Friday, July 24, 2009

"Unlike Lucent, China Has Nuclear Weapons"

A blinding glimpse of the obvious from Vitaliy Katsenelson of Foreign Policy, who observes that China has been lending, well, us, the scheckels to buy their goods, a process which cannot go on forever. What happens next? Vitaliy's not so sure but it can't be fun.

Looks like this roller-coaster named "Recession" might have a few more bumps in it. Hang onto your hat -- could be you'll need it later.

3 comments:

Nathan Brindle said...

I keep wondering about the soi-disant "strong economy" and "strong renminbi" of the Chinese...if the whole thing is based on paper that we could repudiate at any time.

The Chinese set the value of their own money; it doesn't "float" against a basket of currencies, and it's been said over the years that it's wildly overvalued.

The biggest reason they want the dollar to go away is because they've finally noticed they've been flooded with potentially worthless ones...and if Americans stop buying their industrial output, the Chinese economy goes straight into the tank, too.

Nathan Brindle said...

Sorry, I should have said

"The biggest reason they want the dollar to go away as the world's reserve currency..."

Stranger said...

Glad you are feeling better, RX.

A part of what I do between blogs deals with Chinese imports. I seriously doubt ANY China growth.

Too many Chinese are falling all over themselves trying to sell me something. Too many bottoms are sitting in dry dock, in the breakers yard, or swinging idly at anchor.

Yes, the Baltic Dry Index is up, because the Chinese are importing raw materials in a big way for their war machine. Which reminds me of Japan circa 1939. But I suspect they are paying their suppliers the way we pay China. With a post dated check.

If you really want an all too likely preview of future history, type in Juan Peron at the wiki.

Stranger