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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (27247)4/11/2005 10:39:01 AM
From: mishedlo  Read Replies (2) of 116555
 
Rien on the FOOL in response to my blog
There is a way out, at least a "kind of" way out.

If China were to float, and sell their USD holdings, then they would experience deflation and a subsequent depression. But they can also simply not sell at all, ever. until such a time that their USD holdings have become insignificant in the global scheme of things (normal inflation).

That way they would accept that they have worked "for nought". But as you point out, "nought" is not really "nought" as they have gained:
1. Internal political stability
2. A technology transfer
3. A manufacturing base
4. Their main competitor(s) has(have) become unstable.

So I think (like you probably) that the Chinese are the real winners out of this. A masterpiece if it was done on purpose.

Best,
Rien.
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