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China is repeating the mistakes of Japanese real estate bubble burst

Cao Jianhai
2009-08-28

Japan’s economy has maintained an annual growth rate to Surprisingly, several decades of growth, while maintaining the lowest in the industrial countries, inflation rates, in the 20th century, 80 years by many analysts and scholars predict will become the world-scale largest economy. However, since 1991, the Japanese economy suddenly collapse, house prices are production prices plunge, a number of Japan’s major banks declared bankrupt, the Nikkei dropped quickly to less than half in 1990. What factors have contributed to the collapse of Japan’s economy? It is left to us what lessons? Is worthy of our way of learning.

1, a large, inefficient public investment program

After appreciation of the yen, out of the deteriorating situation in international trade, product demand reduction and lower GDP growth concerns, the Japanese authorities concerted effort with all departments to take, including low interest rates, monetary easing policy, as well as some structural reforms and deregulation and other measures to to stimulate domestic demand.

From the spring of 1987, the Japanese central government out of tight fiscal policy, adopted a large-scale emergency spending policies, the adoption of a domestic public investment for the total value of up to 6 trillion yen in additional budget. Local governments have also been the central government proposal for them to expand the regional re-development plan. Meanwhile, the Construction Ministry canceled the city’s planning and building limitations, and encouraging domestic enterprises to participate in re-development plan. These moves mark a proactive fiscal policy, and in the economy generated a lot of investment.

Public expenditure items to the related industries, especially in the construction industry, raw materials and heavy industry sectors, first of all brought growth and prosperity. Government of the grand development plans will be pushed land prices to a very high level. National Land Agency began to “Tokyo regional reconstruction plans” will be re-developed into a downtown Tokyo, an international financial center, the land prices in central Tokyo has been very clearly improved.

Public investment in the demonstration, the public believe that land prices will continue to grow, domestic demand will also be further improved. Land in the public works and low interest rates, spurred by the rapid rise has attracted a lot of money from home and abroad. During the period 1985 to 1990, housing investment and consumer durable goods spending increased steadily, while business fixed investment is also on the rise. This was seen as the main driver of economic growth.

The study found that 80 years in the 20th century, Japan’s economy is mainly by investment rather than consumption-driven. This investment-driven economy between production and consumption distortions, making the capital stock makes the economy more dynamic inefficiency. Investment-driven over-investment caused by explosive growth, and ultimately rupture of credit and production cycle.

Second, extremely loose monetary policy and monetary policy

Loose monetary policy is a necessary condition for generating foam. In response to “Plaza Accord” after the yen’s appreciation to the adverse economic effects of the Fourth Year in 1986, the Bank of Japan to cut the benchmark interest rate from 5% to 3%, and 87 years in February again by 0.5%, to the time historical low of 2.5%. To the mid-87 Japanese enterprises through technological innovation and business rationalization efforts, a substantial increase in high-tech exports, the economy began to show signs of recovery. However, due to concerns about the U.S. stock market crash caused by depreciation of the dollar, as well as the sustained and stable domestic consumer prices, the Bank of Japan will be 2.5% of the ultra-low interest rates of 2 years and 3 months, until 89 years, until May 31 upwards to 3.25%.

Long-term sustained low interest rates make a substantial increase in money supply, the emergence of the so-called “liquidity glut.” As the appreciation of the yen and raw material import prices down, “excess liquidity” and did not show up on the price. Which to some extent the economic theory behind, leading to CPI statistically untrue. In accordance with the original statistical methods, Japan’s CPI at the end of the bubble economy began to rise slowly: in March 1989 over the previous year increased by 1.1% to April 1990 more than 2%, the same year in November reached 3% above, until August 1991 has remained at this level.

The Japanese government policy of expanding domestic demand, encouraged by the country set off a land development boom. A lot of money flowed into the stock and real estate industry, making asset prices skyrocketed. As the delay does not appear to inflation,

Bank of Japan will be the exchange rate and price stability as the primary goal, ignoring the rise in asset prices, resulting in asset inflation. In the “excess liquidity” passed to the CPI, the Japanese central bank’s tightening policy has become Japan’s asset bubble burst in the fuse. Can be seen that the bubble blown a prerequisite for the continuing large loose monetary policy, and commodity prices rise by, loose monetary policy can not be sustained, large-scale asset price bubble will not form. It now appears that a laissez-faire expansion of the bubble caused by the loss than the mistake of taking the austerity policy to economic development brought about a greater negative effect.

Third, the occurrence of the real estate bubble and bust

1985 to 1990, five years, the Japanese urban land price in the already high levels rose another 2 times, in which the central area of Tokyo land prices rose three-fold. The end of Japan’s land assets in 1990 amounted to ¥ 2389000000000000, compared with the end of 1985 increased 1.4-fold, the increase of ¥ 1385000000000000 equal to three times the GDP at that time. Chuo-ku, Tokyo, commercial buildings and land prices in 1982 for 3.5 million yen per square meter in 1990 up to 3200 yen, converted at current exchange rates the equivalent of 220 thousand U.S. dollars per square meter. In 1990, only Tokyo’s land prices is equivalent to the United States the country’s land prices, land the size of the United States, California, Japan, the total value of the land is almost four times the United States. Not only the land continued to soar, but also produced a crazy price linkage, resulting in land and stock bubble era of mutual promotion, circulation rose.

In March 1990, the Japanese Ministry of Finance issued “on the control of land-related financing requirements,” land finance in total control of this man-made emergency brake has led to a natural decline of an already into the whereabouts of the bubble economy to accelerate and lead to support the the core of the Japanese economy’s long-term credit system collapse. Since then, the Bank of Japan has adopted the policy of monetary tightening, and further led to the bursting of the bubble. December 29, 1989, the Nikkei index reached 38,915.87 points, the highest since started to decline, land prices have also started to decline around 1991, the bubble economy began to officially broken. Asset prices plunge, leading to a large number of book assets of companies in just one to two years come to naught.

During the bubble economy, in addition to real estate and construction companies, the Japanese almost all large companies are involved in varying degrees, real estate, real estate prices plunge and long-term economic downturn, resulting in a large number of deeply involved in real estate companies to close down. Real estate prices continue to fall, so that many real estate developers and construction companies in the real estate investment in a serious failure, inability to repay bank loans, had to declare bankruptcy. With land prices continuing to decline, the declining value of the security, leading Japanese financial institutions, the size and proportion of non-performing credit assets is growing, the capital adequacy ratio dropped substantially. The resulting financial structure of Japan’s financial institutions are very fragile, and anti-risk ability is low, some financial institutions and even appeared in a liquidity failure and other issues. Since then, Japan’s 10 largest banks in the Japanese long-term credit banks, Nippon Credit Bank and Hokkaido Takushoku Bank closed down, small and medium financial institutions, bankruptcy is one after another, Japan’s financial system has undergone an intense turbulence of the function of the Bank of Japan have been hit.

4, Japan, China has earnestly draw lessons should be present

From the macro-economic policy review, the lessons of Japan’s bubble economy tells us: first, to prevent due to exchange rate adjustments, in particular the appreciation of local currency led to asset bubbles, and making an economic bubble. Secondly, especially in the period of price stability, but also should beware of assets bubbles, otherwise bound to burst the bubble catastrophe. Third, we must deal with the current economic prosperity and long-term economic relationship between the sustained and healthy development and can not be taken to stimulate short-term economic growth and jeopardize long-term development of macroeconomic policies. Because both fiscal policy or monetary policy, economic growth can not solve the fundamental motivation.

The formation of the real estate bubble from the point of view, the real estate bubble in financial institutions should maintain the highest degree of vigilance. 1985-1990 Yearbook, Japanese financial institutions to inadequate understanding of the real estate bubble of the hazards, have to the real estate and construction companies and loans to form a continuous appreciation of the real estate and credit, expanding the size of a vicious circle, the greater the bubble blowing. The financial institutions in pursuit of high profits, real estate loans as the best loan program, the uncontrolled expansion of the credit scale, fueled the bubble formation. On the bubble about to burst in 1991, Japan’s 12 major banks to the real estate industry paid a total of 50 trillion yen loans to total loans 1 / 4.

Secondly, the Japanese bubble burst in to tell us that the world has never been up not only off the real estate market. In Japan’s rapid economic growth and general improvement in living standards of the late 80’s, the Japanese people and investors generally believe that less people and more contradictions will lead to Japan’s land prices continue to rise, not fall forever rise. Therefore, even if the land useless, all companies are trying to win, resulting in high land prices and house prices further and further. As speculation over investment, resulting in a false real estate boom. People from bank loans to purchase real estate, and then re-use real estate as collateral Zaiqu to buy real estate, causing a great deal of duplication of mortgages and loans, and increased real estate prices skyrocketed.

Finally, the Government of the real estate bubble bursts and housing prices can not remain indifferent, but should actively governance for economic development to create a favorable external environment. Japan’s real estate bubble finally burst, a very important reason is that the Government respected in the field of asset markets, “governing by doing nothing” thinking, to land and housing prices skyrocketing without intervention, as an important reason for the bubble economy. From the beginning of 1990, the Japanese government began to intervene in housing issues, has taken some to stabilize prices and curb land speculation measures. In the bitter lessons of the bubble economy, on the basis of a deeper understanding of Japan through government intervention, has made the 11-year land price stability, it is worth, including China, other countries should learn from the

Econophysicist Predicts Date of Chinese Stock Market Collapse–Part II

www.technologyreview.com

Friday, August 21, 2009

The Shanghai Composite Index was supposed to burst before July 27 but didn’t. A few days after that deadline, however, it dropped by 20 percent. Coincidence?

