China Guts Dollar, Crushes U.S. in Alarming Financial War!!!

China Guts Dollar, Crushes U.S. in Alarming Financial War Game…

 Sep 23, 2010 7:00 PM ET
On a rainy Tuesday in March 2009, U.S. military and intelligence officials gathered in a war room north of Washington to watch a simulated conflict flicker across a bank of video screens.

The struggle was pitting the U.S. against China. And China was winning hands down, writes Eric J. Weiner in “The Shadow Market,” a bleak survey of how flush authoritarian governments deploy financial means to achieve geopolitical ends.

The weapons were dollars, stocks and bonds, not bullets and bombs. The soldiers were Wall Street bankers, hedge-fund traders and economists. For two days, they explored what would happen if the world sank into economic warfare. The outcome was alarming.

“There was no way for America to win,” Weiner says.

Whenever the U.S. did something Beijing didn’t like, China began dumping a fraction of its dollar-backed assets, driving down the currency, sowing economic chaos and prompting U.S. leaders to appease the Chinese. America didn’t have as much leverage with its Asian banker as had been assumed — a lesson reinforced this week when Chinese Premier Wen Jiabao rebuffed U.S. complaints that the yuan was undervalued.

http://www.bloomberg.com/news/2010-09-23/china-sabotages-dollar-defeats-u-s-in-alarming-financial-war-game-books.html

CHINA PREPARES FOR FINANCIAL WARFARE

The US Pentagon recently conducted the first financial war game in the world. This simulation exercise was the culmination of months of preparation.The exercise simulates a global financial crisis where the reserve status role of the US Dollar comes under assault by other nations. Participants must determine what the US should do to defend. The 2-day exercise seeks to find out what modes of attack opponents will adopt through role-playing, how various geopolitical scenarios may affect international finance and what measures nations can adopt.This was the game scenario:
1. Russia announces that she will move her gold reserves to Switzerland.2. Russia conducts bilateral talks with Japan to stop using US Dollar for energy transactions.
3. Russia persuades China to join the arrangement.

http://www.silverdoctors.com/china-prepares-for-financial-warfare/

THE FINANCIAL WAR HAS BEGUN

I have been studying the dollar’s death as the world reserve currency for a few years now and I want to share some thoughts;

1st – The last 2 years or so, lots of deals going around the dollar between trading countries. Some oil exporters trying to sell outside the dollar getting pressure or war from U.S.

2nd – Now a war of propagda showing up on foreign news sites like RT.com – they are anti dollar and also China openly stating they are ready to be the new reserve currency. A call from Chine for all nations to ditch the US dollar.

3rd – The first shot fired will be when China dumps US T-bills at a discount and crashes us and the global economy.

some links…

http://rt.com/business/losing-faith-de-americanize-161/

http://rt.com/business/china-shanghai-free-zone-527/

9 Signs That China Is Making A Move Against The U.S. Dollar

#1 Chinese credit rating agency Dagong has downgraded U.S. debtfrom A to A- and has indicated that further downgrades are possible.

#2 China has just entered into a very large currency swap agreement with the eurozone that is considered a huge step toward establishing the yuan as a major world currency.  This agreement will result in a lot less U.S. dollars being used in trade between China and Europe…

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”

#3 Back in June, China signed a major currency swap agreement with the United Kingdom.  This was another very important step toward internationalizing the yuan.

#4 China currently owns about 1.3 trillion dollars of U.S. debt, and this enormous exposure to U.S. debt is starting to become a major political issue within China.

#5 Mei Xinyu, Commerce Minister adviser to the Chinese government,warned this week that if the U.S. government ever does default that China may decide to completely stop buying U.S. Treasury bonds.

#6 According to Yahoo News, China has already been looking for ways to diversify away from the U.S. dollar…

There have been media reports this week that China’s State Administration of Foreign Exchange, the body that handles the country’s $3.66 trillion of foreign exchange reserve, is looking to diversify into real estate investments in Europe.

#7 Xinhua, the official news agency of China, called for a “de-Americanized world” this week, and also made the following statement about the political turmoil in Washington: “The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized.”

#8 Xinhua also said the following about the U.S. debt deal on Thursday: “[P]oliticians in Washington have done nothing substantial but postponing once again the final bankruptcy of global confidence in the U.S. financial system”.  The commentary in the government-run publication also declared that the debt deal “was no more than prolonging the fuse of the U.S. debt bomb one inch longer.”

#9 China is the largest producer of gold in the world, and it has also been importing an absolutely massive amount of gold from other nations.  But instead of slowing down, the Chinese appear to be accelerating their gold buying.  In fact, money manager Stephen Leeb says that his sources are telling him that China plans to buy another 5,000 tons of gold.  There are many that are convinced that China eventually plans to back the yuan with gold and try to make it the number one alternative to the U.S. dollar.

So exactly what would happen if the Chinese announced someday that they were going to back their currency with gold and would no longer be using the U.S. dollar in international trade?

http://theeconomiccollapseblog.com/archives/9-signs-that-china-is-making-a-move-against-the-u-s-dollar