wobatus

Is the U.S. Dollar Headed for a Mighty Crash? Part I

ah yes, the inscrutable, long term oriented chinese. How far ahead was Chiang thinking?


On May 21 12:51 PM Donald Ingram wrote:

> You are correct.
>
> The Chinese plan in generational terms. In other words they want
> what will be good for their grandchildren, not as here in the West
> where long term planning is deciding what will be served for dinner
> Sunday! Also the Chinese practice patience, they have had thousands
> of years of practice at that!
>
> On May 21 12:19 PM User 417846 wrote:

Is the U.S. Dollar Headed for a Mighty Crash? Part I

And who will buy China's goods if that happens? How will they feed their masses? Just a thought.


On May 21 11:32 AM User 353732 wrote:

> It is an article of faith amongst currency and govt. debt analysts
> that China , Russia , others, will not risk the loss of prinicipal
> by refusing to buy further US govt debt much less selling some existing
> holdings.
> However, suppose in a couple of years China, Russia ,some others
> after accumulating hundreds of billions of dollars in commodities(ores,
> industrial and precious metals, uranium, coal, oil , even soy beans
> and grain depending on the country involved) decide to start selling
> US debt, creating a a formidable bear market in Treasuries and agency
> debt. Would they not make the calculation that a bear market in US
> /Agencydebt would mean spiking yields and inflation, leading to a
> huge and almost frantic global flight to commodities. The resulting
> surge in commodity prices would result in spectacular inventory gains
> for these countries which would mitigate even if not completly offset
> the capital loss on their US govt debt. The relatively small net
> loss may be a price worth paying.
> The truly dangerous time for the US, i think, is not 2009, but a
> couple of years out when China et. al have put in place the coomodity
> reserve basis for a strategic exit from US govt debt. This is just
> a scenario but one that should not be dismissed without some reflection.
>
> Sadly ,even if we in the USA knew with high assurance that this "strategic
> switch" was being contemplated by China et. al there is nothing we
> would do to prevent it. Such is the tragedy of debt addiction and
> loss of national will. Instant gratification and denial have now
> become the walls and bars of self made prison.
>
> Let us hope the Chinese, et. al lack the analytical sophistication
> and execution capacity to successfully engineer the strategic switch.
>

Burst Bubble? Commodities' Long-Term Story Remains Intact

High powered money has not been growing. It has been stagnant. And recession is deflationary, not inflationary. Plus the market expected a 1.0% cut, not .75%. U.S. demand has dropped. Look at oil service stocks (OIH). it had been dropping for a while during the most recent leg of the oil upsurge. Basically, it called bukllshit on $110 oil, and for good reason.