Is China making its move?

**Allen Currie Author** · 03-09-2012, 02:13 PM

Posted on jsmineset.com March 8
China offers other Brics renminbi loans
By Henny Sender in Hong Kong and Joe Leahy in São Paulo
March 7, 2012 8:06 pm

China intends to extend renminbi loans to other Brics nations, in another step towards the internationalisation of its currency.

The China Development Bank will sign a memorandum of understanding in New Delhi with its Brazilian, Russian, Indian and South African counterparts on March 29, say people familiar with their talks. Under the agreement CDB, which lends mainly in dollars overseas, will make renminbi loans available, while the other Brics nations’ development banks will also extend loans denominated in their respective currencies.

Why do I find this important? For many years the Chinese have been buying commodities (such as copper) mines and other commodity based assets as fast as they could. Makes good business sense. Invest your profits to secure against price and supply disruption. And they did have a lot of profits resting on an increasingly shaky US dollar base. Commodities in hand were far better.

Last week I noticed a couple of separate news items. One specifically dealt with a new announcement that China was prepared to ”do business” with their trade partners in Yuan. The second was a chart showing that their percentage reserves in USD have dropped from 65% to 54% in two years!!! Given the absolute size of their reserves their announcement of a year or two ago that they would “diversify out of the US dollar,” they are doing so at a mind boggling pace. Almost impossible to move those quantities in the foreign exchange markets without major disruption. My antennae went straight up.

Todays announcement is especially significant to me. In my mind there cannot be any good for the USD in these moves and their subsequent reactions. This has to be a nuclear attack where the Chinese assume that they will get hurt but not nearly as much as the current entities in the world financial system. In fact that is probably true, especially since the US has depleted its financial nuclear stockpile. As well, The US has its hands tied via the amount of bonds the Chinese hold. The Chinese Satan has the US pinned on its fork and is offering the choice of two doors, Damned if you do and Damned if you don't. The current Chinese mood is very Machiavellian. Look at what books are best sellers in China. Not fiction but get ahead at all costs no matter who it destroys.

It looks to me as if the Chinese are making their move. TEOTWAWKI looms.
Allen

**Rick** · 03-09-2012, 02:20 PM

Gosh. And what move would that be?

**Allen Currie Author** · 03-09-2012, 02:33 PM

LOL @ Rick. What no conspiracy?

BTW Your Shakuru line. Currently the sun is also depositing stuff on my head.

**nell67** · 03-09-2012, 02:46 PM

Originally Posted by Allen Currie Author

LOL @ Rick. What no conspiracy?

BTW Your Shakuru line. Currently the sun is also depositing stuff on my head.

Smug,aren't we??? Welcome to the forum,I think....

**Rick** · 03-09-2012, 02:53 PM

I don't hold to conspiracies just common sense. You will probably be able to tell from my posts that I don't side with those that think China "owns" us either. I understand how economics works.

**Allen Currie Author** · 03-09-2012, 05:19 PM

Rick
Sorry. No offense intended. I have been working on what might happen for about a quarter of a century (Feb 1987) and I certainly wouldn't call it smug. Blase perhaps. I am here because every person here can teach me something, and I can teach every person here something. It just struck me as funny
Allen

**Allen Currie Author** · 03-12-2012, 10:45 PM

Normally attempts to fix something like this don’t work, in fact often it makes it worse. However, given the recommendations I have been given about the site, it behooves me to try.

I had read few posts here but the few I saw of yours said you had been around the block and with a sense of humor
I posted on ‘Is China making its move’ and you replied ‘Gosh, what could that move be?’ Given your obvious knowledge you had to be giving me the gears and that was humor. I smart assed back as I don’t, and thought you didn’t, believe in conspiracies. As well re China owning, so many people think there are no options. There are always options as my ex girlfriend learned when she told me `you will just have to get used to it. This is the new me.` It hurt me too. But…

China doesn`t own, and never will own, but it can inflict serious damage if conditions remain static. (which I don`t expect.) If anything, I would rather suggest that the US has shot itself in the foot, rather than China owning. If the US plays hardball, China will get hurt. But in war both sides take casualties, and I expect casualties in what I see upcoming. In answer to your Gosh, what move could that be-. China probably has declared financial war on the US via sneak attack. It is the oriental way. Waking up on Dec 8 with half your fleet gone by sneak attack is not fun. Right now I am suggesting I can see financial Kamakasi planes on the horizon. Better the US should take its eyes off Europe again to glance west.

Allen

**Rick** · 03-13-2012, 06:14 AM

First, let's not disparage a race a people based on the actions of a single government. We Anglos have our own share of murderous moments. Wounded Knee comes to mind but there are many others. Surprise is the element of war that every side hopes to employ no matter the scale.

Second, there was no offense taken. There would not have been any taken even if it had be intended. Words on a forum don't ruffle my feathers in the least. I've had some pretty good chuckles over some intended arrows slung in my direction from time to time.

Yes, my, "Gosh. And what move would that be?", question was a bit tongue in cheek. However, if you are going to make a statement in abstract then be prepared because someone around here will ask a question about it.

Now, you'll have to excuse me while I go count my renmimbi.

By the by, you do realize that our buddy Jim Sinclair is the same guy that advised the Hunt brothers during the great silver fiasco, right? The same one that sent them to jail for commodities violations and manipulating the market? You might want to keep that in mind when he talks about someone making their move.

**Allen Currie Author** · 03-17-2012, 12:34 PM

Rick
Awww and I thought I had invented that phrase, is China making its move? And the inscrutable orientals just seem to do it better. Yes I read Sinclair with perhaps not enough of a BS filter but I love and agree with his general thrust. I do expect billions (yes with a "B") of deaths before this shakes out.

I have been betting against the USD for some years and so far it has been very profitable. I do trade off what for me is a massive short but unleveraged position, but that is more for entertainment than anything. I love reducing my cost position to zero. Of course the taxmen think of it as a profit. Damn. In the long term I am also betting against the Renmimbi/Yuan and all current fiat for that matter, but in the short term the Renmimbi seems like a good bet. I note that the Chinese seem to be blurring the distinction betweeen the Renmimbi and the Yuan and am not quite sure why. I don't bet that market because I have spent a little time over there and I don't really understand their thinking. That makes them unpredictable.

However, point well made and taken

Allen