, but also highly specialized personnel. I add one thing: it could not be accomplished without infiltrations in the radar and flight security personnel.”
     
    Coming from a widely respected former head of state, Cossiga’s assertion that the 9-11 attacks were an inside job and that this is common knowledge among global intelligence agencies is illuminating. It is one more eye-opening confirmation that has not been mentioned by America’s propaganda machine in print or on TV. Nevertheless, because of his experience and status in the world, Cossiga cannot be discounted as a crackpot.
     
  • See also :
     
    Danish Scientist Niels Harrit: Nano Thermite (Explosives) in the WTC Dust !
    Active Thermitic Material Discovered in Dust from the 9/11 World Trade Center Catastrophe
    Medical Professionals for 9/11 Truth
    Political Leaders for 9/11 Truth

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April 17, 2009 Posted by | GeoPolitics, History | | 38 Comments

Jesus Missing From Obama’s Georgetown Speech

Getty Omage. A symbol of Jesus was apparently blacked out behind President Barack Obama during his Georgetown speech.

Getty Omage. A symbol of Jesus was apparently blacked out behind President Barack Obama during his Georgetown speech.

  • This is for all those Christians who are in love with their Obama ‘messiah’. He is no messiah. More likely a Manchurian candidate. NBC Washington reports :
     
    Amidst all of the American flags and presidential seals, there was something missing when President Barack Obama gave an economic speech at Georgetown University this week — Jesus.
     
    The White House asked Georgetown to cover a monogram symbolizing Jesus’ name in Gaston Hall, which Obama used for his speech,
    according to CNSNews.com. The gold “IHS” monogram inscribed on a pediment in the hall was covered over by a piece of black-painted plywood, and remained covered over the next day, CNSNews.com reported.

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April 17, 2009 Posted by | GeoPolitics | | 1 Comment

Salbuchi: Obama-Things Are Not Always What They Seem!

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April 17, 2009 Posted by | Economics, GeoPolitics | , | 5 Comments

Dr. Rebecca Carley: Horrors of Vaccination Exposed!

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April 17, 2009 Posted by | Medicine & Health | Comments Off on Dr. Rebecca Carley: Horrors of Vaccination Exposed!

Gold to Rise on Further Monetary Devaluation

  • The gold price action of the past 6 weeks has been a testing time for gold bulls. Gold should be much higher than it is. Gold is money throughout history. It is a competitor to fiat currencies in particular the USD. This is the main reason why the PTB suppresses gold price. They know that once gold price rockets upward, the USD will be toast. The gold market is a highly manipulated market in my opinion. Why is the price so low when there is a worldwide shortage in physical gold and demand is known to be soaring? You should never use the Comex paper gold price as indicative of what is really happening in the physical gold market.
     
  • Jim Willie, of Hat Trick Letter, comments:
     
    Staggering additional monetary inflation comes, initially from programs by the USGovt and USFed to date. More monetary debauchery is right around the corner, to be extremely clear by summertime. Bank losses will become a national nightmare, seemingly never ending. Only deception buttresses the bank sector now, their specialty. Both central bank and USGovt funds will become an absolute torrent when they finally come to grips with the bank losses upcoming and the momentum for USEconomic downturn toward depression.Vicious feedback loops at finally in high gear. When the printing press becomes more heavily relied upon, the clarity of USDollar support also coming from USMilitary actions will render the gold & silver assets more desirable safe haven investments. Furthermore, USFed authorities must be deeply worried about the seeds they are planting for future price inflation. The USFed just purchased $1.5 billion in Treasury Inflation Protection Securities (TIPS) in an unprecedented maneuver. No longer does the TIPS tell of inflation expectorations. What on earth is going in on their tiny minds?
     
