Sunday, February 10, 2013

This Is It! China Surpasses U.S. As Number One Global Trading Power

Brandon Smith, Contributor
Activist Post

Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.

This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, consumer hub, and currency powerhouse. In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar. I was, of course, attacked as a “doom monger” and “conspiracy theorist”. Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan-denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency. This process has gone mostly ignored by the mainstream financial media. However, I and many other independent analysts could not overlook the red flags.

I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-replaced

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan-denominated debt? Why begin borrowing capital from foreign creditors? They certainly didn’t need the money. Why were they moving away from export dependency and building a consumer base? And why attempt to proliferate their currency? Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation? Didn’t the Chinese want their currency cheap so that they could maintain export superiority? What did the Chinese know in 2005 that we didn’t?


Well, apparently they were either psychic, or SOMEONE gave them advanced warning. They knew that there would be a crisis in American consumption and that this would lead to severe reduction in imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves. They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long-term treasury holdings to short-term treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting Special Drawing Rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket currency. In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar:

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half-worlds-new-money-supply

China is flooding the system with Yuan! This means only one thing; China is no longer seeking to maintain the traditional trade relationship it has had with the United States.

To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest BUYER, recently surpassing India. Official estimates place Chinese gold purchases in 2012 at around 800 tons; an astonishing increase in their stockpile.

The U.S. and the Federal Reserve can’t even deliver gold it is supposed to be holding for others, including Germany.

China has also recently quadrupled imports of rice and tripled wheat and corn imports in only one year. Why? Again, I ask, what do they know that we are not being told?

http://ajw.asahi.com/article/economy/business/AJ201302020056

As I have stated for many years, China is being groomed as an alternative economic engine in opposition to the United States, and that this will lead to an eventual dump by them of the Greenback. This scenario is not only based on my opinion, it has also been spoken of openly by elitist financiers, including George Soros:



This past month, the same plan has been reiterated by Zhu Min, the deputy managing director of the IMF. In his statement, he proclaimed that the shift by China into a more consumer-based system had been successful, and that the Yuan or RMB, was on the way to becoming a world reserve currency:

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130118000075&cid=1102

I believe that the moment for the epic changeover, and all the political and financial conflict that comes with it, has begun…

It has been announced this week that China surpassed the U.S. for the first time ever as the number one trading power in the world:

http://www.bloomberg.com/news/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.html

U.S. exports and imports last year totaled $3.82 trillion, the U.S. Commerce Department said last week. China’s customs administration reported last month that the country’s total trade in 2012 amounted to $3.87 trillion. China had a $231.1 billion annual trade surplus while the U.S. had a trade deficit of $727.9 billion:
It is remarkable that an economy that is only a fraction of the size of the U.S. economy has a larger trading volume,” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said in an e-mail. “The surpassing of the U.S. is not because of a substantially undervalued currency that has led to an export boom,” said Lardy, noting that Chinese imports have grown more rapidly than exports since 2007. 
According to O’Neill (Goldman Sachs Jim O’Neill), the trade figures underscore the need to draw China further into the global financial and trading architecture that the U.S. helped create.

'One way or another we have to get China more involved in the global organizations of today and the future despite some of their own reluctance,' O’Neill said, mentioning China’s inclusion in the International Monetary Fund’s Special Drawing Rights currency basket. 'To not have China more symbolically and more importantly actually central to all these things is just increasingly silly.'
For those who are still not aware of why this is such a big deal, it is essentially a turning point moment in global trade. There is no doubt that China will now be inducted into the SDR, and that their importance as a trade and consumption center will quickly lead to a move away from the dollar. To put it simply, the dollar is going to lose its world reserve status VERY soon. Many will cheer this change as necessary progress towards a more “globally conscious” economic system. However, it’s not that simple. Total centralization is first and foremost the dream of idiots, and in any mutation (or amputation) there is always considerable pain involved. The proponents of this “New World Order” (their words, not mine) seem to have placed the U.S. squarely in their crosshairs as the primary recipient of this fiscal pain.

In my early analysis, I felt it possible that Japan would be inducted willingly into the new ASEAN trading bloc and that they would swiftly fall in line with a dump of the dollar, mainly because their export markets were suffering greatly due to the decline in American purchases.

