Devoted to Managers and those that seek to improve their management skills

Will US Dollar Crash? 

For those of you that follow world financial events over the years, you know that China has bought up a huge portion of U.S. Treasuries, with foreign reserves of $1.33 trillion. It has now threatened  to liquidate those assets in response to threats from the U.S.

The fallout would probably result in the crash of the dollar, at a moment in history when it's tremendously weak. Bond yields would also surge which would have a devastating impact on the US housing market, and could bring about a recession. The estimation of mixed US bond holdings by China are over $900 billion.

A bill put together by a number of US senators and agreed upon by the Senate Finance Committe has called for trade tariffs against Chinese products for what is allegedly being called currency manipulation.

Even so, the yuan has appreciated by 9 percent over the last two years against the dollar. With that the trade surplus has still increased, growing to $26.9 billion in June.

The ignorant senators wouldn't listen to their own US Treasury Secretary Henry Paulson who advised them against the stupidity of this move. He said that it possibly "could trigger a global cycle of protectionist legislation." Paulson had suggested a quieter diplomacy with the Chinese, and had been making progress. Paulson is an expert on China, the senators aren't.

The potential for sanctions has undermined the negotiations and brought everything to this place.

What is especially disturbing about this is the real, underlying cause: the American consumer. By that I mean people in the free market have chosen to buy the goods that have created a large portion of the overall surplus. None of the senators have the guts to talk about that.

Another thing they won't talk about is the devastating impact sanctions would have on the lower and middle income consumers in America.

None of them will ever admit it, but they resent Americans buying affordable goods made in China. Overall, that's what this is really about.

Start sending letters and emails to your senators and ask them why they're attacking the lower and middle income earners of this country. In the end all of this is a smokescreen to cover up what's really going on. It's just another way of taxing the American consumer if the sanctions go through.

It's also the fault of the US government for allowing 44 percent of its debt to be bought up by foreign entities.