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US gambles freedom on risky printing press policy

This could be it... This worries me more than anything else right now...

http://business.theage.com.au/business/us-gambles-freedom-on...

Intro:

US gambles freedom on risky printing press policy
David Hirst
February 5, 2009

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The end of an unwritten, 15-year-old agreement brings great uncertainty.

IS THE US not just thinking but doing the unthinkable? Is the assumption that has underpinned the world economy since China emerged as the new and great Asian powerhouse and the buyer of US Treasuries over?

Do the actions of the US in repeatedly accusing China of currency manipulation and enacting protectionist policies represent a deliberate move to press the economic nuclear button and bring on "mutual assured destruction" (MAD) of the 15-year arrangement whereby China provided the US with cheap consumer goods and purchased US securities and Treasury bonds to prevent America's financial collapse?



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Notice this?

"China is onto the tactic, which explains why it is keen to convert its dollars into iron, coal and, I suspect, vast amounts of mineral wealth as well as property overseas. China must act, however, while the US dollar is strong.

Don't be surprised if the Chinalco deal is but the first of many and keep your eyes on our resource stocks. There are many games being played at a geopolitical level and many a twist and turn to come."

Now what does that imply?

Strategic Intelligence, true

but I still wouldn't say "master plan".

And it's still going to hurt them. Hard. Static, non-renewable mineral wealth can only take you so far. Food must be produced, and goods manufactured and transported to paying markets, in order to maintain what little foothold they've gained into the modern world.

~jaq

~jaq

Agree. They are desperate.

Agree. They are desperate.

a must bump

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Holy crap! This will be the deal-changer...

I may not know the truth, but I know when I'm being lied to...

I may not know the truth, but I know when I'm being lied to...

Collapsing the dollar is part of the plan

China will not get caught when it happens

Paranoid, Delusional, and Wrong

I scarcely know where to begin!

~jaq

~jaq

Oh, Collapsing the Dollar by accident

..If that makes you feel better. The Priavte Banksters are just imcompetent, and have NO idea what they are doing. Which to you think is more believable?

Incompetence and foolishness

It scarcely matters. The outcome will be the same.

And the "Wrong" portion is saying that China will not get caught. There's no escape from what's coming.

I do believe that China (and India) stand the best chances of recovering afterwords, however. But it will be hard going for them as well.

~jaq

~jaq

I dont totally agree. When

I dont totally agree. When the sh*t goes down, part of it will be them buy up everything with our dollars. I guess it depends on what they spend it all on. They will struggle, no doubt, but nothing like we will.

They'll actually be worse off at first.

They depend upon us very heavily. Many parts of China are still one half step above starvation. Then, you have the Tibetan revolt, and the troubles in Kashmir. All that will explode when capital starts to evaporate.

The incredible gains they've had in the last decade or so are very, very fragile as yet. They don't have a lot of room for fall back.

Right now, those dollars are almost immobile. The most they'll be able to do is loan us back our own dollars to the Fed. Maybe buy a few low-hanging American firms. If they do too much, we'd be in open revolt.

~jaq

~jaq