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Author Topic: How Bombs in Libya Effect the Price of Panda Coins  (Read 825 times)
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tamo42
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« on: 2011 Apr 06, 12:12:33 pm »

I have spent the last couple of days thinking a lot about the nature of the state. I have also been reading. A dangerous combination. I realized that there is a very tangible connection between the US/UK/French led air war (so far) in Libya and the Chinese coins that everyone is so fond of.

First, a little background.

As you have no doubt heard, there is a revolution/attempted coup going on in Libya. Led by CIA assets and former military and government officers, this coup has disrupted oil supplies, cost America millions of dollars in deficit spending, and, most importantly, put China on notice.

As I have stated previously, China is pursuing a very difficult middle road in moving away from its dependance on the American export market. They have pretty much stopped buying US bonds, but haven't flooded the market with sales. They are buying gold and encouraging the Chinese people to buy gold and silver. However they are also inflating their currency to keep pace with the US dollar while raising interest rates to prevent this inflation from causing further dislocations in the economy. When looking at all these pieces working at contrary purposes, it's enough to make your head spin.

A less well known aspect to the Chinese policy is using their dollar-money to purchase productive resources around the world. The powers that be in China seem to recognize that they will need basic things like food and energy sources for their future ascent into a developed country. So they are buying into oil fields in Texas, huge farms in Central and South America and farms and oil in Africa. It is this oil in Africa portion that has put China on notice in Libya.

When fighting broke out, 30,000 Chinese workers had to be evacuated from the war zone in Libya. They were there working on oil facilities. Various Chinese officials have said that the Chinese oil companies (aka communist party fiefdoms) will lose "Hundreds of millions of yuan," which translates to at least several tens of millions of dollars.

Geopolitics is a very complicated game. The same action, in this case invading Libya, can have multiple effects on different parties with different agendas in different time scales.

The net result in this case is to show the Chinese government as well as its people that their interests abroad will always have an exposure risk. The natural reaction by the individual Chinese consumer (aka the fundamental driving force behind the demand for Chinese numismatic coins)? Buy more gold and silver.
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Neal McSpadden
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« Reply #1 on: 2011 Apr 06, 12:18:56 pm »

I have spent the last couple of days thinking a lot about the nature of the state. I have also been reading. A dangerous combination. 
Yes indeed. Thinking and reading is a very dangerous combination. That's why I don't ever do both at the same time.
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