Its Over, page-295

You have read a bit or probably much on the US-Chine trade tensions. Trump is winning? Think again. He is guns blazing , throwing stones when he actually lives in a glass house. You read mainly from the mainstream press but I offer you a perspective below excerpts from Jim Willie's The Hattrick Letter.

CNBC reported that China's US treasury holdings fell to a 6 months low to $1.171 trillion from $1.178 trillion and China's foreign direct investment in US has also sunk to a new low as reported by AFR this morning.

China knows it is vulnerable with its huge holdings of US Treasuries but it is slowly using smart moves to dwindle down its holdings - because China knows in time US Treasuries would be useless paper. Until then, it stays in the shadow , it will not do anything stupid to hurt itself because China is pragmatic.

RISKS, DANGERS, HOT SPOTS & PRESSURE ZONES They are just too numerous to identify completely in a short list. The entire global financial system is in ruins, with tremendous distortions, massive misallocations of capital, grand abominations in rigged financial markets, victim zones from the weakest foreign regions, ugly fascist pressures from the US & UK, sanctions left & right toward friend & foe, war to obstruct the defiance away from the USDollar trade realm, and narcotics bribery to remain loyal to the toxic tainted King Dollar. Consider the following long list of extreme risks. Each risk contributes to the entire gold equation as being the central element of a bonafide solution.
All the following crises and initiatives are working to remove the USDollar as global currency reserve. Ten years ago, the crisis zone was primarily inside the United States, with the mortgage bond subprime crisis breaking out. Little known for that crisis was the fuse lit by China in 2005, when they began selling $billions in Fannie Mae Bonds. They were angry, very angry, at the USGovt for reneging on a gold lease of large scale which was part of the Hong Kong Resolution in 1999. History is so poorly written in the West. To mention the Chinese dumping of Fannie Mae bonds, they would have to mention the reneged gold lease. So neither is cited in the financial press rags, which serve best to line bird cages. Notice the numerous sites around the world, unlike in 2007 leading to the Lehman failure (kill).

• Currency Crisis has slammed Turkey, along with Iran, Argentina, and Venezuela. The USGovt and Wall Street bankers believe they are inflicting pain on the wayward nations who refuse the Washington lead, but they are assuring an Eastern rebellion against the USDollar. They will align with the Eurasian Trade Zone, and move toward Gold gradually.
• Emerging Market debt collapse has crippled numerous nations. Their total USD-based debt is between $9 and $15 trillion. The lure of low interest rates since 2009 resulted in disaster for nations which did not factor in the effect of currency decline in their home countries. A wrecking zone resulted. The victims will be the Western banks who on the hook. These Emerging Market nations will seek help from the East, where the Gold Standard is emerging.
• Belt & Road Initiative projects are a non-USDollar engine. They are directing numerous nations into $6 trillion of new massive projects. Watch China offer up a vault full of USTreasury Bonds in indirect exchange for funding purposes on many projects. They will gain strategic positions in every case.
• Germany & Russia are working constructively together, using German brands and newly created subsidiaries to produce and to sell inside Russia. None of this trade will be in the USD form for payment. The ultimate irony might be that their bilateral trade might soon be done in new Nordic Euro terms (gold-backed). The Jackass expects Frankfurt to become a big RMB trading hub, which will serve the Eurasian Trade Zone.
• The Deutsche Bank and Italian banking system disaster continues to fester. If truth be told, DBank is a Bush narco money laundering bank, and the site of hidden Saudi gold. It also operates as the biggest European bank derivative location, those $trillions in slush funds which support the various broken entities. When Italy goes bust, the principal victim will be the French banks, which own four times as much Italian debt as the German banks. Turkey and Italy will bring the financial system to its knees.
• The European Commision has turned rebellious to both Washington and the USDollar. Just a few months ago, the EU Court declared that Nord Stream II companies were justified in continuing their energy pipeline project. It was like an absolution from USGovt sanctions. Then following a true disaster in the G-7 Meeting, a few key nations lined up several large trade deals with Russia, in full defiance of Washington. Then most recently, EU President Juncker complained that all the trade payment for European commerce made no sense to be so tilted toward USD settlement.
• The entire broken shale oil & gas sector is on the verge of collapse. This saga is given reprieve only by the USFed-Wall Street collusion to lift the crude oil price via open market contract support. The crude oil price will work its level toward the equilibrium prescribed by Supply & Demand. The bank sector wish to avoid a $2 to $3 trillion disaster in the energy fields, where the guaranteed failure of their shale strategy is assured. Theirs is a wrecked Ponzi Scheme with rising oil rigs required, but with contaminated ground water systems.
• The Gold Trade Note and Petro-Yuan will kill the King Dollar. The introduction of the Gold Trade Note is the dagger in the heart of the Petro-Dollar defacto standard. The Petro-Yuan futures contract in Shanghai is the death warrant for the same Petro-Dollar. Already the Saudis are accepting RMB as oil payment by China.
• Food prices and consumer prices across the entire table are rising in the USEconomy. Most popular uprisings throughout history occur after the food prices rise beyond the reach of many lower tier households. Gasoline prices might offer a small oasis of relief, but with a ravaged bank sector from the damage. The public has noticed the price increases. Meanwhile, soybeans rot in US-based silos, since no buyers amidst trade war.
• Miserable USEconomy in reality is the harsh bite. The housing market is ready to enter a new decline, as the subprime factor has become entrenched all over again. The car & small truck market is already in a collapse mode. The public is fooled by the high stock market indexes, which seems to produce a mesmerizing effect.

As the Western central banks continue to tighten on monetary policy, whether with higher interest rates or reduced credit flow, the result will be a suicidal sequence. The marginal nations will fail, but leave the Western banks with defaulted debt. They will turn East and seek entry into the Eurasian Trade Zone, which is expanding with the promise of economic growth and revived vitality. Meanwhile, all elements of the US-China trade war show the United States as the loser. The Chinese have found other sellers to their country, while the US has lost buyers. The rotting soybean story in the US farmlands is horrendous. At the same time, tariff costs are passed down to the US households and businesses. The Trump Admin has achieved a lift in domestic prices along with a strong downshift in US trade. The description of bumbling seems apt. Then again, all USGovt foreign policy initiatives since 9/11 have been dismal failures, without a single exception.
FINAL REMARK ON CLEVER CHINESE TACTICS China is evolving in its clever usage of funds, in a multitude of ways. They are ingenious in their methods and astute in acquiring solicited counsel. The Chinese have lent money to Angola for managing their government debt in Africa. The source of funds has been USTreasurys held in reserves in Beijing. The key twist is that Angola repays the Chinese after selling crude oil on the open market, but now in RMB terms. They no longer sell oil in USD terms. OPEC has become a defunct entity. As a result, China is weaning the entire African oil producers off the USDollar, using their debt vulnerability. Watch Nigeria follow suit, as they are a broken corrupt pathetic locale.