Last month, we looked at a prediction that the Shanghai Composite stock market index was about to crash. The forecast was made by a team lead by the econophysicist Didier Sornette at the Swiss Federal Institute of Technology in Zurich, who has made a study of economic bubbles and how they burst.

His thinking is that bubbles are the result of some kind of feedback mechanism that creates faster-than-exponential growth. This kind of growth rate is straightforward to measure, and so bubbles should be easy to identify.

In July, he and his buddies pointed out that the Shanghai Composite stock market index was following exactly this kind of trend. But they also made an extraordinary prediction. They said that this bubble would burst between July 17 and 27.

That’s a very specific prediction of the kind that economists almost never make. How they came to their conclusion wasn’t clear, and I, for one, was very skeptical. In fact, I bet he was wrong and promised him an arXivblog T-shirt and baseball cap if the market proved otherwise.

So I kept an eye on the index, and on July 27 noted that it was still going strong. In fact, between July 17 and 27, the index rose by 251 points, or about 8 percent. So much for the crash.

Then something strange happened. On August 4, the market hit a peak of 3,471, and then it dropped. Dramatically. By August 19. it had fallen to 2,786, a drop of about 20 percent.

Several questions come to mind. Is this the fall that Sornette and company were predicting or just a coincidence, a regression to the mean? And if the fall is related to their prediction, could the drop have been caused by it?

There’s no way of knowing, really. But it’s too close to Sornette’s original prediction to be ignored. If he has found a way to predict (or trigger) crashes of one kind or another, then it’s hard to underestimate the significance of such a breakthrough. We’ll certainly see other examples, and he and his team may be set to become very rich.

The truth is likely to be more complex. As for the bet, I think I’ll cede him a partial victory in the form of an arXivblog cap.

Econophysicist Predicts Date of Chinese Stock Market Collapse

www.technologyreview.com

Tuesday, July 14, 2009

The Shanghai Composite Index will burst between July 17 and 27, according to a new econophysics forecast.

The boom and bust nature of economics is one of the most puzzling aspects of the modern world. In the last year or so, many people have learned to their cost that when bubbles burst, businesses, jobs, and livelihoods can go with them.

So an obvious question arises: can we spot bubbles when they occur and predict when they are about to burst? One group of theorists say that they can and have used their techniques to make an extraordinary prediction.

First, they say that they’ve found the telltale signs of a bubble in the growth rate of the Shanghai Composite stock-market index. And second, they say that this bubble will burst between July 17 and 27.

That’s a brave move, so let’s look at it in more detail. The theorist behind this prediction is Didier Sornette at the Swiss Federal Institute of Technology, in Zurich, who has pioneered the study of market bubbles. Last year, he used his method for spotting bubbles to reveal that oil prices where dangerously inflated.

The telltale sign of a bubble, he says, is a faster than exponential growth rate caused by a positive feedback mechanism that generates this nonlinear growth.

The faster than exponential growth rate is relatively easy to spot. According to the analysis done by Sornette and a few mates, the Shanghai Composite Index certainly seems to have had a faster than exponential growth–a 69 percent rise since October of last year.

Whether an unsustainable positive feedback mechanism is causing this growth isn’t so clear. Sornette and co suggest that what is responsible is the Chinese government’s massive lending spree designed to maintain its economic growth rate at 8 percent a year. China has maintained that kind of growth for some years now.

Let’s take at face value the idea that a bubble has formed. What of the prediction that it is about to burst? Just how this team arrives at such a precise date isn’t clear, but whatever the mechanism, this is a much more speculative move.

One thing that physicists have learned about complex systems, such as stock markets, earthquakes, and forest fires, to name just a few, is that when changes occur they are scale invariant.

That means that if you were to remove the numbers from the axes of a graph plotting this behavior, there is no way that you could identify the scale of the events by looking at the plot. This implies that there is really no difference in principle between a small change in the stock market today and catastrophic change tomorrow.

That makes predictions of almost anything, let alone the imminent collapse of a bubble, extremely hard to make. Impossible may not be too strong a word for it.

Sornette and co do not say how they make their prediction, but they do hedge it by saying, “This will lead to a change in regime which may be a crash or a more gentle bubble deflation.”

But they’re still predicting an end to this faster than exponential growth in the Shanghai Composite Index between July 17 and 27. That change in growth will of course happen one day, but you’d have to have very good reasons to say that it will occur between those two dates. Those reasons are missing from this paper.

I say that this is a prediction that is impossible to make. And I’m prepared to bet Sornette that he’s wrong. The stakes? Let’s say an arXiv blog baseball cap and T-shirt.

Monetary authorities cleverly taken most of the residents’ 30 years of wealth

by Zhong Wei

Although the CPI in China 30 years on average 4.8 percent, however, there is no appearance of serious inflation, but the caliber of the speed of money supply growth, so that monetary authorities are still subtly, unknowingly took the majority of the residents of wealth, which species of the process is the so-called “monetization”

The early 1980s, China has been a popular vocabulary, called the “million households”, which was to become rich as a synonym for the “million households”, after 30 years of China’s financial baptism, their wealth may be growing and shrinking state?

We were selected 1981,1991,2001 and 2007 to study the four point, take a look at possible changes in monetary ways.

The first is: per capita income from the household perspective, the four time points are as follows: 500 yuan, 1700 yuan, 6800 yuan and 13,800 yuan. So “wealth million” to keep pace with growth in per capita money income, 30 years ago, a million, roughly 27-28 million, and now considerable. Of course there are other changes in caliber of the monetary income, for example, look at the average wage for urban workers, the four time points were 780 yuan, 2,300 yuan, 10,800 yuan and 21,200 yuan, so that the results of almost counts. The money wage workers in the past 30 years, every 10 years to grow by about 3-4 times, which in essence means that the savings up to 10,000 yuan inevitable derogatory followed. In other words, in 1981 1 million, was roughly equivalent to the wages of workers 13 years or 20 years per capita household income, according to the current level of wages or income projections should be roughly 10,000 yuan was equivalent to the current 270,000 — standard of 280,000 yuan.

The second, from the residents to see the per capita savings, the four point total household savings are as follows: 52.3 billion, 920 billion, 7.4 trillion and 17.3 trillion, after the changes take into account the population’s per capita savings of 52 yuan, 800 yuan, 5900 yuan and 13,000 yuan. This calculation, in 1981 the “million of wealth” was the equivalent of 200 times the per capita savings, equivalent to nearly 2.55 million yuan now.

Two from the above calculation is very rough, the “million of wealth” can not suffer a substantial shrinkage of time, it is assumed that China, like the United States with a similar inflation-indexed bonds (TIPS), then using 1981 as a fixed base, four of the CPI index point 100,199,390,440, respectively, that is to say, even if the Chinese people as early as 30 years ago will be able to purchase and CPI indexed government bonds, when 1 million to 4.4 now will only million. The assumption that the “million households” to take a rolling five-year regular savings deposits, even taking into account the preserve and increase the subsidies, when the 10,000 yuan into the bank today, it is difficult, at best, more than 100,000 yuan.

Examples may be rough, but the conclusion is obvious: the past 30 years, the money itself with the passage of time is indeed very “cheap” again!

Although the CPI in China 30 years on average 4.8 percent, however, there is no appearance of serious inflation, but the caliber of the speed of money supply growth, so that monetary authorities are still subtly, unknowingly took the majority of the residents of wealth, which species of the process is the so-called “monetization.”

The degree of a country’s currency and the related study on the effects of prosperity in the international arena in the 1960s to the early 1980s, after a significant cooling. A pioneer in studies of domestic Yi Gang was completed in 2001-2003, Yi Gang was determined by China’s economic reform, the process of monetary and exchange rate variations, currency and the relationship between price changes. For purposes of convenience, we may as well make things even more straightforward and certain.

The past 30 years, the process of China’s currency is the currency of a dimension of the use of the continually expanding. In the early 1980s, may only be useful goods money and other necessities of life, and rationing will have to have a ticket in order to send a on-purpose. At that time, education, housing, medical care is basically the public. With the economic and social reforms deepening, the above-mentioned areas are the currency of the whole, and your school, your doctor, more expensive houses. Not only that, but even many of the currency should not be fully monetized the field, and everything from bribery, buying and selling official posts, the money is the fundamental driving force behind. The expansion of the scope of the currency itself requires the monetary authorities to issue more currency, the original “high-welfare, low-wage” labor remuneration structure, and also gradually to a monetary income mainly as a supplement to Social Security’s structure has been tilted.

The process of China’s currency is the currency of another dimension of the phenomenal expansion of the scale. Running an annual net cash of view, in 1981 50 billion in 2007 compared with 330 billion yuan, an increase of 66 times the cash in circulation grew from 320 billion to 2.7 trillion, which also does not take credit card for cash great penetration and substitution effects. To the balance of broad money M2, the 1.9 trillion for 1981, 2007, compared with 40.3 trillion, an increase of 21 times in the past 20 years, even the lowest in the M2 growth rate in 2000, it reached a year-on-year increase of 12 %. Credit and broad money continue to run faster than the income growth faster than GDP growth, the past 10 years, China has always been M2/GDP ratio the highest in the world.

After sub-loan crisis, as the first half of 2009, M2 reached a balance of 57 trillion, up 28.5 percent growth rate, the credit balance of 37.7 trillion, up 34 percent growth in circulation up to 3370 billion cash balance, up by rate 11.5%. China’s economy seemed to be loose monetary supply and equally difficult to curb the over expansion of industrial scale, the economy was over-lubrication is similar to the wheels, fast forward. Unfortunately, the distribution of the labor factor in the proportion of GDP, the growth of monetary income workers, as well as distortions in the distribution of income has been difficult to conceal. In any case, growth and income growth can not keep up with the pace of the note-issuing.

