Submitted by AGXIIK:

Here is a  good example of Reverse Gresham’s Law.  China is pushing out the dollar, fleeing the reserve currency of the world while the Euro death spirals into irrelevancy. The wealth of the west is moving towards Asia as China builds a currency backed by gold.

China’s buying up commodities, mines, gold, silver and anything else it can to buffer itself from what it sees as an economic and financial collapse of the West.

Since no one can predict how bad the fall will  be, China and its Eastern partners are preparing for the worst. China is also acquiring vital allies in the BRIC nations; ones that are resource rich and not so happy with the hegemonist West.  Australia, South Africa and even Japan will join in (if Japan survives the fallout from Fukushima). Hope for the best; plan for the worst.

China will probably pick up the pieces as European countries and the Euro fails.  The Euro and Dollar failures are classic textbook examples of Gresham’s law and since currency (real money)  abhors a vacuum, China is doing whatever it can to protect its economic interests while filling this monetary void.  The Chinese know how to read history. They made a lot of it, along with the painful experience of paper money failures of their own.   I admire them even though it means we will be suffering.  Its just the way things tend to work out.

There’s going to be a lot of pain to go around since Europe is China’s largest trading partner and we are right behind them. I think China sees that it must build a lifeboat for 1.3 billion people.  To do otherwise would be insane.  With Europe in recession with some parts , such as Spain, Greece and Portugal in a depression,  China will have to take its lumps. The degree of pain will be a function of how quickly and well it puts its house in order and puts its currency in the forefront of the world financial system.

Its population is not entirely self sufficient and resilient but it can take more hits since it has not fallen into the degenerate ways of the FIAT economies of the West.   It’s pretty clear China is shedding our dollars as fast as it can without causing a dollar collapse but they still know when to sell a losing proposition such as their trillion plus of dollar holdings.  The ongoing losses in the dollar and Euro are sunk costs.  If they must be written off they will be, just like the residual costs of a failed investment.

They are not going to bail us out, or Europe for that matter.  We are going to be on our own despite Tiny Tim’s begging bowl trips to the Middle Kingdom.  They know that it’s imprudent to try to catch falling pianos.  But there will be some real bargains once the crash happens.  They simply wait for the opportunity and swoop in.

The one thing I don’t know how to factor in is what part the Rothchilds are playing in this.  I surmise they are seeing the same thing here, and perhaps even orchestrating the transition.  China is ascendent, the West is descending.  The Rothchilds’ merger of the London and French banks is telling as they try to get their financial empire out of harm’s way.  Maybe they’ll just chop up the swap meet asset sales of the west between themselves.

  1. The one thing I don’t know how to factor in is what part the Rothchilds are playing in this.

    It’s amazing how often the Rothchilds name pops up in history when you don’t read the history books that they teach you in school.  I’m in the middle of the video series that Chris Duane put together on http://sonsoflibertyacademy.com/ The Rothchilds seem to be behind every major war for the last few hundred years.

  2. With China actively pursuing economic exclusion zones in the US, I see an effort to parlay their fiat into physical US assets.  The US still has a multitude of natural resources the Chinese would love to own.  At 50 Square miles at a time and a willing seller, maybe I should start taking Mandarin lessons.

    I do not think they are wait inf for a fire sale.

  3. “…maybe I should start taking Mandarin lessons”

    -  -  -  -  -

    Ordinary Joe you were only joking but have a whiff of this:

    My 6-year old brought home from school a sheet of paper with two columns.  On the left side were various chinese symbols, and on the right side were the English words which correspond with these.  Oh, and the color of this sheet of paper was red.  No shit!

    Hmmm…wondering what other crap they are teaching my child in school.  Time to begin thinking about home-schooling???

    • There has been a campaign for some time now, through the use of the public school systems, to dumb down our current and future generations and it’s working very well. They only want us smart enough to be good workers but not smart enough for critical thinking. The Chinese “lesson” given to your child falls into the category of getting them work ready. Reagan struck a deal with the soviets to virtually mirror our systems and move them towards a more communistic slant with the above intent. Charlotte Izerbyt sums it up in this powerful interview. She was the head of policy in the Dept. of Education during the first Reagan term and she tells all. A very enlightening and thought provoking interview.
       

