China, Russia Alliance Deepens Against American Overstretch

 

– China and Russia allied on Syria and North Korea
– Beijing & Moscow economic & monetary ties deepen
– Trump needs Russia in order to maintain balance of power in superpower triumvirate
– Sino-Russian relations currently in their “best time in history” says Chinese President ahead of G20

– China, Russia call for calm diplomacy on Syria, Korea
– China, Russia “fed up with Washington’s pursuit of hegemony”
– US is “biggest source of global strategic risks” according to China state media
– Important calm and diplomacy prevails to prevent nuclear war

Last week a UN report stated that nationalism, protectionism and attitudes of “my country first” posed threats to the United Nation’s global goals. It seems that now more than ever Trump must get relations with the super powers, onto an even keel.

Trump is aware that the US has similar issues with Russia and that it must get Putin on side to a degree or at least neutral in order to confront the more powerful China. The US needs to work with President Xi Jinping on globally important matters such as North Korea. But there are elephants in the room which also must be confronted, namely currency manipulation, trade, climate change and deepening tensions in the South China Sea.

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Trump Avoid Debt Crisis ? “Extremely Unlikely” – Rickards

Remember to keep an eye on March 15th as mentioned in a previous post, the poison pill left by the Obama administration where “everything will grind to a halt”.

 

The Congressional Budget Office, CBO, estimates that inflation and real GDP will each grow at about 2% per year in the coming ten years. This means that nominal GDP, which is the sum of real GDP plus inflation, will grow at about 4% per year. Since debt is incurred and paid in nominal terms, nominal GDP growth is the critical measure of the sustainability of U.S. debt.

 

Trump Avoid Debt Crisis ? “Extremely Unlikely” says Rickards

The upcoming March 15 U.S. debt ceiling deadline is something that is being largely ignored by markets and most media for now. Despite it being just 9 trading days away. This will change in the coming days and is one of the many reasons why we are bullish on gold.

James Rickards writing for the Daily Reckoning today looks at the important ‘next signal to watch’ and explains that Trump and his advisors believe they can avoid a debt crisis through higher than average growth. Continue reading

This Is What A Financial Crisis Looks Like

Just within the past few days, three major high yield funds have completely imploded, and panic is spreading rapidly on Wall Street.  Funds run by Third Avenue Management and Stone Lion Capital Partners have suspended payments to investors, and a fund run by Lucidus Capital Partners has liquidated its entire portfolio.  We are witnessing a race for the exits unlike anything that we have seen since the great financial crash of 2008, and many of those that choose to hesitate are going to end up getting totally wiped out.  In case you are wondering, this is what a financial crisis looks like.  In 2008, other global stock markets started to tumble, then junk bonds began to crash, and finally U.S. stocks followed.  The exact same pattern is playing out again, and the carnage that we have seen so far is just the tip of the iceberg. Continue reading

China’s Gold Army

https://live-bullioninternati.netdna-ssl.com/blogs/koos-jansen/wp-content/uploads/2015/12/gold5.jpg

July 2000, soldiers from the 8th detachment panning alluvial gold in Xinjiang. In 30 years, the gold exploration unit has found many large-scale gold deposits, in total found more than 1800 tons of proven gold reserves.

 

Withdrawals from the vaults of the Shanghai Gold Exchange, which equal Chinese wholesale gold demand, in week 46 accounted for 49 tonnes. Year to date withdrawals have reached 2,362 tonnes.

As part of the wide analysis of the Chinese domestic gold market I would like to share that since the seventies there is a special army in China dedicated to gold. It’s called The Gold Armed Police – if you can read Chinese have a look at this Wikipedia page.

It’s no coincidence this army came into existence in 1979, eight year after the US left the gold standard and when China started opening up under the guidance of Deng Xiaoping. As, this was the moment the Chinese slowly started to reform their economy and made the first preparations in their gold market. They knew, among others, the global dollar standard wouldn’t last forever.

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‘Death of money’: Author Rickards predicts collapse of global monetary system

The collapse of the monetary system awaits the world in the near future, says financial expert James Rickards. Russia and China’s desire to rid the US dollar of its global reserve currency status is an early sign of the “increasingly inevitable” crisis.

“China has three trillion dollars, but they are buying gold as fast as they can. China worries that the US is going to devalue the dollar through inflation so they want to have a hedge if the dollar goes down, so the gold will go up,” Rickards told RT.

As one of the key events in support of his forecast, Rickards points to the words uttered by Russian President Vladimir Putin at the 18th International Economic Forum in St. Petersburg that took place earlier this month.

“Putin said he envisions a Eurasian economic zone involving Eastern Europe, Central Asia, and Russia. The Russian ruble is nowhere near ready to be a global reserve currency, but it could be a regional reserve currency,” he said, as quoted by ETF Daily News. Continue reading