The world currency collapse took another turn today as China weighed in on all the sovereign debt floating around. “We don’t see decisive actions telling the market we can solve this,” according to Zhu Min, a deputy governor of the People’s Bank of China. In other words he doesn’t think that the debtor countries can keep going to the people like him and expecting more and more credit.
Speaking of a lack of credit; Wednesday’s Auction of five year Treasury notes did not go well and was immediately reflected in the interest rate of home loans. (there is an official linkage between the two). Thursday’s auction of seven year notes didn’t go any better and this is going to start causing problems. Mr Zhu and his colleagues are showing less and less interest in buying debt, preferring things like copper mines and farmland in east Africa.
Fed Chairman Ben Bernanke’s says not to worry, Fed monetary policy will remain extremely accommodative. In other words he will just keep printing money and loaning it out at zero interest so Wall Street can keep inflating the bubble. Cash will keep draining in trillion dollar chunks to China and they will keep spending around the world. Potentates and dictators will continue to swell their sovereign wealth funds and buying Wall Street financial products like water systems in Greece. (oops, that one didn’t work out) Well there’s Portugal (uh-oh)…
It’s all a long line of dominos set up by the Masters of the Universe on Wall Street with the full participation of the people in Washington who did away with all those pesky 1930’s laws that would have put them all in prison for this sort of thing. There are probably still laws that deal with fraud that could be brought to bear despite a concerted effort by the Bush Crime Family to literally scrub them from the books.
The Fed claims they have a plan to control the money supply (actually taking money out of circulation) to avoid the wild waves of inflation. Supposedly that will also avoid the economy crushing deflation as debtors default en masse. Throughout history this has always been the eventual out come this sort of insane monetary policy that we’ve been living with for the last thirty years. That’s why they wrote all those laws seventy-five years ago, but like Bush said, “history is a long time ago”.
Now we’re about to stare history in the face. www.prairie2.com