Through Andy Mukherjee of Bloomberg and Dr.”Gloom” Marc Faber we got our hands on a transcript of a speech held at a meeting of the Central Economic Commission of the Chinese Communist Party. The speaker is unknown but is believed to be in a very high party position.
“Dear Comrades,
One of the next days we will publish our paper on the “Ruling Capacity of the Party”. Let me cite three passages:
We should always put national sovereignty and security in the first place and firmly safeguard state security.
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Hostile forces are still pursuing their strategic attempts to westernize and separate our country.
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We will effectively guard against and deal with various risks from the international economic field, so as to safeguard China’s political, economic, cultural and information security.The US cronies at the IMF, the G-7 and the World Bank are putting pressure on us to loosen the peg of our Yuan to the US-Dollar. If we would do so, the US-Dollar could slowly devalue against all Asian currencies and the US economy could move back on a sustainable path. For now we do some cheap talk of planed revaluation to calm them down.
A week US Dollar is NOT in our interest.
The United States have fulfilled their long dream and occupied Iraq to achieve control over Middle Eastern commodities. They are fighting our interests in Sudan and Iran. They are engaged in various Central Asian countries at our north western border. They are even selling German made submarines, offensive weapons with cruise missiles, to the illegal government of our province Taiwan.
We continue actively to buy large amounts of US securities, especially treasuries, to keep the Yuan value bound to the US Dollar. We now have accumulated some US$ 500 billion in such instruments. There are three major positive effects to this:
There are also negative effects, like some increased inflation here. But for now we are able to control these by central administrative means.
- We enable the US Federal Reserve to keep the interest rates low in spite of the huge US deficits and we thereby induce the US consumer to buy more of our goods and services.
- We make the US manufacturing and service industries uncompetitive and force them to move to Asia, teaching our workers the skills we will need in the future.
- We make imports to our country expansive and induce our people to save and to invest their money into our industrial build-up.
There is no chance that this scheme will work into eternity. But there is a good chance that we, the Party, can determine the point in time where a break will occur. Until then we will use the accumulated dollars to build significant strategic reserves of all commodities and increase the abilities of the People’s Liberation Army and especially the People’s Liberation Army’s naval forces.
At some point, for some reason, the US, in their quest of world domination, will threaten us – either directly through military means or indirectly through the oil lever. That will be the right moment do de-peg the Yuan, devalue the US Dollar and throw the treasuries we own onto the international markets.
US treasury rates will then increase immediately to double digit values, the US economy will falter first into recession and then into a Weimar like hyperinflationary depression.
Then we will pick up what is left over from the US empire paying the cheap price of some paper losses in our US security portfolio.
Comrades, lets work to keep the US dollar strong, very strong, for the glory of the Party and the wellbeing of the people of China.”