It is coming at us hard and fast now...
Think back 2 or 3 weeks... Hillary Clinton was in China, meeting about our "mutual interests"... the fact the China holds over $1 Trillion in U.S. debt and is rightly concerned about the mathematical certainty that our total debt/GDP will TRIPLE in 10 years and that that cannot be supported (and there is no way to stop it). Hillary came out of mission "all smiles", called the boss and told him "all is well... they are going to keep funding us... (hehehehehehehe lolololo).
Now this.
Somebody forgot to tell the Chinese to stick to the script. The Chinese do NOTHING by accident. EVERYTHING is well scripted. This was a message, maybe even the message.
So what did our fearless leaders do?
They went into denial.
I expected nothing less.
The real question is: Will you go into denial?
Good Luck!
Mentatt (at) yahoo
8 comments:
No comments yet from Europe or Middle East; it'll be interesting to see what they say. The German Chancellor and now the Head of the Bank of England have already spoken out against further stimulus packages because they could destabilise the Euro and Sterling; effectively a criticism of American stimulus policy.
If the Middle East start making positive noises about the Chinese proposal (because that's what it was), or about pricing oil in other than dollars ......
And bottom line is that if China stops buying US Treasuries, who else will?
t the moment, I think this is mere posturing - a trial balloon if you will. Or a message that was missed during the Clinton meeting.
But it portends much for the future.
Great article in Asia Times by Joseph Stroupe- "Dollar Crisis in the Making" in 3 parts
http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html
"Before the stampede
By W Joseph Stroupe
Increasingly ominous clouds are gathering in what could soon be the perfect storm against the United States dollar and against the present dollar-centric global financial order.
This is not shaping up to be a storm that anyone is trying to initiate, not even those who are actively driving for a new global financial order that is no longer centered on the dollar. Instead, it will result from a correlation of forces arising out of the deepening global financial and economic crises, coupled with recurring and conspicuous miscalculation on the part of some of the world's political, financial and economic leaders."
This is about keeping the promise to the Big Boys of finance that they would be bailed when the bubble popped. The bondholders will be clipped either by inflation if TPTB decide to inflate their way out of this mess, or if they just take AIG and the banks into receivership and clip them outright. Plan A, though, debases the currency. But who cares if the dollar fails as long as AIG and Bank of America survive... 99.999% of Americans. That's who. Biggest crime in history.
Can anyone tell the difference between Paulson and Geithner? Or, Obama and Bush, for that matter.
Regards,
Coal Guy
And what happens when a nation heavily dependent on oil imports ie 15,000,000 bbl/day has a currency collapse?
Will the oil exporters continue to ship that much oil to the US in exchange for (more) greenbacks?
I'll be hard goods traded for for hard goods. No credit. Our trade will be in balance. Then the healing will begin.
Regards,
Coal Guy
Latest; the UK treasury failed to sell all its bonds at auction today.
http://news.bbc.co.uk/1/hi/business/7963815.stm
The UK is in just as deep shit as the US - same proportion of debt to GDP, same collapse in financial services and property, same idea of buying our way out of debt with more debt.
Only big difference is that we are still almost self-sufficient in oil and gas, which will probably be more important in the long term.
To Anon - great Asia Times article, but worrying!
Since oil futures are priced in Dollars, any theories on what a move away from the dollar as a global reserve currency might potentially do to the price of oil futures?
Post a Comment