It is all about keeping China down and out...

[Solomon2]

...Regarding price, it's a negotiation between transient demand and supply, owning huge stocks on the supply side only increase price influence not reducing it.

What the U.S. does - sometimes via government, sometimes via the commodity exchanges - is keep track and publish (every week or so) the reserves of key commodities like oil, grain, and gold. When commodities are held by a central bank businesses and individuals require some idea of its intentions, otherwise they will stockpile or dump the same by rumor. So the goal of stabilization requires transparency.

The whole "rebalancing" thing is a result of errors The People's Bank made in the late 1990s, when it engaged in buying - sometimes panic buying - of dollars while dumping other currencies and.liquidating its commodity holdings - at the very bottom of the market! This, (together with lax financial regulation in both the West and China) has provided fuel for market bubbles and exacerbated economic cycles. That this could happen was realized pretty quickly but Chinese officials were in no hurry to change course - to me, they seemed to have lacked confidence in the productive gifts of their own people.

It is not good for business or savers that so much reserve capital is in the hands of officials who conceal their intentions and analysis to such an extent that markets believe they don't think things through or understand the implications of their actions.

 

[ThaniOruvan]

Yuan replacing Dollar ? Seriously ?

FYI Chinese scholars and intellects...

http://foreignpolicy.com/2016/12/24/what-china-didnt-learn-from-the-collapse-of-the-soviet-union/
https://www.bloomberg.com/view/articles/2016-12-13/why-china-can-t-lure-tech-talent

Anyone can disprove or counter what is said in the article.

 

[Solomon2]

In 1998 during the great Financial Crisis in Asia, China was helping to alleviate the financial pressure upon the Asian currencies by refraining from devaluating its own yuan. China also felt the great economic pressure back then from declining export; however, if it did devaluated its currency back then, the Asian countries would suffer more and take longer time for economic recoveries.

Correct, but such restraint should have been short-term - less than two years.

Talking about (physical) gold reserves, I ain't aware that China dumped gold in 1998, on the contrary many observers -

I don't know if it's official but I'm pretty sure China dumped both gold and silver in 1998.

...China is accumulating the bullion for its reserves during the last decade or so, as well as encouraging the Chinese people to buy the barbarous relics. China itself is the world's largest gold producer and the gov buy all the domestically mined output. For sure it's widely believed that China has much understated quantity of gold reserves.

I think as of twelve months ago China said its gold reserves are about 1800 tonnes. I don't think China updates this number regularly. That should change.

However, do note that in a recession the purchasing power of gold also drops. Often it doesn't drop as much as other commodities but China is a special situation because its domestic demand is so great and its economy depends so heavily on external markets. Whether gold is "safe" or not depends on the actions of the world's central banks, including China's - the reason why clear declarations of intent matter.

Those with deeply seated interests to keep the Petrodollar thus the World Reserve Currency status of course will strive at best to defend its privileges, and China's rise may be perceived as an existential threat to that status, thus its peaceful rise should be contained -

Um, no, it doesn't work that way. The dollar became the world reserve currency because the U.S. honored its dollar debts, either in the form of gold, property, or desired services. So people (and governments) didn't just want to trade in dollars but save in them, too.

Yuan replacing Dollar ? Seriously ?
FYI Chinese scholars and intellects...
http://foreignpolicy.com/2016/12/24/what-china-didnt-learn-from-the-collapse-of-the-soviet-union/

I didn't know about the FP article but some of my worries are along the same lines: that today's Chinese officials are a product of Communist education and this, combined with their secrecy and appeal to xenophobia, doesn't instill the markets with confidence that Chinese officials are competent enough at managing China's monetary reserves.

 

[samsara]

Yuan replacing Dollar ? Seriously ?

FYI Chinese scholars and intellects...

http://foreignpolicy.com/2016/12/24/what-china-didnt-learn-from-the-collapse-of-the-soviet-union/
https://www.bloomberg.com/view/articles/2016-12-13/why-china-can-t-lure-tech-talent

Anyone can disprove or counter what is said in the article.

