Back in 2008, at the onset of the derivatives and credit collapse, I wrote several economic editorials discussing what I saw as the single most vital trend in the global fiscal system, and how it would cause a disastrous upheaval that would leave the U.S. and the dollar financially sunk.

This trend, which seemed to take serious root in 2005, was the massive shift by China from an export dependent source of cheap manufacturing and labor, into a moderate exporter, consumer hub, and currency powerhouse. In my view at the time, the evidence suggested that China was positioning itself to decouple from its dependence on U.S. markets and the dollar. I was, of course, attacked as a “doom monger” and “conspiracy theorist”. Five years later, the critics have changed their tune…

For the past decade, China has been slowly but surely issuing Yuan-denominated bonds and securities around the globe, while simultaneously forming bilateral trade agreements with multiple nations and cutting out the U.S. dollar as the world reserve currency. This process has gone mostly ignored by the mainstream financial media. However, I and many other independent analysts could not overlook the red flags.

I tried to summarize as much of the situation and facts as I could in my article ‘How The U.S. Dollar Will Be Replaced’, which was published in May of last year:

http://www.alt-market.com/articles/784-how-the-us-dollar-will-be-re...

The biggest question for me was, if China is one of the largest holders of Forex reserves on the planet, and had the largest savings of any nation, WHY did they feel the need or desire in 2005 to begin issuing Yuan-denominated debt? Why begin borrowing capital from foreign creditors? They certainly didn’t need the money. Why were they moving away from export dependency and building a consumer base? And why attempt to proliferate their currency? Wouldn’t the pursuit of global Yuan circulation lead to an eventual increase in valuation? Didn’t the Chinese want their currency cheap so that they could maintain export superiority? What did the Chinese know in 2005 that we didn’t?


Well, apparently they were either psychic, or SOMEONE gave them advanced warning. They knew that there would be a crisis in American consumption and that this would lead to severe reduction in imports, which is why they began building trade deals within the ASEAN trading bloc to insulate themselves. They knew that there would be considerable devaluation in the dollar, which is why they converted much of their long-term treasury holdings to short-term treasury bonds that they could dump with far more ease, and they knew that the IMF would be promoting Special Drawing Rights as a new reserve replacing the dollar, which is why they have been spreading the Yuan everywhere, earning them favor with the global banksters and inclusion in the basket currency. In fact, China has been pumping Yuan into global markets even faster than the Federal Reserve has been printing the dollar:

http://www.zerohedge.com/news/2013-02-08/china-accounts-nearly-half...
China is flooding the system with Yuan! This means only one thing; China is no longer seeking to maintain the traditional trade relationship it has had with the United States.

To make my case even more clear, I would point out that China has not only become the world’s largest gold producer, but also its largest BUYER, recently surpassing India. Official estimates place Chinese gold purchases in 2012 at around 800 tons; an astonishing increase in their stockpile.

The U.S. and the Federal Reserve can’t even deliver gold it is supposed to be holding for others, including Germany.

China has also recently quadrupled imports of rice and tripled wheat and corn imports in only one year. Why? Again, I ask, what do they know that we are not being told?

http://ajw.asahi.com/article/economy/business/AJ201302020056

As I have stated for many years, China is being groomed as an alternative economic engine in opposition to the United States, and that this will lead to an eventual dump by them of the Greenback. This scenario is not only based on my opinion, it has also been spoken of openly by elitist financiers, including George Soros:

Continue reading at:  http://www.activistpost.com/2013/02/this-is-it-china-surpasses-us-a...