China is one of the world’s largest producers and purchasers of precious metals, especially gold and silver. Beijing has now unveiled its first gold ATM machine in a shopping district. More than 2,000 will be installed in the next two years. Since the beginning of the global economic meltdown, China has been purchasing and producing commodities at a rapid pace. Digital Journal has reported in the past that its central bank has bought gold bullion and state-television outlets have even urged citizens to acquire silver bullion. Digital Journal has also reported of gold ATM machines being installed in Germany and the United States. Now, China has unveiled its first gold ATM machine in Beijing’s shopping district of Wangfujing Street.
Showing posts tagged China
China’s Dagong Sees No Threat Of Fed Monetization Ending, Believes “World Credit War” Is About To Escalate
Starting to get doubts about QE3? Don’t tell that to the official Chinese rating agency Dagong, who in traditional uber-pragmatic fashion, has the following summary observation on US monetary policy, and any imaginary changes thereto: “The second round quantitative easing policy ongoing in the United States can not change its weak domestic demand in the short term.
In fact, it can only lower the interest rate of US Treasuries so as to maintain stable interest rate in the capital market in the long term, playing the indirect role of clearing some obstacles for a stable recovery. However, the plan of purchasing 600 billion US dollar Treasury bonds can not realize its predicted goal; and therefore, the United States will hardly change its predetermined monetary policy in 2011.” What does this mean for China and the rest of the world: “The continuous implementation of such unconventional monetary policy in the United States will lead to the escalation of world credit war and inflict greater losses for related parties in the world credit system.” Any questions?
Full Dagong report from 01/2011
One step closer to the fall of the dollar as the worlds reserve currency?
BEIJING (Reuters) - Dollar dominance is sowing the seeds of financial turmoil, and the solution is to promote new reserve currencies, a Chinese government economist said in a paper published on the eve of a G20 meeting about how to reform the global monetary system.
Although not an official policy statement, the paper by Xu Hongcai, a department deputy director at the China Center for International Economic Exchanges, offered a window onto the domestic pressures bearing on Beijing to move away from a dollar-centric global economy.
Xu’s paper, “Reform of the international monetary system under the G20 framework,” was published in Chinese on the center’s website this week (www.cciee.org.cn).
“Nations around the world have no way of restricting dollar issuance by the Federal Reserve. The current international monetary system lacks both stability and fairness,” Xu wrote.
He said the global monetary system had fallen into a “dollar trap.” While it would be sensible to reduce dollar holdings in official currency reserves, nations cannot easily cut back, because doing so would only lead the dollar to weaken and so hit the value of their assets, he said.
In much the same way that panic has gripped the US as fearful citizens try to buy potassium iodide tablets, CTV News in Canada reports that hoarders in China are stripping store shelves of salt based on rumors that it might prevent radiation exposure:
BEIJING — Worried shoppers stripped stores of salt in Beijing, Shanghai and other parts of China on Thursday in the false belief it can guard against radiation exposure, even though any fallout from a crippled Japanese nuclear power plant is unlikely to reach the country.
The panic shopping was triggered by rumours that iodized salt can help ward off radiation poisoning — part of the swirl of misinformation crisscrossing the region in the wake of Japan’s nuclear emergency.
The rumours have flown widely. Text messages on mobile phones have circulated about nuclear plumes spreading from Japan throughout Asia. Rumours also spread that salt was adequate protection for radiation sickness.
Supermarkets in the capital of Beijing and many cities across the country have run out of salt in the last several days as a wave of panic buying spread across provinces from eastern Zhejiang to southern Guangdong to western Sichuan.
Prices of salt jumped five or 10-fold in southern Guangdong, the Internet portal sina.com reported.
I feel like I should remind folks in the US, once again, that there is very little radiation threat posed by this disaster, and the time to be afraid of nuclear fallout in the US is already decades behind us.
Consider the history of nuclear testing on US soil. Much worse has already been done in our backyards.
Between 16 July 1945 and 23 September 1992 the United States of America conducted (by official count)1054 nuclear tests, and two nuclear attacks. The number of actual nuclear devices (aka “bombs”) tested, and nuclear explosions is larger than this, but harder to establish precisely.
Is it time for a trade war with China?
A trade war could result in impacts on our lifestyle very nearly as profound as restrictions on the oil flowing from the Middle East.
From the cheap products we buy at Wal-Mart to the municipal bonds that Chinese investors purchase, we are deeply intertwined with their economy.
Opposition to a more aggressive trade stance would also be fierce from American corporations, which have gleefully taken advantage of China’s trade policies to boost their profits.
But the time is approaching when American policy-makers simply won’t have a choice.
If our companies — especially those that provide crucial blue collar jobs — can’t compete and build prosperity on an even footing with China, then our country will surely fall into second-place status, beginning with our manufacturing sector.
In time, other parts of our economy will be exported, eroding prosperity and tax revenues even further. If that’s allowed to happen, the budget woes we face today will look like child’s play.
Put simply, we all expect our government to be the government of a rich and robust nation. But if we allow China to take away that prosperity unfairly, the downward spiral will be irreversible.
In a trade war with China, we all would lose
A trade war with China wouldn’t merely reduce Chinese imports, denying choices and bargains to American consumers. China would undoubtedly reply with tariffs of its own, and Americans would pay in the form of lost jobs.
We have legitimate commercial issues with Beijing, but they should be pursued through the normal dispute-resolution channels of the World Trade Organization — not through measures that risk sparking a trade war during which both sides would lose.