Hi tooearly, <<... administration officials say the economics are far more complex than they first appear>> :0)
Next, the Chinese legislators and provincial governors will be demanding that their central government demand that the US administration balance the budget, allow USD interest rate on all T-bills and government/agency debt to free-float, so that the USD currency can hope stay upright, securing Chinese central bank holdings of otherwise to be worth less US paper :0)
Oh, yes, and do not forget, the Chinese legislators will also be pushing for implement legislation to outlaw the purchase of Chinese goods by US consumers:0)
Question to self: at what rate of currency exchange will US low-tech manufacturing be competitive against Chinese handicraft?
Serious answer: When an average Hunan peasant is living in a USD 220,000 mud hut supplied with electricity, gas, water, equiped with all modern appliances, and there is an SUV and a BMW in the detached garage. Do not forget the 85% mortgage paper held by the average N.Carolina farmer written by Zhenzhou Municipal Mortgage Guaranty Corporation :0)
My serious comment and sincere advice? Buy gold, sell dollar, and on LT basis, stay away from the Yuan, for it will crash against the dollar when China cranks up the printing press to wash away its own social security and banking sins.
Conclusion? The biggest ever global competitive print-a-thon has already commenced, and an attempt will be made to wash all debt-ly sins away in the deluge.
I am of course trying to be funny in face of financial disaster and backed up against economic cataclysm, even though the current situation is dire and the obvious trend is alarming.
Chugs, Jay |
