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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.

Currency War: US dollar vs Renminbi April 13, 2013

Posted by hslu in China, Cold War, Economics, Global Affair.
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Step by step, Chinese’s currency is chipping away green back’s dominance on the world’s stage. The latest player coming on board is France, according to a Reuters article. It appears that France likes to set up a direct currency swap line with China and what’s left to decide is the terms of the deal in terms of the size of the swap and its duration.

http://mobile.reuters.com/article/businessNews/idUSBRE93C01S20130413?irpc=932

The reason is simple to understand: the US dollar is losing its value thanks to Bernanke. France is simply looking after its own interest because there is BIG money to be made in direct trades with China and on being a hub of Europe’s Renminbi trading center. If France does not act fast, it will lose the fight to London forever.

France’s brand new president will visit China and an announcement is expected soon.

America is making new friends with Vietnam and Phillipines and swears to help Japan in a war. It has made major shift of its military might to the Asian theater since a couple of years ago under Clinton. The sole intent is to block the advancement of China.

China knows that and China is avoiding direct conflict with America because its military is nit even one tenth of the size of that of the US.

Instead of fighting the US with guns, nuclear missiles and air carriers, China is fighting US on the economic front. The fight will be long and hard, but China is very patient.

Besides, China doesn’t have $16.5 trillion debt. It doesn’t have 9 air carriers or billion dollar fighter jets (that’s a billion dollar each) to support either. Oh yeah, did I mention Obamacare? That will definitely be a deeper hole for Americans to dig themselves out with.

Hmmm……. 鹿死誰手還待下回分解!

I for one is waiting patiently too.

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