Saturday, January 12, 2008

AHHHH!!!

Stephen King never wrote nothing like this--- an article in The Atlantic explains how China's U.S.-cash holdings have the potential to plunge the entire world into the economic equivalent of a nuclear holocaust.

BUT GODDAMN THAT'S SOME SCARY SHIT!!!

As some one with a deep ignorance and mistrust of science in all its forms-- from physics to medicine to math-- this kind of story strikes a shadowy, unknowable fear into my heart.

Financial doomsday, man........... I'ma start buying bottled water NOW.

1 comment:

Jeremy said...

Heh heh - that's a funny reaction. Truth is the US is in a precarious financial position, one that is getting worse by the day - it's not China building up reserves so much as it is the Federal Reserve continuing to allow credit creation on a massive scale (really ramping up credit creation in a misinformed bid to prop up huge amounts of mal-investment in the US economy), distorting the productive structure of the economy, and making the eventual downturn all the worse. The scale of credit expansion that has taken place over the last 15+ years (basically Alan Greenspan's term) is of a scale never before seen in US history.

If you want to know exactly what is wrong with our current monetary system / macroeconomic policy, read this:

http://www.mises.org/books/desoto.pdf

Not to say the China part of the problem isn't important, it is. They have greater control of long term interest rates in the US than any other country, and if a sharp recession or depression hits the US and they were smart enough to wait, they could pick up massive amounts of assets on the cheap.

Let's just hope they aren't so rational and instead catch quite a few falling knives.