I won't bother to comment on those articles carried by such "established" names they will write whatever suit their interests.

Don't think China wanna take over the USD position as the World Reserve Currency because tied to that status there's some unwanted obligation. It's widely perceived that China just want to have some new global exchange/trading currency that is not under the sole control of any nation, thus preventing the abuses or uncontrolled printing/QE and so on of that medium currency.

 

[LeGenD]

Anybody who has an iota of idea of Chinese economic principles and mindset would know that China is not interested in making Yuan a global reserve currency. A (devalued) Yuan is in the best interests of China because it ensures that Chinese goods remain cheap and competitive in the markets across the world. Global reserve currency status implies that China will loose control over Yuan and this in turn would be detrimental to its business practices.

 

[samsara]

Correct, but such restraint should have been short-term - less than two years.

I don't know if it's official but I'm pretty sure China dumped both gold and silver in 1998.

I think as of twelve months ago China said its gold reserves are about 1800 tonnes. I don't think China updates this number regularly. That should change.

However, do note that in a recession the purchasing power of gold also drops. Often it doesn't drop as much as other commodities but China is a special situation because its domestic demand is so great and its economy depends so heavily on external markets. Whether gold is "safe" or not depends on the actions of the world's central banks, including China's - the reason why clear declarations of intent matter.

Um, no, it doesn't work that way. The dollar became the world reserve currency because the U.S. honored its dollar debts, either in the form of gold, property, or desired services. So people (and governments) didn't just want to trade in dollars but save in them, too.

I didn't know about the FP article but some of my worries are along the same lines: that today's Chinese officials are a product of Communist education and this, combined with their secrecy and appeal to xenophobia, doesn't instill the markets with confidence that Chinese officials are competent enough at managing China's monetary reserves.

You're rather amusing with your fantastic comment

On August 15, 1971, President Nixon “closed the gold window”, refusing to let foreign central banks redeem their dollars for gold. The collapse of the Bretton Woods System, the abandoned gold backup was succeeded by PETRODOLLAR.

Just search and read on your own what's the essence of Petrodollar deal negotiated by Henry Kissinger with KSA and the dollar RECYCLE by Saudi on its huge oil revenue from export.

Saddam Hussein / Iraq tried to sell Iraqi oil in euro, thus he had to go.

Muammar Gaddafi / Libya tried to establish the Pan-African "Gold Dinar" currency, thus he had to be terminated.

Therefore any nation that is not strong enough to defend itself won't dare to think of leaving the party, the wild wild west with its biggest guns are ready to shut it off!

There's three-year lapse between China's two latest gold reserve updates to BIS. Don't take the face value of China's announced gold reserve, it's much understated. It doesn't serve any good for China to disclose its way much higher gold reserves, one of the drawbacks is yuan will much appreciate its value.

 

[Solomon2]

On August 15, 1971, President Nixon “closed the gold window”, refusing to let foreign central banks redeem their dollars for gold.

Yes.

The abandoned gold backup was succeeded by PETRODOLLAR.

The term "petrodollar" refers to the dollar holdings of oil-exporting countries, which were often slushed from CB to CB to some disruption of economic systems, hence the necessity of international negotiations about what the Sauds, especially, intended to do with them. The Eurodollar market - foreign bank holdings of dollars that were loaned out to non-U.S. nationals - was already well-developed by 1970 and became the basis of the non-gold dollar system.

Saddam Hussein / Iraq tried to sell Iraqi oil in euro, thus he had to go. Muammar Gaddafi / Libya tried to establish the Pan-African "Gold Dinar" currency, thus he had to be terminated.

They did? Well, coincidence is only a suggestion of cause-and-effect and does not in itself constitute proof.

Don't take the announced figure of China's gold reserves to BIS, it's much understated. It doesn't serve any good for China to disclose its way much higher gold reserves, one of the drawbacks is yuan will much appreciate its value.

The "good for China" you're writing of to justify secrecy is 18th-century mercantilist thinking, as embraced by Communists: China the State vs. the rest of the world, in which the State considers gold a kind of weapon in reserve.

