Friday, December 15, 2006

The Dollar

Here is a link regarding the dollar.

Things that make you go humm.. Why did Fed Chairman Bernanky back away from his charge that China was keeping the Yuan artificially low at the expense of the American worker? Let’s see. China has massive currency reserves, that if they decided to sell would cause the dollar to plummet. Usually the U.S. could defend its currency by buying up these dumped dollars and thus insulate us from a big currency drop. But, with the U. S. running record budget deficits, as a result of poor tax policy and profligate spending (think earmarks and Iraq) we are in no position to defend our currency. Thus, because of poor economic policy we are at the mercy of China. How is that for this administration "keeping America safe?"

1 comment:

Anonymous said...

It has been my opinion for some time that China's reserve of US currency is the second greatest threat to national security behind global warming.

As competition for fossil fuels tightens, China will be the primary alternative market for oil exporters. As China continues to industrialize their consumption of oil will skyrocket, and that will raise tensions between our two nations.

Given that reality it is extremely dangerous for them to have a veritable silver bullet which they can use to crash the American economy on a whim.

If we had true political leadership in this country, this issue would be being addressed openly and actively.