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

www.zerohedge.com...

#1 Chinese credit rating agency Dagong has downgraded U.S. debt from 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.

If China does decide to back the yuan with gold and no longer use the U.S. dollar in international trade, it will have devastating effects on the U.S. economy. Demand for the U.S. dollar and U.S. debt would drop like a rock, and prices on the things that we buy every day would soar. At that point you could forget about cheap gasoline or cheap Chinese imports. Our entire way of life depends on the U.S. dollar being the primary reserve currency of the world and being able to import things very inexpensively. If the rest of the world (led by China) starts to reject the U.S. dollar, it would result in a massive tsunami of currency coming back to our shores and a very painful adjustment in our standard of living. Today, most U.S. currency is actually used outside of the United States. If someday that changes and we are no longer able to export our inflation that is going to mean big trouble for us.

I don't always agree with allot of things I read for the world is a big place and there are many forces striving to gain some advantage. Like a computer program unless all the variable are written in the code what you get out is a very incomplete picture.
No doubt one day China (an others) may play this card. There are trade agreements in place already between China and Russia that do not use the dollar. When is the question, No?

I wonder what would happen if China dumped all the physical dollars they have into the market? I believe they have enough to give every one of their citizens $2000.

I wonder if that is what they are using to buy up farmland in Africa, industries in Canada and the US? Oh well, I guess this makes up my mind as to what new language to learn!

727Sky
www.zerohedge.com...

#1 Chinese credit rating agency Dagong has downgraded U.S. debt from 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.

If China does decide to back the yuan with gold and no longer use the U.S. dollar in international trade, it will have devastating effects on the U.S. economy. Demand for the U.S. dollar and U.S. debt would drop like a rock, and prices on the things that we buy every day would soar. At that point you could forget about cheap gasoline or cheap Chinese imports. Our entire way of life depends on the U.S. dollar being the primary reserve currency of the world and being able to import things very inexpensively. If the rest of the world (led by China) starts to reject the U.S. dollar, it would result in a massive tsunami of currency coming back to our shores and a very painful adjustment in our standard of living. Today, most U.S. currency is actually used outside of the United States. If someday that changes and we are no longer able to export our inflation that is going to mean big trouble for us.

I don't always agree with allot of things I read for the world is a big place and there are many forces striving to gain some advantage. Like a computer program unless all the variable are written in the code what you get out is a very incomplete picture.
No doubt one day China (an others) may play this card. There are trade agreements in place already between China and Russia that do not use the dollar. When is the question, No?

Well I have an inside in Switzerland that this may be true. As of two years ago. Hence, why I have converted all my cash to tangible, materialistic things I can barter with. Pucker up my friends....

As one empire crumbles another rises to take its place.

The US Empire must crumble. The US debt is simply far too large.

China has been maneuvering for some time to be the one on top.

The EU has also been maneuvering for some time, but not successfully. The whole world knows the US is about to go belly up. No one is happy about it, but the US does not listen to anyone else.

P

superman2012
I wonder what would happen if China dumped all the physical dollars they have into the market? I believe they have enough to give every one of their citizens $2000.

I wonder if that is what they are using to buy up farmland in Africa, industries in Canada and the US? Oh well, I guess this makes up my mind as to what new language to learn!

That's probably exactly what they're doing. After all the dollar is the reserve currency *wink, wink*. If I was China I'd be using dollars and treasury bills to buy everything. They have direct currency exchange with a lot of countries now and more are joining up.

Supposedly they only have around 5000 tons of gold but there is talk that they have or will soon have over 12,000 tons pretty quickly. At a rate of 2000 tons a year shouldn't take long. If they do go to a gold backed currency then that's when they'll most likely dump the dollar too. Unless we implode first.

reply to post by Bassago


If they are going to be backing their currency with gold, they better make sure that they can defend themselves. Look at every other country that tried that lately. (hint: It didn't turn out so well for Gaddafi).

