February 26, 2014 byTom Olago
We may be aware about China’s military might, but how many Americans know that China has the power to literally cripple the U.S economy and is actually “pulling the rug” from under it….little by little? U.S citizens have to contend with some shocking facts: the U.S is now a ‘sitting duck’ for her global economic competitors.
According to a recent article by Michael Snyder in theeconomiccollapseblog.com, China which is the global leader in world trade has started moving away from U.S. dollars and U.S. debt. According to a recent statement from the Central Bank of China, it is “no longer in China’s favor to accumulate foreign-exchange reserves”.
In addition, China has signed a whole host of international currency agreements with other nations during the past couple of years which are going to result in less U.S. dollars being used in international trade.
Snyder elaborates: “This week, we learned that China started to dump U.S. debt during the month of December. Many have imagined that China would try to dump a flood of our debt on to the market all of a sudden once they decided to exit, but that simply does not make sense. Instead, it makes sense for China to dump a bit of debt at a time so that the market will not panic and so that they can get close to full value for the paper that they are holding.
As Bloomberg reported the other day, China dumped nearly 50 billion dollars of U.S. debt during the month of December… So if China is not going to stockpile U.S. dollars or U.S. debt any longer, what is it going to stockpile? It is going to stockpile gold of course. In fact, China has been voraciously stockpiling gold for quite some time, and their hunger for gold appears to be growing…”
And why gold?
“…China knows that gold is a universal currency that will hold value over the long-term. As the paper currencies of the world race toward collapse, China could end up holding most of the real money and that would be a huge game changer when they finally reveal that fact.. For instance, right now the average rate of interest that the U.S. government pays on debt is just 2.477 percent. That is ridiculously low and it is way below the real rate of inflation. It is simply not rational for anyone to lend the U.S. government money so cheaply, and at some point we are going to see a dramatic shift. When that day arrives, interest rates are going to rise dramatically.
And if the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt. Even more frightening is what a rapidly changing interest rate environment would mean for our banking system.
There are four large U.S. banks that each have exposure to derivatives in excess of 40trillion dollars…Interest rate derivatives make up the biggest chunk of those derivatives contracts. As John Embry told King World News just the other day, when that bubble bursts the carnage is going to be unprecedented….”
These reports and predicted scenarios have been confirmed by a variety of independent sources. For example, dailywealth.com reports on 20th February: “Specifically, we learned this week that the Chinese government shrank its holdings of U.S. government debt by $47.8 billion in December 2013, the most in two years. One message from this is that the Chinese government doesn’t want to hold any more dollars than it has to. In separate news, China imported, consumed, and produced more gold than any other country in 2013.
China overtook India to become the world’s largest importer and consumer of gold, importing over 1,000 metric tons of gold that year (a truly massive amount). China is also the world’s largest producer of gold… nobody else comes close. Amazingly, China’s gold production is still increasing… while the countries in the next three places (Australia, Russia, and the U.S.) are comparatively stagnant in their production.”
Goldmoney.com likewise reported: “So why is the Chinese Government so keen on gold? The answer most likely involves geo-politics. And here it is worth noting that through the SCO (Shanghai Cooperation Organization), China and Russia with the support of most of the countries in between them are building an economic bloc with a common feature: gold. It is noticeable that while the West’s financial system has been bad-mouthing gold, all the members of the SCO, including most of its prospective members, have been accumulating it. The result is a strong vein of gold throughout Asia while the West has left itself dangerously exposed.
The West selling its stocks of gold has become the biggest strategic gamble in financial history. We are committing ourselves entirely to fiat currencies, which our central banks are now having to issue in accelerating quantities. In the process China and Russia have been handed ultimate economic power on a plate.”
Could this be one of the reasons that the US is not as clearly mentioned or referenced as other powerful countries in eschatological Scriptures, such as Russia and China? All indications are that the economic, political and military might of the U.S and her allies will be so insignificant in these last days that it will hardly be worth the mention, when dramatic end-time events take place.
We are seeing the U.S slide into this very position right before our eyes.