Capitol Hill Blue Forums Political Issues Finance, the economy & Economics How will the financial crisis develop?

There is mounting evidence that China's central bank is undertaking the process of divesting itself of longer-dated US Treasuries in favor of shorter-dated ones.

There is also...evidence that China's...campaign of capitalizing on the global crisis by making resource buys across the globe may be (1) helping its central bank to decrease exposure to the dollar, while (2) simultaneously positioning China to make much greater profit on its investment of its reserves into hard assets whose prices are now greatly beaten down, while (3) also affording it greatly increased control of strategic resources and the geopolitical clout that goes with it.

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....the US is engaged in...dollar-debasing policies, making a loss of global confidence in the dollar...a virtual certainty. Even if the massive spending does restore economic growth, the US economy is likely to remain very weak for some time.

When the Fed attempts to tighten, the US economy will likely be plunged into a second-round recession or depression, with obviously awful effects upon the dollar. But if the Fed fails to tighten sufficiently and quickly, runaway inflation will ravage the currency anyway.