Reply #1: WrapUp by Rob Kirby

[ozymandius]

TUNNEL VISION

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This past week, Chinese officials revalued their currency by 2% versus the U.S. dollar. Their currency will now be pegged to the value of an, as yet, undisclosed basket of currencies. Many pundits have already made claims that the revaluation is trivial and too small to have meaningful impact – and far short of what Washington wants. Of late, China has funded much of America’s profligacy.

With China removing their currency’s hard peg to the U.S. dollar, there will be reduced need for them to buy U.S. dollars going forward. This will curtail America’s ability to maintain or grow its trade imbalances and continually grow their National Debt – which is conservatively estimated to be the number below – and coincidentally, just happens to be a hole of a different kind:

U.S. Debt to the Penny: $7,905,575,144,504.41

The event(s) outlined above began with the creation of the Federal Reserve in 1913. They have been arguably occurring in slow motion ever since. It would seem that the Chinese are perhaps telling the Americans to stop digging and put their shovels down – they’ve finally made it.



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