In the Hole to China...

[SkyIsGrey]

By PAUL CRAIG ROBERTS

Early this morning China let the idiots in Washington, and on Wall Street, know that it has them by the short hairs. Two senior spokesmen for the Chinese government observed that China’s considerable holdings of US dollars and Treasury bonds “contributes a great deal to maintaining the position of the dollar as a reserve currency.”

Should the US proceed with sanctions intended to cause the Chinese currency to appreciate, “the Chinese central bank will be forced to sell dollars, which might lead to a mass depreciation of the dollar.”

Rest here

[roamer65]

1. Paul Craig Roberts hits the nail squarely on the head...

in this article. China is firmly in the driver's seat of the world economy now. I would strongly suggest Taiwan consider talks with Beijing on SAR status. If they talk now, they may get a decent deal like HK did in 1984.

[Wiley50]

2. Remember that this is the "Father of Reaganomics" who wrote this

although he has since learned the error of his ways

and the frankenstein he created

[Dirty Hippie]

3. Pucker Up!

We gonna start kissin' some Chinese ass.

[Gregorian]

4. This is the truth the American people have been avoiding.

It confirms what I've been saying for over two years. Rates will be rising. So much for the free ride. This is really serious stuff. I've seen this coming for decades. As someone who has had their eye open for "made in China" labels, I saw this coming in the 80's.

Edit- We aren't going to be such a military power much longer. We aren't going to go tromping all over the planet. And that just cannot be a bad thing. What's bad is that it takes something like this to stop the aggression. I think the most interesting part of this article is the control China has over Bush invading Iran. I just don't see them going along with that.

A scary statement in the article: Wal-mart prices will look like Niemann Marcus.

[CrispyQ]

5. Excellent article.

k&r