Bill Poulos - China as the 21st Century Global Economic Leader: The Chinese Petro-Yuan and The New Silk Road (PART 2)

Bill Poulos is founder and President of Profits Run, Inc. He has an educational background in Finance and Engineering. He holds an MBA with a degree in finance, as well as a bachelor’s in engineering. He lives in Michigan with his wife, Karen. Before creating Profits Run with his son Greg Poulos, Bill was an executive at General Motors. He spent 30 years working at GM before retiring in 2001. Poulos writes books and training courses, as well as provides coaching to help people learn how to invest while properly managing risk. Bill Poulos is currently planning an event through Detroit’s Downtown Boxing Gym Youth Program. The event is designed to help give youth advice, motivation, and the correct mindset to become future successful entrepreneurs.

This article is part two of a two-part series. You can read part one of Bill Poulos - China as the 21st Century Global Economic Leader here.

Part one of this series supposed that China will become the top global economic leader sometime on the next few years. I talked about China’s strengths and their move away from the petrodollar towards the petro-yuan. The petrodollar refers to the US dollar being the primary currency for buying oil. China is gaining momentum in their push for the world to move towards using yuan to buy oil, as they recently opened a futures exchange in Shanghai that trades oil contracts in yuan.

Today I’m adding on to China’s push towards strengthening the yuan and including another reason why I believe China will become the top global economic leader sometime on the next few years, China’s New Silk Road.

Part of the economic reach and geopolitical influence that China is putting in place includes their Silk Road initiative.

The term New Silk Road or Silk Road is borrowed from hundreds of years ago when, to facilitate trade, there was what was called the Silk Road.

The Silk Road was a dirt road that expanded all across Eurasia, from Asia to Europe. It was the road traveled by the traders of the day to facilitate trade.

Now China, in the 21st century, is building a New Silk Road.

So, what does the new Silk Road entail?

It's a series of modern day highways, trains, bridges—you name it, whatever is required to get from A to B the quickest way, or the least expensive way. This New Silk Road has been referred to as a land bridge, a bridge going over the land, all throughout Asia, into Europe.

If we were to take a look behind the scenes, China is negotiating joint agreements with all the countries, including Russia, whose land would be traversed by the Silk Road. These countries are, of course, very happy to oblige China because it helps with the individual economies of each of those countries. The new Silk Road will make it easier to move goods in and out of those countries.

All of these contracts, as you can imagine, are more and more going to be in yuan, not dollars.

China is doing a number of things with this initiative—they're enhancing the status of the yuan and they're enhancing their status as the geopolitical leader (the friend to countries worldwide, helping them grow economically, etc.).

China is doing all of this while the United States is preoccupied with the latest Hollywood actor who's offended by something Trump said.

The media in the United States is completely oblivious to anything I just said. American people are unaware of any of this.

This is important to the lives of all Americans. It's going to dramatically change the economic standing of the United States in the world.

Instead of being offended and preoccupied with mainstream media drivel, Americans should look elsewhere for their news.

The other day, Trump came out with tariffs on steel and aluminum imports. The media went berserk.

Of course, his real target was China. But of course, people can't put that together. They don't want to put it together. They just want to attack and show their economic prowess by stating the obvious, which is, "Oh, gee, tariffs aren't good for trade," as if Trump doesn't understand that. They make those statements as if, "Gee, it's too bad Trump doesn't understand that." Of course, he understands it, and he understands it much better than all those detractors.

What he's getting at is everything I just talked about. Trump is well aware of China’s momentum, motives, and endgame—thankfully. He's trying to slow China down. He won't be able to stop them, but he's trying to slow them down and at least give the United States (steel and aluminum industries in this case) a fair chance to compete in the world. In so doing, we’ll maintain the viability of the industries here in America, which are indeed vital to our national interest.

Regarding our poor media and half of our nation, this concept of slowing China down is beyond their comprehension. They can't put this together. Thankfully, we have a president who can.

It's not that the United States can remain the number one economic power in the world. That's highly unlikely, but it's still a very, very strong economic player—even as number two in the coming years.

If United States policy is one of collaboration with China instead of confrontation with China, then the United States can also benefit from China's global initiatives. Likewise with Russia. Russia's population, it's 20%, maybe not even that, 15% of China's population. Russia's economy is nothing. It's a third world economy, but they've got a big army. Because of the big army, you've got to pay attention to them—as China is. China could completely overwhelm Russia, but they're not. They don't have any reason to do that. They would rather form collaborations with Russia, which includes the Silk Road Initiative. It would serve the United States well to do the same, but on an equitable basis, not one where we let them continue to take advantage of us—as we have for the last 25 years.

Thanks for reading. Let’s connect: Follow Bill Poulos on Twitter.

Bill Poulos is an author, retired automotive executive (General Motors), and co-founder of Profits Run, Inc. Bill offers insight into the economy and trading.

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