DATE: 01JAN2018 - The following dialog took place in a recent Central Party Economic Planning commission meeting in Beijing, China.
Comments from Mr. Zhou Rui Zhun-Director of the Economic Planning Commission
Ladies and Gentlemen, Comrades,…Friends. Thank you rescheduling your busy work duties and reporting back to Beijing. The year 2017 saw unprecedented market turmoil. The NATO war in Iran has not gone well for West. They are still bogged down in Iraq, Afghanistan, and Libya. Oil has recently passed $300 a barrel on international markets. We must immediately discuss the recent collapse of the U.S. Dollar and the global financial system.
The Americans have come to us for a new “Grand Bargin” on further debt financing. Our own Central Bank and audit agencies have been warning us about this issue for almost ten years now and it appears the worst has finally been realized. I will now turn over the meeting to Mr. Zhu.
Mr. Zhu Lao Ban – Director of China Central Bank
Comrades…. We have not been totally blind in foreseeing these events. Since 2011 we have greatly cut back our U.S treasury buying. We owned over $3 trillion of foreign currency reserves back in 2011 and due to RMB currency reform we were able to limit our annual purchase of Treasury Bills to a growth rate of only 10%. With that being said, however, our foreign currency reserves this year have swelled to over $7 Trillion USD. Half of this amount or $3.5 Trillion is now in USD and is no longer accepted for international transactions including oil!
Mr. Wang Bing-Chairman of Da Gong, China’s ratings agency
The recent so called QE 7 and New Deal 5 has appeared to fail! We downgraded the U.S. debt almost ten years ago…..right after their former Central Banker Alan Greenspan claimed the U.S. could never default as they could just print the money! We at Da Gong will not accept responsibility for this mistake on acquiring so many U.S. dollars! We are not responsible for this and acquit ourselves of any responsibility!
Comments from Mr. Zhou Rui Zhun-Economic Planning Commission Director
Gentleman…we are all in this boat together. No need for shouting. As our Dear Leader Chairman Mao said…we will cross the river by feeling the stones.
Our department has created a plan. We will convert our U.S. Treasury bills into USD cash and purchase shares in American multinationals through our Sovereign wealth fund. This is not a new plan and was started over ten years ago but due to recent events the acceleration of buying hard assets must increase immediately. Brazil, India, and Russia have already started selling back Treasury Bills to the Federal Reserve and converting to hard assets, however, with gold now hovering at $18,000/oz there is not much they can buy.
We must move posthaste and not be the last one to convert our USD treasuries. We must beat Russia, Brazil, Korea, Indonesia and others in converting our debt instruments holdings into real assets.
We do not expect political interference in the purchasing of the U.S. multinationals.
Similar to the Soviet collapse in the early 1990’s the U.S. is desperate for foreign direct investment. Not unlike a game of weiqi, they are surrounded on the board and therefore we can negotiate from a position of strength. They rely on us for financing and their daily manufactured products. Without us, Wal-Mart shelves go empty and they have no financing for their government services or for their daily consumer purchases.
Below I will outline our Phase 1 purchase plan. We will purchase 100% of the below listed companies and take them private as Chinese State owned enterprises. In the future, they could possibly be re-listed publicly on one of our exchanges in Shanghai, Shenzhen or Hong Kong.
Chinese Soverign Wealth Fund Purchase List for U.S. investment
(1) General Motors: Market Cap: $34 Billion
(2) Ford: Market Cap $38 Billion
(3) Boeing: Market Cap $44 Billion
(4) Caterpillar: Market Cap $52 Bllion
(5) John Deer: Market Cap $30 Billion
(6) UPS: Market Cap $60 Billion
(7) Walmart: Market Cap: $183 Billion
(8) Hewlett Packard: Market Cap: $ 50 Billion
(9) Dell: Market Cap: $ 27 Billion
(10) American Ex.: Market Cap: $ 55 Billion
(11) Alcoa: Market Cap: $ 12 Billion
(12) Oracle: Market Cap: $130 Billion
(13) AT&T: Market Cap: $170 Billion
(14) Coca Cola: Market Cap: $157 Billion
(15) 3M: Market Cap: $ 56 Billion
(16) Archer Daniel: Mid Market Cap: $ 18 Billion
(17) J&J: Market Cap: $177 Billion
(18) McDonald’s: Market Cap: $ 92 Billion
Total: $1.38 Trillion USD
Summary on Asset Purchases: These purchases represent roughly only 40% of our total USD currency reserves and only 20% of our global currency reserves.
In fact, we had $1.38 Trillion in U.S. treasuries going back to 2011 and could have purchased these companies back then.
In other notes regarding the asset purchases, the U.S. gold and rare earth companies are far too valuable to acquire at this stage. We have stayed away from the U.S. financials as they are holding near worthless government paper such as ourselves.
We must make additional efforts on finding real U.S. assets in which to purchase.
Our Prime Minister is currently working on this issue and supporting our efforts. He has declined the Americans using Yellowstone National Park as collateral on any new debt.
I wonder what the Americans will want for Alaska?