re: Geither Affirms Dollar as Remarks Send It Tumbling
Today I am more fearful than I have ever been up to this point in our economic crisis. You may recall that I stated in an earlier post (I have no time to look for it now) that if China were to begin selling off US dollars, then we would be royally fucked, unimaginably more so than we seem to be at the moment. Well, last week a high-ranking Chinese minister voiced his concerns about China’s massive investment in the dollar, and now China is apparently calling for the dollar to be brushed aside as the dominant reserve currency in the world. This is totally fucked, guys.
The best thing the US has had going for it since WWII has been its dominance of world finance. We could pile up debt to the heavens so long as the rest of the world was using our currency for its national reserves and for financing major international transactions. It meant some country has always been willing to buy our debt, most notably China. For years, I have suspected that China’s willingness to buy endless dollars was part of a long-term strategy to divest the US of this extraordinary economic advantage. B-school students would always tell me, “No, no, silly fellow. Why would China risk devaluing its enormous investment in dollars?” Because: the value of being the one who makes the rules in the sphere of international finance is more valuable than almost any amount of currency. Especially one that could become worthless overnight.
China will make a power play economically and politically to overtake US dominance within our lifetime, more likely sooner than later. These are the first tremors of an earthquake that will result in a New New World Order, one that will likely be much less amenable to our Western tastes than the last few have been. How stupid we have been to squander our advantage! We could have persisted for another hundred years in a position of privilege and wealth, but now we’ve squandered everything to fatten the bank accounts of a handful of reprobates and petty thieves, all the while steadily eroding everything that was once good and great about this country.
Sometimes I get so mad when I think about these things that I literally want to put my fist though a wall. People think there will be a “recovery.” Well, to whatever extent there is one, it will be nothing like that after WWII, when the rest of the word was decimated, allowing us to reshape it in our own image.
For God’s sake, Tim Geithner even acknowledging that China’s basket plan for international reserves was worth thinking about caused the dollar to tumble. Can you imagine what would happen if it actually came to pass? Say goodbye to your savings. Watch the value of your paycheck shrink to the size where a pot of broth with a soup bone will suddenly come to seem like a luxury. Watch crime and poverty escalate so that the slums of Chicago and Cleveland come to resemble Brazilian shanty towns a la “City of God.” All this and more will be ours due to our short-sighted greed and stupidity.
For awhile, I was getting on the Obama bandwagon. But this guy has got to get things moving. Now. For real. I’m very afraid that it’s already too late. For everyone’s sake, I hope that it’s not.
