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Originally Posted by Grizzums  China Says It’s Time To Ditch Dollar
Bluff? Anyone follow B. Setser's blog? I can't see China really advocating for such a thing...a precipitous fall in the USD will demolish China's savings and I guess hundreds and thousands of jobs would import then right back to the US...? Nevertheless, all this massive borrowing is going to have painful repercussions, yes I even mean more painful then the recession/depression itself on our country. It'll be a drastic turn back the clock on the American way of life. In my opinion, there is no doubt that the crowding out effect by issuance of massive Tbills is beginning and sure to get much worse as the US needs to roll over some of this massive debt. And what do we do once we hit the full on liquidity trap......is 5% savings rate gonna hold? I'll take a double savings rate up to 10%, on the rocks....it'd be fitting. I hope all those Keynesian disciples are confident in their beloved multiplier for this enormous fiscal stimulus pkg.
GL |
No bluff. Russia and even a few in Europe are grumbling for a new global currency. They see two benefits to such a move. First it takes America down several notches in world economic power, by bringing the US down there own stature increases and our sway in trade and world politics falls. Those pesky Americans would be out of the way.
Second, they see it coming. Why not position themselves for what they percieve as inevitable? Every move the administration makes is designed to bring America to second world status. I honestly think it is deliberate. They preach equality for the masses, but their economic policies are specificly designed to create a two caste economic model. What they are doing is creating a worker bee populace and a ruling elite.
By diluting the dollar to near worthless they remove any business leaders or corporate groups from any sort of influence in economic or social policy. The average Joe will have so little left in his paycheck that there will be no option but to exist at the teat of government. The economic goal of the administrations actions is the entrenchment of economic and political power in themselves. They have made absolutely no moves that do anything but that. China and others see this, they also see that the American people are doing nothing to prevent this slide toward hegemony.
An America that lacks economic influence coupled with a basicly slave populace will no longer matter on the world stage. They will ride over our economic carcass in a rush to replace us. Eventually, it may be that they decide our debt to them is due. How they would exact their pound of flesh is quickly becoming a topic of conversation amongst those that follow international politics.
Good Luck
China Says It’s Time To Ditch Dollar 
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