China’s currency speed the process of bringing a lot of lucky things, First, the monetization of financial resources to enable the Government to concentrate in practice is not conducive to holding long-term government bonds or bank savings, which to some extent alleviate the deterioration of income distribution problem. The second is to enable the monetization of the total assets of the banking system continues to expand, is not conducive to rapid expansion of banks maintain a healthy capital adequacy ratio, but diluted to a large extent even in the banking system to cover up the problem of non-performing assets, Zhou Xiaochuan, has pointed out that the Before 2003, the banking system to resolve non-performing assets, to a large extent due to the expansion of asset size, and then the improvement is the management structure. From the past 30 years, China speed the process of currency is the government to continue to guide the economic reform of the very important factors lucky.

Economic and financial operation of the fun lies in the fact that this is often between the government and the private sector you have a policy, I have the game process of countermeasures. On the million households in the 1980s, if he indulge in consumption, in very rare at that time to buy color TV, refrigerator and tape recorder, then to the residual value of these assets today, close to zero; if he is looking to preserve the value of the buy and hold gold at that time since the 1980s, I remember about 60-70 grams of gold per million, is currently about 270 yuan, less than 5 times the value; if he had to buy rice and rice can be assumed that the long-term non-degenerate, then 30 years, the price per kilogram of rice has increased by about 0.5 yuan to about 3.5 yuan. Even if the choice of savings or bonds, the erosion of the currency under 30 years will still be eroded the value of 2 / 3.

Rapid monetization in the process of holding cash or low-risk low-income savings, bonds and other financial assets, and to give up most of the wealth difference is not significant. Currency can be used to purchase large-scale industrialization of consumer goods, is almost equivalent to extravagant spending.

China speed the process while the currency has been going on for 30 years, but it is hard to imagine another 30 years, the financial system of over-bank and investment in economic growth is too prominent position in technological innovation can be slow poor structural adjustment, income distribution can hardly be genuine concern for reform. Of greater concern is that local governments, businesses and even residents have been in more than three decades of personal experience, have taken note of the use of “long-term financial liabilities” and even to use to counter the rapid monetization of its basic concept is nothing more than fortune today is not money, the debt is not debt tomorrow.

In my view, China’s monetary policy must be returned to a large extent to the classical quantity theory of monetary return, so that economic growth, income growth and money supply remained relatively stable and reasonable relationship between the monetary policy tools should not rigidly adhere to the so-called indirect control, but should the price of tools and simultaneously the number of tools, internal balance and external balance, and attention to asset prices and inflation expectations may be the risk of abnormal changes.

China and the United States, whose economy would collapse?

by Huang Weidong
2009-08-11

In today’s world, a dominance of the United States, we are inevitably dealing with Americans. “Rivals and emerge victorious in every battle” to understand themselves and their opponents strength, is very important. “The world is flat in nature, if not since the collapse, the elimination of no one who can not.” (Appendix 1) Mr. Zhang Wenmu the point of view is justified. Sixty years ago, we just set up the Republic, but also nothing we can in North Korea resisted US-led United Nations forces, the sixties of last century, our economy is still weak, insignificant compared with the West, we will So the two tyrants, the ability to resist the United States. Today, we are every day in the mainstream media propaganda and the development of the so-called achievements of reproduction age, our steel industry is already far beyond the United States, our economic strength is far more than the founding of the early best. With nuclear weapons, the West will never be fully grasped in the absence of eradication of China’s nuclear arsenal before the choice of a military confrontation. As long as China remain vigilant, worried that the U.S. invasion force is no longer exists. However, the U.S. is no longer any time to carry out economic and cultural moment of aggression, in a vain attempt to split China. How to deal with the United States campaign, we need to fully understand the strength of their own and the United States. U.S. military strength is not terrible, the Mao Zedong era has already proved this point. Mr. Zhang Wenmu for this period of history on a very good (Appendix 2), this paper analyzes the economic front.

One of the reasons the United States is a strong U.S. economy is strong. 30 years ago, we go out of the country’s elite, deeply impressed the economic success of the United States. So we have chosen to reform and opening up, learning experiences in economic development of Western countries. 30 years ago, after the media publicity, it seems that the effectiveness of our forward-zhuo. However, the fact is that, compared with the previous 30 years to an important rate of physical development, our economic development rate decreased significantly, food, energy, iron and steel dropped by nearly half, etc. (Appendix 5). Of course, in the ever-expanding, declining purchasing power of the RMB to calculate its growth rate is beyond history. Moreover, we produced a large amount of wealth for export, by 2008, exports have accounted for the wealth of the wealth produced by 40 percent, they turned into a U.S. dollar can not be used. Elite to invest in the United States, by the Americans in a financial crisis, investment businesses going into bankruptcy or nationalization, on the part of do not admit, in part, through the continuous depreciation of U.S. dollars, so that the U.S. dollar in our hands the wealth represented by the gradual disappearance of . Over the past decade, ordinary people to pressure on the three big mountains, no improvement in basic living standards. During this period, the greatest achievement is probably soon elite gather the wealth of the wealthy, 0.4% of the elite 70 percent share of wealth, the elite-controlled media, for singing the praises of this great reform. The previous 30 years, we have the wealth produced, the more equitable distribution to all people, our people will be the average life expectancy from 35 years of age increased to 68 years. Growth from the average life expectancy of view, these 30 years, we have almost fixed in situ, which is far behind countries such as Cuba. U.S. financial crisis, we face the economic development of unprecedented difficulties, it is very much doubt that our reform and opening up, the harvest of wealth, or fleas?

Reflect the economic strength of the United States, where? Today, on behalf of the U.S. economic strength of the manufacturing sector accounted for only U.S. GDP13%, half of them or arms manufacturers (Appendix 11). Judging from the kind of wealth production, the United States has significantly lagged behind China. The American people daily consumer goods mainly from China, had the Americans not to try Chinese goods a year, they found very difficult (Appendix 8). Large value of the U.S. (GDP), mostly virtual. China’s exports to the United States one dollar of goods, to the hands of the American people, it becomes dozens of U.S. dollars, the difference will become the United States GDP. Therefore, after the U.S. financial crisis, many people believe that the U.S. will not be long before the collapse of the economy.

However, the United States firmly control the production of key commodities. In food production, the United States less than three hundred million people, the production of food each year than the 1.3 billion Chinese only less 16% (in 2007 490 million tons to 4.1 tons), is the world’s largest grain exporter. The United States each year to subsidize the United States 10,000 U.S. dollars per capita of farmers, through subsidies destroy the Third World countries, many farmers bankrupt Third World countries, have to rely on the U.S. food supply. Last year, the United States a little speculation, the world food supply, forced many Third World countries have to bow my head to follow the command of the United States (Appendix 10). U.S. to launch food war, U.S. hegemony has become one of the key elements (Appendix 7). China’s edible oil market by the U.S. occupation, used in the production of the main raw material for edible oil, soybeans, mainly from the United States, domestic consumption accounted for more than 70%. Because after the soybean oil cake is the main source of feed, China’s meat production is also controlled by the United States. Under the control of the U.S. capital in recent years, the two products in the domestic prices continue to beat, waiting for the United States defeated the capitalists of our remaining domestic enterprises, so that we can grab excess profits.

In the energy supply side, the United States by force tightly control the world’s major oil-producing countries, through capital controls a lot of oil production, grab most of the oil production profits. In the collapse of the Soviet Union before the Soviet Union as a result of oil exports is the key to the economic development of the Soviet Union, in order to combat the Soviet Union, the United States down oil prices dealt a heavy blow to the Soviet economy; after the collapse of the Soviet Union, the United States continue to raise oil prices, access to excess profits, at the same time by large expenditures in the oil field in China. A large number of oil resources in the United States, but a major importer of oil, oil-producing countries through the use of force to force the U.S. dollar clearing, which can be free of oil.

The United States also produced dollars, investing around the world, control of national economies. At the same time, financial markets, so that the hands of the U.S. States run in a virtual space, without the use of. Inflation as a result of the U.S. policy, the number of countries in the hands of U.S. dollar although the increase in wealth represented has been declining.

Last year, the United States triggered the so-called financial crisis,did not admit a large number of countries in the hands of U.S. debt. First from the hands of large U.S. dollar by the purchase of material wealth countries, financial crisis erupted, the United States for some enterprises have closed down and the hands of the creditor countries have become waste paper, so the United States succeeded in looting the wealth of all countries. As the United States has the world’s most powerful force, States can not be helped. Therefore, the so-called financial crisis, the crisis in the United States, but the loss of wealth of the world crisis is the outcome of China’s opening up the disappearance of the so-called crisis. That save dollars, save China’s fallacy is not ignorance, that is, with ulterior motives. As early as last year I have been on the analysis (Appendix 12).

U.S. financial crisis, the U.S. unemployment rate increased, the people to reduce spending, purchasing power declined, and the world, particularly China’s supply capacity is still very obvious oversupply, declining demand for a variety of materials, excess capacity, bulk materials, such as oil, ores, such as speculation difficult to maintain high prices, and the actual short-term deflation, all kinds of commodity prices down. The closure of a large number of domestic export enterprises, a large number of workers lost their jobs, purchasing power has dropped all the way, how will lead to a substantial devaluation of the dollar collapse?

