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.