Tuesday, 20 November 2007

Alarm: China Signals Flight From Dollar

Xu Jian, a Chinese central bank vice director, told a conference in Beijing, "The dollar is "losing its status as the world currency." Meanwhile, at the same meeting, Cheng Siwei, vice chairman of China's National People's Congress, said, "We will favor stronger currencies over weaker ones, and will readjust accordingly."

Craig R. Smith, CEO of Swiss America Trading Corp., told WND he's been in the investment business for 30 years and has "never seen people more nervous."

Alarmed by today's economic news, he dispatched a note to brokers with a warning of ominous potential consequences if China and other trading partners abandon the dollar.

"If that were to happen, all bets are off, and we will be in a depression that makes 1929 look like child's play," he said, "or we will experience Weimar Republic inflation as the dollar makes extreme moves toward devaluations."
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=58563

It's catch 22 for the US economy. As the American ship sinks, whether by bomb or torpedo, so will other economies be draggeed down to varying degrees. Bad times ahead.

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