Monday, March 9, 2009
What our creditors are thinking part 2
This article says it all. These are not random spouted opinions like in the U.S. press. The government controls media and statements like these, when made, are sanctioned by "the powers that be" in China. By the way, the "foreign reserves" referred to in the article are primarily U.S. Dollars. The Chinese recognize it is better to sell high rather than low and the U.S. Dollar looks like it is in the early stages of topping out.
This is not the first shot across the bow from China. Contrary to current federal opinion, there is not an unlimited appetite for our debt/bonds. Domestic demand is robust right now as everyone flees the stock market for safety, but this also has limits. If Asia decides we are no longer a good investment and turns inward to concentrate on "stimulating" domestic growth, the United States is in big trouble.
We live in interesting times, which is why I hold physical gold...