The current craze for cryptic money, such as Bit-Coin and others, which are backed by nothing, and supposedly are free from government interference. Gold and silver are free from that too, but have historical real value. I understand that Facebook and Amazon are considering issuing cryptic coins also. But I have one which beats them all, and so far no one seems to have noticed. Do not invest in these! They are backed by nothing, and there are hundreds of billions of them around, and billions more are being printed as I write this. There will be no end of them, till the whole thing comes crashing down.
What are they? The Chinese Yuan and Renminbi. What? You may say, as do most of the pundits and even economists, that ‘China is one of the great economic giants of the world, and to say it will crash is absurd.’ Stop and think for a minute about another huge, multi-national entity that crashed and burned a few decades ago, and no one thought it possible. Remember the Soviet Union? That Russian entity which gobbled up dozens of nations and forced communism on them? Hundreds of millions of people were enslaved by the Soviets. The Soviets had planes, tanks, troops, and were considered unstoppable. Know why they crashed? The same way China will crash. Bankruptcy. The Russians had fooled the world into believing they were an atheistic, all powerful, god almighty. It all happened quite quickly. On December 25, 1991, President Mikhail Gorbachev announced the dissolution of the Soviet Union with these words: “We’re now living in a new world.” At 7:32 that evening, the Soviet flag atop the Kremlin was replaced by the flag of the Russian Federation. The 40 year ‘cold war’ was over, which had placed capitalistic America against the communist Soviets. The outcome had to happen, since un-free nations cannot compete with the free. Hundreds of billions had been spent in that ‘cold war,’ and now it was over. Capitalism had defeated communism.
Now please look at China today, and compare them with Venezuela, Russia today, Cuba, or any communist or socialistic nation. China’s currencies are backed by zero, just as the U.S. dollar is backed by zero. However, the difference is enormous. China’s ‘economic power’ is in the large part run by “SOE’s” or ‘State Owned Enterprises,’ which are hopelessly inefficient, never seem to show a profit, and borrow ‘money’ from state owned banks who rarely ever expect repayment of ‘loans.’ Not only that, but the “SOE’s”are subsidized by the Chinese government, making their export stuff priced well below the cost of production. Even with Trump’s 25% tariff, Chinese stuff will still be priced below the cost of production because of government subsidies of Chinese factories. China has literally dozens and dozens of fully built, whole cities, which are uninhabited. Skyscrapers, stadiums, stores, apartments, etc; and all empty. I’m sure they were built with Chinese ‘money,’ which will never be repaid. How many trillions of un-backed Chinese currencies were spent building those cities? The United States is having a horrible time balancing its budget, but it doesn’t spend hundreds of trillions building un-inhabited cities, and has no state owned factories which show no profits, and never repay loans. America makes things China is incapable of making, and we vote for our politicians, none of which are in office ‘for life,’ as has happened of late in China with President Xi Jinping.
Now look at the trade imbalance we have with China. It’s in the hundreds of billions each year. Know what the sticking point is in negotiations? We’re tired of them stealing our inventions and technology. Why do they always do that? Under a communist-socialistic system, invention and discovery are basically impossible. Their space program was stolen from us, and their electronics also from either us or Japan or Korea, all of which are certainly not communist or socialistic. China is incapable of making what we or the South Koreans, Germans, Canadians, Brits, etc. are making. Ever hear of a Chinese car or airplane? Ever hear of a Caterpillar type of earth moving machinery or any heavy industrial equipment made in China? When Venezuela started down the path of socialism, what’s the first thing socialistic president Hugo Chavez did? He confiscated American oil wells and the technology which went with them. When the electrical shortages happened, it was because of a lack of maintenance of the generators which came from America. Venezuela’s oil production is a fraction of what it was before the system was confiscated. Under socialism, no one knew how to operate, maintain, or fix them. When Castro confiscated all American property, and industry, the downfall of Cuba was unavoidable. Be assured that China’s naval ships and all they have which are technical, were stolen, and not invented. Over the years, China has indeed taken our factories and jobs. They have also had no economic sense, mistakenly believing that government is always right and the source of wealth. We in America, consider government in the way, and a hindrance to wealth creation.
North Korea is so backward and communistic, that millions have starved to death, and Kim Jong Un really needs the U.S. to cease all the sanctions, because he’s a communist, and like all tyrants, has little ability to see error of their ways. Russia today, is in an economic basement. It makes nothing anyone wants, and all it has for sale is oil or arms. They’re in a communist rut. After WWII, Russia got enough German rocket scientists to get them started, but not with their own communists, who were technical idiots. Russia made superb tanks in WW II, and managed to kill a quarter million Germans whose boss, Hitler, was a fool for betraying his agreement with Stalin. Tanks and guns are not complex technology. Russian space technology and atomic knowledge was stolen from America, and two American spies, Julius and Ethel Rosenberg, were hung for their betrayal, giving American atomic secrets to Russia.
Speaking of Germany; during the ‘cold war,’ East Germany was communist and West Germany was free. The commie east, built the “Trabant” car, which was a piece of junk, literally. The commies were also responsible for another piece of junk called the “Yugo.” Free West Germany was building Mercedes and BMW’s.
Chinese prosperity began with Sam Walton’s kids inheriting Walmart, and becoming the richest kids in the world. Rather than following their Dad’s philosophy of buying and selling only American made products, they succumbed to Chinese cheap labor and ability to do not much of anything other than basic unskilled labor. China had Chairman Mao and his ilk, who had destroyed anything worthwhile in China, besides murdering, it is estimated, 30 million. Quickly it seems, China started making simple stuff, driving American factories out of business with their cheap labor, which at the beginning, was about fifty cents an hour. It wasn’t long before other ‘big box’ stores and manufacturers of simplistic things we all use and need, switched to China’s cheap labor. Thousands of factories went down, and tens of thousands lost their jobs.
It all proceeded as if it were a novel. More and more jobs left for China, and more factories closed. Techniques, mass production, and American know-how were stolen, and the nail was placed in our coffin, it seemed. The trade deficits grew like Topsy, till Donald Trump took office, and said “No more.” We’ll see what will happen, but without theft of free nations’ brains and ability, communism and socialism cannot make it. China’s endless printing of worthless, un-backed money is spreading around the world, with new ports and influence. Hyper inflation is on the Chinese horizon, and with that comes collapse. It seems obvious to me, but seems to have escaped everyone else, and that is China is broke and helpless without the brains of free people. Of the two Koreas, North and South, which one makes cars, TV sets, and all sorts of things bought around the world? South Korea of course, where people are free, vote, and live in the prosperity capitalism brings almost automatically.
It isn’t unusual for Americans to make huge mistakes and pay dearly for them, but mistakes in industry, won’t take down a nation. Kodak, and the Edsel were industrial mistakes which cost millions, but America was safe. Obama doubled the national debt in his eight years in office, and Trump is doing his best to correct that. The U.S dollar is the strongest currency in the world, and is backed by America’s brains, ability, freedom, Constitution, and form of government, neither of which are held by Venezuela, Cuba, China, or Russia. It’s actually pitiful that American politicians, economists, professors, and experts, haven’t seen that China will go down just like the Soviets did, and that is by BANKRUPTCY, when their yuan and renminbi will become a laughing stock. As the saying goes: “You can fool all of the people some of the time, but you can’t fool all of the people all of the time,” and this applies to un-backed currencies from a broke nation. Stocks, accidents, weather, and other things such as the collapse of a nation can happen very quickly, and unpredicted by most, but it has happened over and over again in history.
don@coloradogold.com 1-888-786-8822