If you miss a payment on your brand new car someone will be out to repossess it that night, what if you owed a billion? China is the largest foreign debt holder owned more than $800 billion dollars. The president of China Hu Jintao is visiting the States this week to talk to President Obama and some top CEOs to talk about China’s currency manipulation, the huge debt, and QE2.
China currency manipulation is to devalue their dollar to keep the price of their exports down. This in turn keeps labor cheap and appeals to American companies to move to make more revenue hurting our labor force. This manipulation makes the value of the there goods cheaper so it forces people to buy their goods over ours and lead to their current state of hyper inflation.
QE2 is an unconventional monetary policy used by central banks to stimulate their economy. How it works is the bank creates money where it uses to buy government bonds and financial assets, in order to increase the money supply and the excess reserves of the banking system. Through the actions of the QE2 it subtracted more than 100 million but devalued our dollar in the process. Another effect of this is higher inflation they’re being too much money in the market. The deficit with China has become so large that America has to pay with inflated money. Politicians have argued about China currency devaluation but America in theory is doing the same thing.
The best plans in place will not be enough unless the people fight for a smaller government less expensive controlling every part of American life. Taxpayers would be relieved of the burden of fueling this overly huge powerful government with inflated salaries great health care benefits, and even early retirement plans while our tax payers stay broke, work till they die, and expensive a failing healthcare system.
Taco Bell, Pizza Hut, and hansom old Kentucky gentlemen have become one of our hottest exports to China. Yum who owns all three restaurants has made over forty five percent of its sales from China while sales dwindle in America. It’s laughable when you think about American culture being our largest export.
http://money.cnn.com/2011/01/18/news/international/thebuzz/index.html
http://en.wikipedia.org/wiki/Quantitative_easing
http://money.cnn.com/2011/01/18/news/international/thebuzz/index.htm
http://www.examiner.com/conservative-in-national/to-slash-the-us-deficit-most-of-federal-government-must-be-privatized-1
