Russia and China have now pooled their efforts in order to make their dreams of a stronger rouble and yuan come true. The currency wars raging around the world are just the tip of the iceberg, the famous US trader Russ Winter says. China has launched a series of manoeuvres to wrest away from the dollar its current status as the planet’s main reserve currency. In accordance with a long-standing Chinese tradition, the strategy of that war is based on deception.
The two allies’ plan is as follows: first they want to put a tight noose around the dollar’s neck, and then, when a convenient moment comes, kick the chair out from under the United States.

 

 

Silver Buffs Generic Add2
We have long warned readers that the dollar is currently undergoing a death by a thousand cuts as nations the world over move to reduce their holdings of dollars and announce new trade agreements in non-dollar currencies.
If currency trader Russ Winter is correct, Russia & China are getting ready to give the process a kick start.

As Russia, Behind the Headlines points out, the goal is for the rouble and the yuan to eventually replace the dollar as global reserve currencies:

In simple terms, Russia and China want to increase the convertibility of the rouble and the yuan, and to increase the two currencies’ role in international trade – and then to propose them as global reserve currencies. The United States, where the level of sovereign dept is approaching 110 per cent of GDP, will be unable to meet such a challenge.


How does one go about position your currency as the next global reserve currency? In a word, gold:

To that end, China and Russia will need to back their currencies with gold. Last year China held 30.2 per cent of the global gold and currency reserves. It is unclear how much of the Chinese reserves are being held in gold, since the country does not disclose such details.

There is no doubt, however, that China’s gold reserves are growing.


Jim Rickards has estimated that China has already accumulated over 5,000 tons of gold. The true number could already be closer to 10,000 tons:

Experts suspect that when the Chinese said they held 1,054 tonnes of the metal in 2009, they deliberately underreported the figure by a factor of 2 or 3.

Be that as it may, China is known to produce 350 tonnes of gold every year, which translates into 1,400 tonnes over the past four years. There is little doubt that all that gold goes straight to the Chinese central bank’s vaults.

Meanwhile, Chinese imports of gold via Hong Kong rose by 950 tonnes between 2011 and 2012. In the first five months of 2013 mainland China imported more of the metal than in the entire 2012.

Perhaps the reason that GOFO has gone (permanently?) negative is the fact that 1,198 tons of gold have been sucked East out of the LBMA during the first half of 2013 alone:

Yet another important factor is the physical shipments of gold from the London Bullion Market Association (LBMA) last May.

During that month, shipments rose to 28.2 million ounces (877 tonnes) of gold. The physical volume of gold that has been sold to China since the beginning of 2013 currently stands at 1,198 tonnes.

While the Western financial media screams that the secular bull market in gold has ended, if anything is ending, it is the global reserve status of the US dollar. We suspect sub-$1200 gold only accelerated China’s acquisition of gold.  Expect June’s import numbers to top 1,000 tons.   When one day in 2015 or 2017 China suddenly announces that the yuan will be backed with 10,000 tons of 1kg gold bars, the chair will certainly be fully kicked out from under the US dollar.

Got PHYZZ??

 

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  1. NOTHING will happen to the dollar unless it is orchestrated by Rothschilds who own the entire global banking system [except Iran.] The US is a major player because we are the ones actively passing the baton. There will be no kicking the chair out – it is all part of a grand scheme to imprison all the people on planet earth with tremendous debt and NO money to pay the bills. TPTB want us to succumb to their plans by accepting their new digital currency. It may have gold and may not – depends. They can certainly afford to kill the pricing of gold/silver or make it punishable by death for even touching these metals.
     
    Is there a flaw in my thinking?

    • Don’t bet on it. China and Russia would love to stick it to the One World Order gang, and they will, Can’t wait for them the KICK THE CHAIR, Hope it’s before My Christmas Shopping season! THEY’LL SET THE PRICE OF GOLD AND SILVER, NOT JPM AND HIS GAND OF CRIMINALS

    • Pay attention to what the general says here. If needed play it a few times. You’ll find the answer to your question there:
      http://www.youtube.com/watch?v=0-5DOCF4vFw the rest of the clips are here:
      http://www.youtube.com/user/kob4you/videos?sort=p&view=0&shelf_index=1
      Also, pay attention to what they teach at former KGB. You can just wish they taught it at FBI, right?
      http://www.youtube.com/watch?v=kuf9d3sci-w
      Again the translation is not perfect but running it a few times will help. Hint. Important material starts at 0:16:00  time mark.

