Who will win...US & Europe, China, Both or Rest of the World? | LinkedIn Answers | LinkedIn
Who will win...US & Europe, China, Both or Rest of the World? | LinkedIn Answers | LinkedIn
Who will win...US & Europe, China, Both or Rest of the World?
The US Fed prints dollars(and ECB prints Euros) and sprays them (with or without helicopters) on the American (and European) inhabitants.
Americans and Europeans quickly go to China and buy real stuff with these paper or electronic dollars or Euros.
China with its sales revenues in its wallet goes shopping to Australia, Latin America and Middle East for Raw materials and oil. It still has spare dollars and Euros which it promptly lends back to US, Spain, Greece etc.
China wants this arrangement to continue for a while purportedly to keep a lid on social unrest. So the People's Bank buys all the dollars and Euros to keep Yuan from appreciating. This creates huge liquidity in China which encourages very poor investments and asset bubbles in property.
China's purchases inflate commodity prices around the world for which poor countries like India pay through their nose.
Someday Fed and ECB will stop printing. Then what happens.... Will US and Europe start collapsing. Will China stop lending to US and Europe...Will Dollar and Euro fall. . Will China's financial sector collapse under the weight of bad loans.
It seems rest of the world may actually gain from a collapse of US, China and Europe as commodity prices may become very very affordable for a long time to come.
Americans and Europeans quickly go to China and buy real stuff with these paper or electronic dollars or Euros.
China with its sales revenues in its wallet goes shopping to Australia, Latin America and Middle East for Raw materials and oil. It still has spare dollars and Euros which it promptly lends back to US, Spain, Greece etc.
China wants this arrangement to continue for a while purportedly to keep a lid on social unrest. So the People's Bank buys all the dollars and Euros to keep Yuan from appreciating. This creates huge liquidity in China which encourages very poor investments and asset bubbles in property.
China's purchases inflate commodity prices around the world for which poor countries like India pay through their nose.
Someday Fed and ECB will stop printing. Then what happens.... Will US and Europe start collapsing. Will China stop lending to US and Europe...Will Dollar and Euro fall. . Will China's financial sector collapse under the weight of bad loans.
It seems rest of the world may actually gain from a collapse of US, China and Europe as commodity prices may become very very affordable for a long time to come.
posted by Unknown at 1:43 AM
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