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Gold Price Jumps Up Again Today & All Eyes Are On China

Head over to Gold Central and check it out.

 

Also make sure to read Jim Willie's fantastic insights to get a better idea why the global economy is what it is today.  You won't believe the politics behind it all! (read it from beginning to end, it's well worth it): 13 Reasons for Major Gold Breakout

I really dig all the stuff he says about China, but I'm surprised he didn't mention the aggressive development of its renewable energy sector in the last two years, especially when it's been all over the news in the last two weeks.  There has been an overabundance of news reports on its MegaWatt solar farm plans and its mass-production of cheaper solar panels are forcing many companies in Europe as well as in the US to close shop or cry for protectionism, not being able to keep up with the competition.

CHINA DECLARES A SUBTLE FINANCIAL WAR
China made three major announcements in the first week of September, each highly disruptive, enough to add thrust to the Paradigm Shift, enough to usher in the nasty phase (see Trade War escalation). The timing of late August and early September for disruptions and onset of instability has not been a disappointment. China has shaken the global system in three key ways, resulting in a grand challenge to the power structure. China announced:

• permission granted for state owned firms to selectively dishonor OTC derivative contracts by means of self-administered Stop-Losses in reneges
• Hong Kong demands the return of its gold bullion held in custodial accounts held in London, to make its own airport vault facility (the Zurich Switzerland model)
• Mongolian rare earth metals will no longer be exported to the West, an assault against hybrid cars, certain electronics, and military weapons (missiles).

Implications are enormous. The OTC abrogated contracts for crude oil and metal contracts, ripe with corruption and entirely unregulated, could wound deeply Goldman Sachs and JPMorgan. The demand for Hong Kong gold is more a symbolic threat, adding thrust to what already has begun. Germany, Switzerland, and the United Arab Emirates have demanded a return of their gold from US and UK storage locations, the bank centers where some accuse the gold was routinely leased. The trend puts considerable pressure on the COMEX, which could be deeply wounded from lack of underlying metal. Some accuse its routine shorting is conducted without sufficient required collateral. Neither the USGovt nor the USMilitary have accumulated stockpiles in rare earth metals, a clear lapse. The distraction of profits from bond trading and organized USGovt fund channels must be too great. Rare earth metals are critical for weapons programs, and their absence could put further strain on the over-extended and generally strained USMilitary. See scandium (21), yttrium (39), and 15 elements from lanthanum (57) to lutetium (71), whose atomic numbers are cited in paranthesis. By the way, copper, silver, and gold are all in the same column for the periodic table of natural elements, a key point, since they share unique traits in their valence.

The Chinese actions border on extreme, but are part of a grand mosaic of change, if not rebellion amidst a Paradigm Shift. THE CHINESE ARE EXTREMELY ANGRY. They are angry about amplified USTreasury debt monetization. They are angry about outsized USGovt deficits. They are angry about USFed Chairman Bernanke being reappointed. They are angry about the battle waged by the USGovt against Swiss bankers. They are angry about Yuan currency manipulation charges. They are angry about being given second class seats at the global banker tables. They are angry about being set up as US debt bagholders. They are angry about the slow retreat of USMilitary presence in Asia. The entire foundation will undergo powerful changes from these three salvos, and more to come, likely even more defiant and elevated. The US-UK wizards who wrecked the banking system will soon find themselves hurtling downhill, weighed down by their own insolvency. That bank system insolvency grows worse by the month, as fresh credit portfolio losses still outpace USGovt 'gifts' and new capital infusions.

China urges its citizens to buy gold - Uh oh look out!

Power to the people!

 

This could very well be the last call to buy gold on the cheap side folks. 

Good for China, but not so fast!  Don't think for one minute that the Chinese government is interested in turning more than a billion Chinese citizens into overnight millionaires. Heck no! 

China, being the world’s largest gold producer and second-largest consumer, is probably using its sizeable population purely as leverage to hike up the value of its gold reserves and help put the dollar out business.  China will probably continue to do so just long enough to secure its financial position and then crank it up a few notches higher to make the price of gold way out of reach for your average peasant.