Germany is taking their gold back that the US was holding, Russia and China are buying large amounts of gold to protect them in case of a currency reset.

It isn't looking good.

Maybe if China becomes the world reserve currency all the banks will head over there and stop robbing us. It could be a good thing, right?

reply to post by 727Sky


This has been in the making for quite a while. I made a series of posts on the history, with lots of links in the thread IMF, World Bank 2013 annual meeting in Washington looking at the international picture

The US government shutdown was not what you think.

The Annual Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) ... was supposed to take place in Washington, D.C., October 11-13, 2013 LINK

However the meeting schedule was actually moved up to October 7 and took place during the Us government shutdown. The International Bankers moved the meeting up because their plans are in complete disarray. China, Russia and the BRICS countries out maneuvered them.

Sep 5, 2013 - BRICS agree to capitalize development bank at $100bn


At first China and Russia wanted to go to IMF Special Drawing Rights (SDRs) See post: HERE

If you go back in history there are some other interesting tidbits. Director-General of the World Trade Organization, Pascal Lamy wrote

...In the same way, climate change negotiations are not just about the global environment but global economics as well — ...

Can we balance the need for a sustainable planet with the need to provide billions with decent living standards? Can we do that without questioning radically the Western way of life?... [This is UN Agenda 21]


..And finance is not the only area where domestic issues are turning into global concerns. Countries claim the right to use national resources as they see fit. But the byproduct can be greenhouse gases... [Well that certainly answers the question of why the UN created the Global Warming Scare.]

The reality is that, so far, we have largely failed to articulate a clear and compelling vision of why a new global order matters ....

All had lived through the chaos of the 1930s — when turning inwards led to economic depression, nationalism and war. All, including the defeated powers, agreed that the road to peace lay with building a new international order — and an approach to international relations that questioned the Westphalian, sacrosanct principle of sovereignty...

To advance this agenda Clinton took the following actions while he was president. ( To understand the mindset of Clinton and the others. The whole situation depends on your stand on INTERDEPENDENCE.See "Economic Interdependence and War: A Theory of Trade Expectations," - Does economic interdependence increase or decrease the probability of war among states?

Chasing the Dragon: Clinton's China Policy

...Bill Clinton took contributions he knew came from China, and played another angle as well. US companies wanted to sell China military technology, but the sales were prohibited by law. Economic sanctions for the Tiananmen square massacre and restrictions on technology exports prevented these companies from selling China the armaments they wanted.

In return for campaign contributions, the President shifted regulation of technology exports from the State Department to the free-wheeling Commerce department. The administration also relaxed export controls and allowed corporations to decide if their technology transfers were legal or not. When easing restrictions wasn't enough, Clinton signed waivers that simply circumvented the law. The President's waivers allowed the export of machine tools, defense electronics, and even a communications system for the Chinese Air Force.

Bernard Schwartz and Michael Armstrong, the CEOs of Loral and Hughes, each donated over one million dollars to Clinton's re-election campaign. These companies had an interest in seeing China develop reliable missiles to loft their satellites into orbit. Clinton arranged direct talks between Bernard Schwartz and a Chinese general to improve China's rocket technology. Michael Armstrong was made head of the Export Advisory Council. Both companies were allowed to upgrade the launching and guidance of China's missiles.

Clinton even involved the Department of Energy, caretaker of our nuclear weapons, in his fundraising schemes. In 1994 and '95 then Energy Secretary Hazel O'Leary accompanied Johnny Chung, John Huang, Charlie Trie, and Bernard Schwartz on trade missions to China. Shortly afterward the DOE relaxed security at US weapons labs. Wen Ho Lee, an ethnic Chinese physicist assigned to Los Alamos, illegally transferred data on nuclear warheads to his private computer files.

In June of 1995, the CIA learned that China had stolen the crown jewels of our nuclear arsenal, including the neutron bomb and the W-88 miniaturized warhead....

