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For the last decade, we’ve been “relying on the kindness of strangers” to help cover our debts, [says Bill Gross, founder of PIMCO].
By “strangers” he is referring to our foreign counterparts, like China for example. Basically, for years Americans have spent their hard-earned dollars on less-expensive Chinese made goods. With great gratitude, China turned around and used all those dollars to buy up U.S. Treasuries and other dollar-denominated assets.
But now after years of reckless spending, America’s debt level is nearing a breaking point and can no longer rely on foreign capital as a last resort. “When a country reaches a certain debt level, confidence in that country’s ability to repay that debt becomes jeopardized,”
So now when your 5th grade kid asks you how do we "owe" China?, you can explain it.
Last edited by grimace8; 03-08-2011 at 12:07 PM..
Reason: headline included the word "said" twice in error
If we were a corporation and could NOT print money - we would already be in chapter 11 bankruptcy.
I am not sure how soon but I think it is a given that USD will one day cease to be the worlds reserve currency. Already many countries are trading in their own currencies instead of absorbing inflation by a devalued USD. Even our so called good freinds the French are calling for a new reserve currency, the world is sick of our banksters.
I am not sure how soon but I think it is a given that USD will one day cease to be the worlds reserve currency. Already many countries are trading in their own currencies instead of absorbing inflation by a devalued USD. Even our so called good freinds the French are calling for a new reserve currency, the world is sick of our banksters.
in the future, what will the world see instead of the current system?
Nothing will change in this country until the dollar collapsed. Politicians will continue their business as usual activities. Continue to guarantee entitlement and kicking the can down the road.
Nothing will change in this country until the dollar collapsed. Politicians will continue their business as usual activities. Continue to guarantee entitlement and kicking the can down the road.
Correction nothing will change until the American people get off their *sses in large numbers and demand change.
in the future, what will the world see instead of the current system?
As you know everything is global and their next move would be to have a global currency. I think it will be the SDR issued by the IMF, which is backed by a few currencies including USD.
Quote:
The calls are coming from many corners. Nobel Prize-winning economist Joseph Stiglitz chaired a United Nations panel that recommended the creation of a global reserve currency. Zhou Xiaochuan, governor of the People’s Bank of China, proposed that the International Monetary Fund take over the global leadership role traditionally ceded to the U.S. And Russian President Dmitry Medvedev handed out minted coin samples of a new world currency at the recent Group of Eight meeting in Italy.
These calls are worth paying attention to for a number of reasons. The arguments for a world currency are much better than you might think. An alternative to the dollar clearly has a promising market that can develop even if it is opposed by the U.S. And the idea of a world currency is most attractive to those who devoutly believe in multilateral institutions and the Canon of Lord Keynes.
Dollar Is Funny Money in Push for World Currency: Kevin Hassett - Bloomberg
Consider also how the IMF forced Greece and other countries to take on austerity measures before getting any new loans. They are running the show now and it is just a matter of time before every bankrupt country and their creditors will be under their thumb.
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