    The story not told often enough is the utterly huge short gold futures contract positions put on by JPMorgan immediately when the USFed announced its $1 trillion monetization plan in mid-March, and the additional batch of gold short contracts they put on during the G20 Dollar Funeral event in early April.Perhaps the USDept Treasury can access some of the $1.9 billion from the AIG car insurance business unit sale to Zurich Financial to fund more market corruption and interference, with a simple handoff from to their free market brothers at JPMorgan. Still, despite all the harmful, unregulated, and relentless pressure put on precious metals, their prices refuse to be pushed down. The gap between the physical gold price and paper COMEX price continues to widen. The story behind the scenes that captured my attention centered on German demands to return all their gold bullion held in custodial accounts on US soil. The deep source contact said something like, “the German demand is making the US bank nazis sweat bullets. Pressure on COMEX will get much worse.”Expect even more pressure on the June gold contract than was seen with the March gold contract, as far as delivery default is concerned. Deutsche Bank saved the COMEX bacon with a last minute 850,000 ounce delivery, courtesy of the Euro Central Bank at the eleventh hour. Such are the games not told on national financial networks, but which are central to Hat Trick Letter analysis.
     
    The gold price is busy carving out the Right Side Handle to a messy Cup & Handle reversal pattern, one which is testing the patience of yellow metal investors. When the weekly stochastix cycles down a little farther, the consolidation should be at an end. We observe not so much a battle of monetary inflation versus asset deflation, as with free market pricing structures versus disruptive USGovt custodial management that will someday be chronicled as the most corrupt in modern history. Asian and Arab creditors to the USTreasury Bonds are not pleased with what the management of either the USGovt bond securities or gold, and they hold both in great volume. The target for gold remains almost 1300, with a breakout inevitable.
     
  • See also :
     
    NYSE Runs Out of 1 Kg Gold Bars ?
    Did the ECB Save COMEX from Gold Default?
    Max Keiser – Gold Price Suppression and Central Banks Buying Gold !
    GATA – Gold Price Manipulation
    Russia Backs Return to Gold Standard To Solve Financial Crisis
    Gold is Money ! Save it !
    Fed Monetization of Debt as US Dollar Flows to Central Banks Collapses
    Gillian Tett: Return to a Gold Standard for Currencies?
    G20 US Dollar Fiat Currency Smoke and Mirrors Manipulation
    The G20’s Hidden Agenda of Devaluing the US Dollar to Inflate Asset Values

Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals.

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April 17, 2009 Posted by | Economics | , , , | 2 Comments

GEAB: The Breakdown of the International Monetary System is Underway!

  • Will we see a monetary system collapse this year? Highly likely. There does not seem to be any way the world can avoid this. Despite all the rhetoric of the G20 on 2 April, nothing of significance was set in motion. Just some trumped up actions to paper over the cracks and Gordon Brown’s manipulation of stimulus data to make himself look good. The MSM just followed along and continued the propaganda.
     
  • The key question is how will China, Japan, Middle East petrodollar countries, Russia….etc… get out of their USD denominated holdings? How will the world abandon the USD world reserve currency system and USD trading system without hurting itself? There is no easy way out of this. Many countries will get hurt ie: economic collapse, when their USD denominated reserves become toilet paper.
     

    china-foreign-reserves

    Quarterly Chinese foreign exchange reserves growth - Source: People’s Bank of China / New York Times, 04/2009

  • Global Europe Anticipation Bulletin (GEAB) explains :
     
    The next stage of the crisis will be determined by a Chinese dream. Indeed, with what dream can Beijing dream well, according to Washington, in the “Dollar trap” of its 1.400 billion credits made out in US Dollars (1)? According to the American leaders and their procession of media experts, to continue to be a prisoner and even to reinforce this prison condition by buying always more Bills Treasury and Dollars US (2).
     
    However, does everyone know with what dream a prisoner dreams? With escaping of course, leaving its prison. Also, for LEAP/E2020, there is not any doubt that Beijing seeks without slackening from now on (3) to get rid, as fast as possible, this mountain of “toxic” credits which became the US Treasury Bills and the American currency under which the richness of 1 billion 300 million Chinese (4) is imprisoned. In this GEAB N°34, our team thus details the “tunnels and the galleries” that Beijing has dug discreetly for several months in the economic system and world financier in order to escape from the “Dollar trap” by the end of the summer 2009. At the bottom of suspension of payment of the United States, a period will then open in which “every man for himself” will become the rule of the international game, in the same line of G20 of London whose final communique reads like the “chronicle of an announced geopolitical dislocation”, as LEAP/E2020 analysed in this number of Total Europe Anticipation Bulletin.
     