Come on now, let's be real...who's going to work the fields otherwise?

American Eagle Gold Coin

Whether the official urging by the Chinese government for its citizens to buy precious metals is merely prudent, "fatherly" advise to its citizens, or part of a somewhat more sinister campaign the result will be the same: soaring precious metals prices indefinitely into the future.

With gold and silver having just broken-out above their summer trading ranges (the weakest season of the year for the precious metals market), precious metals appear poised for spectacular runs this fall, as I suggested a month ago (see "Two short-term scenarios for Gold Market"). Those who have continued waiting for cheaper prices have been shut out of this market (notably the price-conscious buyers in India), and the window for buying at current, bargain prices appears to be closing quickly.

All roads for El Dorado lead to China

Hey I'm no economist, but in case you haven't noticed, the dollar has been tanking as of late and it's almost too painful to watch.  Financial experts across the board are speculating that maybe inflation is upon us and the mighty dollar will soon become nothing but a worthless piece of paper, while the price of gold keeps going up.
 

OK, so what? 

I have to admit, usually these things don't interest me all that much, but the sudden rallying in the gold market this past week has everybody talking and it also happened to coincide with some major moves in the solar market with regards to China. 
Now I'm wondering if China already has everything in place to dominate the global economy for the next few decades.
Does this mean we're going to start seeing a mass-exodus of corporations heading to China any time soon?

 

Why The Energy Revolution Needs China | Solar Feeds News and Commentary Blog Network

If we want an example of good long-term resource planning, we might want to look to China. While the first world spent the last decade taking on debt and levering up dubious assets like dot-com startups and subprime mortgages, then suffering the inevitable fallout, China kept its debt relatively modest and its currency depressed while it accumulated a vast war chest of foreign-exchange reserves–some $2.1 trillion worth as of the end of June, according to the Wall Street Journal.

Now, with a significant risk of the US dollar and other currencies not backed by hard resources imploding after the greatest spree of worldwide money-printing in history, China is prepared (if not anxious) to exchange its potentially worthless forex holdings for hard assets like oil, metals, and fertilizer.

America better wake up or lose the solar competition to China

But then again, in today's global economy, I don't think any country is capable of competing against China's state-sponsored incentives/subsidies for the solar market....except maybe Germany, which is currently holding the title of #1 solar country in the world.

China Will Have Solar Feed-in Tariff in Place in 2009 - Suntech - Renewable Energy World

 

The Chinese government is readying a feed-in tariff (FIT) for utility-scale solar plants that will dwarf the country's previous solar subsidies, and drive a wave of investment into the sector, according to Suntech.

Cat Soup, Democracy, Nutrition and Power

I was reading this article about the hunt on cats being on the rise in China, because of their "elite" culinary status in Chinese culture and I'm sitting here wondering why chicken soup or beef barley is OK in most cultures, but not vegetable cat soup for instance?

Most people would probably gag at the thought of eating cat or dog meat, but apparently not in Chinese culture, where they're on the high demand list as a delicacy.

Some say this sudden demand for cats is caused by bad economic times, which doesn't make sense to me, because usually when something is in high demand the price goes up too.

Are cats and dogs spared from the butcher's knife in western culture perhaps because of their level of intelligence and the ability to fight back?  Or is it because human compassion gets in the way due to the many human-like personality traits cats and dogs possess, which other domesticated animals do not? Or could it be the level of self-esteem and hunger for power or control in a democracy vs non-democracy that people seem to be consumed with, so they take it out on animals?  Sound crazy?

Sighhh, so many questions.

I can understand hunting animals for the sake of survival out in the jungle or when you're lost somewhere way out there in the middle of nowhere, but I fail to understand the persistent need to kill another living being purely for gourmet consumption in our modern day civilization, when we have an overabundance in alternative sources for nutrition.

