As the United States contemplates the bankruptcy of several of our states, all democrat run, and how best to bail out states whose hallmark is profligate social spending; the Chinese are forming alliances with any sound currency they can find. China and Brazil have begun in earnest to remove the dollar as an entanglement in international trade. Both China and Brazil have economies and currency that’s in much better shape than the beleaguered US Dollar and the path is being cleared for an alliance of the most stable currencies on earth, first among them china, to create new channels of trade and finance based on its own currency and those of the best world currencies. Deals are being struck in currency’s other than the US Dollar and its clear that this trend is likely to accelerate to China’s benefit and at our expense. The loss of the US Dollar and the reserve currency of the world will be quite a blow to American prestige and it will have negative ramification in geo politics around the globe. As the world finds alternatives to the dollar it opens us up to a form of economic warfare that will destroy our economy and turn us into an economic joke as the world sends all their dollars back to us as trillions of dollars become worthless overnight.
Last summer we saw the effects of gas as a weapon against our economy as gas prices triggered the popping of the “Mortgage Bubble” which in turn took out the entire banking and finance system, insurance and the Automakers. This summer as gas prices again turn north, over $60 a barrel as of this writing, we should be treated to the popping of the retail real estate bubble and perhaps the worst of all the return of trillions of valueless dollars to our shores resulting in an inflationary tsunami even as we make matters worse by guaranteeing the crazy liberal debt generated by states like California, New Jersey, New York, Massachusetts and so on. The popping of the commercial real-estate bubble would be bad enough but when the world sees the insanity of how Obama will bail out huge democrat states like California by looting all the republican states until these United States find equality at last in bankruptcy. This is where the world just says NO to the US dollar.
But the Stock Market is up! Barak is our savior! The world won’t take a real retributive glee in sticking it to the United State for all our crimes real or imagined! Yeah? I got a bridge in Brooklyn I want to sell you!
As we pass through this fairly benign economic reprieve, before the next big bubbles burst, it would behoove us to consider the problems economic, foreign, and social, that are arrayed against us and prepare for a long hot summer as some fool ,somewhere, drops the match and our economy goes up in a blaze of foreign bought gasoline. The final bullet to end our economic supremacy will be the implosion of the US dollar. It’s the dollars destruction that will truly do us in and that’s what’s being actively planned for in the story below. This isn’t a theoretical threat to our currency: this is active planning to conduct business without the US Dollar because the world is realizing that our problems are an order of magnitude beyond our ability to correct.
Stronger currencies won’t be taken down by the stupidity of weaker currency. Look for a growing international movement of stronger currencies that will make some agreements with the IMF and that will supplant the US Dollar sometime soon.
While the Obama Administration steals from Missouri to fund outrageously stupid spending in San Francisco; while they steal money from Montana and Texas to fund the outrageous corruption of New Jersey: they sign the death warrant of all the states. China and Brazil are not going down with the dollar they’re blazing a new trail that don’t include dependency, in any way, on the USA.
It’s going to be a long hot summer folks! Consider this article from the Financial Times:
Brazil and China eye plan to axe dollar
By Jonathan Wheatley in São Paulo
Published: May 18 2009 18:24 | Last updated: May 18 2009 23:31
Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president.
The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.
Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China’s president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.
An official at Brazil’s central bank stressed that talks were at an early stage. He also said that what was under discussion was not a currency swap of the kind China recently agreed with Argentina and which the US had agreed with several countries, including Brazil.
“Currency swaps are not necessarily trade related,” the official said. “The funds can be drawn down for any use. What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi.”
Henrique Meirelles and Zhou Xiaochuan, governors of the two countries’ central banks, were expected to meet soon to discuss the matter, the official said.
In an essay posted on the People’s Bank of China’s website, Mr Zhou said the goal would be to create a reserve currency “that is disconnected from individual nations”.
In September, Brazil and Argentina signed an agreement under which importers and exporters in the two countries may make and receive payments in pesos and reals, although they may also continue to use the US dollar if they prefer.
An aide to Mr Lula da Silva on his visit to Beijing said the political will to enact a similar deal with China was clearly present. “Something that would have been unthinkable 10 years ago is a real possibility today,” he said. “Strong currencies like the real and the renminbi are perfectly capable of being used as trade currencies, as is the case between Brazil and Argentina.”
In what was interpreted as a sign of Chinese concern about the future of the dollar, the governor of China’s central bank proposed in March that the US dollar be replaced as the world’s de-facto reserve currency.
In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency ”that is disconnected from individual nations” and modelled on the International Monetary Fund’s special drawing rights, or SDRs.
Economists have argued that while the SDR plan is unfeasible now, bilateral deals between Beijing and its trading partners could act as pieces in a jigsaw designed to promote wider international use of the renminbi.
Any move to make the renminbi more acceptable for international trade, or to help establish it as a regional reserve currency in Asia, could enhance China’s political clout around the world.