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If there were ever a sign that
something is amiss, this may
very well be it.
United Nations agricultural experts are reporting
confusion, after figures show that China imported 2.6 million tons of
rice in 2012, substantially more than a four-fold increase over the 575,000 tons imported in 2011.
The confusion stems from the fact that there is
no obvious reason for vastly increased imports, since there has been no rice
shortage in China. The speculation is that Chinese importers are taking
advantage of low international prices, but all that means is that
China’s own vast supplies of domestically grown rice are being
stockpiled.
Why would China suddenly be stockpiling millions of
tons of rice for no apparent reason?
Perhaps it’s related to China’s
aggressive military buildup and war preparations in the Pacific and in
central Asia.
If a 400% year-over-year increase in rice stockpiles
isn’t enough to convince you the Chinese are preparing for a
significant near-term event, consider that in Australia the country’s
two major baby formula distributors have reported they are unable to keep up
with demand for their dry milk formula products. Grocery stores throughout
the country have been
left empty of the
essential infant staple as a result of bulk exports by the Chinese.
A surge in sales of one of Australia’s most
popular brands of infant formula has led to an unusual sight for this wealthy
nation: barren shelves in the baby aisle and even rationing of baby food
in some leading retail outlets.
We’d be more apt to believe the Chinese were
panic-buying baby formula had the Chinese milk scandal occurred recently. The
problem is that it happened four years ago. Are we to believe the Chinese are just now
realizing their baby food may be tainted?
In addition to the apparent build-up in food stocks,
the Chinese are further diversifying their cash assets (denominated in US
Dollars) into physical goods. In fact, in just a
single month in 2012,
the Chinese imported and stockpiled more gold than the entirety of the gold
stored in the vaults of the European Central Bank (and did we mention they
did this in one month?).
Their precious metals stockpiles have grown so
quickly in recent years that Chinese official holdings remain a complete
mystery to Western governments and it’s rumored that the People’s
Republic may now be the second
largest gold hoarding nation in the world, behind the United States.
We won’t know for sure until the official
disclosure which will come when China is ready and not a moment earlier,
but at the current run-rate of accumulation which is just shy of 1,000 tons
per year, it is certainly within the realm of possibilities that China is now
the second largest holder of gold in the world, surpassing Germany’s
3,395 tons and second only to the US.
But the Chinese aren’t just buying precious
metals. They’re rapidly acquiring
industrial metals as well.
Spot iron prices are up to an almost 15-month high
at $153.90 per tonne. The rally in prices, which started in December 2012, is
mainly due to China’s rebuilding of its stockpiles as the Asian
giant gears to boost its economy, which in turn, could improve steel
demand.
The official explanation, that China is preparing
stockpiles in anticipation of an economic recovery, is quite amusing
considering that just 8 months ago
Reuters reported that China had an oversupply, so much so that their storage facilities had run
out of room to store all the inventory!
When metals warehouses in top consumer China are so
full that workers start stockpiling iron ore in granaries and copper in car
parks, you know the global economy could be in trouble.
At Qingdao Port, home to one of China’s
largest iron ore terminals, hundreds of mounds of iron ore, each as tall as a
three-storey building, spill over into an area signposted “grains
storage” and almost to the street.
Further south, some bonded warehouses in Shanghai
are using carparks to store swollen copper stockpiles – another unusual
phenomenon that bodes ill for global metal prices and raises questions about
China’s ability to sustain its economic growth as the rest of the world
falters.
Now, why would China be stockpiling even more iron
(and setting 15 month price highs in the process) if they had massive amounts
of excess inventory just last year?
Something tells us this has nothing to do with an
economic recovery, or even economic theory in terms of popular mainstream
analysis.
Why does China need four times as much rice
year-over-year? Why purchase more iron when you already have a huge surplus?
Why buy gold when, as Federal Reserve Chairmen Ben Bernanke suggests, it is not
real money? Why
build massive cities capable of housing a million or more people, and then
keep them empty?
It doesn’t add up. None of it makes any sense.
Unless the Chinese know something we haven’t
been made privy to.
Is it possible, in a world where hundreds of
trillions of dollars are owed, where the United States indirectly controls
most of the globe’s oil reserves, and where super powers have built
tens of thousands of nuclear weapons and spent hundreds of billions on
weapons of war (real ones, not those pesky semi-automatic assault rifles),
that the Chinese expect things to take a turn for the worse in the near
future?
The Chinese are buying physical assets – and
not just representations of those assets in the form of paper receipts
– but the actual physical commodities. And they are storing them in-country.
Perhaps they’ve determined that U.S. and European debt are a losing
proposition and it’s only a matter of time before the financial,
economic and monetary systems of the West undergo a complete collapse.
At best, what these signs indicate is that the
People’s Republic of China is expecting the value of currencies ( they have trillions in Western currency reserves) will
deteriorate with respect to physical commodities. They are stocking up ahead
of the carnage and buying what they can before their savings are hyper-inflated
away.
At worst, they may very well be getting ready for what
geopolitical analyst Joel Skousen warned of in his documentary Strategic
Relocation, where he
argued that some time in the next decade the Chinese and Russians may team up
against the United States in a thermo-nuclear showdown.
Hard to believe? Maybe.
But consider that China is taking measures now, in addition to their stockpiling, that suggest we are already
in the opening salvos of World War III. They have already taken steps to map our
entire national grid – that includes water, power, refining, commerce
and transportation infrastructure. They’re directly involved in hacking
government and commercial networks and are responsible for what has been
called the greatest
transfer of wealth in the history of the world. Militarily, the PRC has been developing technology
like EMP weapons systems, capable of
disabling our military fleets and the electrical infrastructure of the country as a whole, and has been caught
red-handed manufacturing fake computer chips used in U.S. Navy weapons systems.
If you still doubt China’s intentions and
expectations, look to other governments, including our own, for signs that
someone, somewhere is planning for horrific worst-case scenarios:
)
Perhaps there’s a reason why former
Congressman Roscoe
Bartlett has warned, “those who can, should move
their families out of the city.”
As Kyle Bass noted in a recent speech, “it’s
just a question of when will this unravel and how will it unravel.”
Given how similar events have played out in history, we
think you know how this ends.
It ends through war.
Governments around the world are stockpiling food,
supplies, precious metals and arms, suggesting that there is foreknowledge of
an impending event.
Should we be doing the same?
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