Trade deficit is really getting way out of hand and becoming an embarrassment to the free trading neo-cons. Something must be done or nation's manurfacturing base (read jobs) will all but disappear. Leaving the USA as a poor third world type country. Solution let the dollar fall until imports loss their price advantage over domestic goods.
Similarly Break the Chinese currency peg to the US dollar. China has the value of it's currency, the Yaun, pegged to the US dollar, this effectively gives Chinese goods a permanent advantage over US goods. With this permanent advantage the US will never be able to compete in either the US or Chinese market. Something must be done. Solution, a game of chicken, make the Yaun worthless by making the dollar worthless effectively wiping out the value of all the dollars being hoarded by the Chinese.
The debt load of the USA is enormous and growing, something must be done to get rid of that debt. Solution, the debt is in dollars so reduce the real debt by reducing the value of the dollar.
The Bush Administration has absolute faith in the free market and will not intervene one way or the other. They believe that the best course is to allow the market to set the price of the dollar, if that means a big drop in value, so be it.
Anyone have any other ideas? Certainly does appear that the Bush Administration has a hands off policy when it comes to a falling dollar.
Fiat money is'nt money, because its fiat..
Chinas financial progress is pegged to the U.S. market..
Thats why they(the Chinese) are looking to expand to other nations.. and get raw material from, say, "Africa(currently)", expanding their hegemony at the same time.. The Chinese are not stupid.. even with capitalism.. Half of America IS stupid(Clinton/Gore, Kerry).. They are counting on that..
However, the tide may be changeing. Did I say "may be". Ah! yes I did.. Alaska has more oil, natural gas and coal than the Saudi's and Iraq put together,, AND about any other raw material that America needs.. Alaska is bigger than the entire western U.S.... and a treasure trove of resources. which the democrats have blocked useing for decades now..
WHY ?... because democrats depise america generally and specifically in relation to americas soverignty.. Hopefully that will change.. and foreign companys will NOT be used to extract those resources.. like British and French companys..
.....the debt is in dollars so reduce the real debt by reducing the value of the dollar.....
I like your analysis. This process worked before to our advantage. The Japaneese absorbed massive quantities of $$$ and to use them came to America and bought everything.....New York, LA, golf courses, Palm Beach Condo's and such. The US$ then began to drop against the Yen and the Japaneese sold out. America had the realestate and the $$$