According to Want China Times, China is planning to make the U.S. Dollar crash in the near future. Most probably, Russia is going to assist China in manifesting this plan. The key fact supporting the supposition is the 30 000 tons of gold accumulated by China. At the same time, Russia is said to be heavily being gold as well. This is definitely not a coincidence. Maybe the collision is indeed underway or maybe Russia and China just want to secure themselves against another major crisis which is just a matter of time.
At the same time, there predictions that the Chinese economy is going to outpace the American one in 2016 while the Chinese Yuan is going to become the world’s major reserve currency after ousting the U.S. Dollar. This opinion is popular in China and around the globe. However, is it really so?
it is hard to say for sure but some opponents say that the real state of affairs looks differently while the scenario is unreal, at least for now. The thing is that China has a lot of urging economic problems, which keep on escalating on a daily basis. In particular, the People’s Bank of China has cut the interest rates 3 times over the last 12 months. The same holds true for bank reserve requirements. All of it is done to stimulate borrowing in China. While no one wants to borrow, the money go to the stock market while inflating a huge bubble in the Chinese economy. Over the last 2 weeks, Hong Kong media has been reporting that China is on the verge of a major crisis similar to the one seen in 2008. There are first wakeup calls already. In particular, a Chinese public corporation went bankrupt for the first time in history. At the same time, the total debt of all the Chinese corporations is higher than the one in the USA. At the same time, deflation is at the Chinese door already. This means that their is nothing to actually invest in when we consider China.
Now let’s consider the Chinese economic growth. At this point, it is 7%. This would be a miracle for developed economies. However, it is insufficient for China. Anyway, the IMF predicts that India is going to outpace China in terms of the annual GDP growth rate in 2016.
At the same time, Masterforex-V Academy experts remind that economies are tied within a common global economy. If China dumps its dollar-denominated assets, everyone will feel the consequences, including Russia. Indeed, Russia and China has cut down on US T-bonds over the las few years. However, China is still the biggest lender to the USA. The Chinese are smart guys. They are great strategists. This means that they may go into extremes only if they see the real threat of non-payment. At this point, they see no point in aggravating their domestic problems. As for gold, this is a great hedge tool in case there is another major crisis. So, this seems to be an attempt to secure the economy.
