I’m back after a few days away from writing a blog. I spent a lot of time writing the special report and doing some research.
The big story that caught my eye these past couple of days is a headline that China is hinting that it may allow its currency to rise against the U.S. Dollar soon by allowing its currency’s value be determined by a basket of currencies. Currently, the Chinese government manipulates the value of its currency so that it stays relatively stable against the U.S. Dollar. The Chinese want to keep the value of its currency relatively stable against the U.S. Dollar because it helps them maintain an export advantage over the U.S. and keeps their main customer-the U.S-from having severe economic problems. If the Chinese did not restrict the movement of their currency against the U.S. Dollar the U.S. economy could be a complete disaster-far more than it is now-because the value of the Chinese currency would soar; causing everything Americans buy to skyrocket.
The past two administrations have put pressure on China to stop restricting the movement of its currency because China’s artificially low currency is putting U.S. producers at a disadvantage. China has slowly made concessions to show the world that they can be somewhat cooperative and to receive some concessions from the U.S. (i.e. not formally being label a currency manipulator by the U.S. Treasury). China’s hint that they may allow the value of their currency to rise indicates that they may be growing tired of following the inflationary practices of the U.S. Government. China is very unhappy with the way the U.S. Government is handling the current financial crisis and is getting tired of lending the government long-term money. China’s current verbal protests are likely to one day become protests involving actions that will have repercussions on the U.S. and the world.
I will have a lot more about this topic in detail in the special report I’m working on. In fact, one of the things I write that can basically destroy the U.S. economy and trigger a global economic and financial meltdown would be China completely dropping its peg to the U.S. Dollar. Although many currency experts think that it will take a while for China to drop its peg to the U.S. Dollar, it is an event that is inevitable…
