How Asian governments rob Asian citizens:
“When a Chinese business exports to the U.S., the dollars earned are exchanged in a Chinese bank for local currency. Those dollars are then recycled by the Chinese Central Bank to buy U.S. Treasuries. America then creates more dollars (inflation) so that it can redeem those outstanding Treasuries. This mechanism props up the dollar and holds down the RMB. As a result, the Chinese are poorer and America richer. “
John Browne (Euro Pacific Capital).
My Comment
This is the pattern in many Asian governments. Effectively, the savings of Asian citizens are being destroyed by their government’s short-sighted pro-export policy. But for how long? Anyone who can is going to be buying land, gold, and other tangible assets and getting out of weak currencies to avoid losing any more.
Unless the Asian central bankers follow the same insane monetary policy of the FED. Actually to keep ahead of the FED, they have to up the ante.
Thus are vicious cycles created.
I believe they are also hoarding precious and industrial metals as well, but those markets are also being manipulated.
PS, there is a terrific video of Rothbard on the creation of the FED posted on the LRC blog today…
Hey – thanks
I’ll check it out.
Yes – of course, the asian bankers are under pressure, but you’d think they’d have figured out by now that Uncle sam was going to renege on his debts…