The only possibility of the collapse of U.S. dollars in China to stop exports, while China’s use of short-term dollar markets in the United States a large number of procurement, the people free of charge to domestic use, while the United States to refrain from interference. This is impossible, the elite will never do so, this would lead to U.S. military intervention. Britons have been comments in the article, China’s massive sell-off if the United States Treasury, the United States may declare that China is a hostile act, the right to take hostile measures, including confiscation of Chinese holdings of U.S. Treasury bonds (Appendix 6). Therefore, this led to the collapse of the dollar is unlikely to happen.

Even if the future, a large number of the closure of the factory production line corrosion can not be used, at the same time countries such as China or the United States to substantially increase the income of a large number of people to make the world a significant increase in the purchasing power of the short term, which may lead to a short period of tight supply, but, as a result of this productivity highly developed, but also the ability to quickly increase the supply, the occurrence of hyper-inflation, especially the United States firmly leading food and energy supply, the possibility of the collapse of the dollar is almost non-existent.

Only food supply problems, and the hands of ordinary people around the world have enough dollars or enough purchasing power, will lead to the collapse of grain prices, leading to the collapse of U.S. dollars. Although the U.S. is now a lot of the world, but concentrated in the hands of a small number of people, concentrated in the United States a virtual financial market, the world’s population more than 80% of the ordinary people of modest income, the lower the purchasing power. Is unlikely to result in crisis and the collapse of U.S. dollars.

A lot of people think that bilk the United States financial crisis, people get a clear understanding of the world after the United States in real terms, the U.S. dollar will result in credit problems, will lead to dollar crisis. However, the United States control of the elite and the media in many countries, these elites will be the fate of their own closely linked with the United States, they follow the United States, it is also supported by the United States, also seized a large number of personal wealth, even if they will realize that whether or not willing to go back, but also a question mark. Moreover, they prefer to believe that the United States, they were reluctant to rely on the people. China’s elite are also efforts to increase export subsidies to increase the dollars, 2 quarters of this year and an increase of 178 billion U.S. dollars (Appendix 9).

However, the continuous depreciation of the U.S. dollar will, it is the United States has done, 100 years ago, 10 billion U.S. dollars, if we are to preserve to the present, the purchasing power of even 100 years ago, the purchasing power of less than 1 percent. 10 billion U.S. dollars will be saved for 100 years, of which 9.9 billion U.S. dollars of the wealth represented by the United States took in our hands the one hundred million U.S. dollars only. 40 years ago, is the ounce price of gold (equivalent to 31 grams) 30-35 dollars, it is 1000 U.S. dollars. 40 years ago, we use 10 billion U.S. dollars for about 300 million ounces of gold, but for now only 010 million ounces of gold. Therefore, if we are holding U.S. dollars, will be plundered by the United States. The United States the use of U.S. plundering the wealth around the world. We have an independent economic development. U.S. dollars to change the current use of plundering the world, but also the needs of the Chinese people stand up, the establishment of China-led world economy.

For our economic strength, although this 30 years, compared to the first 30 years, with a growth rate lower, but after 30 years of growth, or more than 30 years ago with a greater economy of scale. Our production capacity has been ranked the highest in the world, and some key commodities, such as iron and steel production, lead in the international arena. Steel is a key resource for the war, but also the key to large-scale production of industrial goods and materials. Is the first 30 years of restricted economic development, one of the key products. Of a country it is important that material wealth is food, energy and steel. Food is the basis of our survival, our energy and iron and steel in a large food production but also to services. It is reported that 40% of U.S. energy expenditures for the agricultural services. Modern industrial production, the use of machinery to replace human production, production and high efficiency. Most machines are manufactured using steel, not steel, there will be no modernization. Drive the machine work in the energy, we use energy, such as oil, coal and electric power production to drive the machine work, no energy, machinery has become a pile of scrap metal. However, the past 30 years, our rate of decline in food self-sufficiency of our energy imports has become the world’s second, and the United States is different from most of our oil comes from the United States under the control of oil fields, its large number of means of transport is also controlled by the United States, energy and very prominent economic security.

The domestic economy itself by the US-led Western countries to control. Most of our industry by foreign control, we have the gradual disintegration of the technical system, and now we are producing goods for Western factories. Technology from the West, the key equipment from the West, the key components of many products also comes from the West. There are a lot of corporate assets belongs to the western capitalists. 40% of product markets is also Western countries, the majority of the fruits of their labor by Western capitalists away from hard labor in exchange for that dollar, but also can not be used because people have low incomes, there are no purchasing power, even if the imported goods, but also no one to buy and into the backlog of waste. For U.S. exports, the people in addition to providing free labor, nothing. Our so-called economic development, is to keep the meager resources of the domestic export processing, while the pollution of their environment, have no longer be able to continue.

Wealth is created by workers. The quality of workers is one of the key factors. Compared with the beginning of the founding of the PRC, the quality of our people has been greatly improved. Nation-building, our people are sick man of East Asia, deprivation, the average life expectancy is only 35 years old, 80 percent are illiterate, to master modern science and technology, very little knowledge. On this basis, the development of modern industry, it is very difficult. We were unable to develop the leadership of a group of illiterate mechanization and automation of modern industrial production. With modern knowledge workers is one of the keys to economic development. Moreover, at that time, we are also affected by the threat of foreign aggression and strength, our limited technical staff, but also for the defense industry. Therefore, at that time, we have universal education, while the use of limited technical talent, focus on the development of heavy industries, large industrial machinery for the production of preparatory work, including steel, energy and machine tools – machine tools (machine tool is used in the production of mechanized production equipment tool) production. In the civil context, we mainly address the industrialization of agriculture-related issues, to resolve the chemical fertilizer industry, agricultural machinery, chemical fiber industry, focus on resolving the issue of people dressed for dinner. In these areas, we have made rapid development. However, in the production of civilian consumer goods, has just started, for example, has just begun the production of television sets. The first 30 years of media propaganda and the expense of farmers, but is also out-and-out lie. As a result of 30 years ago, we have universal access to basic education and basic elimination of illiteracy, today, higher education is also significant growth in our higher education has greatly increase the number of personnel. We have no reason to worry about our ability to independently develop the technology.

Elites to engage in reform and opening up access to the grounds that the Western advanced technology, the so-called market for technology. The actual effects of our enterprises have closed down and the gradual disappearance of the original technology. Western countries is not possible to capture excess profits will be able to sell our technology, we must develop its own technology. We are not without technical capabilities, we are able to carry out manned space flight, but can not run an independent production of the cars on the ground. We rocket into space, launching the same number of cases, low prices, high reliability and shows that we can produce high-tech products. 30 years, we have forgotten the independence and self-reliance. This is the main reason. And fundamentally different from the first 30 years, our technical staff has been an unprecedented growth in the number. 30 years ago, to establish a modern industry, all walks of life are the lack of technical personnel, college students are precious. Now, many of our students graduate unemployment. Technology developers do.

Today, the main reason for embarrassment caused to abandon the principle of independence, at the same time believe that the Western theory of the so-called free market so that our forces dispersed, so that all break the Western capitalists. In the international market, we export products, its internal fight against each other, low prices. While imports of raw materials, by Western capitalists together, resulting in what we import goods, the significant increases in commodity prices on export commodities, commodities on the decline.

Many people worry that the development of our economy to the United States and the Western level of consumption, the world’s resources are not used in China. Such worries exist, but we can solve. Specifically, that is, non-renewable energy resources is the cycle, they will not have the face of the earth will not disappear for no reason at all. Our consumption of resources will not always be on the increase. Japan, the United States in the land the building is completed, the production of steel and other raw materials resources are significant decline in demand, the production of raw materials, mostly from the domestic recovery, such as the United States iron and steel output dropped to 100 million tons, far less than China’s annual output of 500 million tons, and the use of more than 75% recovery of waste iron and steel production. We need to address the issue of alternative fuels, we can the development of solar energy to solve the power supply (Appendix 4). Solar energy from the sun, taken from inexhaustible. The production of solar energy equipment will be consumed, but the use of solar energy equipment, access to energy, only 1-2 years added on to the production process of solar energy equipment energy consumption. We estimate that only 50 thousand square kilometers desert, we can solve our energy supply. Desert area of our country more than 1 million square kilometers, to meet China’s growing energy needs. In addition, we should learn from Japan, the development of rail transportation to reduce motor fuel demand, thereby reducing dependence on oil.

In general, the economic collapse of the United States will not, but it’s high welfare, high-enjoyment is dependent on the free supply of China is the parasitic body in China (Appendix 11). China to continue the current economic line, to keep our material resources into commodities, given away free of charge the United States, continue to pollute their environment, it is not sustainable to continue, from the economic collapse we will not be far behind. The United States triggered the financial crisis, it is also aimed at China’s economic crisis triggered to speed up China’s economic collapse. China, as a long history, there is the world’s rich countries of human resources, natural means to prevent the United States as the hegemonic power of one of the key is the enemy of the United States, one of the main strategies. Illusion depends on the United States to develop the economy, is absolutely stupid. However, the development of our sixties, especially the first 30 years of efforts, we have a good foundation, as long as the change in the development of the wrong line, China’s economic development over the United States, and will not be too far away, is likely to the hands of our generation will achieve. We need to change the following:

1, restricted foreign investment, foreign investment away until gradually. The existence of foreign investment, the main role is to take away the wealth created by workers at the same time control of the Chinese economy. China’s economic development, not a lack of foreign investment is needed for the lack of material resources and technology. Foreign investment will not provide technology to allow access to the disappearance of the monopoly profits. Foreign investment will not provide the resources. Technology needs to develop independence and autonomy of our resources we need to directly deal with the third world countries directly. Today, we have two trillion U.S. dollars, but also concessions to attract foreign investment, which is a wealth given away free of charge folly. There is no government support, foreign investment in China can easily be expelled. 30 years, Western countries continue to surround China, we get a clear understanding of the people has long been the scourge of the United States and other Western countries the nature of China.

