The Basics of Forex, or Foreign Exchange, or Currency Reserves and how this will decimate the poor in America
“Deposits of a foreign currency held by a central bank. Holding the currencies of other countries as assets allow governments to keep their currencies stable and reduce the effect of economic shocks. The use of foreign exchange reserves became popular after the decline of the gold standar...d.”
This is good. Unless it becomes unbalanced, or in America’s case, unless we devalue the US Dollar to such a point that those holding our dollar band together against us.
Headline in Financial Times this morning; China’s Forex reserves reach $3.4tn - Last updated: April 11, 2013 - 12:17 pm
This headline will NOT make the regular news, but should concern you all, as I believe it is about to impact America in a way that Sam Zell, the CEO of Equity Residential, one of America’s largest Real Estate Investment Trust told CNBC, could lead to a drop in the US standard of living by as much as 25%.
China’s mountain of reserves reached $3.44tn – roughly the size of the German economy. It is mostly in Dollars, followed by Japan’s Yen.
Cheng Siwei, head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
"If they keep printing money to buy bonds (Through our Treasury) it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.
"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," Cheng added. (This means they’re secretly buying it)
Mr. Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China.
"This is where Greenspan went wrong from 2000 to 2004," he said. "He thought everything was alright because inflation was low, but assets absorbed the liquidity." *He is referring to our Housing Bubble*
"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow."
"He who goes borrowing, goes sorrowing," said Mr Cheng. It was a quote from US founding father Benjamin Franklin, Mr. Cheng noted.
Very sad that China knows our history better than we do and is adhering to what our founding fathers taught us about monetary policy and we’re ignoring it.
The unilateral moves by China are a sign of the growing impatience with America’s unwillingness to get its act together. The US' public debt has reached 100% of GDP and shows no sign of a let-up. China is also signaling its willingness to confront the US, if it is required to protect its interests. It is doing so by divesting itself from our dollar as quietly as possible so as not to impact the global markets and hurt themselves.
If they don’t want our dollar anymore, should you? Why is our largest creditor not happy with the dollar? It’s simple; we are devaluing it at a record pace by spending more than we produce. The effects of this will be devastating.
Liberals and Democrats claim they want to help the poor and anyone and everyone else they deem worthy. They claim, I and those like me are simply white, angry, racist, conservatives, who are heartless. Here is the irony of it all, if my fears come true and the Liberals and Democrats continue to go forward with their plans under Obama and state governments to live beyond our means and tax and spend more than any time in our history and at record levels never before attempted in the history of the world, and China as well as our allies grow tired of this, they will have no choice but to act. When they do, there will be no more money or ability for Liberals and Democrats to use other people’s money to help those they claim they want to help.
Bottom line, their folly will be the poor’s worst nightmares realized. And it is already happening and you have not a clue. Why? Why would Obama and others allow this? "Chris, you're over reacting." All I can tell you is that if one wishes to remove America's ability to spread God, self reliance and freedom, destroying our US dollar is the quickest way.
Comments
George, I'm not sure I'm tracking. Am I reading that you believe the middle class are orchestrating their efforts to keep poor people poor?
The poor have nothing to do with this!
Elect a President on a first past the post basis and not the corruption that is the Electoral College that gives differing values to your vote, depending whee you live!
The poor have no power, so blame those who do, the so called Middle Clasd who in the main only care for themselves while claiming to support their country!
These are the people who shout loudly for America, while refusing to due on the from line!
These people are America's cancer! The patriotic cowards that hold power within their franchise! They refuse meritocracy by keeping the poor poor!
Those who's blood is genuinely looking for the American Dream, not those who take it for granted!
Karol, you are correct. Often I and others are guilty of referring to “poor” due to the Obama mantra and the media blitz that self-reliant, fiscally conservative Americans who wish for liberty in order to pursue happiness are against the poor in America.
As you so adeptly point out, nothing could be further from the truth.
We’re demonstrating righteous indignation. However, it must be channeled properly or be viewed by the masses that elect our leaders as nothing more than a fringe rant, easily dismissed.
True and if I were the Politicians in charge, I would be very concerned, as they have created all this borrowing, with Obama being the chief in charge of it all, along with the liberal Progressive Democrats, they have caused this debt crises in my opinion and millions of us are aware of it. The National Debt has quadrupled under Obama;s regime. It will be the poor who turn on the Politicians first. Then the Middle Class will return to a strength not ever seen before to bring on a stronger more just system of politics and better ways to run the government. Their will be much less tolerance of corruption. Politicians will be held much more accountable and not allowed to pass the buck. There will be many citizens protecting themselves and others. People will become very adept at adjusting to quick changes.
It may be their agenda to destroy the idea of self reliance and freedom, it will limit alot of our choices, but their is a saying: Neccessity is the mother of all Inventions! Americans and our Dreams will prevail. We can as long as we think we can! What the mind of man and woman can believe, they can achieve.
I personally am hoping for a "New Renaissance of Prosperity, Innovation, Creation, Cooperation, and Spiritual Growth for many who have no beliefs" as they see those who have faith, ingenuity, and integrity prosper.
Communism has failed worldwide, politicians come and go, but the Word of God remains and grows stronger everyday! It does not fail and never returns void.
I kind of resent that "the poor deserve it", because this poor person did not help elect or re-elect Obamass. I have never been wealthy, but worked 47 years and raised my children, grand children and raising 2 great grandchildren right now, by myself. Having kidney cancer and the removal of the kidney at 64 took me out of the work force. Am lucky I can manage 2 children, but I consider myself fortunate. I am not sure we can blame anyone, but politicians and big business for their deceit, greed and being power hungry. Satan looks for the smallest opening and knows just how to use them to create discourse for everyone. So lets put the blame where it belongs. We all should be preparing for the martial law, as best we can, and praying like I lives depend on it, because it does. Only faith in God and standing together is going to see us through this. Not blaming or fighting.
The " POOR " deserve it because they re-elected Obamass .
it is joan,our money is worthless and the bonds we print are worthless ,and these countries are seeing right through it , where headed for the bottom thats why he and his cronies are in such a big race to get all thies bills and laws past, so they can control us and leave us derriencless against martial law ,
I think our debt to China is a down payment on buying our country. Reason Obama could care less about it. It fits into his plan for all of us. Kill the elderly, kill the unborn babies, take our money away from us, force poor medical care on us, and leave us vulnerable with no place to go. God Bless America.
Our comrade leader wants us bankrupt, we see and hear every day spend, spend, spend. Soon, there will be NO money left cause the elite have it all! yes, i think obummers ok with it!
How does this fit with comrade president Obama?
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