Phil > Part 1 ..............
It has occurred to me that total world consumption has probably not increased that much, and by simply switching production from say the US to China doesn't increase the total demand
I'm sure that's true. In fact, in what is supposed to be a depressed world economy, how can it be otherwise?
> the Chinese are stockpiling the raw materials
As an alternative to holding US paper dollars?
> the Chinese are stockpiling the finished product
Could be but that is a very tricky policy because, by over-producing, they are creating deflation and forcing down the price of their manufactured goods.
> there has been an increase in demand, unseen by the rest of the world, internally in China & S.E
Maybe?
> I think the US is committed to low interest rates for years to come.
I don't know about that. Strikes me that they are already preparing the US public for a rise in rates. Makes sense in terms of my "strong dollar" hypothesis because then they can print more and buy more, ad infinitum. In fact, the whole game is to print as much as possible and then to suppress every hint of inflation. That's why they dare not allow the gold price to get out of hand because a low gold price signifies low inflation and that means a strong paper dollar.
> This will produce bubbles in real estate, banking, stock markets and other large capital activities
That's why it's necessary to put up interest rates. The whole game is fictional except to those who are being squeezed dry by having to pay more interest on their mortgages, credit cards, cars etc. And, it's that squeezing, and the crying which follows, which convinces foreign investors that the dollar is "real" and not just the product of a paper-mill. As I say frequently, an indirect aspect of the whole game is social control. People who are in debt and struggling to make ends meet don't give trouble, don't make revolutions and do as they are told. They also believe anything their government tells them. In fact, it is probably their debt, rather than any other reason, which makes the average American gullible and ready to believe the nonsense put out by their government, something which non-Americans find very hard to understand.
Part 2 to follow |
