China Prefers Greece over the United States
October 06, 2010
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The cat is out of the bag, Fools. China is actively jumpting the U.S. dollar ship, and cozying up to the Eurozone in its stead.
I can't think of a more poignant moment during the past ten years that underscores the enormity of the shifting balance of economic power underway as a consequence of the financial crisis. China is the victor, and the era of the United States' economic supremacy is hurtling to a close. China has played its cards masterfully, playing along with the dollar devaluation ruse just long enough to position itself for greater readiness for the dollar's big and inevitable slide. They have bought and are continuing to buy as much of those things that will rise in price as they possibly can, and they have moved to secure future supplies of strategic resources the way a nation does when preparing for a worst case scenario. At the same time, we have squandered trillions propping up bankrupt corporations and prolonging the inevitable delevering of our financial system.
Gold is trying to tell the world what is transpiring. Sadly, I feel few Americans are even aware of the nature of our predicament.
Please do what you can to share this article with your family, friends, and online communities. People need to be informed of what is coming. It is highly unpleasant, which keeps most looking in another direction out of a cultural habit for unconditional optimism, but this a time for sober realism.
China Prefers Greece over the United States
http://www.fool.com/investing/international/2010/10/05/china-prefers-greece-over-the-united-states.aspx
Excerpts:
While the United States continues to pump unseemly levels of deficit spending into piecemeal attempts to stave off stagnation, China has consistently funneled its crisis-era spending into strategic initiatives that serve to support the nation's breakneck pace of industrialization. I offered that very dichotomy of spending strategies as the most overlooked story of 2009, and I believe its significance to the global balance of economic power continues to go largely unnoticed.
China's investment in Greek shippers is but one cog in a string of strategic moves that Fools must consider in their totality in order to draw the correct interpretations. The sum of China's crisis-era strategic actions can be deemed dollar-defensive. The nation's official policy directive -- announced in August -- to support "large-scale gold producers in their development and overseas expansion plans," provides a golden example. The crystal-clear message to leading producers like Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM)Coeur d'Alene Mines' (NYSE: CDE) Kensington mine highlights China's eagerness to secure future gold supply. is that tight bank credit will not block the world's development pipeline for gold from achieving production. In fact, a supply agreement for one-half the gold production from
This weekend, mere days after the U.S. House of Representative passed a bill designed to penalize China for failing to permit the yuan to appreciate fast enough for Washington's liking, China has made a strongly symbolic move to cozy-up to the European Union and the euro currency. Through both actions and rhetoric, China is casting a vote of no confidence in the U.S. dollar, simultaneously with a vote of confidence in the euro. Premier Wen Jiabao explicitly stated this weekend that China "will not reduce the holdings of European bonds in our foreign exchange portfolio". I encourage Fools to consider investing where China invests.
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