An in depth focus on why the PBOC devalued the Yuan
Valentin Schmid is back on our show to discuss his thoughts on why China devalued this week. The most important question is will it work to spark production and demand.
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Michael Pento is in line with Big Al:
http://kingworldnews.com/michael-pento-broadcast-interview-available-now-8-16-15/
China has an overproduction of capital and goods. In the last ten years industry has become highly mechanized and more capable of producing on a huge scale than ever before. Cheap labor is no longer needed as cheap machines through all the developed world have changed the game plan. Easy credit and stock profits had increased the buying power of The Chinese people and the rest of The World. Now that stock profits have dissolved in China it’s much harder to find new buyers for their products. The Chinese are eyeing foreign markets because their consumer is tapped out. Chinese industry and bank credit is inflated. Consumers worldwide are worried about how to meet the next payment on the goods they have already purchased on credit. Chinese factories are going to have to wait for buying power to recover but artificial Intelligence has made their all too productive factories unprofitable and the jobs have disappeared, cheap labor no longer matters. DT
Interesting thoughts DT. It is the rise of the machines….
Cory – Good interview and good questions fro Valentin. He provided some sound answers.
Average minimum wage in China is $1.50 per hour.
That would be overly generous for western consumption purposes.
Sweatshops exist as normal operating procedure and human slavery is abundant.
Cheap labour built China and cheap labour will always be normal operating procedure.
Matt, when people talk about China people thought China is uniform as US in income. Actually regions are so different in their income, which are the reason for migrant workers. Regional different will always ensure that China has cheap labour, if not in Beijing shanghai it will be in Guizhou.
DT,you have never been to China,never mind Asia,I take it.
I have not been to China and I told Bob M that in a post yesterday but I guess you didn’t read it. He told us about the massive changes he has seen there in his many trips. For me Bob M is a very credible guy and I believe him but I also have my own views based on my readings of causes of The Great Depression when America was very profitable and then wasn’t. Anyway why, what is it you wanted to say?
Peter Schiff’s assessment is a good one:
http://news.goldseek.com/EuroCapital/1439576754.php
If China wants to put themselves on a gold basis or standard they have to decouple from The US dollar because The Americans are not interested in doing this, I think that is China’s next big move. DT
Agree Matthew.
Next time, who will buy U.S. Treasury and U.S. Dollars ?
“By decoupling from the dollar now, China is sending a message that it may be prepared to let it fall later. This means that when the dollar starts to fall in earnest, China may not be there to catch it. This will also mean that the biggest foreign buyer of Treasury bonds will likely be sitting on its hands when deteriorating U.S. finances force the Treasury to begin issuing trillions of new bonds annually. So when the U.S. needs China’s help the most, it will be unwilling to provide it.
In the absence of a Chinese backstop that the U.S. has for too long taken for granted, when the dollar resumes its decline, the fall will be much more pronounced. This will also generate significant upward pressure on both U.S. consumer prices and interest rates that was absent five years ago, when Chinese buying provided a huge cushion to the U.S. economy. In fact, data indicates that China is already paring the amount of Treasuries held in reserve. That means a full blown dollar crisis may not have been averted, but merely postponed, with the dire warnings of U.S. hyperinflation potentially coming true after all.
The move may also rekindle to the Chinese appreciation for gold as a safe haven asset as the yellow metal has surged in yuan terms over the past few weeks. Increased buying in China indicates that this may indeed be the case. Given the importance of gold to the typical Chinese investor, the yuan/gold exchange rate may become more important globally than the gold/dollar rate.”
Let’s not kid ourselves here China never had any intention of helping The US, does anyone think that The US would try to help China. The US is all about itself and China might pretend they want to backstop the dollar but that is kindergarten rhetoric. The sooner The Chinese can take over The World Reserve currency the better for them and The Americans are so arrogant that they can’t understand owning gold they don’t deserve to have the pre-eminent position of World Reserve currency.
Watch what will happen to The US if they lose their Reserve Currency status, your citizens will start paying what all the other countries have, prices will escalate and you will quickly become a vassal of Chinese power.
He who controls the money……………………?
Has the largest military.
Largest may not count, if it is dependent on hackable computer systems.
I can’remember the US actually winning a major war in the last 50 years.
Secure the resources,kill off the children and leave the lovely departed with destitution and deplorable conditions. Democracy for all.
I Have learned that the us population doesn’t like offense . And you really don’t want to offend the POPE’S orders YOUR GOD USA ! John ! https://www.youtube.com/watch?v=vehoxi2aoFA
No offense ! In Euroland the POPE orders to accept Muslims bay the 1000 Daily ! More booming the Middle east will maike me buy a Gas chamber ! No offense muslims its fore ME ! Jesus com pleis COM !
The most likely to achieve bankruptcy first.
Off Topic:
Did you know the forestry officer that allowed Nestle to draw millions of gallons of water from California’s very limited springs, and sell it, now works for Nestle?
It seems to me that the government agency’s complete inability to even review Nestle’s long-expired permit — plus the lucrative job a retired Forest Service supervisor currently enjoys — there is an arguable case that collusion and corruption are at the very heart of the entire issue.
Forest Service officials shirked their duty to review the company’s long-expired permit . Even the basic legality of allowing a private company to use federal land for the extraction and bottling of water for profitable sale was never seriously called into question by various officials.
Federal government incompetence. Just as allowing or even encouraging millions of illegal immigrants to further strain the water supply in California.
Corruption, corruption, and incompetence in federalistic control over local matters, best decided at the local level.
http://www.desertsun.com/story/news/2015/03/05/bottling-water-california-drought/24389417/
Off Topic:
meanwhile in Finland:
http://www.shtfplan.com/headline-news/government-wants-to-implant-recipients-of-welfare-assistance-with-satellite-tracked-chips_08142015
Idea coming to a government near you soon?
A 1 more ! Don’t make me drink , Thank’s Day trust us so much !
Of course Hillary’s email was secure!
Oops, maybe not!
( IBM ) is the monopolizer of the World Diss STOCK CAN GO UP ! What you think ? CFS ?
( IBM ) MUCH PATENS ONE THE INTERNET AND DAY LOVE NAZI THINKING ! NEW WORLD ORDER S BICK BOY !
Did you know that Russia ruled Finland in the days ?
Are trannys dangerous ! https://www.youtube.com/watch?v=bl9-wEyAa80
DON’tT Worry ! https://www.youtube.com/watch?v=7syWmHYJ6j8
Off Topic:
The forgotten war:
http://thesaker.is/afghanistan-map-of-war-august-16-2015-talibans-disunity-hasnt-made-the-group-any-less-lethal/
THANKS VAL………….