Whereas the "good for China" I'm writing to justify transparency is market economy thinking, the good of the China the nation: its tens of millions of businesses and the wealth of its billion plus people, to whom gold can be considered a form of savings, the primary possible spoiler being the mechanisms of the State itself.

 

[Götterdämmerung]

"By way of deception thou shalt do war"

That's the motto of the intelligence service of a certain tribe.

 

[ThaniOruvan]

I won't bother to comment on those articles carried by such "established" names they will write whatever suit their interests.

Don't think China wanna take over the USD position as the World Reserve Currency because tied to that status there's some unwanted obligation. It's widely perceived that China just want to have some new global exchange/trading currency that is not under the sole control of any nation, thus preventing the abuses or uncontrolled printing/QE and so on of that medium currency.

China's intentions on a new global currency is questionable.
What we know is China does want an alternate exchange currency. Only time will tell its true intention.
Yuan replacing USD is ruled out at least for now looking into the existing crisis the Chinese economy is facing/going to face.
USA's better performing economy makes USD an irreplaceable asset.

 

[samsara]

...USA's better performing economy makes USD an irreplaceable asset.

You mean the up up of the Dow Jones Index represents a better performing economy? What are exactly produced by the USA to make it a a better performing economy? Oil? Soybean? Corn? Wheat? Nuts? Fruit? and other agricultural products? Weapons? Software? Hollywood movies?

And how can a better performing economy undergo an over one trillion dollar deficit every single year thus accumulating around the 20 trillion dollar debt?

What make the USA seems to be able to sustain so far is its money printing press, the Petrodollar status thus the World Reserve Currency (WRC) status, hence it can still sell its bonds or Treasury bills and nations keep on buying to park their national reserves in USD denominated assets to import oil and settle other trade transactions. But the key point is petroleum. And when major oil exporters like Russia, Iran, Nigeria, Venezuela started to sell their oil in currencies other than USD, the WRC cracks start to happen. Plus those bilateral swap agreements bypassing the usage of usd and at increasing rate and amount, the cracks are getting wider!

Thing will get clearer as time goes by, but the time window won't be too long from now on, give it a decade or so or even less!

Btw, have not you noticed a nation in panic thus all the bizarre things do happen there? Therefore the world is witnessing the Trump vs Hillary, the Rep vs Dem, the Left vs the Right even FBI vs CIA about the Russian hack accusation etc comedy-dramas...

 

[ThaniOruvan]

You mean the up up of the Dow Jones Index represents a better performing economy? What are exactly produced by the USA to make it a a better performing economy? Oil? Soybean? Corn? Wheat? Nuts? Fruit? and other agricultural products? Weapons? Software? Hollywood movies?

All these count too !
Please take a look at their employment data over the past two to three years. I am not saying USA is coming up with flying colors but they have started showing signs.

And how can a better performing economy undergo an over one trillion dollar deficit every single year thus accumulating around the 20 trillion dollar debt?

USA's debt-to-GDP ratio is hovering around 71-100 %.
China's debt-to-GDP ratio is a massive/chronic 250 %. China is on the verge of a crisis/turmoil/disorder/downfall. 2017 will provide much better answers.
The primary difference between these two nations is their per capita incomes. Isn't it enough for USA to spring back to the center stage supported by its job creation ?

What make the USA seems to be able to sustain so far is its money printing press, the Petrodollar status thus the World Reserve Currency (WRC) status, hence it can still sell its bonds or Treasury bills and nations keep on buying to park their national reserves in USD denominated assets to import oil and settle other trade transactions. But the key point is petroleum. And when major oil exporters like Russia, Iran, Nigeria, Venezuela started to sell their oil in currencies other than USD, the WRC cracks start to happen. Plus those bilateral swap agreements bypassing the usage of usd and at increasing rate and amount, the cracks are getting wider!

