Luo Ping, a director-general at the China Banking Regulatory Commission
“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”
“We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] … we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”
The US probably wants the dollar to depreciate, because then US exports will increase as other countries buy from us using cheap dollars.
Confusing, isn’t it?
Plus that massive $10 trillion national debt is easier to pay back with dollars worth only half as much.
BTW, an article in today’s news says China is also buying cheap American homes. Good for the market in the short run, but there’s a reason most countries prohibit foreigners from owning real estate.
A businessman from India just said, change the immigration laws in the US so millions of people from India and Asia can live in the US, they will buy the cheap homes, work 18 hours a day to pay for the and start businesses to do so. Everyone gains…
Boiled down to ones and zeros, classic Shock Doctrine – forced (or induced) rapid depreciation of the monetary exchange.
I’m really having my doubts that any of this came out of the blue, or were the result of incompetence and mis-management. Someone sat back and cooked the whole deal up, no doubt fully aware of the consequences. And are making a shitpile of money off of it.
Call it 9/11 blowback, and the classic, mocking “they wouldn’t do that to their own people!” Just as those occupying the WTC that fateful day, we of the High Desert(s) and the Hippie Cities, the NYC beat-cop, airline pilots, staff and passengers… are not “their own people”.
We are of no value to them.