 Now it appears that Japan has not been as pliable as the globalists wanted, and so, a war may be on the table in the Pacific.

Rhetoric in Chinese newspapers has been very heated and provocative, and the tensions surrounding the Senkaku/Diaoyu Islands is reaching a boiling point. The two countries have done everything so far EXCEPT shoot at each other, and that will be happening in due course now that China is allegedly locking offensive radar onto Japanese ships. Even Chinese films released in the past two years have been soaked with anti-Japan propaganda, most of them usually set during WWII around the brutal invasion and subjugation by the Japanese in Chinese provinces.


The recipe is one of inevitable disaster, with the U.S. at the center of a boiling pot. As I pointed in my last economic piece, we must now look to events rather than numbers to gain insight into where we are headed. The time has come. China is nearly ready for IMF inclusion. Volatility around the world is high. Our government has a final decision to make on the Fiscal Cliff in March, not to mention the sudden push for possible gun registration and confiscation. My instincts tell me that so many explosive aspects coalescing together at the same tenuous moment is not a coincidence. The next few months call for hyper-vigilance and every ounce of energy we can muster to educate as many people as possible in as short a time as possible.

I say again, China has surpassed the U.S. in global trade. A drop of the dollar is the obvious next step…

You can contact Brandon Smith at: brandon@alt-market.com

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11 comments:

Anonymous said...

i think both japan and china have swapped their reserve currency.

Hide Behind said...

When author mentions Japan was not as pliable as globalist wanted let us remember our US is the largest of the globalist. Amd id the military means they use to projecct and protect those goals.
The influence of the US within Japanese sovereign economy is huge and yes our military presrnce there avvpints for a lot og that imfluence but not all.
Hete is but one little tidbit of how US military protected Japanese industry and in a sitiation that could of destroyed all Japanese economic base.
when ee talk of mid east oil gields we thinl of Saufis ad being top dog and say Saudi oil fields, but that is a lie, for in truththe greatest portion of those fields are koimt owned Saudi Kuwait fields.
Saidis fo not "Manage" thosep foelds they ovrrsee them and hire fitms to manage.
AT time of Gulf War One it was s Japanesep firm under a Trade Treaty with both Kuwait and Saudis sovereigns. Under this agreement exports to Japan were given a preferepntial pricing. As well ss payments for managing.
After war Japanese Political and Industrialis gave Bush a 5 million contribution to his Library.
Then at the next luncheon he received a few million for the same library from Kuwati and Saudi banks and all funds run through a Bush Friendly. Bank that is europes version of off shore banking Lichtenstein. Bank a family owned enterprize.
Okinawa is underWwIi reparations treaty that guarantees perpetual domination but lets Japan absorbed its own citizens cost

Many may of read where US was putting pressure upon Japan to increase value of yen in order to help US lower its deficit; but this increasing decreaading has since sround 1960 and Japan once more an economic power beeen one of greatest ways US has held its currency at a some what balancef value.
When ever US wanted to increase or decress its voinage value they vontacted Japanese bankd to either buy up over flow of dollars or drll them

AEither way it has been the Japanesr and zuS consumers eho pay ultimate cost.
Today US oil and Liquified gasses have huge mow and future vontracts signeff by not buisness to nuisness but Gov to gov contract.
US is dumping tjos energu items below other producets cost but once Japan got locked in the US says Japan must increasr its monetaryvalue so that a barrel of itsoil will now be paid for. So US will dry up a lot of its funny money helf by Japan

LIKE mentioned earlier since 1950'sp this arrangement with S Korea being same has been in place anf used today to manipulate FOREX.
Ask Obamas' Buddy Soros and he wpuld just smile in same way Obama does.r

Andrew Puhanic said...

Stupid Capitalists (in the West) stopped innovating to protect their own interests and monopolies (think Apple). So, China took up the slack America and the west was not willing to pursue.

Now, we have a situation where China is not only the biggest producer of goods, it will soon become the 'hub' for innovation and technology.

When the Chinese become the center of innovation and technology in the world, I think then we should start to worry.

At the moment, they are a toothless tiger, reliant on the stupidity of the west for their prosperity (and cheap iron ore in Australia, lol).

Anonymous said...