Countries like Iran, Russia, Venezuela etc can forge bilateral trade deals to export oils with big economies like China, India and the EU. But which currency will they use other than USD ? Will it be the Rupee / Yuan / Ruble ? Where will they spend these currencies ? Will these currencies account for any substantial forex value other than the originating nations ? No. So best bet is the USD is an irreplaceable asset until a strong, alternate currency emerges. That currency is not going to be Yuan as it is weaker than the dollar. People only prefer alternatives that are better.

World will not fall to that single currency dependency again having suffered for long due to the American slowdown triggered recession in 2008.

Btw, have not you noticed a nation in panic thus all the bizarre things do happen there? Therefore the world is witnessing the Trump vs Hillary, the Rep vs Dem, the Left vs the Right even FBI vs CIA about the Russian hack accusation etc comedy-dramas...

It is called democracy where people have basic rights like freedom of expression, freedom to speech etc.,

 

[shadows888]

All these count too !
Please take a look at their employment data over the past two to three years. I am not saying USA is coming up with flying colors but they have started showing signs.



USA's debt-to-GDP ratio is hovering around 71-100 %.
China's debt-to-GDP ratio is a massive/chronic 250 %. China is on the verge of a crisis/turmoil/disorder/downfall. 2017 will provide much better answers.
The primary difference between these two nations is their per capita incomes. Isn't it enough for USA to spring back to the center stage supported by its job creation ?



Countries like Iran, Russia, Venezuela etc can forge bilateral trade deals to export oils with big economies like China, India and the EU. But which currency will they use other than USD ? Will it be the Rupee / Yuan / Ruble ? Where will they spend these currencies ? Will these currencies account for any substantial forex value other than the originating nations ? No. So best bet is the USD is an irreplaceable asset until a strong, alternate currency emerges. That currency is not going to be Yuan as it is weaker than the dollar. People only prefer alternatives that are better.

World will not fall to that single currency dependency again having suffered for long due to the American slowdown triggered recession in 2008.



It is called democracy where people have basic rights like freedom of expression, freedom to speech etc.,

you ate the cool-aid, indians on this forum are funny.

 

[Götterdämmerung]

That's because you booze too much and lost the capacity to differentiate reality and dream.
How much can we get for brainwashing and forced education ?

The most brainwashed people I have seen in this forum are Indians.

 

[sweetgrape]

The most brainwashed people I have seen in this forum are Indians.

You know, what they got is democratic brainwashing, much more "superior" to autocratic brainwashing!

 

[samsara]

All these count too !
Please take a look at their employment data over the past two to three years. I am not saying USA is coming up with flying colors but they have started showing signs.

USA's debt-to-GDP ratio is hovering around 71-100 %.
China's debt-to-GDP ratio is a massive/chronic 250 %. China is on the verge of a crisis/turmoil/disorder/downfall. 2017 will provide much better answers.
The primary difference between these two nations is their per capita incomes. Isn't it enough for USA to spring back to the center stage supported by its job creation ?

Countries like Iran, Russia, Venezuela etc can forge bilateral trade deals to export oils with big economies like China, India and the EU. But which currency will they use other than USD ? Will it be the Rupee / Yuan / Ruble ? Where will they spend these currencies ? Will these currencies account for any substantial forex value other than the originating nations ? No. So best bet is the USD is an irreplaceable asset until a strong, alternate currency emerges. That currency is not going to be Yuan as it is weaker than the dollar. People only prefer alternatives that are better.

World will not fall to that single currency dependency again having suffered for long due to the American slowdown triggered recession in 2008.

It is called democracy where people have basic rights like freedom of expression, freedom to speech etc.,

You wrote a lot but of little substance indeed!

"Please take a look at their employment data over the past two to three years."

For the more accurate statistics check following:

Alternate Unemployment Charts - John William's Shadow Government Statistics
http://www.shadowstats.com/alternate_data/unemployment-charts

U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/


"Debt-to-GDP ratio" --> who they owe the debt to? Domestic? Foreign parties? What the debt is spent for? For something productive, or wasted on the over 50-million "welfare depends" of EBT/SNAP class? How about the availability of the infrastructure and its condition? Public utilities? The Chinese debt are owing to themselves. For the developments of infrastructure and public utilities you may read around PDF.

