Rise of China, the End of the Dollar Coming

In this video we will examine in depth the
current state of the economies of the US & China but first we’ll take a look back at the history
of the monetary system of the United States. After the nation’s founding, The Coinage Act
of 1792 establish the dollar as the basic unit of currency.
According to the US Constitution Article I Section 10, no state in the union should make
anything but gold and silver coin a legal tender. Under the act dollar coins were to contain
24.1 grams of pure silver and Ten dollar “Eagle” coins were to contain 16 grams of pure gold. This gave a 15:1 silver to gold ratio which
was updated in 1834 to 16:1. From 1873 to 1900 the nation slowly switched
to a gold only backed currency. Toward the end of WWII, The Bretton Woods
Agreement of 1944 tied world nation’s exchange rates to the US dollar making it the world’s
reserve currency. Fast forward to 1971, President Richard Nixon
ends the reedemability of U.S. Federal Reserve Notes for gold. The US was then officially
on a fiat money system dragging the rest of the world with it. In this year the GDP of the People’s Republic
of China measured 98 and a half billion US Dollars. Starting in 1978, economic reforms in China
created a more capitalist style market, spurring incredible GDP growth reaching 488 billion
in US dollars by 1992. In contrast, US GDP in 1992 was roughly 13
times that of China’s GDP. From 1978 to 2010, the Chinese economy grew
an average of 9.5% each year. This closed the gap in ratio to US GDP which was now only
2 point 5 times that of China’s. At this rate, China is set to overtake the
United States’ economy by…2025? [Link 1] 2018? [Link 2] how about 2012? [Link 3] All Americans should know about the ever disappearing
manufacturing base of the United States.[Link 4] So called free trade agreements NAFTA & GATT
are now blamed for the great loss of jobs in the U.S.. In the first 30 months of NAFTA
the U.S went from a $3 billion trade surplus to Mexico to a $23.3 billion trade defeceit.
[Link 27] From 2002 to 2006 the United States lost 1.4
million manufacturing jobs while China gained 10.18 million. For better perspective, China’s popuation
in 2000 was 1 billion 265 million whereas the US had 281 million 422 thousand people.
This makes their population 4 and a half times that of the US but they are gaining nearly
10 times as many manufacturing jobs as we are losing(?). Additionaly, China’s almost the biggest holder
of U.S. Debt, 2nd only to the Federal Reserve. China is estimated to hold over 1 trillion
of our debt as of February 2011. This definately does not sound like a good
trend for the United States. But what does China think about it? Is this our fate? Are the Chinese smarter
or more hard working than Americans? Or do things such as excessive business regulations
in the U.s. have something to do with this trend? A study submitted September 2009 by Varshney
and Associates written by two Ph.D professors of CSU Sacramento states that “the total cost
of regulation to the State of California is $492.994 billion”. Perhaps less regulations would have helped
to gain more tax revenue for that 2010 budget defeceit of $19 billion, eh Arny? A significant chunk of California’s business
regulations are emissions related. Last year Californians voted down Prop 23 which would
have taken away some effectiveness of 2006’s AB 32 the “Global Warming Solutions Act of
2006”. Give me a break. It’s normal for temperatures
to vary, there’s no great “global warming” to be worried about. What we should be worried about in the US
is not having enough energy for our homes. Obama wants to bankrupt anyone building coal
powered plant when coal power represents 44.8 percent of America’s energy source In early 2011 inclement weather helped to
cause power outages in states such as Texas which in turn led to shortages in natural
gas from Texas to New Mexico, Arizona and California. So the US is discouraging new power plants
when we’re reaching the capacity of our current ones. Let’s look at how China is handling their
energy. The New York Times reports that “China has
emerged in the past two years as the world’s leading builder of more efficient, less polluting
coal power plants, mastering the technology and driving down the cost”. The article goes on to mention US restrictions
for a type of coal power plant that is not restricted in China. And they’re not just working with coal. In
2010 China became the top world manufacturer of solar panels. These Chinese seem to like renewable energy.
They also seem to like GOLD. The Wall Street Journal thinks that one big
reason for the large rally in gold at the end of 2010 could be do to “huge buying from
China.” China started their first gold backed Exchange
Traded Fund (ETF) early this year, after China outputted a record 340.88 tonnes of gold in
2010. In 2007 Chinese gold output outpaced the United
States’ by 36 tonnes, 1 million 265 thousand ounces. Gold price rose about 25 percent in 2010,
reaching all time highs in December. Silver however gained a massive 79 percent increase
in price last year. Already in February this year silver jumped
to new 31-year highs, reaching $32.86, more than twice the lowest price of silver during
2010. Ever increasing demand for use in latest technology
keeps this commodity supply very low. China is now the world’s largest Silver producer
AND consumer. In 2010 China’s net imports of silver increased
15% and their exports decreased 60% showing China’s future trend to hoard silver. If there was a catastrophic collapse of the
global financial system, China would not be in the worst position with their large precious
metals production and supply. Can we say the same for Americans? Does the
average american know the pieces of paper inside their wallet are backed by debt and
that they should really own a commodity worth value. China is on the right path where we are on
the wrong one. As we see ads asking us to sell our “scrap
gold” they’re being encouraged to buy. Food prices and other commodity prices are
increasing but this is not a result of supply and demand for bananas, as an example. There
aren’t less bananas being produced for or more being demanded. The reason why bananas cost more is because
there are ever increasing amounts of US dollars being printed whether on paper or digitally
in a computer system. China is seeing rampant inflation in their
money supply, As China keeps its exchange pegged to the
US dollar they will continue to see this high inflation. That has been changing as China and Russia
have recently announced that they will trade in their respective currencies instead of
the US Dollar. If this policy spreads throughout the world
the US with it’s current policies may not be a first world nation for much longer. Americans should prepare themself for the
coming crisis never seen before. We’re digging a hole of debt Please save storable food and invest in real
money or commodities such as gold and silver if you are serious about having a future for
you and your children.


Add a Comment

Your email address will not be published. Required fields are marked *