Jonathan Christopher

Geithner Smart Not to Confront Chinese Yet About U.S. Borrowing Needs

Dear Blind Reason: Thjink of the following scenario:

1. Chinese sell products overseas - get Dollars, Make profit
2. Chinese get dollars, purchase Treasuries - get interest
3. Chinese sell Treasuries to countries with weak currencies, and get their government agreement to allow them to buy commodities, etc with that countries currencies. Locks in value of currency.
4. Chinese buy commodity at bargain prices, with the country's over-valued currency. Locks in future profits
5. Chinese sell commodities to themselves, make Profits
6. Using cheap raw materials, Chinese make products, sells overseas, gets Dollars make profits.
7 Return to #2 above
Looks a lot like the modern version of the "Triangular Trade", and the Dollar gets to hang on as the Reserve Currency for a bit longer, based on Chinese largesse.

Obama's 'Buy American' Plan May Meet China's Export-Led Growth in 2009

It appears that a major factor in deepening the level of the "Great Depression" was the passing of laws raising Tariffs. a "Buy American" policy from the world's greatest EXPORTER is a dangerous step to take. The LAST thing we need is for countries to start a "beggar thy neighbor" policy, because we all know where that will lead.