After all of the denial about the U.S. Budget Deficit and our silly social programs that we have NOT been paying for, the Chinese felt the need to clarify.
In other words... "Can you hear me now?"
There is an old adage that The Powers That Be really should listen to:
"When you find yourself in a hole - stop digging."
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As I laid out in my previous post, the U.S. saw Peak Oil in 2005, and supplies began to decline earnest in 2008.
In earlier posts I have made the case that because of the size of the U.S. Budget Deficit, the interest on the debt will outpace any possible growth in GDP. Without more Oil, growth is going to be hard to come by.
Now China is making it clear that things must change.
Things could really come unglued politically and economically in the next several years. So what should you do?
Most of us are completely broke, we just don't know it yet (If you had you had a Billion German Marks at the end of WWII, you had less net worth than a guy with 100 live chickens). If you are not willing to make any serious adjustments in your life, well, "no decision" is a decision, too. Besides, when you think about it, the average (poor as a church mouse) person in the U.S. lives to be 79. The Rich and Famous Kings of Rock and Pop (Elvis died at 47, Michael Jackson at 50), can't seem to make it past 50.
Life is short. Go to the beach.
Mentatt
4 comments:
I'm all for the dollar losing its status. It would impose some discipline on the government.
I can't see how a basket of fiat currencies would be much better. The Chinese have been buying commodities lately, so they must feel the same.
I think your previous commentator (in another post) was right; China is buying oil futures and taking delivery in order to get rid of some of its dollars, that's why the price is rising. In which case it'll contiue for some time, despite the fall in US consumption.
With all that ethanol in the figures, the price of food has to rise too, especially if the Asian monsoons don't happen very soon (they're late).
BTW, I guess you saw this; http://www.france24.com/en/20090613-billions-bonds-seized-swiss-border-japanese-italian-police
Speculation is the bonds were actually real and the Japanese govt was trying to dump them illegally!
I have been following the bearer bonds incident and it is as screwed up as a bag of coat hangers. The 134.5 billion in bonds were undeclared so Italy was entitled to seize 1/3 if they were real but they did not. They were also required to prosecute the pair if they were forgeries but they did not; nor did the US ask for extradition.
The “forgeries” were of sufficient quality that the Italians has to ask the US treasury to authenticate them so it was not monopoly money- someone put time and effort into making them if they were forgeries. Moreover, the Treasury took several days to determine that they were fakes even though it stated there was only around 100 million in bearer bonds outstanding and the smallest bond in their possession was 500 million.
The ideal that the securities were traveling in a diplomatic pouch does make sense on some levels: The US could not prosecute, not the Italians, nor could the Italians reap their windfall in undeclared securities so it fits there. On the other hand if that false bottom suit case was a diplomatic pouch all Japan’s agents would have had to do is declare it as such and it would have been inviolable and the subsequent hooey avoided so it doesn’t make sense either.
At any rate something is seriously wrong with the whole screwy incident.
Doh that should be:
The US could not prosecute, nor the Italians, nor could the Italians reap their windfall in undeclared securities so it fits there.
Note to self; proof then post.
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