We are losing the war with China...

 Note.  I don't remember the reader that recommended this.

via MoneyWeek (tidbits...read it all yourself)

If you thought the West was unprepared for inflation – or indeed for Russia – wait and see just how unprepared it is for this bombshell.

This is the biggest story in world finance, and yet nobody, bar your intrepid blogger, is reporting on it.

For those without the attention spans to read all the way to the end, let’s cut to the chase and get the main point out upfront: China has more gold than the United States.

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 The sanctions on Russia and its removal from the Swift messaging system this week are perhaps the most dramatic example of all. Russian civilians have had their wealth decimated (in fact, probably significantly more than decimated for most) almost overnight. 

China will be surely watching all of this, learning from Russia’s mistakes and thinking it needs to de-dollarise as swiftly and discreetly as possible. Whether to protect its citizens’ wealth or its national interests, China cannot be beholden to a banking system that is run by the West – the US especially – and which is one of their weapons of war.

----- (I never considered this part of the sanctions...We have declared financial war on Russia.  If another country or group of countries did to us what we did to Russia then missiles would already be flying)-----

Not all gold entering China is accounted for by SGE withdrawals. The People's Bank of China (PBOC), the central bank, likes to buy 12.5kg bars, which do not trade on the SGE. The PBOC often uses dollars on exchanges in London, Dubai and Switzerland, while the SGE sells its gold in yuan. 

The Chinese army, too, owns gold and does not have to declare its purchases. And there are other state agencies, as well: the State Administration of Foreign Exchange and China Investment Corporation – the sovereign wealth fund, for example. 

How much of this gold is state owned? Norman guesses 50%; Suchecki, formerly of the Perth Mint, says 55%.

At 50%, the implication is that China owns over 15,000 tonnes – closing in on double the US.

“Chinese Central Bank gold holdings have apparently been entirely unchanged since mid-2019 at 1,948 tonnes,” Ross Norman tells me. “But few of us believe that. Put an additional zero on the end (19,480 tonnes) and I should not be surprised if that is not much closer to their official holdings”.

Alasdair McLeod goes one stage further. “The PRC probably has as much as 30,000 tonnes hidden in various accounts, but not declared as official reserves”.

Whether ten, 15 or 30,000 tonnes, there is no way China can declare such large holdings. Not yet anyway – it would cause an unwanted surge in both the yuan and the gold price. The government's $3.2trn of US dollar foreign exchange reserves would be devalued. 

“I don’t think China needs to brag about its largesse,” says Norman. “After all, a stronger currency as a result of that reserve backing would be counter-productive, as it would confer competitive disadvantage”.

What’s more, to declare so much gold would be a direct challenge to American supremacy, which China is probably not yet ready for. Parity first, then supremacy.

Story here 

To beat China it would take a whole of govt, private corporation and ultimately mobilization of the American people.

Additionally it would take focus and discipline..and a work effort that I no longer believe the average American has.

Lastly it would also take a unity of effort that is beyond our current grasp.

We had a small window to kill this monster in the crib, we didn't and it's all grown up now.

It's pretty jacked up to think that the only way you survive a fight against a foe is to rely on their restraint but that's where we're headed with China.

Ukraine isn't our fight and its a huge distraction.  No worse. It revealed our last remaining card against a more powerful foe. In other words we no longer have any bullets left.

Congrats.

A Eurocentric mindset and foreign policy has laid the seeds of our defeat.