http://www.bloomberg.com/apps/news?pid=20601087&sid=agLiLPeFZCE4&refer=home Simple Speak.... Once upon a time there was a country which lived within its means and provided a stellar economic example to other rising star countries.... However things changed.... Both the country and its citizens starting building debt such that debt became a mistaken sign of wealth....The country played the game "you know that I am always good for it" and kept cutting its orchard trees such that there was no way to repay the debt.... Thus there came no solution other than trying to keep rolling its debt into future....The debt became so large that the interest alone became unpayable.... Thus a failed state ensued.... Furthermore its debt demands were so large that it was impossible to sell debt to others because even collectively available currency was not sufficient..... Thus monetization became the only option which led to a monetization domino effect upon other countries throughout the world....The few countries that were registering surpluses had to monetize in order to protect their own export markets ....The other countries who also ran deficits simply could no longer borrow, and had to monetize as well.... So at the end of the day....most every world currency was deeply diluted such that huge disruptions in commodity prices prevailed.... But finally there was a calming of all currencies and markets as the total became more equlibrant....in that commodities were re-priced in accordance with normalized demand.... The tide went up and down....and all boats rose and fell with the tide...with some uneven waves....
If I were China I would do everything, spend every last dollar to support and rebuild the American economy.....but first I would ask for the resignation of Barak Obama
Article 101 of the Maastricht Treaty forbids debt monetization So take Euro zone out Then, there is nothing wrong about debt monetization as long as the money is collected back when the economy recovers. I thus conclude that American economy will recover soon but Euro zone will have many problems. Expect the $ to rally when Euro zone member countires start defaulting on their debt.
Intradaybill.... Expect the $ to rally when Euro zone member countires start defaulting on their debt. Article 101 of the Maastricht Treaty forbids debt monetization ......................................................................... Good points................. ...................................................................... The stronger will not favor bailing out the weak .... Particularly when it is not THEIR sovereignty.... Thus the flaws of a blanket currency....
I seriously propose that we put Washington DC up as collatoral for any new loans from China. When default occurs -as it surely will-then DC will be their problem-not ours!
If I were China - - I would congratulate myself for a job well done (intentional or not). I have now turned the U.S. population into a nation of debt slaves by selling them useless crap and loaning them money. I have their politicians in my back pocket & can be assured that they will do my bidding including taxing their citizens to keep the interest payments coming. I know the big pile of 'dollars' I have is nothing more than useless paper, but the Americans actually take them seriously - - I will trade them for real assets that actually are worth something including hard asset commodities and companies with technologies that can be exploited and copied. I will build the military, because it provides future options - - but likely won't need to use that force for awhile. Its so much better to use 'China dollars' as a weapon because, it preserves the assets of material and slaves working in the future. It also drains their nation, weakening their ability to react in the world to military & political threats. We are patient and can wait for decades for the inevitable. Their economy & population is getting older and smaller so things will play out for us in the future. We never should have followed that idiot Mao - - this Way works so much better !
Euro countries are net holders of US debt obligations. If they go down, they take the US and Bretton Woods II down with them.