China's Currency Fully Convertible in Months?

By Kevin Freeman
blog
September 17, 2013Sep 17, 2013

Since 2009, we have argued that the next big attack on America would be targeting the U.S. dollar. Our enemies clearly understand that the strength of our dollar is tied directly with our nation's global influence. We have the reserve currency of the world and this has allowed us to retain superpower status even as we have a $17 trillion federal debt that has been growing at $1 trillion. Other nations have to hold dollars so they can buy oil and other goods in international trade. So, when nations have surpluses, they buy U.S. Treasury bonds denominated in dollars, making an active global market for our debt. As we have noted before, this expands American power in ways that make Russia and other nations jealous. It also causes enemies of the United States such as al Qaeda to plan to destroy the dollar. In fact, al Zawahiri expressly called for the destruction of the dollar in his 9/11 speech. And, as we posted yesterday, this has been al Qaeda's plan since at least 2005 with their timeline targeting the dollar's destruction in 2013.

Most economists dismiss the risks to the dollar, naively believing that currencies are driven purely by economics. Economic factors do play a role in currencies but they are not the only factor. In fact, we have seen currencies kept artificially low to improve trade position. This is a political decision. Why is it so hard to believe that geopolitical factors could play a significant role?

Saying that currencies are solely based on economic factors is as ignorant as saying that birth rates are based solely on biology. Sure, there is a biological component. But when China can enforce a "One Child" policy, it becomes obvious that political factors matter as well.

If enough nations decide that the U.S. dollar should not be reserve currency and are willing to undertake efforts to remove it, the dollar will be removed. Obviously, we have a vested interest in seeing the dollar remain strong. This is why we call it a global economic war.

One of the primary arguments against the idea of the dollar ever being displaced has been that the Chinese have been unwilling to internationalize the renminbi. The second argument has been that the Chinese internal economy has been to weak and debt-laden. Our argument is that when the Chinese leadership decides that they want to fully internationalize the currency, it will happen. In fact, internal debt and weakness could be a reason to do it. There are political, not just economic factors at work.

Now, one of the loudest voices on internal economic problems in China, Gordon Chang, has written a significant column in Forbes worth studying:

China's Currency Will Be Fully Convertible In Months

by Gordon Chang September 15, 2013

The Shanghai free-trade zone, China's first, will officially open for business on September 29.  Just about every China economy maven has been following the months-long saga regarding the establishment of the zone because in Shanghai the central government will punch a gaping hole in the country's currency wall. To CONTINUE Reading at Forbes . . .

The article concludes with this thought: "The result of rampant zone creation will be, as a practical matter, capital account convertibility for the entire nation.  It's coming soon."

Consider this quote from an official publication of the Chinese Communist Party discussed as a weapon of economic warfare:

Qiushi

December 10, 2010

"The fact that the U.S. dollar is the world's reserve currency makes the U.S. a financial superpower. Currently, China's increased share in the International Monetary Fund and its increased voting rights are a very big step forward. The problem is not that the value of this share is expressed in U.S. dollars, but that it would be best if the share could be expressed in RMB. Therefore, for China to challenge the position of the U.S. dollar, it needs to take a path of internationalization and directly confront the U.S. dollar."

For full context, go back through some of our earlier posts on the dollar as reserve currency and global plans to derail it.

https://globaleconomicwarfare.com/category/phase-three-evidence/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/2/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/3/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/4/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/5/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/6/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/7/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/8/

https://globaleconomicwarfare.com/category/phase-three-evidence/page/9/

We have solid evidence that the Russians are cheering Chinese plans to internationalize the renminbi. So is al Qaeda based on the 9/11 anniversary speech by its leader:

Zawahiri urged the Islamic world to "abandon the dollar and replace it with a currency of other countries that are not taking part in the aggression against us". He also said that Muslims should refuse to buy goods from America and its allies, as such spending only helped to fund US military action in Muslim lands.

READ THAT CAREFULLY! Now, look at this blog post:

China's Strategic Alliances

China has been building economic alliances around the globe that are designed to position the Yuan to replace the U.S. dollar as primary reserve currencyThe Russians have already been very vocal in stating that is what they would like to see happen. We also see thinking from the Muslim world that would suggest a preference for China as well.

Consider this recently published at al Jazeera:

Why China might be a better superpower

Unlike the US, China does not have a substantial history of invading and subjugating the inhabitants of far-flung lands.

Last Modified: 25 Jun 2013 14:14
Murtaza Hussain Murtaza Hussain is a Toronto-based writer and analyst focused on issues related to Middle Eastern politics.

It doesn't get much clearer than that. It is obvious that al Qaeda prefers China to the U.S. and is calling on Middle Eastern nations to abandon the dollar and replace it with the Chinese Yuan.

Bottom line:  We are in a Global Economic War.