the really sad part is how the American government is so dependent on foreign loans.
http://www.tradingeconomics.com/united-states/government-budget-value
129 billion government deficit just in august, if China doesn't loan any more money either the American army goes starving or the American government plunders its population for money.
America used to be the worlds biggest creditor nation, it has become the debt slave of the Chinese,
when one looks at the data it becomes clear who the real world power is.
Peter Schiff has it right https://www.youtube.com/watch?v=EgMclXX5msc&feature=player_detailpage#t=2417
http://www.tradingeconomics.com/united-states/government-budget-value
129 billion government deficit just in august, if China doesn't loan any more money either the American army goes starving or the American government plunders its population for money.
America used to be the worlds biggest creditor nation, it has become the debt slave of the Chinese,
when one looks at the data it becomes clear who the real world power is.
Peter Schiff has it right https://www.youtube.com/watch?v=EgMclXX5msc&feature=player_detailpage#t=2417
You got it the wrong way. China will keep producing for USA and continue feeding them as otherwise if it collapse then all the dollars they have is worthless. USA is in a solid position, they buy with dollars which they know the sellers will try and keep propping up.
you assume China will continue throwing good money after bad forever.
they are already working with the BRICS to get rid of the dollar
http://www.standartnews.com/english/read/russia_and_china_team_up_to_destroy_the_petro_dollar-5652.html
the end game is near, once China refuses to accept dollars for products America goes hungry.
nothing China can do will make the dollar successful in the sense that you can exchange it for products, America doesn't produce anything anymore and China knows it, they'll have to take a loss there's no way around it.
other countries are starting to sign currency swap deals to trade in their local currencies directly without using dollars, once they stop pricing their products in dollars the game is over.
http://money.cnn.com/2013/10/10/news/economy/ecb-china-currency/
China already signed an agreement with England to swap local currencies and now they do it with the EU, they are not going to continue playing the dollar ponzi, they are actively working on dumping it.
China is exchanging dollars for pounds and euros however they are still buying more dollars then they are selling, making them a net buyer of dollars. It has been reported they are only trying to diversify their currency holdings
the dollar can't remain stable, the American government is running huge deficits and China is not buying bonds as much as it used to.
the only way this can continue is by having the fed buy bonds with printed money a.k.a QE, this will create high inflation first in the financial markets and then in consumer goods.
the American government is helpless in stopping inflation because raising interest rates will make it impossible to continue rolling its huge debt.
no one is going to price commodities in a currency that is inflating out of control.