Talking about GDP, just beware of the GDP fallacies!

"Transactions reflecting both wealth creation and also economically destructive state spending are included in GDP without differentiation. Far from the government component of GDP being singled out from the total, it is often welcomed as contributing to economic growth. Macroeconomists, with an eye on the statistical impact of cuts in government spending, discourage governments from making them. The lack of distinction between wealth-creation and wealth-destruction is fundamental to their belief that state intervention is beneficial."

In short what does it imply? Even having a huge military spending waging wars everywhere will add up to the GDP number this is the miracle of the all inclusive and elastic GDP yardstick. Another example: UK started to include the grey sectors of prostitution and gambling businesses to jack up its GDP number as of 2014.

Read more here:

Robert P. Murphy, Pitfalls in GDP Accounting | Library of Economics and Liberty
http://www.econlib.org/library/Columns/y2016/Murphygdp.html#

How GDP Metrics Distort Our View of the Economy | Mises Institute
https://mises.org/library/how-gdp-metrics-distort-our-view-economy

The Fallacies Of GDP | ZeroHedge
http://www.zerohedge.com/news/2015-06-13/fallacies-gdp


"The primary difference between these two nations is their per capita incomes. Isn't it enough for USA to spring back to the center stage supported by its job creation ?"

Per capita-wise of course China (as well as India as solely two nations on earth ever exceeding 1,000,000,000 people benchmark... and in reality they have 1,385 mio and 1,335 mio respectively - http://www.geohive.com/earth/population_now.aspx ) will be lower than the USA (with 325 mio). The USA has less than 1/4 of their populations... they simply have much different population scales. However, what wealth the state (gov) has/keep differs much among them... state-wise China is holding the most surplus while as USA has the deficits.


"Countries like Iran, Russia, Venezuela etc can forge bilateral trade deals to export oils with big economies like China, India and the EU. But which currency will they use other than USD ?"

So did you mean China pay in USD to their oil exports? When the USA is using the SWIFT mechanism as a tool to attack those countries LOL

"No. So best bet is the USD is an irreplaceable asset until a strong, alternate currency emerges. That currency is not going to be Yuan as it is weaker than the dollar. People only prefer alternatives that are better."

Individuals, corporations may prefer strong currency; but nations (states/govts) of world exporters do not. Not just China, just take a look at Germany, Japan, South Korea too.

Nope, China does not want its yuan to replace dollar as the WRC. The next exchange medium will evolve over time, it's unclear at present, perhaps IMF SDR comes into play.


"It is called democracy where people have basic rights like freedom of expression, freedom to speech etc."

Nope! The USA has corpotocracy vis-à-vis China has the one-party system.

Watch: A tale of two political systems:

The much hyped ideological concepts of democracy, freedom of expression, freedom to speech alone etc neither feed the people nor make society prosper and have better lives... you can witness your own country as "the largest democratic nation" on earth.... what is the good of all the hypes??

On the contrary, the basic rights of people are the fulfilment of the basic life necessities (food, clothes, housing) incl. access to toilets, clean water, electricity; free from poverty; access to education and healthcare and further opportunities for better standard of living, security and safety, and prosperous and harmonious society and so on! Needless to say the huge efforts to uplift the livelihood of around 1.4 billion people are taking gigantic, unprecedented real hard works, the true deeds instead of empty words!

Not relevant at all that people can vote, can express, can speech... if they remain poor and backward and uneducated, then all the so-called "individual freedom" becomes useless, irrelevant... it's indeed very inhuman, against the essential human rights to remain POOR and UNEDUCATEDLY STUPID. Then all those ideological hypes become useless.... that's why the factual reality of the society, of the nation in aggregate is much more important than all the conceptual ideological matters.

Think using one's own cognitive power, logic and rationality, do not just parrot or swallow the propaganda of the mainstream media (MSM). Otherwise, no wonder why a nation remains poor and stays in backwardness!