.... Bill Clinton's China policy has been venal at best, treasonous at worst. He is responsible for China's rise as a militant, nuclear armed threat to the United States. China has grown from an agrarian backwater into the world's third largest economy on Clinton's watch. While or yearly trade deficits with China have risen to 70 billion dollars a year, they have been the world's fastest growing economy. China has become a colossus precisely because of our trade deficits.

With their new wealth, China has sought military parity with the United States.....

reply to post by 727Sky


Things get even more interesting. Remember Pascal Lamy mentioned ".. climate change negotiations are not just about the global environment but global economics as well ..."

Well Copenhagen was supposed to be the place where a climate change treaty was signed by all nations but it flopped big time. The Guardian UK reported:

...The so-called Danish text, a secret draft agreement... hands effective control of climate change finance to the World Bank; would abandon the Kyoto protocol – the only legally binding treaty that the world has on emissions reductions; and would make any money to help poor countries adapt to climate change dependent on them taking a range of actions... The document was described last night by one senior diplomat as "a very dangerous document for developing countries. It is a fundamental reworking of the UN balance of obligations. It is to be superimposed without discussion on the talks"....

It seem from a first hand witness THE FLY IN THE OINTMENT at Copenhagen was CHINA!
How do I know China wrecked the Copenhagen deal? I was in the room

....Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful "deal" so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen.

China's strategy was simple: block the open negotiations for two weeks, and then ensure that the closed-door deal made it look as if the west had failed the world's poor once again. And sure enough, the aid agencies, civil society movements and environmental groups all took the bait. The failure was "the inevitable result of rich countries refusing adequately and fairly to shoulder their overwhelming responsibility", said Christian Aid. "Rich countries have bullied developing nations," fumed Friends of the Earth International.....

Moving forward you then have The Cyprus Haircut

...very disturbing news that despite the ongoing liquidity blockade, capital controls and (somewhat) closed Cyprus banks, one particular group of people - the very same group targeted to prompt this whole ludicrous collapse of the island nation - Russian Oligrachs had found ways to bypass the ringfence and pull their money out quickly and quietly. We said that, if confirmed, "If we were Cypriots at this point we would be angry. Very, very angry." Turns out the Cypriots did become angry, and the questions are finally starting....

And that brings us to the BRICS countries retaliation in March: BRICS Nations Plan New Bank to Bypass World Bank, IMF

The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.

“The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. “There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.”....

The threat was made solid in September, the US government was shutdown and the IMF meeting was moved forward.

Again look at my post on Special Drawing Rights (SDRs) and GOLD.

Theres more to it.... EU has just made trade deals with Canada and will make the same deals with China to significantly lower tax and duty on goods between the countries.

The US has not yet secured such a deal because of its impending economic doom and the fact the US intelligence agencies dont give a # about respecting sovereign nations private affairs. The US has dug this hole themselves... Now lay yourself in it and start scooping the dirt down over yourselves...

reply to post by flice


It is EUROPEAN BANKERS (Paul Warburg representing the Rothschild's to be exact) who stole US citizens blind and then used their children as cannon fodder.

Before the 1913 Federal Reserve Act that EUROPEAN BANKER Paul Warbure wrote, the USA was isolationist. The act was signed into law December 22nd 1913 and within six months the banksters had manipulated the USA into WWI. SEE LINK

we have been given the heads up now we must get ready for the big flush usnews.nbcnews.com... from the link

Passing the buck: What would happen if greenbacks weren't top dollar?

Mark Wilson / Getty Images file
A worker inspects newly redesigned $100 notes during the printing process at the Bureau of Engraving and Printing on May 20, 2013, in Washington, D.C.

