Posted on 05/18/2009 5:37:56 AM PDT by SeekAndFind
"The U. S. should be afraid, very afraid. China is questioning the dollar's status as a reserve currency and, at US$1,000 an ounce, gold has become the world's de facto currency." -- John Ing, Maison Placements in Canada
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It is a chilling statement from an expert on both gold and China. But he is speaking the truth: In a G2 world (the United States and China), he who is the piper calls the tune, and China holds a US$2-trillion mortgage on the United States and is not happy. This country, along with others that lend money to the United States, such as Saudi Arabia, will determine the value of the U. S. dollar and gold. And they have spoken. They are not buying more U. S. treasuries and are buying gold as a new asset class. China announced that it was doing so quietly, and recent reports are that the Saudis and others have been buying bullion and hocked gold jewellery from around the world.
The only way is up for gold prices because the United States, which backstops the International Monetary Fund, the world's lender of last resort, has had to become its own lender of last resort.
Washington has cranked up the printing presses in an unprecedented way, replicating the behaviour of its spendthrift corporations and consumers. This year's budget is US$3.5-trillion, bigger than any in history.
And as Ing points out, the "bi" in this bipolar global economy is China. Beijing has not only started to hoard gold but has continued to talk up a new reserve currency concept to replace the U. S. dollar. The only reason the Chinese and others don't dump U. S. dollars is because it would be like shooting themselves in the foot.
(Excerpt) Read more at nationalpost.com ...
Just like Japan was going to buy up everything in the 90s, right ? I wouldn’t be worrying too much about some of these types of hyperventilating articles.
While the printing presses are still smoking, let’s just roll off an extra 2T and send it along to them. I bet they succumb to their internal revolt before we do.
I’ve been thinking for awhile that the price of gold is artificially low, given the irresponsible massive printing of $ by the the Fed.
Where is all the money we lent to these countries over these many years?
Agreed. This will keep the Chinese from blowing up the Golden Goose.
They risk getting caught in a gold bubble if that is their only strategy. I would think natural resources would be their best bet,to buy oil companies and oil wells and farming as Jim Rogers suggests. Ironically when these prices skyrocket democrats will demand windfall profits taxes, but they cant tax foreign company profits beyond import tariffs, which would not go over well when prices are high.
Printing more dollars creates economic growth ping.
“Printing more dollars creates economic growth ping.”
That’s pure crap!
It creates inflation and has nothing to do with economic growth.
You’re apparently under 60 and went to a government school and ate their crap up.
Do you mean ‘gave’ to them?
Russia still owes us money from the wheat we “sold” them 50 years ago.
They could do something radical like buy some stuff from us. Of course they already manufacture it there, so I guess I see their point.
O’ba should sell them wind turbines.
There is an old saying that if you owe the bank a million dollars, they own you. If you owe the bank 100 million dollars, you own them.
No they won't.
We have some serious problems the greatest being the propping up of legacy industries and govt intervention in the mkt. It will take a generation to get back on the right track, but we will.
Perhaps the ChiComs should apply for relief under TARP?
Are you unbalanced? If I thought that why would I post the Greenspan post that you were pinging to earlier today that talked about the bad effects of creating tons of money in 2003? Do you even read these articles or are the voices in your head too loud?
Ping
That article was pure BS, printing money has nothing to do wirh the economy, the housing boom or anything but creating inflation.
Our problems are and were created by easy credit which should never happen, ever.
If you can’t pay for it lay down in the street and die.
The article might be hyperventilating, but how will we pay the debt? The debt is beyond normal comprehension at this point. It’s sort of like trying to understand distances in outer space.
What I’m trying to figure out is where China got money to loan to us? Up until the late 80’s China was a fairly moribund country until western INVESTORS poured money into China to build factories and hire workers cheaply. It seems to me they’ve been loaning us money we had already had LOANED or INVESTED in them. Perhaps we really owe CHINA nothing!
I know my analysis is wrong somewhere...but I never see the question asked, where did China get the money to loan to us?(IE, the money with which to buy US treasuries and bonds?)
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