Last week Zhou Xiaochuan, the head of China’s central bank, announced, in a jargon-filled technical interview, that China would no longer be pegging its currency to the US dollar. Instead, the Chinese yuan will be linked to a broad basket of currencies, Zhou said.
This seemingly arcane shift could trigger a collapse in the US dollar, which, as economist Peter Schiff put it, “will be the single largest event in human history.”
The fact is that 84% of the US workforce is in the service sector (banking, government, retail, etc.), meaning they do not actually make anything. In other words, the Americans do not make enough stuff to pay for the stuff they are getting from the rest of the world.
The corporate propaganda media still cling to the lie that the US is the world’s biggest economy and China is number two. That is outright fiction. The Chinese, for example, produce 11 times more steel than the US and, in the last 3 years alone, have produced more concrete than the US used during the entire 20th century. The Chinese have decided enough it enough and demanded real payment for their goods, not so-called US dollars.
The significance of the shift has been underlined by the double digit collapse in world trade in January and the shutting of US ports. Chinese exports in January fell by 11.2% year on year while imports fell 18.8%. Most of this was related to the US. The message was clear, the US was not going to be allowed any more to pay for stuff with money printed out of thin air.
This Chinese move is what prompted US Corporate Government Presidential spokesperson Barack Obama to ask Chinese elders and the Rothschild family for permission to devalue the US dollar, which was, as reported here last week, denied.
The failure to get permission to devalue the US dollar prompted Obama’s handlers to call an unscheduled emergency summit meeting of ASEAN heads of state last week in California.
In fact, the real meeting that took place in California was between General Joseph Dunford, head of the US military and General Mulyono, chief of staff of the Indonesian armed forces. The purpose of this meeting was to discuss