Egg Drop Economics
August 8, 2007
So the Chinese are threatening an economic ‘nuclear option‘ against the US? Well, so be it.
If the Chinese want to sell of their US Treasury holdings, the Federal Reserve can buy back our dollars at bargain basement prices. The Chinese can then base the yuan on the artificially inflated Euro.
All the while, we could keep the dollar low and thus our exports would expand and increase. That in turn would spark economic development in capital expenditures and in job creation.
Is there a down side to this? Yes, there is.
What is now a $6.00 cup of coffee in Paris will cost $8.00 and a $7.00 hamburger in Marseilles will cost $9.00. On the other hand, expect hordes of Speedo wearing Europeans to flock to bargain basement (to them) American beach holidays. Even sessions with the renowned Dr Sanity and Shrinkwrapped will be a positive bargain to the unbalanced insane Euro lefties (which is only a partial benefit. Chances are both Dr Sanity and Shrinkwrapped would be able to help their new patients and the Europathologies they bear).
On the other hand, if the Chinese were to ‘drop the bomb,’ we could ban their food exports (and let the Europeans reap the prize of tainted seafood at discount prices) and invest in our own aquaculture projects and industry.
In the end, if China were to have less dollars they would also have less political and economic influence.
Egg Drop economics.
August 8, 2007 at 11:52 AM
SC&A:
“In the end, if China were to have less dollars they would also have less political and economic influence.”
In view of the mountain of debt teetering over all of us as a result of the real estate bubble bursting, (and M-O-M is all over that ‘un), there’s really no other way for us to stave off disaster than by devaluing our currency.
The fact that Congress has just given minimum wage earners a 50% raise over the next two or three years should be all the warning you need.
We’ll be paying off yesterday’s insanely over-priced condominiums with tomorrow’s cheaper dollars.
The Chinese? If they sell off their US securities, they’ll hurt us economically. We’ll have to manufacture our own dishwasher-safe rubber sex toys and novelty plastic dogshit.
The recoil of this move would mean mass unemployemnt in the “Workers’ Paradise”…pretty damned ironic, if y’ask me.
(I don’t think Beijing REALLY wants to idle Guangzhou Province.)
Regards;
August 8, 2007 at 2:48 PM
“If the Chinese want to sell of their US Treasury holdings, the Federal Reserve can buy back our dollars at bargain basement prices.”
Buy them back with WHAT?
August 8, 2007 at 3:02 PM
You have to be kidding- we have enough (even in gold reserves) to fund a buyback.
Besides, the whole thing thing is a scam. See this:
http://blogs.telegraph.co.uk/business/ambrosevanspritchard/july07/willtheusdollarcollapse.htm
August 8, 2007 at 6:39 PM
lol
August 8, 2007 at 7:51 PM
I say let the chicom’s drop their currency nuke. I would rather buy domestic plastic dog shit toys than cheap imitation asian dog shit.
Remember when our indebtedness to Japan was going to bury us? Well that sort of passed didn’t it. The folks in Japan had a long stagnation, and found that debt accumulated in 1970′s and 80′s dollars was rendered kinda useless by the new century. Their cars sell a hell of a lot better in Canada and Europe than in the USA.
The Chicom’s aren’t altogether stupid, and must know that the debt held today will be worth a lot less in dollars of the year 2525(just like the song).
And wouldn’t we all love to put a 100% tariff on the bastards when you factor in that a lot of the munitions killings our boys are Chicom manufactured.
Could we please all just get along and do the Russians, the Iranians and the Chicom’s at the same time?