China Scorns US Funny-Money
by Eric Margolis
One day, the emperor of ancient Babylon summoned his treasury overseer and exclaimed, “I need more money to wage war on those filthy Hittite terrorists!
“But I looked in my great treasure chest and it’s nearly empty. There are hardly any gold coins left,” he thundered.
“Oh Light of the Euphrates,” groveled his terrified minister, “we are out of gold. Your wars have become too expensive.”
“But I have a solution, your celestial greatness. We will quietly trim the amount of gold in our imperial gold coins to make them go further. No one will notice.”
Fast forward to Washington, 2010. It’s no longer called “clipping coins.” Today, the name for debauching a nation’s currency is called “quantitative easing(QE),” but it’s still the same old fraud committed by financial flim-flam men.
Washington is flooding financial markets with $600 billion of worthless dollars, hoping a rising tide of Monopoly money will somehow lift America out of recession. The Fed’s first QE effort was a fizzle. Welcome to QE2. In high finance, hope springs eternal.
The US government is stoking worldwide inflation in order to lower its outstanding debt by repaying creditors with depreciated dollars. The rest of the world is boiling angry at Washington.
Just before last week’s G20 economic summit in South Korea, China’s state credit agency publicly downgraded America’s credit rating and questioned US leadership of the world’s economy.
In an unprecedented, stinging rebuke, China scolded Washington for “deteriorating debt repayment capability,” and predicted quantitative easing would lead to “fundamentally lowering the national solvency.”