That would be true if we lent money to the World, not the
other way around. FWIW, the dollar short squeeze was clearly
in part engineered by Bernanke, Paulson, and the ECB, as the
clownbuck was threatening to die. The US rating agencies
dropped the sovereign ratings of our creditors - and voila -
the dollar rally was engineered. The truth is, our sovereign
rating is now C-. In fact, I'd give it an F, cause the
savings of the whole World is not enough to finance $2 Trillion
dollar budget deficit.
The situation is both ways, we own foreign assets, they
own more ours. So, as we dumped foreign assets, the dollar
rallied. Now they dump ours and the dollar will drop.
Who wants a rummy currency? Would YOU hold Zimbabwe government
bonds? -g-
Here are the fundamentals:
Foreigners own productive assets - plants. All we produce
here thanks to twin bubbles is PAPER no longer backed
by anything. Thanks to the bailouts of the WRONG paper
producing sector (finance), we will keep producing paper.
Only nobody in the World wants that paper now, nor do
they want our dollar, which is backed by that trash. So...
they will keep selling until our paper is backed by real
assets, or they will buy up US real assets with their
dollars. |
