http://www.spiegel.de/international/world/0,1518,517060,00.html
November 13, 2007
WEST WING
A Pearl Harbor without War
By Gabor Steingart in Washington, D.C.
Translated from the German by Christopher Sultan
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The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar — a problem the United States should take very seriously.
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So far Beijing has behaved like the benevolent shopkeeper who willingly extends credit to his customers. The Americans receive shipments of Chinese-made television sets, toys and underwear, but the Chinese do not import a comparable volume of US goods. The gap between buying and selling amounts to about $5 billion every week.
The Chinese are satisfied with buying US treasury bonds, partly to keep their most important customer afloat. The central bank in Beijing already holds currency reserves of $1.4 trillion.
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Within a single generation, the world’s biggest lender has become its biggest borrower, a circumstance the United States has made no serious attempts to change. And what has been Washington’s standard take on the shift? The dollar is our currency, but it’s your problem.
Thus, the tone of the US government’s callous and thick-skinned reaction to China’s announcement last week came as no surprise. There was a reason the dollar became the world’s reserve currency, US Treasury Secretary Hank Paulson said in a slightly offended tone.
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Well, the other shoe is about to drop. And, it would be nice if it didn’t drop on us! I have no illusions about just how important this upcoming Presidential election is to everyone’s pocketbook. Personally, I’m prepping fro President Hillary and adjusting my thinking along those lines. It will make the 1929 Great Depression look like a walk in the park. We have a Notre Dame style Hail Mary if Ron Paul can get the Republican nomination and then win the election. At least, he understands the problems and a way for us to escape the executioner’s guillotine. A return to commodity money! Sure, it’s painful. But not as bad as a Great Depression Cubed with Hillary (i.e., the Dollar is no longer the World’s reserve currency, Social Security – Medicare – Medicaid – Drug Benefit time bomb explodes, and a global depression that makes the Japanese Stagflation look like a boom). Add to that President Hillary’s version of a “Great Society” with Guns + Butter + Socialism. And, it’s pretty bleak.
I’m advising getting your financial house in order for a plague of Biblical proportions. Seven years of lean might well be seventy. Look at the aftermath for the Roman Empire and you might get a feel for the next set of Dark Ages.
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Reinke Faces Life 