In an interview Jan Skoyles of the Real Asset Company and Koos Jensen who blogs on China and gold have said that the Chinese government has to be co-operating with the Federal Reserve to manipulate the price of gold. China accepted its chosen role to replace America as the World center for manufacturing during Nixon’s historic visit of 1972.
The economist Wassily Leontieff won the Nobel Prize for his analysis of the American economy. In the 1930s he studied the outputs of raw materials industries like iron ore and coal mining and their related steel and automotive industries. He concluded that America had abundant natural resources and a skilled work force. Americans added value from their raw materials and produced finished goods. Subsequently, in 1955 it was proven that when America’s population went over 150 million, wages would have to be lowered. Why? Because that level of population required imports of raw materials. That and the Vietnam war put America into a permanent trade imbalance. Technically the economic solution was to devalue the dollar and lower wages so America could compete with foreign nations to sell US manufactured goods. This permanent trade imbalance forced President Nixon to devalue the dollar and break the Bretton Woods agreement to redeem dollars for gold at $35 an ounce. At that point America only suffered from over population and the costs of the Vietnam war. Please note that the Vietnam war might never have occurred if Israel had not been allowed to kill President Kennedy and get away with it.
In 1973 Henry Kissinger helped to set up the Petrodollar as a replacement for Bretton Woods and convertibility of dollars into gold. Under this system the price of oil could never drop too low. Why? Because the profits from the sale of oil were plowed into US Treasury bonds to finance both the US deficit and the trade imbalance. This ability to print money allowed Americans to maintain an artificially high standard of living even after they had over populated their country and had squandered their resources maintaining the Judeo-America Empire which had been given them at Bretton Woods by His Majesty’s Jewish government.
In 1993 the US passed the North American Free Trade Act (NAFTA) which sent American manufacturing overseas first to Mexico and then to China. The Chinese government lowered their exchange rate and wiped out the competitiveness of the smaller Asian nations like Indonesia and Thailand. Since 2000 the US has lost 56,000 manufacturing plants. NAFTA was the first step towards the de-industrialization of America. Trade and budget deficits became larger each year. Today the average deficit for the past five years has been greater than a trillion dollars a year.
Those are not the only deficits. America needs desperately to spend 4 trillion dollars on infrastructure repair. Without those repairs the United States will slide into a Third World status. There is also an unfunded liabilities deficit. The total amount of unfunded liabilities for Social Security, Medicare and other programs is 211 trillion dollars. It is growing at 915 billion dollars a month. That is a lot of money Americans do not have. Their money has been spent killing Muslims since 9-11-2001 when Israel blew up the World Trade Center Towers and successfully blamed the Arabs.
Currently, China has 3 trillion dollars. Not all came directly from America. The Chinese have been making trade agreements with Japan, Russia, India, South Africa, Venezuela and even the European Union. In the latter case they agreed to trade in euros and yuan and avoid the use of the dollar. Many of these swap arrangements were with smaller nations that had been bullied into accepting dollars and US Treasury bonds they did not want. These poor nations have dumped their dollars onto China. In 2010 China had a conference in Beijing and promised 100 billion dollars in investments to develop the continent. Mr Obama would object to any comparison to his policy of sending soldiers in to steal the mines and farm lands of Africans. In Uganda soldiers allied with the US evicted 20,000 African farmers from lands that had been theirs for hundreds of years and gave it to men in London.
The reasoning of Jan Skoyles and Koos Jensen is that China is planning a transition from the current system where Federal Reserve Notes are the reserve currency of most nations. A reserve currency is a substitute for gold in settling international trade. If a man in Italy in 1800 wanted to buy something from the Ottoman Turks, he could use gold coins. Today Americans can print dollars and buy cars, electronics, clothes and food from all over the world. If the value of the dollar goes down, the easy solution is to print more dollars. Janet Yellen’s campaign to succeed Ben Bernanke as Federal Reserve Chairman was based solely on the promise to Print and Print again. Larry Summers campaign promise was to steal depositors money and to Print.
