Gold, Financial War & The Fed’s Dangerous Exit Strategy
July 4, 2013
With the United States celebrating Independence Day, oil still trading over $100 a barrel, and continued uncertainty in the Middle-East, today King World News interviewed the director of international economics at the Council on Foreign Relations in New York. Dr. Benn Steil warned KWN about the Fed’s exit strategy, and also spoke about China’s large hoard of U.S. dollars, and their massive accumulation of gold.
Eric King: “What we are looking at right now is a financial war between the U.S. and China.”
Dr. Steil: “That’s right. In the 1940s the U.S. was the world’s largest international creditor, and Britain was the world’s largest international debtor. Today, China is the world’s largest international creditor, and of course the United States is the world’s largest international debtor.
And it’s fascinating to see that the United States today takes the same position in terms of identifying the flaws in the global monetary architecture that Keynes and the British took in the 1940s. For example, former Treasury Secretary Tim Geithner, in 2010, proposed imposing caps on persistent current account surpluses. Of course that was aimed at disciplining Chinese economic behavior….