by Michael Snyder, End Of The American Dream:

Does China believe that we are on the verge of a major global crisis?  The communist Chinese government has always been very big into planning, and it appears that they have decided that now is the time to hoard food, gold and other commodities.  Of course in recent days the fact that China is completely cutting off U.S. agricultural imports has made headlines all over the globe, but at the same time China is dramatically increasing the amount of food that it is importing from the rest of the world.  The end result is actually a substantial surge in Chinese imports, and this is starting to show up in the official numbers.  For example, we just learned that Chinese soybean imports in July were actually up 8 percent compared to last year…

China’s soybean imports in July rose 8% from a year earlier, to their highest level in almost a year, customs data showed on Thursday, as importers increased their purchases of Brazilian beans on higher crush margins.

As I discussed the other day, China had already been drastically reducing soybean imports from the United States even before this recent announcement that U.S. agricultural imports were being cut off completely.  So American farmers were definitely not benefiting from this Chinese import boom, and now that China has decided not to buy any of our crops it is going to be a  “devastating blow” for our farmers…

With China officially pulling out of buying U.S. agricultural products, American farmers are losing one of their biggest customers. It could be a devastating blow in an already tough year for crops and commodity prices. It may also dent U.S. gross domestic product and hurt companies like Deere, whose business is directly tied to farming in the Heartland.

“Sales have already been lower this crop year because of the existing tariffs. If we went all the way to no China exports whatsoever, that would of course result in even larger market and price impacts,” said Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. “Cutting China completely out of the market would be a very big deal.”

Needless to say, China has had to turn to other sources to supply their needs, and last month we learned that China had decided to substantially increase wheat and soybean imports from Russia…

China has approved wheat imports from the Russian region of Kurgan, the Chinese customs office said on Friday, bringing Russia a step closer to its goal of dramatically increasing grain exports.

It also approved soybean imports from all parts of Russia, the General Administration of Customs said in a separate statement on its website, having all but halted U.S. soy imports as the trade dispute between Beijing and Washington deepened.

This is yet another sign that Russia and China are drawing closer, and this is something that we have been anticipating.

Meanwhile, China is also hoarding gold.  In fact, July was the eighth month in a row in which the Chinese increased their reserves…

China bought nearly 10 tons of gold in July, marking the eighth consecutive month the country increased its reserves, Bloomberg reported Wednesday morning.

The purchase is another signal from China that it’s gearing up for a prolonged trade conflict with the US. Gold serves as a historic safe-haven investment, and its price typically rises when markets and other currencies see increased volatility or prolonged weakness.

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