    • “…throw the US under the bus”!”
       
      There’s really no need for that, is there?  We’re busily throwing ourselves under the bus.  All the Russkies and Chinese need is a bit of patience.
       

    • I can’t be more succinct in my thoughts on the above videos than to quote Mr. Webster.

      “It is hardly too strong to say that the Constitution was made to guard the people against the dangers of good intentions. There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters” –Daniel Webster

      On either hand we have Oligarchs and Collectivists. They’re merely dressed up in seemingly opposing vernacular and philosophy, but this is pure feint. Both have as their prime object to subjugate humanity to secure lavishness in their lifestyles beyond imagination of the Caesars. Both revile Free Markets born of Individual Determinism and Private Property under Common Law. That either DARE criticize manipulation of the ‘Public Mind’ is supreme irony.

  2. Correction : Country’s not affiliated with Rothschilds is Cuba, North Korea, Iran.

    These countries + BRICS alliances do not enjoy usury or debt.

    Information is a global phenomenon,

    for example, what happened from the dark ages into the renaissance?

    I will give you a hint, Gutenberg?

    What happen after?

    • Hehe,
      ok, but really, Cuba, North Korea or Iran????
      Who needs the Rothschilds when you’ve got dictators that torture, starve, torture some more, grab your family and torture them, starve them, grabs their childhood friends, tortures them, starves them, tortures you some more while informing you about the torture being inflicted on your family, and then either you die an excruciating pain or live to tell others while living the rest of your life with severe physical ailments and psychological, all because you:
      love and worship Jesus Christ
      Do not love and worship the leader
      said something or looked the wrong way at a party official
      Are related to someone who didn’t tow the line
      Oh, and, uhm, hmmm, i don’t see many Iranian/North Korean/Cuban “prepper” and “truther” sites and blogs… because there’s nothing to prepare for, they’re already living a hellish life, and truth is censorship filters says it is.
      I’ll live in a “Rothchilds-controlled” nation any day over those crazy places.
      Just sayin’.
      Usury and debt?
      Russia has plenty of it, and so does every BRICS nation (with India having an extremely cruel Caste system where if you’re not “reincarnated” [no such thing] into the right caste, you’re a life-long untouchable reject).
      Iran and Muslim countries? They have plenty of inflation (mass usury) and they have loopholes in their banking system to earn interest on deposits while technically not calling it “usury”.

  3. “An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

    In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

    Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

    The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.”
    –Alan Greenspan, in ‘Gold and Economic Freedom’, 1966.
     
    And remember…
    “The major monetary metal in history is silver, not gold.”
    –Milton Friedman

    • Money is “not” a “commodity”. It is a “promise to complete a trade”. Until that is understood, proper management is impossible.
      Todd Marshall
      Plantersville, TX

    • Thank you all for your concern, but you need to ask yourself, where is all this (Toxic) money going? Kill all the people & start over, such as democide? Nope, I think there is going to be a Global Transformation. Planetary Debt Jubilee with the end of the federal reserve for the next one-thousand years. Bible says it, history says it, but you do not see it? Please follow the BRICS countries + currently 140 to 197 countries because these events are going to happen in your life time.

      Sorry to say, but you live in a tyrannical Government which is owned and operated for the confort and convience of the ferral reserve (federal reserve).

      There are forces out there under the banking system which want to enslave you & grandchildren called the debt based fractional reserve that has grown to 1.6 quadrillion dollars(globally speaking).

      Yes, when speaking of slaves, we the United States HAS had there fair share. Talk about the execution of a race, look at the Native Americans ( Indians). Talk about war, look at the last WWI, WWII, & if the ferral reserve had it there way, WWIII, with the Syrian to Iranian propaganda war the ferral reserve wants to start at this moment!

      Yes, where is the real value of gold & silver? Thank you ferral reserve.

