James Lewis

China Stockpiles TIPS, Anticipates Commodities Bubble

The Chinese are becoming very astute to using financial trading strategies to assist them in their economic war effort. They are learning very fast. Had China and America started this war on an even foot. America would be waving its white flag by now.

But of course this is not the reality. America is the modern day architect of the financial system and banker to the world. They print the currency that the world uses to trade, have the biggest economy, the biggest asset base, are the military world power.

For China to out smart, out trade and take meaningful power away from America is an exceptionally hard feat. 2-3 Trillion dollars does not come close.

Buying up commodities, procuring TIPS. These only act to hedge their portfolio risk against inflation (dollar devaluement) slightly. It does not give them a full hand in any respect. After all if America decides to create 10 trillion dollars, the TIPS/Commodities will not make a large difference. The US will after all have 10 trillion dollars to pay any money owing on the TRIPS (which will have lost huge purchasing power). Also lets be clear, the USA has gigantic reserves of almost every natural resource possible. So any increase in commodity prices will have a far better effect on the US's balance sheet than China's.