Chinese stock commodity coffers

OUT AND ABOUT: Ancient Greek writer and philosopher Aesop wrote about the tortoise and the hare and how the former won their contest as the latter became complacent thinking it could never lose the race they ran.

It is probably sad, in world market terms, that the birthplace of democracy is the basket case it is today having taken the role of spectator in that duel rather than opting to be one of the main competitors.

Those parts were taken up by the western world, built on the basis of capitalism, and its eastern nemesis, riding the shoulders of Marxist revolutionaries and communists.

Russian communism eventually folded and attempted to harness the ideals of western thinking, however, corruption and nepotism in high places restricted any real advantages reaching the grassroots population.

China, on the other hand continues to roll on. Some may say at an unabated pace, even with recent inflationary concerns providing a slight hiccup to world commodity prices.

Although it maintains its Maoist regime, China also remains loyal to its ancient philosophical roots, which acknowledge that the world will exist beyond five year plans and, all things going well, for centuries beyond.

It is this philosophy that was most likely behind the prediction of The Dines Letter editor James Dines that a new social global order is emerging.

 

“My long-standing prediction of the coming new social order was introduced in Australia one year ago,” Dines told the RIU Melbourne Resources Round-up.

“It was founded on the prediction that unlimited printing of paper money, not related to the true wealth created by labour, plus borrowing, would distort the world’s primary currency.”

Dines bases the re-affirmation of his prediction on the fact America maintains a policy of printing money and running deficits to boost its struggling economy.

According to Dines in order to cure its need to over-print of money the land of the free is just printing more, and then can’t apprehend why that is not working.

“True, America has provided the world with a unified currency – a unified, international currency – and as it spread it helped to awaken the entire and non-European world,” Dines said.

“But America’s apoplectically high deficits have caused currency crises.”

As the USA has continued its attempts to print itself out of trouble China has systematically amassed a foreign exchange surplus of over three trillion dollars.

“Not everybody fully comprehends how much even one trillion dollars is,” Dines said.

“If you spent one million dollars every single day since Jesus was born you could not spend one trillion dollars.

“America’s deficit is projected by the government to be twenty trillion dollars nine years from now.

“That will never be repaid. Clearly, it seems to me, the world is in danger of something breaking, one currency crisis after another.

“These are all connected, these are not separate events. It is one organic, underlying, rumbling Vesuvian volcano and not everybody will survive financially.”

As the world continues to become smaller in the metaphysical sense the populations of China and other non-European countries, such as India, are seeing the ‘American dream’ first-hand.

Their collective desire to emulate this life-style is driving demand for consumer goods, which in turn is driving the demand for rare earths, which China is busily squirrelling away.

Dines suggested this hoarding mentality would be certain to kick off, “A mad scramble for the world’s remaining commodities”.

“Believe the unbelievable or not as China, for example, is buying way more copper than it currently needs, storing it as a form of hard money for the next century and beyond,” he said.

“This transition is truly momentous, and I feel constrained to report it as the coming desperate race for planetary self-sufficiency.

“I’m going to the heart of the nature of your wealth and where to store it safely.”

Paper, as in paper money and financial assets, was highlighted by Dines to be flimsy and easily blown away.

It is hard assets, such as rare earths, gold and silver that he identified as the wave of the future.

“China is also stealthily gaining monopoly positions in many other commodities,” he warned.

“Anything and everything in a new “Resource Imperialism”, a phrase that I’m inventing that you will hear more about, I suspect.

“Nothing I am saying is anti-China by the way because what they are doing is legal and far-sighted thinking.”

Ostensibly, this all comes down to the differences in cross-cultural thinking.

America, like the rest of the western world, reinforces its fast food desire for immediate satisfaction by remaining fixated on quarter to quarter earnings outlooks.

China, on the other hand, China is stocking up for coming centuries.

To draw parallels between the two philosophies take a morning walk in any park around the world.

There you will see westerners engaged in frantic exercise regimes determined to get fit or lose weight for summer.

In the same park you will see others engaged in the calming eastern practice of Tai Chi as they attune themselves for a long healthy life.

“In the nineteenth century the work of Marx and Engels favoured seizing the means of production by violent revolution,” Dines said.

“But, here, now in the twenty-first century China’s communism has evolved from violence to actually buying the means of production busting the free-trade, free-enterprise capitalist model.

“I am not envisioning old-fashioned communism spreading again.

“I am predicting the end of capitalism as previous centuries have known it. Believe the unbelievable or not.”

Dines said the new social order is evolving right in front of us and China’s monopoly of rare earths and its hunger for other commodities are just early examples of what is to come.

“China uses seven hundred pounds of rare earths in each wind turbine and might need all of its rare earths for itself as it is furtively taking control of the centre of the world’s energy chess board,” Dines said.

“The game is changing and China gets it.”