Sunday, January 20, 2008

With China Revaluing its currency, Is this the beginning of the End of American Consumption?

Quick History Lesson.

China is brutal, cruel and has no consideration for the welfare and rights of its own people.

For years now China has been keeping its currency artificially low even as its economy has boomed, and it's factories produced billions of dollars of cheap goods.

Why would China do this you ask?

Simple...China did not want it's own people to buy the very products they were making in the factories. They wanted to keep the value of their currency artificially low, and pay the factory workers pennies on the dollar. The Chinese people would not be able to buy the products, which allowed them to ship their crap out to Wal-Mart stores across America so US citizens could enjoy a great bargain.

As they say on the infomercials that wake you up at 4 AM... Wait... There's more!

American consumer spending was fueled primarily by debt spending. Home equity loans on houses, massive credit card debt were all the rage for the past decade and someone had to buy that debt. Guess who? It was China who would buy the American debt allowing American consumption to continue, fueling China's manufacturing economy, fueling America's consumer spending economy, buying American debt, which would keep the Yuan artificially low vs the American dollar so that Americans could continue to afford cheap Chinese products.

The sick cycle carousel continued until 2005 when China began to revalue its currency, and as the American dollar continues to collapse the whole situation is about to spin into economic disaster.

This article I found, which I posted below, really tells the whole story, Wake up America...

The stock market is about to crash.
The Fed is destroying the dollar.
Inflation is causing people to go hungry.
And Economic disaster is looming on the horizon.

It hath been fortold.

1 comment:

Anonymous said...

That picture is bad ass lol.

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