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US not trustworthy October 25, 2013

Posted by hslu in China, Economics, Euro, Global Affair, Obamacare, Politics, stocks, Taiwan.
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Foreign countries will no longer trust America no matter how many times Obama calls Merkel. It’s like an egg on American’s face which can’t be washed off easily.

Obama’s order to force Bolivia president’s private airplane to land in Austria has already caused serious consequences in its relationship with many South America countries. These countries will think twice before doing business with the U.S. again.

NSA’s monitoring of domestic and international communication has stirred up hatred towards American’s policy. This kind of action is simply not acceptable according to international laws. No amount of denying from Obama will ease other countries’ concerns. Even France and Germany are leery of American’s action and they will not be satisfied with whatever Obama or American ambassadors told them for a long time.

US federal government shutdown and debt ceiling impasse has became a joke among financial markets and other countries in the world. America’s credibility has been seriously damaged too. QEs by US Federal Reserve has other countries worried and countries like China, Russia, Korea and Germany will re-evaluate their foreign reserve policies. They will likely diverting some of their foreign currency holdings to other currencies such as Euro because Europe has started to emerge from financial ruins created by America five years ago. It appears that Euro as the single currency for EU countries is no longer in question and there is even some talk of creating a de facto central bank for EU countries. 

China will speed up its move to create more direct currency swaps with other countries, especially in South America,  in an effort to increase their acceptance of Renminbi in bilateral trades. As such,  the status of American dollar being the world reserve currency will be in question.

The high drama of currency war has just started. America, being the bully of the world, will continue to enjoy the privilege of being able to print the world reserve currency whenever it feels like it.

With American’s national debt at 100+% of US GDP and with America government borrowing 40 cents of every dollar it spends, the day of reckoning for the imperial empire is just around the corner.

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