2, adhered to an independent development path of self-reliance. The history of mankind, there is no state-to-state relations selfless. China, the world’s most populous country, the country’s oldest, has become the dominate force in the world of the natural basis, which inevitably become the greatest enemy of the United States hegemony. The United States from the beginning of hostilities, to recognize the effect of force is not confrontation, in the Mao era, a joint initiative with China against the Soviet Union was pressing offensive. At a time when the collapse of the Soviet Union is about to begin a new round of lay siege to China, only after repeated setbacks before they change their tactics, for the psychological, cultural and economic aggression, mainly, at the same time the military has been testing. Rely on the United States to develop China’s economy is the history of our country and the world’s biggest joke. We need to self-development, the need to address the issue of technical self-reliance.

3, provide significant benefits and income of ordinary workers to resolve the overproduction problem. A large number of our wealth into the hands of a small number of people, their spending power is limited, and ordinary people have a consumer demand, but have no income, so that new production capacity there is no market. Modern society, capacity building is highly efficient, we only need very few people will be able to produce enough supply of their main commodity. Bottlenecks in the development of our economy is the spending power, as long as we ensure that food production, modern society is unlikely to result in economic collapse. We should learn from Japan and Scandinavia, the income gap control to prevent the gap between rich and poor is too large. Tax policies should be adopted to reduce the affluent class of property, including property tax and inheritance tax, such as cumulative. This is the key to modern socio-economic development.

4, we take the initiative to establish an independent economy, from the West, especially the United States of plunder. This requires our military to go abroad for us to protect the international economic activity, we should first of all to defend the South-East Asia and the Middle East routes, to increase our oil security. Secondly, should be established based on the RMB in the international monetary system and trade system, and resources to achieve our national direct trade, to bypass the U.S. hegemony. Can not export to the United States and we need resources, Third World countries to export oil is mainly used for production of our commodities, we have the two sides complement each other Third World countries through the U.S. to carry out transactions, only the Americans profit. To bypass the United States, is to avoid the only option for economic losses.

