Comments on: The Global Liquidity Crisis http://dissidentvoice.org/2007/06/the-global-liquidity-crisis/ a radical newsletter in the struggle for peace and social justice Thu, 08 Dec 2011 15:07:30 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: atheo http://dissidentvoice.org/2007/06/the-global-liquidity-crisis/#comment-1145 atheo Wed, 06 Jun 2007 16:12:25 +0000 http://www.dissidentvoice.org/2007/06/the-global-liquidity-crisis/#comment-1145 "the Chinese are the only ones who are still buying our Treasuries. That’s mainly because it gives them power over political decision-making in Washington." Mike has this all wrong. In fact the Saudis and Gulf Arabs (through London and the Caribean) are now purchasing as much treasury debt as China is. Another view: Why A Chinese Monetary Tightening Could Be Followed by a Global Depression by Thomas Au "...China is facing the essentially same dilemma today as America did in 1929. The United States in the 1920s flooded the world with liquidity in order to hold down a fundamentally strong dollar and prop up a weak pound at the behest of Britain’s central banker, Montague Norman, and a Treasury Minister named Winston Churchill (who failed at everything he did in public life before winning World War II). China has been similarly accommodative until recently to support the weak U.S. dollar, despite making heroic efforts to “sterilize” these dollars. But some of the liquidity inevitably found its way into the Chinese and global economies, helping to bring about torrid (and probably unsustainable) double-digit percentage growth in China... I believe that China is setting a massive tightening of the global money supply in progress, and that this tightening could soon be followed by a global depression. Either event may happen or ultimately fail to happen. But in either case, it is basically out of America’s control. Like a lot of other goods that Americans now import, the modern 1929 (or a somewhat better outcome), will have been “Made in China.” “the Chinese are the only ones who are still buying our Treasuries. That’s mainly because it gives them power over political decision-making in Washington.”

Mike has this all wrong. In fact the Saudis and Gulf Arabs (through London and the Caribean) are now purchasing as much treasury debt as China is.

Another view:

Why A Chinese Monetary Tightening Could Be Followed by a Global Depression

by Thomas Au

“…China is facing the essentially same dilemma today as America did in 1929. The United States in the 1920s flooded the world with liquidity in order to hold down a fundamentally strong dollar and prop up a weak pound at the behest of Britain’s central banker, Montague Norman, and a Treasury Minister named Winston Churchill (who failed at everything he did in public life before winning World War II). China has been similarly accommodative until recently to support the weak U.S. dollar, despite making heroic efforts to “sterilize” these dollars. But some of the liquidity inevitably found its way into the Chinese and global economies, helping to bring about torrid (and probably unsustainable) double-digit percentage growth in China…
I believe that China is setting a massive tightening of the global money supply in progress, and that this tightening could soon be followed by a global depression. Either event may happen or ultimately fail to happen. But in either case, it is basically out of America’s control. Like a lot of other goods that Americans now import, the modern 1929 (or a somewhat better outcome), will have been “Made in China.”

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