That brings up an interesting factor. China is completely stuck with us as long as the dollar is cheap. They bought them when the dollar was dear (over time of course, and with a sliding range of values) but if they even started to unload now, not only would they take a huge hit compared to what they comparatively paid, they would also drive down the dollar's value even further making it even more difficult for them to unload.
In other words, at a whim they could screw us royally...but they'd have to screw themselves to do it. Definitely an interesting problem. And they don't have a short term fix to this issue. As much as they talk about an alternative currency, they can't afford to have that happen when the dollar is down. And they are more-or-less forced to keep loaning to the US government for the same basic reason, until they decide to bite the bullet anyway. So, the sky isn't falling. Yet. Chuck On Oct 9, 2009, at 3:29 PM, Daniel Mullen wrote: > I just cannot keep quiet on this any more. > > Gold, in US Dollars, was $1045 and change this morning. That sounds > high, but it was higher, in constant currency terms when you look at a > basket of currencies. > > Yes, oil still is priced in nice U.S. Dollars, and everyone is glad to > have them. > > So far, so good. > > The folks in the Middle East buy German cars, use European adult > personal entertainment, and go shopping - either in the sparkling new > massive shopping mall in town, or again, somewhere in Europe - and the > dollars get converted eventually into Euros. > > I used to get 80ยข to the Euro. Now it is $1.46. > > You can do the math on that. > > As long as China continues to be the 'sister nation' to the United > States of America, keeping its currency fairly closely pegged to the > U.S. Dollar, then everything will be fine. All the Asian countries > will do their best to work on U.S. Dollar terms so as to stay > competitive vis-a-vis China. > > But China is now sitting on TWO TRILLION - that is 2,000,000,000,000 - > U.S. Dollars, and wondering what to do. If they wanted to take over > the world today, instead of merely the entire Asia-Pacific region and > Africa, they could simply cut the line and then let the U.S.A. dangle > in the wind. > > As it is, China is going around the world buying everything you can > imagine: years worth of factory equipment from Germany, minerals in > Africa, oil and gas everywhere, iron ore from Brazil, uranium from > Australia, and on and on. > > You should see the pictures: gigantic barges being loaded with > enormous open spools of copper, a good ten feet in diameter, to be > stockpiled in China, and more ore than you could possibly fathom. > > And now they are buying gold: gold and more gold, and the government > is telling its citizens to also buy gold. > > Simply put, they are turning the greenbacks into hard assets. > > None of this will bother you, because all your gear is made from parts > which are priced in U.S. Dollars, and China is keeping a good lid on > things - until they stop. > > When the Sheiks - or Mr. Chavez - decides they want some pretty thing > from Europe, and see how small their wallets are, the price of oil - > yes, in U.S. Dollars - will go to the moon. > > The fact that oil is priced in dollars really means nothing. It is the > value that the producer gets for the specific volume sold that > matters, and as long as the rest of the world is getting more > expensive by comparison, the more dollars the sellers will want to > ensure they can keep on buying those things, regardless of what the > dollar buys for you in your own backyard. > > By the way, milk is cheap everywhere now - in Belgium the farmers > started to spray it on their fields rather than sell it, just to make > demonstrate how low it has gone. > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ -------------- Chuck Bartosch Clarity Connect, Inc. 200 Pleasant Grove Road Ithaca, NY 14850 (607) 257-8268 "When the stars threw down their spears, and water'd heaven with their tears, Did He smile, His work to see? Did He who made the Lamb make thee?" From William Blake's Tiger!, Tiger! -------------------------------------------------------------------------------- WISPA Wants You! Join today! http://signup.wispa.org/ -------------------------------------------------------------------------------- WISPA Wireless List: [email protected] Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