  4. China has built entire cities as make work projects that remain completely empty.  And here is a sign that China’s housing market is in big trouble.  If you purchase  a luxury condo, the developer will throw in a new Mercedes.  That happened here right before the crash.  

  5. I believe that when the yield on the 10 year bond drops to the low 1.20′s that the dollar will no longer
    be the Reserve Currency. This I truly believe will happen in far less than 5 years. The dollar will have hit
    net Zero. My question is how will we sell our silver and gold and in what currency then?

    Ranger from Texas

  6. My true feelings are as follows, regardless of Banksters raids which will soon follow, is that regardless of
    any further QE’S or Bond buying by the Fed that Gold and Silver will rise entirely on their own.
    Keep your eyes on and watch your back.

    Ranger from Texas

  7. Let’s face it, any collapse of the west will be a collapse of the east and vice versa. We are all in this together. China may be bolstering their assets but make no mistake, if the U.S. goes down, the globe goes down, at this stage of the game.

  8. As the markets fail and the sheeple find themselves hungry those of us with any PM holdings will still be able to find food if needed. The if needed is added because I hope you are preparing for collapse and stocking food too.

  9. To be fair, I’ll admit that China is making the wisest moves to defend itself from the ensuing collapse, by gathering in basic commodities to best position itself for post-collapse production capability, Comparing this to the West’s stupid pre-occupation with collecting up ultimately worthless claim tickets, the contrast is quite stark.

    Nevertheless, from the Chin Dynasty to the present, China is and always has been politically totalitarianist. At the point of its prior zenith in the 12th and 13th centuries, it was then also entirely capable of becoming the world’s premier international trade powerhouse, but the Emperor and his Court forced the country into Isolationism and violently suppressed technological innovation more effectively than the Papists in Europe about the same time.

    While the present scenario is formidable, there yet remains the distinct possibility that a reversion to Capitalist Social Structure and an untrammeled Free Market economic environment may very well revive itself in the West.In the face of that occurrence should the Chinese ‘Emperor’ and ‘Court’ again see the prospect of being forced to competitively choose Capitalism’s Liberty over their traditional stranglehold on incontestable domestic power, China could again turn inward!

  10. I’ve used the analogy with people I know, that the u.s. is akin to someone who has jumped off of a very high building with no parachute. China took the stairs. While the dumbest amongst us are really enjoying the fall, the rest of us are trying to put a parachute together on the way down, and it’s not easy with what we’ve been left with. China is not going to risk catching us, they will be there to pick through our remains though. As far as some of the comments above, like where does china fit in with the rothchilds and rockafellers? Well, I’d say any country that is currently acting aggressive towards us in the world, are doing it because they aren’t going along with the anglo-american bilderberg vision of things. I personally believe the die has already been cast, we should all be watching the middle east very closely. As I see it, this looks like the prelude to ww1 all over again. Turkey and syria could declare war on each other at anytime, and turkey is a member of n.a.t.o. Assad has said he would deploy chemical weapons into israel via hezbollah if they are attacked by n.a.t.o. Syria and iran are backed up by china and russia, and there is going to be a war with iran, so if we stick our nose in it, they may do the same, and the results could be truly horrific. I believe there will be alot of posturing, but with how inept, especially the western gov’ts are, it’s hard for me to imagine a good outcome to our current predicaments.

  11. @SilverSucker I guess that explains why I don’t learn at my school about my rights, to create my own products, to create my own successful business and about the value of today’s currency. Although last year, I had an history teacher who told everyone in my class to buy gold and when I asked him if He thinks that gold is money, He said yes it is. He showed us on the board all the crisis that happened in 100 years and told us that crisis are getting more and more common as we move on today (one more reason why you should own physical gold and silver). He gave us a few lessons about economics and I did ask him a few questions about this subject. He knew what I knew, I knew what He knew. The best part of it is that it wasn’t part of the school program so He wasn’t forced to teach us stuff about it. I wish He was still my teacher but in 1-2 years, I can have him back if I choose history class and I sure will.

  12. I think that you guys are giving WAY too much credit to the Chinese as regards getting non-Chinese people “work ready”.  Considering that the Chinese take a VERY long view of history and have BIG plans for the future, what need can be served in their idea of the future by keeping the inferior races alive?  Off hand, I can’t think of a single reason why they would want to have ANY non-Chinese in their world 500 years from now… and perhaps sooner than that.

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