CHINESE MONETARY THOUGHTS I HEARD FROM A MOUSE We all know that the Chinese have

CHINESE MONETARY THOUGHTS I HEARD FROM A MOUSE

We all know that the Chinese have been running around the world buying up all possible resources.

But interestingly enough it turns out that they’re buying them in dollars and dollar denominated accounts, and securing them against their holding of US bonds.

Now you can look at this a couple of ways.

First, It could be that that buyers have greater faith in the dollar than the Renminbi. And so the price for assets is lower if paid in dollars.

Second, it could be that the Chinese expect our dollar to explode and that if it does, they will leave the rest of the world holding the bag.

Third, it could be that by spreading US debt around the world, it becomes possible to use the entire debt structure as an economic alliance against what the USA must do at some point, which is destroy the value of the dollar.

Or. Of course. All of the above. Now, ‘nice folk’ don’t think in these kind of terms. But you know, I do, and I know that there are other people in the world who think like me. And it’s not ‘nice folk’ I’m worried about.

It’s people like me.

(Thank you Roman and Michael. )