By Tracy Connor, Staff Writer, NBC News
Washington’s brush with default this week has renewed debate about the future of the U.S. dollar as the world’s reigning currency – a position the greenback has held for nearly 70 years.
Any American who has stocked up on pesos before a trip to Cancun might not realize the extent to which the global economy depends on the familiar bills already in their wallet.
Because the United States still has a dominant economy, a strong banking system and a stable government, the dollar remains the grease for the world’s financial works.
Some 80 percent of foreign exchange transactions are conducted with dollars, and American money accounts for more than 60 percent of overseas reserves, the investments that foreign governments and banks sock away.



Oil is bought and sold around the world in dollars. Foreign currencies are measured against them. And when there’s a crisis, even one wrapped in red, white and blue, world investors seeking stability buy American green.
That means the U.S. government can borrow money cheaply, and it means Americans pay less for their homes and cars.

i have a thread on this as well www.abovetopsecret.com... china is getting set to take the stage in 2014 as the world’s currency leader The US shut down is a part of this.

China is making a play for the reserve currency but that's all it is, a play for it as It will not be allowed. The best way to achieve the goal of a single global currency is to get things divided and pull the plug on the dollar. With yuan not strong enough to take the dollars place and still holding too much in T bills the yuan will get pulled down along with all the rest. Any country that jumped on the yuan bandwagon suffers the same fate. Holding dollars or CNY will sink you ship at this point.

Washington's theatrics over the debt merely set the stage for the division and with the threat of another possible shutdown in Jan and possible default in Feb, there's a lot of bandwagon jumping. Expect the wagon to get overturned soon.

superman2012
reply to post by Bassago

 

If they are going to be backing their currency with gold, they better make sure that they can defend themselves. Look at every other country that tried that lately. (hint: It didn't turn out so well for Gaddafi).

I was about to make the same comment. Maybe the majority still thinks that Gaddafi was a dictator and hated by is people. LOL

rt.com...

Amid the government crisis, the US is $17 trillion in debt which is 107 percent of GDP. However, more important is the fact that it is 700 percent of the country’s revenue, Michael Pento, president of Pento Portfolio Strategies told RT.

“That $ 17 trillion everybody says its 107 percent of GDP, that’s true. But who really cares about the percentage of GDP? It’s the percentage of the debt as a percentage of the revenue – its 700 percent of our revenue. Deficits are growing at 30 percent of our revenue every year added to the deficits we have already. So it’s unsustainable. What is going to happen eventually – a currency and bond market collapse,” he said.


RT: Those huge immediate financial loses aside for a moment... how much extra damage do you think has been done to the country's credibility?


Michael Pento: We have about 17 trillion in total debt right now and 126 trillion in unfunded liabilities and entitlement programs. Instead of doing something to address our entitlement programs, what we’ve done instead is enact a new entitlement program called Obamacare - the affordable care act, which is going to cost trillions of dollars. In fact the White House says the latest assessment is 2.6 trillion dollars over ten years added to the debt and deficits that are already unsustainable. And if they say its 2.6 trillion you could pretty much double it.

Timing is everything

"BEWARE THE TIGER YOU CANNOT SEE"

A little off-topic but a interesting article on Thailand being a very big importer of gold which is going unnoticed .
www.bloomberg.com...
I think the world is just happy to get rid of the cancerous U.S. dollar as the global coin first and then worry about who will be the next global coin later. People used to say a few years back that one day the dollar would no longer be the global coin, then it was said it is inevidible that one day the dollar would fall, nowadays there the world already knows the dollar will be no longer around in six months apart from the good folk of the U.S of course. "If you don't know who the sucker is at the card table then its you". Don't be a fool if your in America, because the whole world already knows the dollar will end up like this;
www.rogershermansociety.org...

Telos

superman2012
reply to post by Bassago

 

If they are going to be backing their currency with gold, they better make sure that they can defend themselves. Look at every other country that tried that lately. (hint: It didn't turn out so well for Gaddafi).

I was about to make the same comment. Maybe the majority still thinks that Gaddafi was a dictator and hated by is people. LOL

Those are the people we blame for the current crisis we are in. They failed to hold their government accountable and in the end the completely failed themselves and their families.

