America is Overthrown, Abandon the System

H/T:  NCRenegade

Fed is Building an Economy by Counterfeiting

H/T: NC Renegade

Is China Betting an International Currency Will Replace U.S. Dollar?

China’s state owned PetroChina has surpassed Exxon/Mobile in oil production. The Associated Press reported the following:

PetroChina (PTR) announced Thursday that it pumped 2.4 million barrels a day last year, passing Exxon by 100,000 barrels. The company has grown rapidly the last decade by squeezing more from China's aging oil fields and outspending Western companies to buy petroleum reserves in countries including Canada, Iraq and Qatar. It's motivated by a need to lock up as much oil as possible.

Considering China’s investments, you have to take a look at their bottom line, which is not impressive:

In 2009 and 2010, PetroChina's profit margins for its exploration and production business were only about two-thirds that of Exxon Mobil's. Its stock price has climbed less than 1%, in the past year, compared with a 3.7% rise in the stock of Exxon Mobil.

"You have to ask yourself: What is the purpose of PetroChina?" Bellinski says. "It is to fuel China. That's it. Although they're a public company, I'm very skeptical that they have any interest in shareholder value creation."

Well, that’s one motive. But is there another? Could the U.S. economy and the monetary policy of the Federal Reserve have anything to do with China’s acquisition in commodities such as oil and gold? Since the formation of OPEC and the demise of the gold standard, oil has been pegged to the dollar; it has remained the world’s reserve currency. And it’s no secret that Russia, Iran, Venezuela and China have all openly called for an international currency to replace the dollar.

Is China playing the long game? Are they betting that the asinine policies of the Obama administration and the Federal Reserve will bring about the demise of the dollar? Will an international currency replace the green back? Here is an excerpt from a Mises Institute article published in 2009:

Skeptics regarding the rise of China as a major economic power doubt that China can profit from a weaker US dollar through a stronger yuan or develop a sufficient domestic consumer market quickly enough to offset reduced exports. However, while China contributes to US consumption as an export-dependent supplier, as well as a financier, their exposure to losses resulting from a declining US dollar is limited. A stronger yuan would mean that, after a period of adjustment, China would import more goods and services and that, in real terms, wages of Chinese workers would increase, thus supporting a higher standard of living. What is more important is that a stronger yuan, implicitly backed by growing gold reserves (not to mention by a large and fully modern navy), is exactly what will guarantee China's oil supply.

The struggling US economy, burdened with excessive levels of debt, cannot support a sustained rise of the US dollar against the currencies of growing economies in Asia. Growing demand for resources, especially oil, as well as gold, contrasted with the inflationary policies of the US, will maintain the upward trajectory of commodity prices measured in US dollars indefinitely. In the near term, the end of the petrodollar standard will cause a sharp decline in the value of the US dollar and a marked increase in the prices of oil and of gold measured in US dollars.

Today’s gas prices are a direct result of the inflationary policies of the Obama administration and the Federal Reserve. How much longer will the international community tolerate the U.S. dollar as the world’s reserve currency? Time will tell.

http://www.usatoday.com/money/industries/energy/story/2012-03-29/oil-production-petrochina-exxonmobil/53851876/1

https://mises.org/Community/blogs/hera/archive/2009/10/23/china-s-dragons-oil-gold-and-the-us-dollar.aspx

China Calls for International Supervision Over Dollar

America’s chickens have come home to roost. The outrageous spending by the D.C. swamp monsters has put our nation in peril. And now China, our biggest creditor, is scolding the reprobates:

China -- the United States' biggest creditor -- said Washington only had itself to blame for its plight and called for a new stable global reserve currency.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency said in a commentary.

It only gets better:

In the Xinhua commentary, China scorned the United States for its "debt addiction" and "short sighted" political wrangling.

"China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets," it said.

It urged the United States to cut military and social welfare expenditure. Further credit downgrades would very likely undermine the world economic recovery and trigger new rounds of financial turmoil, it said.

But that’s not the only demands that China is making. Now, they want a global committee to oversee the U.S. dollar:

"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," Xinhua said.

You can expect more clamoring from other totalitarian regimes. They smell weakness.

Source: http://www.chicagotribune.com/business/sns-rt-us-eurozonetre7712hb-20110802,0,389757.story

Federal Reserve to Tax the World

The Federal Reserve is about to impose a tax upon the whole world through Bernanke’s quantitative easing scheme. Germany and other countries have been outspoken on the U.S. debt and possible currency crisis:


BERLIN - German Finance Minister Wolfgang Schaeuble lashed out Friday at the United States' move of printing huge money to stimulate its slow recovery, saying that these policies would not help but create more troubles.


"With all due respect, my feeling is that the United States is at a loss," Schaeuble told reporters in Berlin, two days after the US Federal Reserve (the Fed) announced it would purchase 600 billion dollars of long-term government bonds by mid-2011, in a new round of "quantitative easing".


"Saying now that we once again make an additional $600 billion available will not solve any problem." Schaeuble said. The difficulties faced by Americans had nothing to do with " liquidity drain."



“Helicopter Bob” Bernanke should take the advice of Germany’s Finance Minister. After all, I’m sure Mr.Schaeble remembers what his parents and grandparents went through with the Weimar Republic.