Treasury Sec. Geithner made an unscheduled stop in China today, really tomorrow (it’s already Thursday there (where’s Dr Who when you need time explained)). He will meet Wang Qishan, the vice-premier responsible for economic affairs, after spending two days in India getting them on board. It’s not likely an agreement on revaluing the Chinese currency will be announced during his visit with a high level visit to Washington next week.
Before he left India he had to make a statement reassuring Wall Street that out-sourcing jobs to India would not stop and he would oppose protectionism. He did this while still in India so he could wink while he said it. India knows the gravy train will end one way or the other. Their experience with China causing a huge trade deficit for India makes them ready to go back to “protectionism”.
Both China and India realize that the US will collapse without a return to economic sanity and a failed state that has 2500 missiles with each carrying multiple warheads is not a desirable situation.
Wall Street didn’t react well to the possibility that the flat earth party is over and the markets were down. The Euro continues to decline as the damage the Wall Street banks has done becomes more apparent. With the Euro down, the USD was up but gold was also up sharply so the USD is not really as “strong” as it appears. Gold should go down as the dollar gains “value”.
Anybody who follows my missives knows I’m not a blue birds and roses kind of guy. This looks like it’s going our way for a change but the neo-cons may not just scurry back under the fridge this time. They have a lot riding on this and they could go for broke. Maybe they’ll make a deal with Obama to keep their ill gotten gains while they allow the country to be rebuilt so they can steal it all again in another couple of generations. I think we should slide the paper with the roach bait on it under the fridge behind them. www.prairie2.com