These are most likely the same people that believe their government should be out policing the world according to Western traditions, morals, ethics, values, mores, norms, etc. I wish there was still a puke icon.

reply to post by pstrron

China is making a play for the reserve currency but that's all it is, a play....

It is more than just a play. The progressives in the USA and the rest of the world underestimated China. As I said above Clinton gave away the USA's military and technology secrets so China in the last decade has become a real military threat while the Progressives continue to seek to set-up a World Government. China and Russia are countering those moves.

The plan was to set-up a global government via INTERDEPENDENCE.

Does economic interdependence increase or decrease the probability of war among states?...

The prolonged debate between realists and liberals on the causes of war has been largely a debate about the relative salience of different causal variables. Realists stress such factors as relative power, while liberals focus on the absence or presence of collective security regimes and the pervasiveness of democratic communities.(1) Economic interdependence is the only factor that plays an important causal role in the thinking of both camps, and their perspectives are diametrically opposed.

Liberals argue that economic interdependence lowers the likelihood of war by increasing the value of trading over the alternative of aggression: interdependent states would rather trade than invade.... Realists dismiss the liberal argument, arguing that high interdependence increases rather than decreases the probability of war. In anarchy, states must constantly worry about their security. Accordingly, interdependence - meaning mutual dependence and thus vulnerability - gives states an incentive to initiate war, if only to ensure continued access to necessary materials and goods.

The unsatisfactory nature of both liberal and realist theories is shown by their difficulties in explaining the run-ups to the two World Wars....

.... Germany and Japan, were also the most highly dependent despite their efforts towards autarchy, relying on other states, including other great powers, for critical raw materials.... Realism's problem with the interwar era, however, is that Germany and Japan had been even more dependent in the 1920s, yet they sought war only in the late 1930s when their dependence, although still significant, had fallen.

The theory presented in this article - the theory of trade expectations - helps to resolve these problems. The theory starts by clarifying the notion of economic interdependence, fusing the liberal insight that the benefits of trade give states an incentive to avoid war with the realist view that the potential costs of being cut off can push states to war to secure vital goods. The total of the benefits and potential costs of trade versus autarchy reveals the true level of dependence a state faces, for if trade is completely severed, the state not only loses the gains from trade but also suffers the costs of adjusting its economy to the new situation.

Trade expectations theory introduces a new causal variable, the expectations of future trade...

Levels of interdependence and expectations of future trade, considered simultaneously, lead to new predictions. Interdependence can foster peace, as liberals argue, but this will only be so when states expect that trade levels will be high into the foreseeable future.... In short, high interdependence can be either peace-inducing or war-inducing, depending on the expectations of future trade.

Obama’s Science Czar and his buddies wrote a College text book in 1973 saying this:

A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States. . . . Resources and energy must be diverted from frivolous and wasteful uses in overdeveloped countries to filling the genuine needs of underdeveloped countries. This effort must be largely political” (italics added).

- John Holdren, Anne Ehrlich, and Paul Ehrlich, Human Ecology: Problems and Solutions (San Francisco; W.H. Freeman and Company, 1973), p. 279.

Since the 1970's when 25% of US labor was engaged in manufacturing US policy reduced it to less than 9%.

Al Gore is very big into Interdependence. At one point I read the master plan on what country would do what. Unfortunately I no longer have the link or a copy of what was written. But I do have this:

This comes from the Ag Journal, Billings, Montana:

At a recent ceremony at the White House, Vice President and presidential candidate Al Gore let slip what many have long believed was his real intention as regards to U.S. agriculture.

"While presenting a national award to a Colorado FFA member, Gore asked the student what his/her life plans were. Upon hearing that the FFA member wanted to continue on in production agriculture, Gore reportedly replied that the young person should develop other plans because our production agriculture is being shifted out of the U.S. to the Third World.

showcase.netins.net...