      The truth needs to start right here, right now!

      China needs the US to buy there crap.

      We got crap to sell to China. A symbiotic relationship, but it is not backed by any (gold&silver) commodities.Or the collapse of the fractional reserve system.

      We are making history right now. GLOBALLY

      So please help me end the ferral reserve & put back real money into the system as gold & silver has played for the last 6,000 years.

    • @Ranger
       
      I don’t know that Russia has any of our T-bonds / bills / whatever but China certainly does.  If they are not actively moving them on the world market and buying not only commodities but their means of production, they are not as smart as everyone thinks.  I know that there is a rate at which they could sell them without roiling the bond markets too badly, so that is the pace at which they should be selling or trading them off.
       
       

  4. Ed_B,
    China and Japan hold the most. If the Bond Swap spread is not abundantly even between both on the U S T’s, Japan and China alone could bring the The Fed to it’s knees. Remember as the interest rates rise The Fed has to print even more Fiat to pay the newly created interest rates. The interest rates are rising steadily because the bonds are selling off, none of the foreign countries want them anymore, in fact major investors don’t want them. The long end and the short end is The Fed will need to print more money for two reasons concerning bonds, 1. To pay the interest payment rising and 2. To buy more Bonds to hold the interest rates down.
    Constantly shooting themselves in the foot!

    • “Remember as the interest rates rise The Fed has to print even more Fiat to pay the newly created interest rates.”
       
      Ah, but therein lies the rub.  Interest rates cannot rise much as long as the Fed controls both the long and short rates via being willing to buy every single bit of US Treasury paper that is offered for sale and at the coupon rate asked.  It only costs them a bunch of bogus green paper and they can print that any time they want and in unlimited amounts.  When the Fed wants rates to rise, they will.  Until then, they are rather neatly corralled.  Aside from this, about the only thing that the holders of many bonds can do is dump them onto the market in a short time and crash it.  While they could do this, it is unlikely to profit anyone financially, although it very well might profit Russia and China politically.  As commies and supposedly former commies, this could be quite an enticement.  Without the big bad USA under foot all the time, Russia and China would be the big dogs on this ball of dirt and could pretty much do as they please.  They have LONG dreamed of this.

  5. One ton of gold is $42,000,000 approx.  1,000 tons is $42 billion.  10,000 tons is $420 billion. The last figure I heard was that the China M3 was about $9 trillion.  How does a measly  10,000 tons of gold worth $420 billion back that?  Russia may have the same amount.  Given the level of ‘trust’ between China and Russia, two countries who’s primary economic interests are not closely allied, if they both chipped in their 20,000 tons, we’re only taking $840 billion.   My math may be hazy but we are not talking even $1 of gold to $10-12 here. 

    • Simply adjust the price and then the math works.
      If my math is correct, 10000tons is 321M troy ounces.
      $9T / 321M oz = $28,000 / oz 
      This is an instant revaluation, and the masters would not be pleased.  Many believe that this is where we are headed… revaluation to recapitalize the zombie banks.

    • Ignore Tyrone. His comment is silly on its face. Why would anyone pay $28,000 for an ounce of gold when miners are willing to dig and old computer grinders are willing to grind and refine, producing an ounce for less than $2,000?
       
      Todd Marshall
      Plantersville, TX

  6. @AGXIIK. Ive thrown this out there once before, but it’s been a year so I’m going to ‘re-stimulate creative thought on this matter:
     
    Assuming the U.S. is not completely blind, could it be possible that knowing the fiat system is lost, since the Chinese have been our largest supporter, is it not probable even, that a secret aggrement was made to allow China cheap gold from the west, enough to balance the 3 trillion investment that will be lost with a declaration of U.S. fiat debt default, paired with an agreed gold standard of sorts.  In short, an unplanned default would break it off in China’s *as in return for their support, and assuming America is blind to the golden hemmoraging from west to east is a naive thought as well. But a secret agreement puts both together.  Ive always seen this as very explanatory to events of the past 4 years.
     

    • Many people are coming to this conclusion. Independently. Why are Western banks still net sellers of gold?

      I suggested that it was for this reason about a week before Jim Rickards publicly mooted the idea that the States was ‘holding the door open for China’. .