“The U.S. dollar trap”: China is going downward spiral

Jiang Yong

Since China’s central bank to dish out the “super-sovereign currency” after the article, a Nobel laureate in economics, Princeton University professor Paul Krugman (Paul Krugman) has announced a series on this subject and comment on the article, the core content is China single-handedly push their own “dollar trap”, and now do not know how to get rid of the only manufacturers in other countries decided just to throw a question. Krugman in New York in mid-April in an exclusive interview with the media pointed out that China’s investment in the United States the biggest risk for the depreciation of the dollar, China is expected to suffer the ultimate fear of loss of investment by 20% ~ 30%. According to the U.S. Foreign Relations Committee, Setser (Brad Setser), China has accumulated at least 1.5 trillion U.S. dollars of U.S. dollar assets, the RMB exchange rate against the U.S. 30% of the change (this is very possible) means that the about 450 billion U.S. dollars the loss of almost one-tenth of China’s economy. Even more painful is that China’s determination to control the appreciation of the renminbi to force them to buy billions of dollars a month assets. China is like a person from indulging in gambling, betting and no hope of ever-increasing, making it the ultimate losses increasing. People questioned that day in China’s economic elite, “holy”, why is falling into the hands helplessly, “U.S. trap”?
Rely on export-oriented
Without long and short term, there is fear. Looking at the history of the world, it is because a lot of tragedy in ownership for the success of day intoxicated, opinionated and should not listen to different voices, and ultimately bound for the avalanche engulfed by worries.
Looking back at three decades of reform and opening up, behind the huge success, it is not difficult to find, not only in scientific and technological innovation, we have little improvement in the thinking of the concept of innovation is inadequate. Reform and opening up, we play “the advantage”, has been following the East Asian export-oriented mode (by the Japanese and the “Four Little Dragons” proved more successful as a model), a road go black. There are two major export-oriented policy tools: one is through the tariff policy, protection of domestic markets to curb imports; the other is down the national currency exchange rate, in order to promote exports, curb imports.
Due to the rush into the WTO, China’s continued reduction in tariffs at the same time, only more and more dependent on the devaluation of the Renminbi, especially the foreign exchange system reform in 1994, the significant depreciation of the renminbi, China’s export-oriented policies in the performance of the more obvious, cheap labor catch a cheap resources and cheap environment, makes “Made in China” marketing world, bearing the portrait of President of the United States rolling paper, China’s foreign exchange by the scarcity to surplus soon, by the rationing had suddenly become a rare a hot potato.
It is noteworthy that, in Japan and other East Asian countries and regions, through the export-oriented, supporting domestic infant industries to continuously upgrade the quality of local manufacturers, in order to upgrade the industrial structure, in order to improve the status of the international division of labor in the provision of bedding. However, China’s export-oriented exchange is the main task, especially in the East Asian financial crisis, China’s foreign exchange extremely high enthusiasm by raising the export tax rebate increase in exchange, to encourage overseas investment primer Meeting, to be added, so the formation of sustained huge “double surplus “of the international spectacle.
As a result of the introduction of a large number of foreign direct investment, China’s national enterprises to grow and continue to squeeze the space was due to low profits, business is not too much money for R & D and innovation, and therefore more and more firmly nail in the labor-intensive and low technology-intensive, most low-end on top of the international division of labor, processing and manufacturing the prevalence of substance will become China’s actual resource conversion tool for the United States bonds. Once the international market and signs of trouble, first of all, experience the impact of these non-self-brand, non-core technology, without the ability to create high value-added of the Chinese-funded enterprises. China’s export-oriented development has come to an end.
U.S. pressure and induced
US-led international financial order, the international financial turmoil will inevitably become more persistent and normalized. financial monopoly”not only controls the press, but also controls the government”, so the financial monopoly interests and national interests are often the same. The international financial market turbulence, in line with the interests of financial monopoly, the U.S. national interest, because the financial turmoil in the U.S. monopoly capital to provide a transfer of wealth nations, sub-drinking countries an opportunity to profit; financial turbulence in emerging markets and developing countries to force ever-increasing foreign exchange reserves to prevent the attacks on international speculative capital, which will increase U.S. distribution, increase in the United States Mint tax (less than a dollar issue cost one cent); for the increase in dollar reserves, it is necessary to increase the export of U.S. products, not only the United States sustainable use of the international low-cost resources, and the use of the advantages of the status of the domestic market, the country succumbed to pressure from U.S. interests.
The United States continue to pass legislation, additional sector institutions and mechanisms to the name of national security, restrictions on foreign exchange reserves of surplus countries to purchase U.S. assets or advanced high-quality technical equipment. Therefore, emerging markets and developing countries in the ever-increasing foreign exchange reserves at the same time, close to the purchase of U.S. dollar denominated assets can only be so on the one hand, the United States continues to finance deficit spending, on the other hand, for the United States financial institutions, transnational monopoly capital to expand the implementation of the international financial provision of adequate funding.
Under normal market economy conditions, personal and corporate debt to be liquidated after all. However, the higher the accumulation of U.S. debt was not liquidated intended only to keep the issue of new debt is also old. When the accumulated foreign debt load of more than ability of the United States, the depreciation of the dollar on the implementation. Since the disintegration of the Bretton Woods system since the dollar has clearly entered a cyclical depreciation, the depreciation rate on the previous term, usually 30-40%. 70 from the early 20th century after the collapse of the Bretton Woods system, the dollar depreciation will be cyclical, each time the average rate of depreciation of about 30% -40%. Measure of the depreciation of the dollar is not just the euro, Japanese yen and other credit currency, more important is the “real money” – gold (gold and silver currency is not natural, but natural is the gold and silver currency). From the original 35 U.S. dollars / ounce 900-1000 now USD / oz, the real value of China’s foreign exchange reserves has been shrunk. Citigroup has predicted that gold will rise to 2000 U.S. dollars / ounce level. United States authorities to manipulate the depreciation of the dollar, in essence, by reducing the real purchasing power of dollars to implement bilk, the transfer of financial risks and shift the financial crisis. Therefore, as an international reserve currency since that date, accompanied by the risk of moral hazard on the dollar.
China’s trade surplus and capital surplus in the ever-increasing cases, rapidly becoming the world’s foreign exchange reserves. Sustainable use of China’s foreign exchange reserves, and took the opportunity to transfer risk to the Chinese, the crisis shifted the strategic choice of the United States. Sino-US economic strategic dialogue is the strategic choice of the United States provides the best mechanism. Underestimation of the RMB exchange rate and trade surplus, to the United States put pressure on China to handle the best. Through the strategic dialogue, the United States continue to put pressure on China to buy U.S. dollar assets, China this one step at a time into the “trap of dollars.”
If China’s foreign exchange reserves continue to purchase, hold U.S. bonds, the value of dollar will be a gradual depreciation of the “dry”; positive reduction, will immediately hand the assets of a large number of evaporation. Professor Krugman of Princeton University that China’s focus on the purchase of U.S. debt to the neglect of other assets, such as the euro is to blame – very cool discourse; analogy Western officials, the Chinese if the U.S. bond sell-off as “their own feet at open gun “- to do satire.
Over the interests of the sector
Statistics show that since 2004 China has been the holder of U.S. treasury bonds on high-speed growth, from 2004 to 2007 grew threefold, to reach 922 billion U.S. dollars high. Last year, in 2006 only to 2007, China’s growth in the United States bonds held by 66%. In the U.S. sub-loan crisis, the Chinese, as always, keep buying American bonds generous. U.S. sub-loan crisis, in the same boat, China is still overweight passion to keep.
In the “comparative advantage”, the China real commodity, of condensation of cheap labor, cheap resources, low-cost environment, in exchange for piles of green “paper” (U.S. dollars in cash, also known as “green backs”) and electronic symbols (now issued by the overwhelming majority of U.S. electronic symbols), and then use the “concept of dollars” to buy U.S. treasury bonds to support the functioning of the United States Government, to support the U.S. consumer borrowing in support of the United States financial institutions in China to use the money to make more money. U.S. debt snowball, debt, can only be used to issue more U.S. dollars to repay dollar devaluation inevitable. From the collapse of the Bretton Woods system, the dollar devaluation cyclical, China’s foreign exchange reserves continue to shrink in a matter of fact. In the world, including U.S. allies Japan and the United Kingdom irons are cast aside or reduce the case of U.S. dollar bonds, the Chinese are still working tirelessly to increase the hold, now became the largest holder of U.S. treasury bonds. The outbreak of the century the United States financial crisis, the devaluation of U.S. dollar, China’s holdings of U.S. bonds, U.S. dollar assets in the end the number of losses, related departments have been vague, to become a mystery.
In 2003 for the completion of a major national issue, I had the honor of “close” contact with our leaders of the foreign exchange management departments. I took the opportunity to ask a very simple but since that has plagued the topic, that is, “Why China’s foreign exchange reserves to buy used instead of U.S. bonds to buy gold?” Leadership that answers very simply: “Because money does not buy gold.” I was full of doubt, would like to know why not make money? But the leadership was arrogant and that did not answer why not make money to buy gold, but about the “oil dollar” is the concept of the textbook. I in 2005, “the interests of the state sector the impact of major policy decisions” research topics, with a leading financial regulatory authorities to exchange this topic, which led to answer is not to make money to buy gold, even if gold does not appreciate the good we reflect the financial books, as the value of gold in the changing, even if reflected in the book, but when at the close, as well the sale of gold reserves, it is not the earnings. Buy U.S. bonds, because of debt, earnings are due, in spite of the views of scholars in accordance with your actual losses may be, but we have the proceeds of the book, and we buy the more the greater the absolute return, sector performance is also greater. I asked to buy gold, gold revaluation, and the country has not earned it? Xiao said that the leadership of the country can be said to make, but we did not profit.
According to Xinhua News Agency, April 24, 2009 the Secretary of the State Administration of Foreign Exchange of the interview, since 2003, China’s gold reserves increased by 454 tons, at present has reached 1054 tons. This 1054 tons of gold to the current market price converted into U.S. dollars, less than 2% of China’s foreign exchange reserves, much lower than the European Union set the safety level of 15%. It should be noted that China’s gold reserves increased slightly (as opposed to the rapid increase in the huge foreign exchange reserves), is purified by domestic as well as miscellaneous payment transactions, such as the domestic market to achieve, is not (at least not primarily) to use foreign exchange to buy, but not in the international market to buy, not only failed to spread the risk of foreign exchange reserves, and raise the domestic price of gold will not only affect the possession of gold to the people, but also with the people for profits.
Contempt for economic laws, the challenges of economic common sense
In February 2006, China’s foreign exchange reserves reached 853.6 billion U.S. dollars, replacing Japan as the world’s foreign exchange reserves. The central bank senior officials in the China Development Forum on the speech made it clear that “per capita scale, China’s foreign exchange reserves was not high. If China’s 1.3 billion people in terms of per capita in China’s foreign exchange reserves more than 600 U.S. dollars only, less than Japan one-tenth, compared with Singapore also fell far short of. ” Prior to this, international economics, it seems that there is not a scholar, a division of a country’s foreign exchange reserves per capita to measure the country’s foreign exchange reserves of the appropriate standards, when China is the first. Usually today’s international trade is to support the import of foreign exchange reserves as a measure of the time an important indicator of foreign exchange reserves, foreign exchange reserves is generally believed that the amount of the minimum import requirements should not be less than three months as the warning line.
China’s contempt for economic laws and economic common sense, to engage in foreign exchange reserves, “多多益善”, so that in December 2006, China’s foreign exchange reserves on the one trillion U.S. dollars, in the world. To the end of 2008, China’s foreign exchange reserve reached 1.95 trillion U.S. dollars, accounting for the world’s foreign exchange reserves of 40%. Of these, the proportion of dollar-denominated assets as high as 70%, that is, to put the majority of eggs in one basket. Therefore, falling into the hands of “trap dollars,” just as Princeton University professor Paul Krugman has said, is “to blame.”
High foreign exchange reserves, foreign exchange has increased the pressure on the one hand, resulting in the difficulty of financial control is not conducive to the healthy development of China’s economy; On the other hand, will further aggravate trade friction, delegate to handle mercantilism. In addition, the huge foreign exchange reserves reduces the efficiency of the use of funds, resulting in a waste of money. High foreign exchange reserves of foreign exchange reserves also increased costs, increased risk reserves. I did not see that the foreign exchange, “a lot”, how can there be “good benefits”?
World powers for its own interests, an increasing emphasis on independent use of monetary policy, China-related financial and senior officials made it clear that they do not mind the independence of monetary policy, the RMB exchange rate lock, with the Fed’s policy every step. Precisely the Fed monetary policy is the world’s largest operator. March 18, Federal Reserve Chairman Ben Bernanke is finally open HKNPL machine, from the “lied helicopter money”, and further to the market, “transfusion” 1.15 trillion U.S. dollars. Doomed to devaluation of U.S. dollars, China will face greater foreign exchange reserves shrink. Its biggest creditor of the United States commitment – to ensure the safety of dollar assets – is doomed to fail, even though the United States can hold U.S. dollar assets in China to achieve the payment with interest, but the depreciation of the dollar, also by the “The “is not the original” this “paid” interest “is not the original” income. ”
Thus, to see the world, China’s ground-breaking out supranational monetary sovereignty born. SDR (Special Drawing Rights) is the International Monetary Fund (IMF) was founded in 1969, is allocated to the Member States IMF a right to the use of funds. 37149300000 United States for the largest share of SDR members, 6369200000 China located 8. SDR use of U.S. dollars, euros, pounds and yen currencies weighted set of four values (weights were 44%, 34%, 11% and 11%), for the government and international organizations for International Settlements, members It can be used to temporarily balance of international payments. Over the past 40 years, SDR has not been able to expand the fundamental reason is that the major share of SDR by the developed countries to hold, while the developed countries is often hard currency, they do not need the SDR, there is no promotion of SDR was more widely used in market demand. China SDR to SDR or similar nature of the currency to replace the dollar, it is somewhat sounds reasonable. The reason is very simple now, in order to stabilize the financial and stimulate the economy, the Western countries of “collective cheating”, switched on banknote printing machines in the printing of bank notes, the collective international reserve currency devaluation, such as if a “super-sovereign” SDR, what is the use? Therefore, Hong Kong “Oriental Daily News,” March 26, 2009 editorial that, it is proposed to create a new reserve currency, under the wrong side, looking for the wrong people, picked the wrong time. Even liberal economist Zhang Wuchang dare gambling hard, wrote in his blog, “Thomson’s analysis of the financial disaster”, the article said, “willing to bet money, I try, XXX’s recommendations, if successfully launched, the Chinese will be losers in the best in the world. ”
Growing fiscal deficit the United States (accounting for the proportion of GDP: 13.6 percent for 2009, 9.7 percent for 2010) goes far beyond the annual 3 percent warning level, and has become the world’s largest net debtor countries (about the world’s GDP 10%) to the U.S. dollar as the single currency system, the threat is there. The adoption of international economists to study the history of the world economy consolation China: the 20th century, 20 years, more than half of the world’s foreign exchange reserves for France, but in the end to fall into the hands of “trap pounds,” ended in the disastrous outcome. At that time, the management of foreign exchange reserves of the Bank of France is a private body, and not cover all foreign exchange assets in France. The difference is that France, China’s foreign exchange reserves are almost all the nation’s centralized management of foreign exchange is 30 years of reform and opening up a concentrated expression of the achievements. Today, China’s falling into the hands of “trap dollars,” and in “U.S. trap” of being bogged down further, the relevant departments and people should give the public an explanation.

gold is Non-monetary? The lie of U.S

by zhang tingbin
2009-08-08

Main gold bull market is yet to come

In the summer of 2009, some investors began to feel cold in the top of mountain.

Shanghai Stock Index in just over eight months more than doubled. And the outrageous prices up even more, from 3,4-quarter last year, the Center City housing prices fell about 20-30%, the second quarter of this year, a sudden strong counterattacks, another record high, the property market has entered a frantic final period. Shanghai’s housing prices, from 2001 to 3000 yuan, now risen to about 3 million, is already “10 times as large bullest stock”, July 19, I wrote a special “buy a house to deal with inflation is a big trap now buying real estate would be tantamount to self-stack firewood, “warning of risk, try to avoid repetition of mainland residents in Hong Kong after the Asian financial crisis of” negative assets “the tragedy of mistakes.

Need to be clear is that for the general public to enhance the future of increasing inflation expectations, which I agree, but also remind one of the earlier. At the same time, also pointed out that although the future of the stock and property markets are still up some space (the stock market may be larger than the future of space up the property market, and even does not rule out the very substantial increases), but has entered the bubble period, the risk of investment has been large on opportunities.

