Koos Jansen
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Koos Jansen
Posted on 7 Jul 2013 by

Chinese Press On Gold And The Dollar Hegemony

Below is an article that appeared in the Chinese newspaper “World News Journal” from 2011. The first part is about the relationship between gold, the dollar and oil. The second part is on the US plundering the rest of the world by means of the dollar as the world reserve currency. China wont go along with this forever and knows exactly what the roll of gold will be in a coming shift in monetary order.

First some highlights.

Google Translate from here:

Since late 2008, the U.S. government in order to rescue the financial crisis, the continued introduction of QE1, QE2 and other huge dollar “rescue” plan, resulting in the dollar and inflation rampant spread of  the global situation, greatly hurt the global economy.

In the United States can lead the world economy, many countries have also had to endure the plundering of U.S. monetary policy. Therefore, the U.S. for decades, repeated use of its monetary policy, plundering the wealth of other countries, but still do not stifle their dollar dominance.

Commentators believe that the current price of gold soaring, is actually a harbinger of change in the international monetary order.

Venezuela to recover gold reserves, it means that U.S. and European banking systems in developing countries are losing confidence in the world monetary system is expected to change more than ever more strongly. In such an expectation under the gold as a non-sovereign hard currency, touted by the funds in a short time, it is a legitimate phenomenon.
Look below a message ……
Riddled dollar hegemony could collapse overnight

Do not think that U.S. hegemony unbreakable, you know, before the collapse of the former Soviet Union, and no one would have thought it would fall apart overnight.

QE3 In essence, or plunder his country’s wealth to pay for Wall Street.

Once in that position, not only to dollar hegemony no longer, and the United States for decades by printing out the dollars, of which the vast majority will return to the United States; until then Hou, U.S. inflation would be astronomical..

Gold soared indicates the global crisis

2011-08-23 14:09:43 Source: International Online – “World News” Editor: Shen Shi
Things such as chess new Board. The truth and the truth hidden in mass occur daily current affairs behind. “Talk about the world” perspective of political, economic, cultural and three-dimensional vision, the overall situation through both domestic and foreign, once a week for you to unraveling the nature of emerging news. This month’s “Talk about the world” for your analysis of the current world price of gold in international political factors behind skyrocketing.

Gold prices soared, why deviate from market discipline

● Gold prices hit record highs
Newspaper comprehensive news: the 20th New York gold futures prices continue to rise for the fourth consecutive trading day closing price hit a record high, and further approaching $ 1,900 an ounce. As the market worried about the prospects for global economic growth, prompting investors remain wary of the stock market, and thus turned to buying gold futures as a hedge assets.
Day, the New York Mercantile Exchange (under the Commodity Exchange, gold futures for December delivery rose $ 30.20 to close at $ 1,852.20 an ounce, or 1.7 percent, after earlier touching $ 1,881.40 an ounce, a record intraday high .

● the international market price of crude oil fell
Newspaper comprehensive news: August 20, investors generally believe that crude oil prices falling more in the future is close to bottoming out, with the day part of the power provided by the weak dollar, crude oil prices in the vast majority of floor trading hours to maintain a slight rising trend ; However, crude oil market close proximity to the vast selling lead before reversing the trend slightly lower oil prices. Main oil contract closed at $ 82.26 a barrel.
In 1979, the third oil crisis. In crude oil prices, while gold prices also because of the economic crisis in Western countries soared; Soviet invasion of Afghanistan in 1980, the gold price reached 850 U.S. dollars one ounce or so of vertices. Subsequently, as the U.S. inflation rate has dropped, gold prices have been falling crude oil prices continue to decline.
Observed since the disintegration of the Bretton Woods system in the world gold prices, oil prices and the dollar index movements between curves, you can see an obvious phenomenon is: the price of gold and oil and mineral resources, and is the positive correlation, while the price of gold and The dollar index, and is the negative correlation.
However, this year the price of gold skyrocketing, we have found that this relationship appears many times in history curve, but now has changed. The current price of gold reached a record high, but the oil and mineral resources are on the decline, while the dollar is in the historical low levels, out of a sideways curve.
If the by-point analysis, then, energy and mineral prices fell, means that investors pessimistic about future economic development; while the U.S. dollar remained at low levels, it means that people still think that the future inflation risk, great risk of depreciation of the dollar. Therefore, if the individual from the dollar hovering in the low price of gold soaring view of the phenomenon can also be understood, but it is difficult to speculate that a reasonable explanation as to why energy and mineral prices have declined. Energy and mineral resources, not as a hedge against inflation can become the object of it? Moreover, with respect to the price of gold today, many energy and mineral prices rose far not so great.
However, we see that the international capital appeared abandon other commodities, while the individual pursuit gold phenomenon. Commentators believe that this is by no means expected inflation can be explained by the phenomenon. In fact, the current surge in gold prices, is another more profound change in the situation of international politics omen.
Look below a message ……
World has changed, the price of gold soaring round herald big change in the world