The Chinese have just recently said they plan to replace the dollar as the world reserve currency. They have prepared themselves by buying gold from Europe and from the ETF GLD. That gold is sent to Switzerland to be recast and sent to China. Nobody really knows how much gold either the US or China has. American gold had been leased out to bullion banks who have the right to sell to five different buyers paper certificates saying pay the depositor xxx ounces of gold on demand. Dr Jim Willie has said that between 20,000 and 40,000 tons of allocated gold bullion being held for depositors is missing from the vaults. And there is a suspicion that many of America’s gold bars are really just gold plated tungsten-steel alloy bars.
China is the world’s largest producer of gold. None of that gold is sold outside the country. China is buying gold mines overseas. China does report the gold it imports from Hong Kong but what of the bullion it gets through other ports? China is casting their gold into kilogram size bars as part of its plans for a gold backed yuan which will probably be converted at a fix rate into a dozen or two different currencies like the euro, the Australian dollar, the yen, the Venezuelan peso and other regional and national currencies. Dr Willie says it will be a distributed exchange system where the central organs like the IMF and the World Bank will no longer exist.
Skoyles and Jensen see China’s manipulation of the gold price as part of a soft transition to the New Order where the dollar is devalued and American wages are cut in half. Obviously, if American wages are cut too soon, fewer Chinese people will be employed selling goods at WalMart for I Owe You Nothing Federal Reserve Notes. The Chinese government has been replacing workers with robots. Americans might remember during the mortgage Bubble that they could see people holding signs for new real estate developments. These people were paid the minimum wage. Not any more. Today robots are sold to do that job for less than what a minimum wage worker makes in a month. The preferred robot is a blonde female who is not too excessively pretty and is modestly attired. They do not want too many problems with male drivers being distracted.
High wage jobs are being replaced too. Most pilots will replaced with drones. Robots that can run 35 mph and kill a man at a distance of a mile can and will replace most policemen. They can work with drones and satellites. They can use facial recognition software and GPS to track you, your cell phone and your car so the robot can kill you.
The Chinese want a soft landing on the other side but are preparing for a hard landing. China has only a few rivers and they are all seriously polluted. American water wells are being contaminated by fracking (hydraulic fracturing) which sends pollutants and acid mixed with water underground to fracture the earth and to pump more oil out of the ground. However, these companies are also sending nuclear waste into these wells. Apparently, a 1,000% increase in cancer is not good enough the elite who run the United States.
What I think will happen is that the dollar will stumble along until events force its demise. Even small nation like Iran and Venezuela could bankrupt the Too Big To Jail Banks within weeks. A smaller nation could just go into the silver bullion market and demand delivery. Go to the silver mining and exporting nations and bid away their output. Companies in electronics like Apple would have to protect themselves by unleashing their cash in the Cayman Islands to buy silver. If silver ever went above $55 an ounce, J P Morgan would go bankrupt. This can easily be done because the silver market is so much smaller than for gold. But to do that would be to invite an invasion of your country.
I expect the US stock and bond markets to collapse due to the poor economy and rising interest rates. Obamacare will make the economy a lot worse a lot sooner. When it all hits the fan, it will be every man for himself and billions will go into silver and gold ending bullion manipulation opening the door to Hyperinflation.
I should make one last point. I have talked to Team B for Chinese intelligence. These are Chinese people who live in the US but are doing everything they can to promote the Chinese government. They told me even before 911 that their thinking was that after a certain amount of economic growth for China and continued decline for the US that China should be given California. They already run major ports in Mexico, the US and Panama. The Chinese might be willing to forgive that last trillion or two dollars in debt we owe them in exchange for California. Though I think they will want Oregon and Washington so America has to go through Chinese ports to sell our food to Asia. Of course that would be food Americans might desperately need to fend off starvation. But the problem of over population in both America and China could easily be solved by releasing a few plagues.
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This is Mr Jensen’s website. He has been collaborating with Jan Skoyles on a series of articles on China and gold. I think China has a lot more gold than they estimate.