In that case, there is no investment goods, which not only real anti-inflation, more investment opportunities are much greater than the risk? Yes, this is the kind of gold. Since July 2005 has been a point of view I have not changed, this round of global financial crisis is in the nature of the currency crisis in U.S. credit, that is, the proliferation of credit in dollars to enlarge, extremes meet, the inevitable collapse of the trend, the gold is the best hedge hedge assets. The collapse of U.S. coin big negative is that the gold bull market.

The future wealth of the Chinese people the greatest challenge to defend the U.S. dollar collapse of the knock-on effect, if large dollar collapse, the substantial depreciation of commodity prices, or even 10 dollars for an old new dollars, new dollars will be re-linked and gold, this could be huge wash of the U.S. national debt, the United States can be a traveling light.

If that happens, China will suffer huge losses. External, foreign exchange reserves of 2.3 trillion U.S. dollars will be lost 90%; at home will also be a result of very serious situation.

The face of the substantial depreciation of the old dollar, and even re-link the new gold dollar, China There are three responses: 1, the RMB to the U.S. dollar appreciation against the old, it will core competitiveness of China’s economy a tremendous impact; and then forced to the new U.S. substantial depreciation of the yuan’s international reputation will be damaged; 2, the yuan to follow the old substantial depreciation of the dollar against the commodity, that is a serious price inflation; 3, when the U.S. dollar and gold re-linked the yuan is also linked to gold to protect its international purchasing power.

For China, the first two were disastrous, the correct solution is the third way, is about to add foreign exchange reserves, and the U.S. out of foreign exchange assets in due course, a large number of holdings of gold reserves. Can reduce a major collapse of the future U.S. dollar-denominated assets of the loss of China, at the same time take precautions to prevent future re-linked to the dollar and gold.

Readers may think that, since 1999, gold prices have risen from 252 U.S. dollars an ounce to the current 950 U.S. dollars, up 275 percent, has been up a lot, is not it already have the risk?

In my eyes, the gold price is now roughly equivalent to the last round of A shares when the bull market, by the end of October 2006, ICBC’s listing, the real master up period yet to come. Large as the U.S. the main stage of the collapse of yet to come, but faster, Rogers recently pointed out: the collapse of U.S. large monetary crisis occurred in the 3 years. This time the judge basically the same with me.

Gold can rise high in the end it?

Gold can rise high in the end it? Here to mention three simple methods of calculation: first, in 1980, the international gold price of 850 U.S. dollars an ounce the highest, taking into account the dollar over the past 30 years the name of the devaluation, the price should be around 2250 U.S. dollars; the second, from 1968 to 1980 gold bull market, gold rose 35 U.S. dollars from 850 U.S. dollars, up 24 percent; in 1999 if the current round of the 252 U.S. dollars as a starting point to the same range of estimates, gold will be up to 6000 U.S. dollars, and this round of notes the crisis than the U.S. credit crisis was more thorough and more severe; Third, the total amount of treasury bonds with the countries of the world’s stock of physical gold prices measured 1:1. Global gold stocks to 165,200 tons (What is this concept? 20.5 meters it is a positive cube, the cube is equal to only 5-story building of ordinary residents, we can see its scarcity. Another comparison, the main Olympic stadium — – Bird’s Nest steel volume only reached 42,000 tons, which far exceeds the total weight of the world’s gold stock). To the current gold prices, it is a total of 5.5 trillion U.S. dollars, but only the total U.S. national debt reached 13 trillion U.S. dollars, not to mention the 60 trillion of liabilities of all the people. Global gold with the U.S. national debt reached only 1:1, the price will be more than 2000 U.S. dollars; world bonds with 1:1, it will reach more than 5000 U.S. dollars. In short, the real value of gold is still being seriously underestimated so far, in 2000 dollars, gold is not the risk, the opportunities far outweigh the risks. Countries, financial institutions and the public can be bold Jiancang holdings.

Why even today continues to be a serious underestimate of gold then? This is due to the past more than half a century behind the U.S. and the ubiquitous international金融寡头huge propaganda machine to brainwash the people of the world repeatedly,千百亿times to repeat a lie, a lie – since the dollar from gold in 1971 , then there is no monetary gold properties, gold has been useless; adhere to the true value of gold is the “gold bug” and so on.

In recent years, I have the “honor” branded the “Top Hat.”

U.S. gold VS paranoia paranoia

In the past few years, I have been called China’s famous “golden insects.”

The courage and the mainstream of the monetary and financial expectations, the courage to “collective blindly” go in the opposite direction is to have the courage and the will of the spirit under tremendous pressure, “gold bug” is only one of a small “crown.” I also follow a longer period of time greater crown is “narrow-minded nationalism” in the “golden defend China – Republic of the new 60-year Raiders”, a book, I will be comprehensive, thorough, systematically expounded the truth of the world.

In November 25, 2004, I published “The global economy exacerbated by cracking oil clouds” article, pointing out that: With the birth of the euro, “the entire world economy ice is a huge gap open, it is the side of U.S. dollars, the other side of the euro. the ecological balance of the world economy are being broken, the broken balance from the old to the new balance of the reconstruction, only God knows how tragic human will pay the price. ” Since then, a better understanding of the gold in the world monetary and financial and economic reconstruction of an important ecological status, in July 29, 2005, written press, “experts recommend a large-scale increase in gold reserves in China,” a text to become the first domestic media papers called for a massive increase in gold reserves in China article (The international gold price was only 429 U.S. dollars an ounce).

Since then the dollar as the deepening of the financial order to understand, I increasingly strong U.S. dollar collapse of the monetary and financial order will not be a people’s will the prospect of the arrival, and in early 2006 with “danger and Machine 2006: The United States and China adjustment speed, “the article clearly states: the U.S. economy has been hard to avoid the financial crisis. Of gold in the future reconstruction of the international monetary and financial order in the increasingly central role in the clear.

Thus, in the past 4 years, my best efforts to do everything in its power, has repeatedly suggested that China adhere to the official, financial institutions and civil society to increase large-scale gold, oil and other reserves, firmly opposed to China’s large-scale increase in U.S. treasury bonds to buy dollar-denominated assets, such as, for the collapse of the future prepare for big dollars. At the same time, more and more people began to identify and promote strategic reserves of gold.

That adhere to the mainstream in some westernized almost seems to have a “paranoid”, especially in those who insist on “a unified U.S.” values, I sent two “crown”, one “golden child care providers” ; The second is the “gold bug.” Of course I care about this, no response has been. Today, by Sina weeks column and “to defend the gold in China,” the occasion of the publication, so I replied:

First, the so-called “golden child care providers,” the accused, in fact: 1, such that the counter-argument, which is not the author’s occasional gold, but gold is gold to the value of the entrusted to the Enlightenment is the true wealth of the Chinese people to defend of care. In July 2005, when only a small number of domestic gold business, especially for the very few public sales of gold, it is precisely because we have spared no effort to enlighten, only more and more Chinese people are gradually beginning to recognize the serious underestimation of the gold value, with the market demand is an increasing number of gold sellers. In short, these new gold are the followers of the Enlightenment; 2, if asked, then, how can there be in the gold price is only 429 U.S. dollars an ounce, the international price of gold has not yet started up the main time period highly recommended to start ? And I repeatedly made clear that the international price of gold dollars in 2000 are being seriously underestimated the value of the stage.

Second, for the so-called “gold bug” of the accused. Is even more ridiculous – and because the “gold bug” concept is a lie too black-and-white reversed – that staring eye without fear and blush. Health bug gold how can it? We have heard that Apple, vegetables Health insects, have heard of books, papers can be Health and insects, gold, gold bars, in particular, is the world’s investment in higher-density, quality, the most weight, texture, the most pure, the most noble qualities of the material, in any case is the Health insects to see, but where a pile of sand dollars, when a long period of time will give birth to the insects to paper.

This absurd name, or a lack of common sense at least, or a deliberate smear, motivated. To borrow the logic of their son’s spear attack our very own, they are the real “dollars insects.” They are the “U.S. does not set” unlimited worship, several decades to inculcate the “golden useless” to brainwash the people of the world, that is the real paranoid. Has itself moved in the opposite direction!

Gold for the extreme importance of the Federal Reserve

However, they can not always deceived the people of the world is – they say one thing and do the full 180 degrees of opposite another. Very hypocritical that they not be overstated.

They simply can not answer this rhetorical question: Why is the U.S. Federal Reserve to create the core of its gold assets it (the U.S. Federal Reserve assets accounted for more than 75% proportion)? Why is the world’s two major international trading and reserve currency, has a huge gold reserves (Fed 8 130 tonnes, the EU central banks more than 12,000 tons), while behind the national economic strength of the yen was very strong, only theory temporary borrowing for speculative international speculators to “bring money,” because the Japanese central bank gold reserves of 800 tons it has only a few? Since the properties of gold has lost money, why should the Federal Reserve which 8 130 tons of gold as a “no-sale” assets, even if today’s financial crisis unabated, the Fed has never sold the gold to obtain the funds to rescue the market it?

More intuitive is that the Federal Reserve to leave U.S. treasury notes and in-kind treasury of gold really different attitude.

U.S. Federal Reserve kept the central treasury notes on the location of its headquarters in New York City suburbs, where hundreds of billions of dollars stored in the U.S. dollar notes. China surprised the visitors is that they pass is transmitted by the taxi driver, this is not the underground vault. The first door of the treasury and the general office of the revolving door is no different. The second door, third door is also true, but none more than the front door, back door can not open an organ. The bank mainly relies on the safety of the work in the treasury of 480 monitors and security personnel.