  7. Shamus  Nothing would suprise me.  40 years ago the Petrodollar was born.  We bought, at that time, cheap oil from  the Saudi in return for them recycling those oil dollars back to us through the purchase of UST bonds.  Not a great deal for the Saudis since they were selling us their non-renewable resources for depreciating dollars. Back then a barrel of oil was $1 or a bit more.  The Saudis, the oil giant, basically went along with the deal because we offered protection; military hardware, military protection, the US Dollar solvency, and through the US Petro Dollar system the rest of the world was pretty much forced to accept the US Dollar as the world’s reserve currency. We were in a costly cold war with the USSR and no other country came close to matching us with our military might. We protected most of Europe and a good part of the MENA and Asian area from Soviet attempts at domination. We had them by the nads so they had to go along.
    We, TPTB, Nixon, our oil firms and others, knew that we were incurring unsustainable debts. It was a simple bit of math to see that. We could not finance our empire building and war making elsewhere so the oil nations biought up the dollar. The Saudis bought a bag of air however.They’ve become completely dependent on the dollar for their their entire social superstructure, including a vast oil welfare program and their food programs. They depend on us buying Saudi oil to the tune of tens of billions of dollars.
    If we stopped, then the house of Saudi cards would fall and fall badly.  They made a Faustian bargain.  Their EROI is about $50-60 dollars a barrelincluding the embedded social and food programs. It’s rumored that their Garwhal field whales are starting to tap out.

    We got to spend less valuable dollars for increasingly greater amounts of most costly oil, depleting the Saudis and others of their life blood and the only product they have to sell. They took our dollars, a currency that, and here is your point well made Shamus,  for so long as we were willing to support the dollar, pay the interest to their US Treasury denominated sovereign wealth funds, they were content in a small way, to continue the scam. National self interests are not a pleasant thing to watch up closely. 
    Those funds hold more than a trillion in US dollar securities.  Talk about having the Saudis and other OPEC nations over a barrel and by the balls.  They are as dependent on us as we are dependent on them. But I think they are more dependent on us to support their UST wealth. China may very well be as deeply embedded in the Kimchi for that reason too.

    But here is what I think is the kicker.  We have a lot of oil in this country. At a high enough price we can mine, drill and extract oil from our country while leaving the OPEC nations wallowing in worthless FIAT US notes after they sell the last barrel of their birthright, the precious oil, to a nation that would have not a second thought about throwing them under the bus.

    China is probably even worse off as they have $1.2 trillion in US treasuries and sell us products that I would argue are not as important to us as oil. We can make the stuff they sell us if we are willing to pay the price. Cheap Chinese knockoff junk is not going to make us rich. We could reindustrialise and send China back to third world status if we starting making our ‘stuff’ here as opposed to overseas. Made in China stuff is not oil. We don’t need it.  So the Chinese also sold their birthright, their cheap labor, to us on the cheap, while recycling our dollars we sent to them for their products back into US debt, thus continuing the scam. The Chinese are the new age Saudis in that regard. They hold a vast sum of tenuously valued FIAT dollars, and other currencies AND THEY KNOW IT. 
    I am sure the top brass in  China is sweating this because in their haste to get rich and jump into first world status, or at least boost their GDP to a respectable $5 trillion, (plus or minus $10 trillion (LOL)),  they are finding out they are not getting rich fast enough to overcome their troubles with Sino M3, inflation, their own QE problems, a debt to GDP which is at a minimum 200% and an aging population. A recipe for disaster. They know it and are trying to keep the wheels on the rickshaw. If they have a hard landing as some suggest, their problems will become Europes, the BRICS, SA, Africa and Australia. All of whom are dependent on selling to the bottomless pit of Chinese demand.
    Ooops.
    Not a good idea to put all your 1,000 year old eggs in one basket, as those countries and economic zones are finding out. I will give the devil his due, we can be crafty SOBs when our national economic interests are at stake. And we will sell our trading partners and economic allies down the the Yangste in a New York second.
    As a country they are getting old before they got rich.  So their plan to stack maybe 20,000 tons of gold before they are done would seem very prudent decisions coming from the top brass.  They have to get rich with FIAT conversion of our UST back to gold before they, as a nation, fall into the Japanese trap of stagflation and spending the nation’s wealth into demographic suicide and bankruptcy.

