China May Call EurAmerica’s Bluff and Let the Western Financial System Collapse

Brazil taught the world that what was behind the Wizard of Oz’s curtain was pure smoke and mirrors. When two MBA’s transformed Brazil’s rapidly deteriorating economy by simply creating a second currency and stating that it, unlike its hyper-inflating counterpart, had a constant value, and by sternly imposing political discipline on the new currency, they showed the world that currency is not the purview of international banks that create it from thin air. Currency is the will of a nation to share its productivity on an equitable basis.

China had not learned this lesson at the end of the barrel of EurAmerica’s gunboat diplomacy and suffered millions of casualties in the years after 1840 as a result. But China has learned it since and has taken advantage of her hard won understanding by playing the West’s own mirage of money against its immobile institutions. Through sophisticated manipulation of our businesses, banks, and politicians, China has reaped the rewards of EurAmerican pursuit of maximum quarterly profits and interest rates. The entirety of EurAmerica is now neck deep in its own debt that has provided China with tens of thousands of factories at EurAmerica’s workers’ detriment. Our citizens will languish in decades of debt repayment, wage decline and underemployment as a result.

Now that EurAmerican leadership has transferred massive amounts of real wealth to China’s shores, building the armaments of the world’s next century of commerce, our captains of industry, fathers of finance, and patrons of politics are now asking her to protect the financial instruments that procured those resources. Certainly, after how the West scourged China less than two centuries ago, she owes no allegiance to the West’s economy. In fact, China may already have ascertained that the end game cannot afford a prosperous West in the face of China’s emerging commodity and consumption needs.

If China does not responsibly act to assist the global crisis, she will surely suffer in the short term from it. However, as the Long Depression of 1871 proved, the country emerging from the depression with the abundance of real assets emerges more quickly and with a stronger position to consolidate hegemonic power. And the Great Depression proved that the country holding the world’s financial wealth emerges as the dominant reserve currency. In that case, America held the majority of the world’s gold.

It may be in China’s strategic best interest then to allow the world to financially collapse. China has the productive assets. She has a surplus of fiat money. She has the commodity relationships. She has built a substantial reserve of gold bullion as a backup source to restart her economy. And more importantly, China’s state run bank recognizes that the curtain protecting the Emerald City protects only a fiat monetary system built upon the premise of an existing western caste system commanding allegiance to debt derived money.

If EurAmerica collapses, it will take years for our political system to sort out a restructuring of power and debt obligations. In the meantime, China will surge ahead in re-establishing a world order built on a constructive new monetary and credit system with China at the center. She will then selectively engage with companies and institutions of the West as she strategically sees fit. Our current debt and credit default swap bubble has created dinosaurs of the West walking aimlessly into financial tar pits. It is unfortunately a house of cards that and I am afraid China is going all in to call EurAmerica’s bluff.

2 Comments

Filed under China, Economic Crisis, U.S. Monetary Policy

2 responses to “China May Call EurAmerica’s Bluff and Let the Western Financial System Collapse

  1. Clif, I think that China’s dubious “assets” listed above are diaphanous. Howard Chang’s classic “The Coming Collapse of China”, though over a decade old, is still spot-on in exposing China’s systemic problems.

    America, on the other hand, still has the most inspired, robust Constitution on earth; to the extent that it is obeyed, this republic can again be the envy of the world for the rest of this century at least. AmericaAgain! is a private, perpetual charitable trust being formed for the express purpose of enforcing that Supreme Law, for the rest of American history, against the individual members of Congress severally, in state criminal courts for actions cognizeable under state criminal statutes.

    You see, it is only the criminogenic nature of Washington D.C. over the past three generations that have brought us to this retrograde pass. If that one simple action was taken by a critical mass of the American people — simply see to the enforcement of our highest law — then those who now ‘serve’ in Congress would either have their assets seized and do serious time in their State Penitentiary, or they would begin repairing the ruins.

    As to the money and credit debacle, see my article here to understand how elementally an economy can be destroyed by regular, perennial counterfeiting and fraud:


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