Gurn
Here is a secret I will share with you. The Chinese are not stupid. They know that printing massive amounts of dollars will cause the dollar to be worth less. That is just common sense. The Chinese, Russians and other countries are talking about trading in other currencies. They are also talking about lowering their exposure to the dollar. Wonder why that is if the dollar is the world's greatest currency on the face of the earth. Devaluation means that the dollar is worth less and so is the value of the debt they are holding. We are printing so much money and piling up so much debt that the day of reconking will come one day. They will refuse to buy our debt and then what, or they will demand much higher interest rates. Note, Bernanke got tabbed Helicopter Ben for a reason.
Moody's lowering our bond rating is a big deal. Ask any state that has had theirs lowered. FYI, the interest rate goes UP when that happens. Inflation will go thru the roof. If the government included energy and food in their inflation figures, the rate would be much higher than 2 per cent. Same with the unemployment figures. Plus, I don't trust these government voodoo figures.
I'll share a secret with you. The worst thing that could happen to the PRC would be for the RMB to rise sharply in relation to the Dollar.
You can put that in the bank. You can even take it to Moody's.
The PRC has two modes - whining & boasting. Yes. They whine about the falling Dollar. Then what do they do?
They buy more Treasuries. They order their midget vassal state NK to sink a ship or lob a few missiles into S. Korea.
I don't know how many times you've been to the PRC. You seem to know a lot about it.
Inflation? I keep track in when I'm China. I buy stuff at one of the innumerable 7/11's I see there.
I compare the prices from one trip to the next.
Food inflation is there & growing already baby.
Aunt Samantha* isn't the only nation printing currency.
The China-Russia currency thing is only between those two countries. The PRC is not demanding
that the US convert its Dollars to Rubles for trade. That would be really stupid. Likewise, Russia still happily accepts
hard currency for its trades with the West.
A Question - what is the exchange rate between the RMB & USD today?
Another question - What was the exchange rate before QE2?
What happened in between QE2 & today?
Heh heh. Answer those questions and you're on the road to wisdom.
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(*Known as "Uncle Sam" before the surgery.)