China Looks to Finish Off Post-WWII Reign. Better Learn Mandarin

The world’s greatest economies have always competed fiercely to reign supreme. From Egypt to the Iberian Peninsula, to Great Britain and the United States: when a King of the Hill got sloppy-drunk on power, a more hungry rival was ready to pounce.

Over the past decade, China has made huge strides toward the economic throne of the world. They’ve joined the WTO, repurposed their entire country into the greatest manufacturing machine in history, embraced as good a derivative of capitalism as any, and, most importantly, been on the right side of the wealth transfer pipeline.

Now, in recent months, China has pressed their heel into the throat of their debtors. They have sharply pared back purchases of US Treasuries, they have further diversified into Gold, and they are helping foreign companies such as McDonald’s (MCD) offer hordes of yuan-denominated bonds.

What does this mean for the US Dollar? A guaranteed near-death-experience.

While we’re all sitting here using prayer as an economic policy, China is using all the wealth we’ve exported to them. How much wealth is that? Take a look (click to enlarge) at the Trade Deficit:

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