Dollar bills and deal with the “pseudo-treasury” just a normal, compared to defend the United States the real gold on the heavily guarded store, guard.

Gold in the United States, mainly stored in two. One is located in the southern tip of Manhattan Island, New York 24 meters deep under the bed of hard rock of the Treasury, Federal Reserve Bank of New York, where storage of the 60 countries, central banks and international organizations in more than 8.3 thousand tons of gold stored. Belonged to the Federal Reserve Bank’s gold reserves account for only 5%.

New York suburb of treasury bills and the security measures here is quite different entirely. The depths of the rock in the ground there is no door of the treasury, who passed out is a 2.7 meters high and weighs 90 tons of solid steel tube. Outside the steel tube with up to 140 tons of reinforced steel and concrete wall, steel tube has a central 3 meters long narrow passage, just gently manipulate the switches, steel cylinder that can rotate 90 degrees, exposing access for staff access. All of the steel tube system using manual mechanical manipulation. The Federal Reserve in New York this building, but also to prescribe both the safety of dozens of tons of heavy doors, hidden in buildings, it is generally less than the fundamental note, but when an emergency, two doors to complete the closure of 7 seconds, even the only Do not try to climb to all ants. In addition, there are a large number of security personnel inside the building, armed with semi-automatic weapons, at all times to monitor the building inside and outside of every corner. 70% of the guards are “Archery” sharpshooter attacks.

Treatment of foreign gold stored like this, while the United States most of their gold reserves deposited in the more heavily guarded and more mysterious Fort Knox (Knox) barracks. Fort Knox barracks hinterland behind the United States is a strategic rear base for the United States. Here was first built during the First World War, Knox barracks, the expansion in 1932 into a permanent military base, becoming the headquarters of the U.S. armored forces headquarters. The construction of the barracks building a solid square, and with electronics, machinery guards, is said to have only 7 re-grid, a safety door weighing 24 tons, specialized storage of gold and treasures, it is estimated that around Fort Knox 4 570 tons of gold.

The United States the most extreme attention to these kind of gold, the treasures of the United States was founded – “Declaration of Independence,” “U.S. Constitution”, “Magna Carta” Lincoln “in the Gettysburg speech” and so on stored in this manuscript. In other words, the real power of the United States it seems that if the founding fathers of these United States the founding values of the ink is the lifeblood of the United States, then the gold is the source of U.S. economic power – the lifeblood of dollars.

Gold is the root of U.S. currency

In a modern Declaration of the most popular currency – does not set U.S. dollars, gold is no longer possible to currencies, gold useless. However, the most intelligent of the 20th century masters – the origin of socialist Karl Marx’s assertion that: “Currency is a natural gold and silver”, and excellence on behalf of JP Morgan capitalism more straightforward – “Gold is a currency, is” between charge? Or, in Marx and Morgan, the currency occurred in the evolution of how, gold and bank notes, stock and financial derivatives between the relationship between what is in the end?

Have produced anything, development, peak, decline and demise of the process, the U.S. dollar alone can escape this law of nature and the history of it? All these problems need to be a reasonable answer.

In the “gold to defend China’s” one book, through the past 100 years, and even trace the history of the history of monetary analysis, the author proposed a new theory of international currency – “money three-state” and “Four Seasons dollar” theory.

Tri-state means the currency is the currency of the solid, liquid and gaseous, solid-state money is the corresponding value of goods and in kind, the general is the equivalent of gold; liquid gold out of currency is restricted and there is no kind of net direct mortgage credit notes, For example, the U.S. dollar and the yuan now, including asset securitization and bonds; gaseous currency derivatives. Over the past hundred years, the evolution of monetary expansion from solid to liquid, and then expanding to the gas, its root causes is to get rid of after the gold, paper money and the over-expansion caused by India. This is a centuries-old currency from the solid – liquid – gas expansion cycle. When the euro challenge the dollar in 1999, this single dollar reserve currency for international transactions and the system was closed to the bubble expansion, the balloon collapsed rapidly inward, the International Monetary contraction began to reverse the collapse of the cycle of contraction from the gaseous to the liquid, and then contraction of the solid-state, when its contract when the solid-state, that is, the return of the gold standard.

“The U.S. dollar Four Seasons” is a vivid example. Gold is the currency of the roots, notes secured by the gold dollar is the trunk, the rise of great powers in the United States of spring and summer, and then grow from the trunk of numerous leaves – pure dollar credit notes. However, the major powers the United States has entered a cycle of decline, the U.S. dollar as the currency has ushered in a tree fall and winter, the leaves will inevitably decline, and gold trunks and roots to survive in the winter.

In short, in U.S. history until today, gold has always been the root of U.S. currency, which is taken by various means U.S. forces can not defame the prime reasons for the end, the Fed is not afraid to sell the 8130 tons of gold reasons – because it is equivalent to a tree trunk to the leaves and tree trunks to eliminate, it is absolutely impossible!

I am convinced that the answers to these questions, design and realization of the current global monetary and financial order Rothschild is likely to have 100 years ago, already anticipating the secret. But the “Truth and monetary gold” in the past 100 years has been to cover up the layers to become large and complex, the vagaries of modern monetary and financial, “the sea” the deepest secrets of the seabed. In-depth study of the relationship between gold and currency for many years, the truth in my eyes has become increasingly clear.

There is no doubt that U.S. is the largest to date of human society a monetary giant trees. In the growth process, it is almost completely changed the currency of human jungle ecosystem.

U.S. Federal Reserve is the rise of the history of swallowing gold

In the previous era, of course, the currency has a relatively tall forest trees, such as pounds, but more variety of trees, and even some small shrubs, but when the U.S. in the 20th century the process of growth, the original almost disappeared in the jungle, like a giant super-chain business, “Wal-Mart,” the process of forming the closure of many small businesses the same. In the 20th century when the late 90’s, the face of the earth with only a little giant trees, which trees leaves and head of trees very well-developed livelihood of almost all tree can not be separated from a “super tree” of the.

In fact, the growth process of the Federal Reserve, the U.S. dollar as an international super-tree growing process, that is, the process of continuous gold like a whale. In 1895, the United States the best times of crisis, the U.S. official gold at least nine million U.S. dollars only, equivalent to 12.3 tons, it is precisely because the very lack of gold, the U.S. government was NM Rothschild and JP Morgan family grasp the throat, had to sell the gold market and the United States the right to issue debt. By 1907 the shortage of another currency crisis in the gold may not be right to sell the currency to the Rothschild family and Wall Street financial president who in 1913 established the Federal Reserve financial president lock the currency of international distribution rights to such a power in the United States is paramount, Congress, the Government, the public right to know the inner workings of the Federal Reserve, let alone monitored (please detail the process of participation “to defend the gold in China,” Chapter 1-2), and even within the most important of the Federal Reserve meetings are not allowed to be recorded.

Only control the Federal Reserve before the international financial president are well aware of the “gold is money the root of” the true meaning. In fact, from the Federal Reserve after the establishment of the first day, the Fed has become a super “animal swallowing gold.” World War II for its legitimate and effective “swallowing gold” to create the best conditions.

During the war, weapons have been continuously out of the United States, to Europe, to eliminate the soldiers and people, destroying houses and wealth there; and in exchange for an endless stream of gold has been shipped out of Europe, to the United States. In 1913, the United States gold reserves is only 7 000 million (at 20.67 U.S. dollars at that time one ounces, or about 96 tons), and after the First World War, gold reserves increased to an alarming 4.5 billion U.S. dollars (6 172 tons) . U.S. Federal Reserve has become the world’s most powerful central bank. And after the Second World War, but also an increase of 20,200 tons, accounting for the global gold stock 3 / 4! U.S. Federal Reserve has become a veritable behemoth swallowing gold Super. At the same time, the United Kingdom, Germany, France, gold fell sharply, the British gold reserves before the war of 3629 tons by the sharp decline to 261 tons in 1941, Germany and Italy because they are defeated, almost non-existent gold.

Unprecedented in human history, a super-economic and financial hegemony was born. The year end of World War II, the United States not only has superior economic strength, as well as super gold reserves – GDP accounted for 66% of the world, the world’s gold reserves account for 75% of the stock of gold. All the old imperial past had to succumb to it, accepting the capitalist world after the war the United States for the design of the Bretton Woods system, the U.S. dollar since then dominate the world of capitalism.

Dominate the world as seen when the Federal Reserve gold and currency notes, the Federal Reserve and international financiers from the beginning of the smear on the age of gold. They rely on the destruction of the war’s main rival the United States, through the savings of the absolute superiority of the gold reserves, and relying on powerful economic strength of the U.S. dollar on the currency hegemony in the world. But they are not going to sum up this experience, so that after other major countries – such as China to share, but to bury it deeply, and many times to repeat a lie: gold from the useless, out of gold from the stage of history . Such efforts in 1971 – to rid itself of dollars of gold and the ultimate success of all the constraints. And after decades of repeated lies super paranoid to 1000 times, 10,000 times, billion times a trillion times paranoid, trying to speak into the gold of truth.

However, the truth is the truth, is the Federation of luminous gold. Any business when there are extremes meet, the U.S. dollar and gold are the same – the history of U.S. changes its attitudes, review for the gold in hand.

The problem is that the gold dollar was once inseparable comrades-in-arms of the most important, why it does throw of gold? Why are they so out of hatred and gold so strongly?

The answer is that, if they can not shake off the constraints of gold, one the largest in human history, the most greedy and most of the profits there is no way the business model was born. I will be the next in an analysis of Bowen. More in-depth exposition of strict Please refer to the “golden defend China.”