Posted on 04/24/2011 9:42:07 AM PDT by library user
...Following last week's announcement by PBoC Governor Zhou Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified... Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy... Tang Shuangning, chairman of China Everbright Groug... suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health... noting that the key is to reform the mechanism of how the reserves are generated and managed... While China is certainly tired of recycling US Dollars, it still has no viable alternative... all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
China is attacking the USD. This is economic warfare.
Send the US Navy out to turn around Chinese container ships heading for US ports, and lets just shut down Chinese unfair trade practices.
Were going to have to some time.
Might as well be right now.
Every bar and restaurant owner is hoarding more physical currency than they ever have...along with the few construction contractors still working.
Yes, we're now a cash and carry economy.
I'm also pretty darn sure all the moneyed classes of the world are keeping a several thousand dollars under the mattress, just in case. That's THEIR SHTF contingency...get to America where you can buy guns and food.
I know several people who have upwards of $10k in currency. Can't say I blame them, it's all they know.
I got rather perturbed with one of my colleagues in China and in a fit of rage told him that “while we were putting men on the moon, they were making pig iron in home built ovens that wasn’t worth the cow shit they were fueled with, and not to lecture me about engineering”. He was speechless and ashamed.
I agree that we Americans are tough. England,though is not a free nation. It’s citizens are subjects. We fought a war to be free of that tyrannical BS.
I do find it somewshat ironic that the day to pay the piper arrived on Easter Sunday.
The SHTF.
On the international scale creditors don't come knocking. They just close their own doors to you. Want to buy some steel on the market? That would be one billion trillion dollars per ton. Don't like the price? Well, make your own, if you can. US military will not launch nukes at Bejing simply because we want their steel or aluminum; our generals are, by and large, honest people who don't do highway robbery.
If the USA is cut off from the international market it will be necessary to rebuild all these missing industries within the country, and fast. I think we'll need another Stalin to accomplish that, if we are lucky. USSR didn't lose any of its technologies; only the physical assets were destroyed in the war. Realistically speaking, it would be a miracle if the USA can sustain itself 10 years after the isolation begins.
Most likely a good part of those 10 years will be spent in a small civil war against criminals; both sides will have to form militia to defend (or attack) and many people will be tied up in that. Restoration of food producion and delivery will be the #1 problem after the oil deliveries from our Arab "friends" stop. The army will most likely fall apart due to the fall of the government, lack of supplies and money. There will be no foreign invasion - there is nothing to gain, unless you want lawyers' offices and computers from stock exchanges and some office supplies. If an invader wants to grab some industry - sorry, pal, we don't have much of it here, it's all in China.
“If the USA is cut off from the international market it will be necessary to rebuild all these missing industries within the country, and fast. “
-
Oh gosh.
Heaven forbid.
We might not make it the immediate next ten, if we keep giving all our money to foreign countries and governments, and then borrowing even more after that. The time to stop it is now, before it is too late, and the situation you describe so lividly actually comes to pass.
Go ***** a camel.
Cheers!
It’s depressing to think that so many years later, the voters in 2008 were no smarter than to once again fall for someone who could make a good speech, promising voters the moon once again...paid for with someone else’s money, of course. Voters so stupid as to fall for this same scam over and over don’t deserve to have a country.
“Yes, we’re now a cash and carry economy.”
Which of course does not facilitate the revenue enhancement side of deficit reduction efforts.
Wonder what the dollar will buy in a year...
You're right - they're deserting a sinking ship - nothing more...
Correct me if I am wrong, but doesn’t this mean the debt ceiling is pretty much capped?
30 years ago my folks had a family friend who was a flooring contractor who evidently was frequently paid in cash --- and who got into the habit of depositing his extra currency into a safe he kept in his garage... intent upon saving up for a new truck.
He shoved the bills through a slot in the safe and never opened the thing, just keeping track of what he'd put inside.
Well, 10+ years later the day came when his ledger said there was enough for the truck, so he went and ordered it.
The truck arrived and he opened the safe to retreive his cash to pay for it.
Moths had eaten it to dust.
"oops".
No, I did. I was commenting on the need for a trailer to make everything mobile, versus what could be packed in the moter home. You need 4-6 cubic yards at least for a years supply for two.
But you’re WAY AHEAD of most everyone else, including me!
There's plenty of domestic money looking for a home. Few Americans want 1 Year Treasuries at 0.27%, though. The Fed will have to raise interest rates to levels that investors want. The problem for the Chinese is that they will have severe problems investing their cash in any other asset, because of liquidity issues - the pool of capital available to invest is so large that getting in will cause the price to rise, and getting out will cause the price to fall by much greater percentages than US Treasuries. A big player like the Chinese will always buy high and sell low. But in something like gold, buying will drive the price up 10x, while selling will equally drive the price down 90%. This is why they buy Treasuries - relative to total volumes, they are a drop in the market, meaning that they don't lose huge sums just by buying and selling.
Ideally, the Chinese central bank would stop artificially suppressing the yuan's value (which it does by retaining them USD handed to them by Chinese exporters), and just sell its excess foreign currency. The sale of $2T excess USD could cause the yuan to rise rapidly - perhaps to 4 yuan to the dollar - compared to the current 6.5 yuan, and create a vast new market for American goods in China, since American imports will be much more competitive with Chinese goods, even with the stiff tariffs currently levied by Chinese customs. The average Chinese would love to buy imported goods, but the artificially suppressed yuan gives them no buying power.
All good and well, but the opposition did nothing to warn the voters as to why this person was an empty incompetent, or worse a wolf in sheep's clothing. John McCain worked very hard to get Obama elected...he acted as if he were only there to be the supporting part in the "historic" election of a minority to the U.S. Presidency. McCain was the worst of a terrible GOP lot. And he enabled the destruction of the country through his haughty superiority. McCain should be hung as a traitor.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.