    The Chinese are smart but smart does not mean wise. Anyone, from an individual to a nation, cannot get rich fast and remain smart and wise. That is totally against human nature. The quest for fast wealth makes people stupid. Huge mistakes are made.
    They may simply realize that the demographic and wealth production jig is up and they are working as hard as they can to prevent a catastrophe. Maybe they think that by having enough of their citizens ‘gold wealthy’ and seeing the value of gold go up 200-500%, they will save their nation on the backs of gold’s real monetary value increase. Just sayin’

    Whatever plans we and they have developed will be signed off as to our best interest because I think China is much weaker than anyone lets on. They might find themselves forced to comply with our demands. We are at least 3 times their GDP and that means something. They are still a financial colony of the US. If we allow them to buy up a goodly percentage of our western gold we would not do that because we’re stupid.  Even if we are growing poor through the theft of our birthright by some really bad players that we talk about incessantly here on this site.
    Low priced gold, just like low priced oil, was and is in the best interest of the US, not the best interst of sellers of oil or the buyers of gold.  We could stop that sale to China and any other country by a basic force majeure edict.   We’ve stolen gold and silver from China more than once. Japan too. The top leadership knows they have a real tiger by the tail since their population is restive, wants more of the good life, is aging badly with the one child policy and has some real enviromental problems. Solar won’t solve that in time.
    We will see how this shakes out but China is no more immune to our suasions than the Saudis were 40 years ago.  Gold and oil are great honey traps. Every factor in the EROI equation poses problems for China and will force some very difficult decisions. If gold goes up in price then oil goes up in price and if there’s any commodity that China needs in vast quantities, it’s energy. We still have a pretty solid stranglehold on that, hence the reason we are in the middle of the middle east making a stink of things. But that another story, sort of.
    I probably missed 90% of the real story and am probably at least 50% off base, but what you noted, Shamus, is some solid thinking of what might come of the gold conveyor belt to China. Those types of surprises always come from the most unexpected angles

    • Good write up, AG.  I agree with much of it but would also add that one of China’s greatest exports is people.  Yes, they are using a lot of their new-found wealth to buy businesses, factories, mines, farms, ranches, fishing fleets, and just about anything that has anything to do with basic commodities production.  Then, they send some Chinese guys to the places where they have bought these things and they manage them with the help of those who sold them to the Chinese.  Next, they replace the old managers who have been helping them run these enterprises.  The final stage comes when these managers start hiring Chinese workers to come and work in these enterprises.  Or they may build new enterprises and require that all employees speak Mandarin Chinese as a condition of employment.   Before we know it, the world will be awash in migrated Chinese.  Their country is ancient.  Like Japan, they have a homogeneous society and prefer it that way.  They have WAY more people than they need or want.  What to do with them?  Ship ‘em out!  Whether or not they can “take over the world” is debatable. That they are trying to do just that seems pretty clear.
       

  8. some fascinating comments
    China is the old man up against the teenager 
    If the dollar collapses,it will happen because Rothschilds plan the collapse
    What happened to the amero? 
    Why did the dollar go off the gold standard ? Was it because Rothschild’s man Kissinger coerced the puppet Nixon?

  9. China and Russia cannot become the world reserve currency simply by acquiring gold. If they acquired all that existed, they would have just 1 ounce per person on earth … less than $1,400 … petty cash. The US Fed will lose the job due to mismanagement. Hopefully, someone who knows how to manage any Medium of Exchange (MOE) will save the day. But that has never happened so we can expect our current dollar house of cards to fall, only to be replaced by a new house of cards.

    Sadly, this would be oh-so-simple to fix. With proper management, beginning with monitoring DEFAULTS and collecting an equal amount of INTEREST, assuring INFLATION at zero by the relation: INFLATION = DEFAULT – INTEREST, a wonderful trading place could be established. Unfortunately for them, because of their perpetual deadbeat behavior, governments would not be allowed to trade.
    Todd Marshall
    Plantersville, TX

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