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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Perspective who wrote (12593)9/30/2004 8:52:33 PM
From: mishedlo  Read Replies (2) of 116555
 
China and the US$
politicalposts.com

In yesterday's Daily People's Online, Jiang Ruiping, director of the Department of International Economic under China Foreign Affairs University, spelled out the case for China to stop financing America's spending spree. In essence, Jiang Ruiping explains that the risk of a collapse in the American dollar is great enough to warrant China no longer accepting dollars. He lists the following points as primary justifications for China's moves:
1) The worsening fiscal deficit is putting great pressure on the stability of the US dollar. “
2) The deteriorating current account deficit of the United States is menacing the future fate of the dollar. “
3) Foreign direct investment (FDI) in the United States is decreasing
4) Oil Producing countries are beginning to switch toward the Euro-dollar.
Is Jiang Ruiping simply a Chinese academic-type writing an opinion piece for a narrow group of Chinese scholars? Or was this something much more sinister? This could well have been a shot across our bow. It could well be the first arrow thrown in an economic war against the United States. The reason is that The Bush administration has put America in its weakest position in decades. Our ability to respond to any foreign threat, militarily or economically, is hamstrung.
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