China
Is Massively Boosting Stockpiles of Rice, Iron Ore, Precious Metals,
Dry Milk
11
January, 2013
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:
The
Russians have scheduled 5,000 underground bunkers for completion this
year.
Europe
rapidly designed, built and stocked the so-called Doomsday Seed Vault
in Svalbard, Norway, which contains tens of thousands of varieties of
seeds and is supposed to preserve them in the event of Armageddon
style events like asteroid impacts or nuclear war.
The
United States government has been stockpiling tens of millions of
emergency meals and other supplies and regionalizing their emergency
distribution centers across the country (curiously, those supplies
never made it to Hurricane Sandy victims)
The
government has purchased nearly 2 billion rounds of ammunition in the
last few years.
The
Pentagon has been Actively War Gaming ‘Large Scale Economic
Breakdown’ and ‘Civil Unrest’
China
recently made a call, through their Xinhua news agency, for the
complete disarmament of the American population (Behind every blade
of grass…)
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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