NC Renegades

In Wenzhou – dubbed the capital of China’s private businesses – nearly 90 per cent of loan guarantors have failed since the start of the credit crisis arising from the underground banking system, according to the media. As SCMP reports, although their services are critical for the economic system and the millions of small firms – that provide the majority of the mainland’s jobs – hundreds of loan guarantee groups are creaking under the weight of bad loans and are simply unable to bear any more. “It could become the last straw that breaks the camel’s back,” exclaims the head of a local law firm, “without the privately owned small businesses, China’s economy won’t have a future.” But PMIs are up so everything’s fine?

As The South China Morning Post reports,

Mainland loan guarantors have found themselves ensnared in the woes of the underground banking sector following a fresh wave of bankruptcies around the country.

Creaking under the weight of bad debts, hundreds of guarantee groups would be unable to bear even more, although their services are critical for the economic system and the millions of small firms that provide the majority of the mainland’s jobs.

“It is by all means a risky business,” said Wang Xiao, a Zhejiang entrepreneur who invests in a loan guarantee business. “An increasing number of loan defaults will soon force us to close down the business.”

In Wenzhou, nearly 90 per cent of loan guarantors have failed since the start of the credit crisis arising from the underground banking system, according to the media.

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As the Obama administration continues to alienate almost everyone else around the entire planet, an increasing number of prominent international voices are starting to question why the U.S. dollar should be so overwhelmingly dominant in global trade.  In previous articles, I have discussed Russia’s “de-dollarization strategy” and the fact that Gazprom is now asking their large customers to start paying in currencies other than the dollar.  But this is not just a story about Russia any longer.  As you will read about below, China and South Korea have just signed a major agreement to facilitate trade with one another using their own national currencies, and even prominent French officials are now talking about the need to use the dollar less and the euro more.  John Williams of shadowstats.com recently said that things have never “been more negative” for the U.S. dollar, and he was right on the mark.  The power of the almighty dollar has allowed all of us living in the United States to enjoy an extremely high standard of living for decades, but as that power now fades it is going to have profound implications for the U.S. economy.  In future years the value of the dollar will go down substantially, all of the imported goods filling our stores will become much more expensive, and it is going to cost the federal government a lot more to borrow money.  Unfortunately, with the stock market hitting all-time record highs and with the mainstream media endlessly touting an “economic recovery”, most Americans are not paying any attention to these things.

French oil giant Total is one of the largest energy companies in the entire world.  On Saturday, Total’s CEO made an absolutely stunning statement.  According to Reuters, he told reporters that there “is no reason to pay for oil in dollars”…

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As the inevitable decline of the US dollar accelerates, what will we do when this reality hits? We already are seeing the impact of food inflation. Do not be fooled by a preliminary deflationary period as people scramble to reduce inventories in order to survive.

If you do not have faith, I suggest that you at least consider who really is in charge. Incompetent tyrants are no match for a faithful remnant.

David DeGerolamo

By “Punishing” France, The US Just Accelerated The Demise Of The Dollar

Not even we anticipated this particular “unintended consequence” as a result of the US multi-billion dollar fine on BNP (which France took very much to heart). Moments ago, in a lengthy interview given to French magazine Investir, none other than the governor of the French National Bank Christian Noyer and member of the ECB’s governing board, said this stunner at the very end, via Bloomberg:

• NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR

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South Korea Agrees Won-Yuan Trading Link, RQFII Quota With China

South Korea and China will introduce direct trading between the won and the yuan in Seoul and promote greater use of the Chinese currency under agreements reached today during talks between the two nations’ leaders.

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