currency trading signals
Tuesday, September 7th, 2010
Is China trying to get rid of the U.S. $$ as a Gold Standard?
I don’t feel the “Los Angeles Times” is the pinnacle of unbiased truth but this article on July 27th in the Business section is NOT the 1st time I heard wind of this as follows
“Although leaders on both sides have been stressing the importance of cooperation, Chinese leaders have not been shy lately about expressing concern about the dollar’s dominance. China has introduced about $95 billion in currency swaps with other countries since December (2009) and floated the idea of an international currency (other than U.S. $) for trade. The moves signal a sharper tone out of Beijing.”
What are your thoughts on this? Any links would be appreciated.
Oh…and I know about how “Gold” is not what U.S. currency is based on any longer…duh.
excuse me, “since December 2008…” sorry.
China wants to get rid of the USD as the standard trade currency because the USD has become unstable and China now realises the US is going down and will likely never be able to pay it’s debt to China. This means China will inevitably forgive a huge portion of the debt.
For the future, China and the rest of the world want to trade in stable currencies with countries that repay their debts. They do not want a repeat incident like this. The Euro will likely replace the USD in this regard in the coming years. Investors around the world have lost faith in the USD.
It’s not just China though. The news in the US always makes it look like China holds all US debt. I guess it’s because Americans view China as the enemy so it’s more sensational to report on the debt to China. Truth is, Japan holds a bigger protion, but Canada, Russia, India, S.Korea and many others all have lent great deals of money to the US. Nobody in the world is happy with the US government. The US hasn’t put even 1 penny against it’s debt since 2005. The US government seems to think they can just keep taking, and the world will just go along with it.
The USD is dropping which is devaluing the treasury bonds these countries have bought, which in turn forces them to buy more bonds so the US won’t print more money. That further increases US debt to these countries. The debt is becoming so large now that it is on the verge of becoming valueless as it can never be repaid. This pushes the world to the point of potential economic Armageddon.
Not only does China and the rest of the world want to pull away from the USD, they have to. The US refuses to pay it’s debts, therefore they need to cut their losses and invest elsewhere before it gets any worse. They will all take a huge hit, but it must be done. There is no other choice left by the idiots running America. Well, besides war.
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