Thursday, July 8, 2010
Thursday, July 08, 2010 No comments
China is ruling out the “nuclear option” of dumping upwards of a trillion in US government debt accumulated over the last decade. But the State Administration of Foreign Exchange (SAFE), that is in charge of China’s $2.5 Trillion in reserves, the largest in the world, also called on Washington and other governments to pursue “responsible” economic policies. The statement on Wednesday, one of a series that Safe has issued in recent days in an apparent effort to address criticism about its lack of transparency, also downplayed the chances of China making major further buys of gold bullion, describing the gold market as too “thin“ to allow for major purchases. Of course they buy as much as they can without driving up the price.
SAFE wasn’t saying anything they haven’t said before and their timing may have to do with distracting everyone from the revelation that China has been buying massive amounts of Japanese government bonds since the first of the year. This is credited with artificially driving up the Yen relative to the USD. This hasn’t made the Japanese happy as it screws up their balance of trade and unlike the boobs in charge of the US economy, they don’t like having a foreign government owning their debt.
The fact is that they have a sense of national purpose that we lack in the US. After decades of propaganda, Americans are convinced that they are all rugged individuals that should make it on their own and anybody who can’t should starve in the street. This is why a country that was a bombed out wasteland in 1945 is now a thriving powerhouse and vast swathes of the country who won the war now look as if it was they who had been bombed.
Japan protects its interests and instills a pull together spirit in its people, while the US has done the opposite. Americans all believe they can get rich on the flat earth where patriotism means waving the flag and going shopping on credit. In reality their wealth is evaporating in favor a tiny sliver at the top who now live like 18th century English lords.
Now that the inevitable result of these policies is beginning to drag us under, the rugged individuals are more than willing to throw their neighbors into the street. To a Republican there is no problem creating more homeless people won’t fix.