Max Keiser: China's Addiction to the Dollar Will Cost Them

Max Keiser certainly has a way with words. In one of his latest TV appearances, using the colorful analogy of “Warren Buffett’s toilet paper,” he calls the U.S. dollar worthless.

He goes on to say that China is addicted to this worthless paper because they are using it to stimulate their domestic economy. In another memorable analogy, he labels this an “opium” addiction which will cost the Chinese dearly.

While the Chinese (and the Indians) are increasingly turning to gold as a currency alternative, it is fairly clear that China will have to eventually take an enormous haircut on its holdings of U.S. paper assets. One reason the Chinese are refusing to revalue the renminbi is their desire to forestall this eventuality – and with good reason. Last year, the Chinese central bank needed to go cap in hand to the Finance Ministry because the central banks U.S. dollar paper assets had so depleted the central bank of capital.

Keiser has a lot more to say. Very entertaining. Below is the video. It runs just under 5 minutes.

Comments

[Shocksink:]

You can´t fool the chinese all the time...lol

Nov 16 01:09 PM

[Ricard:]

Just reading the title, I have this comment:

The dollar is to China what food is to us. They need to eat...what else can they do? Commodities? Mainly owned by us, and we're not letting go. Other currencies? Worse than the dollar. Gold? The real paper tiger. Domestic spending/consumption? Right...copy us, and eat ourselves until there is nothing left.

Nov 16 02:10 PM