“The business site Bloomberg is running a story today titled Yuan Deposes Dollar on China’s Border in Sign of Trade’s Future. [Interestingly, after being up for over an hour, this story suddenly went away between 1 and 2 am. Before coming back in what seemed like a slightly less hard hitting form.]
When Treasury Secretary Geithner spoke on June 1st to students at Peking University and claimed that America was in good shape and China’s dollar investments were safe. His assurances were greeted with loud hoots of laughter from the assembled students, many of them the sons and daughters of China’s elite. Geithner humiliation was barely reported in America, but it seemed to resonate much more strongly elsewhere around the globe. Spawning many stories similar to the story running today at Bloomberg.com about how people are digging up that jar full of dollars and replacing them with gold or border traders switch from dollars to other currencies. The disbelieving laughter of China’s students may well mark a sea change. The begin of the end for the dollar’s reign as the world’s reserve currency. With America’s politicos planning to spend approximately double what they expect to collect in taxes this year, it is easy to see why the students were amused by Geithner posturing. But the chaos that will ensue if a dollar crisis were to suddenly force America’s politicos to start living within America’s means won’t be funny.” (from humods.com)