And this from the IMF: World Economy Convergence, Interdependence, and Divergence Finance & Development, September 2012, Vol. 49, No. 3

Three fundamental trends
The first trend is a new convergence..

Recent data suggest that while there remains linkage, it is now important to distinguish between long-term trends and cyclical movements. Since roughly 1990 the pace of per capita income growth in emerging and developing economies has accelerated in a sustainable manner and is substantially above that in advanced economies. This represents a major structural shift in the dynamics of the world economy....


. And with the notable exception of China, demographics will favor emerging and developing economies over the “old” rich countries for more than a decade to come. Finally, the very high debt ratios that most advanced economies have accumulated will constrain their macroeconomic policies and slow investment.

....The world economy remains one of interdependence, where countries’ business cycles travel across borders. Emerging and developing economies are growing much faster than advanced economies, mainly thanks to supply-side factors such as long-term capital accumulation, technological catch-up, and demographics.... The recent global growth declines in early 2012, due much more to macroeconomic and financial sector management issues than to long-term supply-side factors, vividly reflect this worldwide interdependence.....

The second channel works through increasingly global, huge, and complex financial markets. A new IMF report measures “spillover effects”—the impact of policies in one country on another as a result of the large volume of trade and financial linkages in today’s economy—and documents the importance of the financial channel. Using the euro area as an example, the report concludes that “direct (trade-linked) spillovers from stress in the euro area program countries are manageable, but if the stress were to cast doubt on the soundness of euro area banks, the spillovers to the rest of the world would be large...

crimvelvet
reply to post by 727Sky

 

Things get even more interesting. Remember Pascal Lamy mentioned ".. climate change negotiations are not just about the global environment but global economics as well ..."

Well Copenhagen was supposed to be the place where a climate change treaty was signed by all nations but it flopped big time. The Guardian UK reported:

...The so-called Danish text, a secret draft agreement... hands effective control of climate change finance to the World Bank; would abandon the Kyoto protocol – the only legally binding treaty that the world has on emissions reductions; and would make any money to help poor countries adapt to climate change dependent on them taking a range of actions... The document was described last night by one senior diplomat as "a very dangerous document for developing countries. It is a fundamental reworking of the UN balance of obligations. It is to be superimposed without discussion on the talks"....

It seem from a first hand witness THE FLY IN THE OINTMENT at Copenhagen was CHINA!
How do I know China wrecked the Copenhagen deal? I was in the room

....Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful "deal" so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen.

China's strategy was simple: block the open negotiations for two weeks, and then ensure that the closed-door deal made it look as if the west had failed the world's poor once again. And sure enough, the aid agencies, civil society movements and environmental groups all took the bait. The failure was "the inevitable result of rich countries refusing adequately and fairly to shoulder their overwhelming responsibility", said Christian Aid. "Rich countries have bullied developing nations," fumed Friends of the Earth International.....

Moving forward you then have The Cyprus Haircut

...very disturbing news that despite the ongoing liquidity blockade, capital controls and (somewhat) closed Cyprus banks, one particular group of people - the very same group targeted to prompt this whole ludicrous collapse of the island nation - Russian Oligrachs had found ways to bypass the ringfence and pull their money out quickly and quietly. We said that, if confirmed, "If we were Cypriots at this point we would be angry. Very, very angry." Turns out the Cypriots did become angry, and the questions are finally starting....

And that brings us to the BRICS countries retaliation in March: BRICS Nations Plan New Bank to Bypass World Bank, IMF

The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.

“The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. “There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.”....

The threat was made solid in September, the US government was shutdown and the IMF meeting was moved forward.

Again look at my post on Special Drawing Rights (SDRs) and GOLD.

what does all this lead to though?

Is China trying to take over the world one step at a time? Will it force a World War? Where's the one liner doom and gloom we THIRST for here at ATS? ha