● Venezuelan officials confirmed intention to transfer gold reserves
According to Reuters August 18 reported: Venezuelan officials confirmed that, taking into account the United States and other developed economies by the global debt problems, the country’s current plan will be stored in a large number of overseas gold reserves transferred to the country, in order to achieve multi-asset portfolio technology.
Venezuelan President Hugo Chavez urged the Committee of Central Bank Governors Nelson accelerate the pace of nearly $ 11 billion of gold from Europe and transferred to the central treasury in Caracas. Earlier, there were reports that the Venezuelan government plans to billions of dollars in foreign cash reserves transferred to Russia, China and Brazil, domestic banks will also be stored in a European bank transfer large quantities of gold. Venezuela plans to store 211 tons of gold in the overseas transfer to Venezuela’s central bank vaults. The Government is currently stored in the vaults of the central bank gold total of 154 tons.
United States sovereign credit rating was downgraded on the global financial markets and a huge shock, vividly demonstrated the U.S. dollar-dominated international monetary system, the existence of major shortcomings: difficult to overcome the “Triffin Dilemma”, the United States and the global monetary policy objectives conflicting objectives of monetary policy as well as so-called “Stiglitz cycle.”
Since late 2008, the U.S. government in order to rescue the financial crisis, the continued introduction of QE1, QE2 and other huge dollar “rescue” plan, resulting in the dollar and inflation rampant spread of the global situation, greatly hurt the global economy.
Hegemony of the dollar as the main feature of the current international monetary system, the U.S. monetary policy has a unique advantage, you can completely according to their economic stability objectives of monetary policy, while completely ignoring its spread effect, which is formed in the objective U.S. monetary policy effects on other countries plunder.
In the United States can lead the world economy, many countries have also had to endure the plundering of U.S. monetary policy. Therefore, the U.S. for decades, repeated use of its monetary policy, plundering the wealth of other countries, but still do not stifle their dollar dominance.
But this time is completely different, since the end of the Cold War, the world’s biggest change is China as the representative of the rise of emerging economies, which completely broke the previous world economic pattern. Therefore, relying solely on internal Western countries coordinate monetary order, has been unable to solve the current financial crisis. For example, the history of the “Plaza Agreement” Let the appreciation of the yen, is a typical internal coordination of monetary order, which makes dollar successfully consolidated its hegemony.
Commentators believe that the current price of gold soaring, is actually a harbinger of change in the international monetary order. Dollar hegemony system for the existence of world economy, has been completely changed to dollar hegemony is characterized reinvent the wheel of the world monetary system, is inevitable. Venezuela to recover gold reserves, it means that U.S. and European banking systems in developing countries are losing confidence in the world monetary system is expected to change more than ever more strongly. In such an expectation under the gold as a non-sovereign hard currency, touted by the funds in a short time, it is a legitimate phenomenon.
Look below a message ……
Riddled dollar hegemony could collapse overnight

● Bernanke detained “treason” charges
According to the Xinhua News Agency reported on August 17: U.S. Republican presidential candidate, Texas Gov. Rick Perry criticized Bernanke printing dollars on the 17th, playing politics is indeed “treason.”
Perry campaigning activities, said, “From now on if Bernanke printed more money before the election, then the United States in this particular historical period, print more money to play politics, in my opinion is almost treason.” Despite this criticism with partial pull votes for their own means, but no doubt that the Fed’s quantitative easing monetary policy now being increasingly bleak prospects for the dollar. Bring the United States dollar huge seigniorage profits, in fact, the Fed’s credit currency, along with the continued easing, the Fed’s credit is gradually compromised.
Perry accused Bernanke’s behavior is “treason” and its tone can be very intense. But so-called “treason” and a little let outsiders confused. Commentators believe that, in fact, Perry say is that Bernanke is now printing too many dollars, has the greatest threats to the dollar’s status as the world currency. National interests of the United States, any detrimental to the dollar’s dominance behavior, naturally called “treason” behavior.
Perry may be right. However, the so-called “improper leading a poor family I do not know the” why Bernanke printing money approach taken to overcome the crisis, it is quite upset. Commentators believe that if the United States is not printing money approach taken to temporarily through 2008 subprime mortgage crisis, but austerity, then the U.S. financial bubble inevitably dashed, this way, I am afraid that in the overnight dollar hegemony between sudden collapse. Do not think that U.S. hegemony unbreakable, you know, before the collapse of the former Soviet Union, and no one would have thought it would fall apart overnight.
Currently, the U.S. media has been carried out for QE3 bedding. QE3 In essence, or plunder his country’s wealth to pay for Wall Street. However, the price of gold skyrocketing, it is a warning against the United States. Commentators believe that it is the price of gold skyrocketing world monetary system by the release of the information revolution, is on a new round of monetary easing in the United States the biggest constraint lies.
Currently, the United States also has a disastrous dollar hegemony, although it is gradually disintegrate, however, if the United States would like to help the crumbling hegemony, and then engage in a quantitative monetary easing to plunder other countries in the world, then they might The result will be completely abandoned the dollar countries. Once in that position, not only to dollar hegemony no longer, and the United States for decades by printing out the dollars, of which the vast majority will return to the United States; until then Hou, U.S. inflation would be astronomical, the United States or to suffered the fate of the former Soviet Union, but also unknown ah! Commentators believe that part of the U.S. elite is to see such a prospect, therefore, only “treason” This is very serious scolding appears. Look at the right side of two messages ……
Riots and unrest in developed countries is far from over

Chinese version:

http://gb.cri.cn/27824/2011/08/23/5190s3347347.htm

Google Translate:

http://translate.googleusercontent.com/translate_c?depth=1&hl=nl&rurl=translate.google.com&sl=zh-CN&tl=en&u=http://gb.cri.cn/27824/2011/08/23/5190s3347347.htm&usg=ALkJrhimqwofWpQlZiqHRPKe28xw9pYqEQ

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