But now I'm back. And tho I've tried to maintain my happy feelings for as long as possible by NOT looking at the events of the world outside my lil South Pacific island, I find myself at work with nuttin to do, except trawl the worlds media......
Usual stuff about killer diseases rampant in the UK's livestock, rampant killers loose in the Middle East, diseased minds rampantly killing kids the world over....
Then I came accross this piece....
Quote:
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.
Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.
Quote:
Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.â€
I remember a thread here a while ago where the US economy (and by extension the state of the global economy in general) was discussed.
Some people thought it was chugging along just fine, and other people thought that it was seriously fecked and only managing to be sustained by massive support (lending) by countries in the far east and China in particular....
Now if China ceases to buy US Treasuries, Bush’s wars would have to end. (The several billion a month being spent pursuing the **** is essentially being provided by the Chinese after all).The savings rate of US consumers is essentially zero, and several million are afflicted with mortgages that they cannot afford, its all looking pretty dire.
The options (if that came about) would be that Americans would have to be hit with tax increases in order to close a budget deficit that China and others will no longer finance, or cuts in income security programs (pensions etc). The only other source of budgetary finance would be for the government to print money to pay its bills (very Robert Mugabe-esque). If that happens, there would be huge inflation as well as higher consumer prices from the devalued dollar.
Bearing in mind that foreigners control 44% of US debt and that productivity in the US is slowing considerably, GWB's happy smiley economic predictions are looking decidedly shaky.
The silver lining in that particular cloud tho, I guess, would be that pursuing aggressive wars around the placeis going to become harder and harder for the crazies in the Whitehouse. So economic collapse of the western world wouldn't be all bad I s'pose.....
I was wondering what your thoughts were about it all.....
Or are you all still all gushing over the Harry Potter movie or some such?
Holy Smokes!!!