  • The reality of a upcoming global monetary collapse has still not sunk in for everyone. Actions are taken quietly behind the scenes to dispose of their USD denominated holdings by China. They cannot afford to be seen publicly as selling their US$2T in USD denominated holdings as it will cause a massive panic and they will end up as the biggest loser. But mark my words, the conclusion is inescapable, there is no permanent way of hiding this massive disposal. Massive panic will come and it will be every many for himself.
     
  • What were the key powers in the G20 doing at the 2 April meeting? GEAB adds :
     
    Behind “set of easily deceived” Londoner, where each one claimed to believe that an “historical” international collaboration (5) was in action, one in fact notes a deep division of G20: the Americans and the British (followed by flexible Japan) hopelessly try to preserve their control on the world financial system, while blocking or by diluting any significant reform giving a more important capacity to the other actors of the system, without having enough power to impose their objectives.
     
    The Chinese, the Russians, the Indians, the Brazilian ones … try to rebalance the international monetary and financial system in their favour, but without being able (or perhaps even without really wanting (6)) to impose such a reform. Europeans (and when this term is used, an EU without the United Kingdom, it implies more and more that they) prove incompetent on their side to slice between the only two only options which are offered to them: to sink with the United States and the United Kingdom by copying their policies or to basically call into question the current world system monetary and financial in partnership with the Chinese, the Russians, the Indians and the Brazilian ones. They are not able any more to follow Washington and London in their reproduction of the last policies which already did all bankruptcy (7), but they do not dare to manage to prepare the future.
     
    Europeans will take a major responsibility if, in the short temporal window which remains (less than six months from now on), no major action is undertaken to avoid the long crisis and tragedy which will last more than one decade (8). They have at the same time technical know-how to help with the success of an international currency founded on a basket of the principal currencies and a political method which makes it possible, as well as possible, to manage the various strategic interests of all the countries, as those whose currency would be behind the new international currency of reference. However, there exists today an obvious incapacity of the leaders of the EU (and in particular of the euro area) to assume these responsibilities, as so finally they preferred to see the Western system finish by breaking (while proclaiming the opposite) rather than to fight to make a bridge of it towards a new world system: that it is a choice (what LEAP/E2020 does not believe) or which it is the simple result of the pusillanimity [cowardliness] of European leaders selected for their docility (with respect to Washington and of the large European economic and financial operators), in all the cases, their neutrality is very dangerous for planet since it prevents the launching of an effective process making it possible to avoid a long and tragic crisis (9).

     
  • However much we wish for a turn around in the US economy, it is wishful thinking. The MSM is becoming a propaganda tool of the ruling elite. The economic data dished out and revised frequently cannot be trusted. What is next for America ?
    US tax receipts on corporate income (1930 – 2009) - Sources: US Department of Commerce / Saint Louis Federal Reserve (Q2-Q3 2009 projection by EconomicEdge)

    US tax receipts on corporate income (1930 – 2009) - Sources: US Department of Commerce / Saint Louis Federal Reserve (Q2-Q3 2009 projection by EconomicEdge)

    …..  our researchers develop more their anticipations on the possible forms that the American suspension of payment will take by the end of the summer 2009, and from April 2009 (principal month of collection of the tax incomes in the United States) will be impossible to mask (10).
     
    The suspension of payment by the United States in the summer 2009 is indeed a topicality increasingly more extreme from now on with the public deficit completely out of control on the back of explosion of the expenditure (+ 41%) and of collapse of the revenues from taxes (- 28%), like LEAP/E2020 anticipated more than one year ago: for only March 2009, the federal deficit was assembled to nearly 200 Billion USD (much above the most pessimistic forecast), that is to say not under half of the deficit recorded for the whole of the year 2008 (11). And the same phenomenon is repeated on all the levels of the public structure of the country: federal state, federate states (12), counties, cities (13) … everywhere the revenues from taxes disappear involving in an accelerated way the worldwide in an overdrawn spiral that nobody (Washington in first chief) controls any more.

  • The casualty will be the USD. The FedRes can print lots of it out of thin air but cannot guarantee it will be worth anything. America is heading towards economic collapse like Argentina 2001-2002. Be prepared!

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April 17, 2009 Posted by | Economics | , , , , | Comments Off on GEAB: The Breakdown of the International Monetary System is Underway!