It was plannedby the brilliant people who created the mess. The U S corporations have moved there and Walmart gets all its goods there. If you stop buying at Walmart, that would be a step in the right direction.

newsrider said...

Get an education "Hide Behind," you can't spell for carp.

messianicdruid said...

Its his hyping, not his spieling that bothers us carps.

Anonymous said...

So now it's time for the globalists to rape China; first they will build her up, get all the peasants (farmers) to move off the land into the city; they can't have any people who are self sufficient.

After they have built her up and accustomed her people to the "good life", they will rip her apart. The Chinese people only need to look to the US to see how it's done.

There is no reason to believe that the Chinese elite are any different from their Western counterparts; that's why people like Maurice Strong have relocated to China.

http://www.freedomadvocates.org/articles/sustainable_development/maurice_strong_-_no_better_place_to_hide_than_china_20061101193/

It is interesting to note that the only non-Western Illuminati family just happens to be Chinese -- the Li family. I can no longer find the link but rumors have it that Bill Clinton is related to the Li family.

http://www.theforbiddenknowledge.com/hardtruth/the_li_bloodline.htm



Anonymous said...

You have to look at the whole scenerio instead of being brain washed by the spoon fed circus main stream news media and what you learned in the public schools.

The Elite Politicians, industrialist and the Banking CABAL of the NWO have sold you out to International Finance. They hold no alegence to any one country. They are international. They are not concerned with morals or right or wrong, they are concerned with excess parasitic profits and usury interest rates.

China is not a democratic country with human rights. It is a totalitarian dictatorship and a oppresive form of government. Communist party members live like capitalist while the working class live like peons. The workers are assigned to forced labor at low wages for 12 hours a day. Their leaders tell them it is for the good of the state. Desent is not tolerated and dealt with harshly. It is just another form of slavery.

The Elite Politicians, Industrialist and bankers are laughing all the way to the bank.

The Elite play both sides against the midlle class. They finance both sides during war time.

It is an international conspiritorial drive for power on the part of the men in high places, willing to use any means to bring about their desired aim, global conquest.

One world government under Elite Politicans, Industrialist and Bankers.

Only True National Democratic Socialism can free the common man from bondage and slavery.

The propaganda machine in Washington and the news media has been telling you that it is a boogy man word. What do you think that social security, medicare and public schools are. It is not a free lunch; you pay for those programs with your taxes.

The people have become like horses with horse blinders on with a coachman at the reins.

Declare National Soveregnty!

Wake-up before it is too late!

Wake-up before it is too late!

Carroll said...

I actually feel sorry for the Chinese people, because once the Banksters have looted the natural resouces of China and exploited it's workers, they will do the same thing they did to the Western World, which is cash in their chips and move on to the next nation of hapless fools. Oh sure, the Chinese people will enjoy a few years of false prosperity, but in the end, they'll end up destitute and far worse off then they ever were under Communism.

whisker child said...

to HideBehind:

Do you belief in proof-reading? Sheesh kid, learn to spell.

Anonymous said...

China is temporarily being used as a host for the global elite to build up more of their wealth and suck the life and resources out of their own people as they have been doing with the U.S. The economies of the world were never for the benefit of the people, but for the elite who control everything. That is why they have promoted their propaganda crap of materialism, consumption, and commercialization. They take their wealth and hide it under corporations and foundations that answer to nobody. There are no set of laws or jurisdictions that can contain them. The corporations want to be the law of the land and they can move around and do business with out being confined to any country's laws. A big mobile global business. The international bankers are the problem along with the federal reserve. Once you get rid of these parasites, the world will prosper. They are the ones that profit off of war, corruption, chaos, and destruction because they financially and secretly control all sides. They have all world leaders do their bidding out in the open while they benefit behind close doors while laughing at us. In the future, they will screw China over and move on to the next country or region. China right now is nothing but a vacuum cleaner sucking the wealth and life out of the population. The ruling elite along with the rich families of the world are just freeloading off of the common population whether by labor or financially. They are all about taking, taking, and more taking. I guess karma has never been in the consciousness of these greedy bastards thinking they can go on doing this to the world without any consequences to their actions. All of you who do not know how to spell, unless you are learning English, take a spelling and writing class. Your writing is atrocious.

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