Ohio.com - Animal lovers protest cat soup

''The police did what they could, but there's little they can do to stop or punish those traders from shipping live animals,'' Lai said.

Zhu Huilian, a nutrition and food safety professor at Sun Yat-Sen University in Guangzhou, said people usually eat cat in restaurants, not at home.

''There's a famous soup called 'Dragon, Tiger and Phoenix,' '' Zhu said. ''It involves cooking snake, cat and chicken together. In winter more people eat cats as they believe it's extra nutritious.''

Olympic Kaftans

China reveals her style, fashion and beauty at the Olympics...

The gorgeous dresses worn here by Olympic hostesses clearly give a hint on the origins of the traditional Moroccan kaftan.

Picture Gallery

But the Moroccan kaftan still rules though. :D

China: Fashion role model of the future

The Chinese already manufacture a huge chunk of high end designer products, mainly due to cheap labor and their ability to deliver high quality merchandise. Just the Italians alone have given them an enormous amount of business since the rise of the Euro.

Exploring China's march from manufacturer to designer - AOL News

LONDON (AP) - "Made in China" appears on everything from iPods to refrigerators, but for the country's stunning economic growth to continue the next step is for shoes, laptops and mobile phones to start bearing the label "Designed in China."

An exhibition opening Saturday at London's Victoria and Albert museum appraises for the first time how close China is to making the jump from running the world's factory floor to taking control of the drawing boards.

Timed to coincide with the run-up to the Beijing Olympics, "China Design Now" reveals that although the country may not yet be ready to dominate the catwalks or consumer electronics shows, an exciting entrepreneurial design culture is stirring.

"I feel that we're on the cusp of that shift actually and what I hope is that a lot of people's expectations will be confounded," said Lauren Parker, the exhibition's co-curator.

The exhibit takes visitors on a journey starting in China's southern frontier in Shenzhen, which transformed from a group of fishing villages into the world's largest manufacturing center after being made China's first free trade zone 30 years ago.

The exhibit traces the birth of China's graphic design culture to the arrival of young designers who gave up secure state jobs to move to Shenzhen for access to the latest technology and ideas from neighboring Hong Kong, which was then in British hands.

Unlike their western counterparts, the Chinese designers had no advertising industry to provide training and jobs.

Examples show artists playing off of traditional calligraphy, altering Chinese characters to reveal deeper meanings, before moving on to modern urban designs for toys, sneakers and skateboards.

China's love affair with Africa has a fast heartbeat in Sudan

Sudanese students flock to learn Chinese

During a recent language competition, Khartoum University resembled a province in China. Everything became Chinese. The students even laughed in Chinese.

China defends its role in Africa

China was recently accused of breaching a UN embargo by continuing to supply arms to Sudan - a key supplier of its oil - to the troubled region of Darfur.

China says oh come on, "business is business, we know how to separate business from politics"...it's not like we're planning to take Africa or anything.

Oh so China's strategic placement of 4,000 Chinese People Liberation Army troops in Sudan is really only meant to protect the oil pipeline?  OK, so I'll just worry about Iran then.

Fla. law bars investment in Iran, Sudan

Florida became the first state in the nation Friday to have a law that its pension fund dollars cannot be invested in any companies doing business with Iran's energy sector and Sudan.

Several others states have divested pension funds with companies doing business in Sudan and some states have general policies against such investments. But none have yet put the action into law that divests funds from both countries.

"It's not just what's right for Florida. This is what's right for America, it's right for the world," Gov. Charlie Crist said after signing the bill. "It says that Iran, the world's leading sponsor of terror, we will not stand idly by anymore. And to Sudan and the genocide that is occurring there, we will not stand idly by and let that happen anymore, not Florida."

 

Good News From China

I'm liking China more and more every day.  If it stays the course, it won't be long before everyone wants to move there.

China has left Iran, Sudan, and Nigeria off its latest list of resource-rich countries for which it will provide financial incentives to Chinese companies to invest in, the Financial Times reported.