Hendren Global Group Forum Author James Gorrie to Moneyne..
Author James Gorrie to Moneynews: China's End to US Treasury Buying 'Final Nail in the Coffin' for the Dollar-Xanga10 Years AgoSource
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China ending its purchase of
Treasury bills will lead to "probably the final nail in the coffin"
for the dollar, said author James Gorrie.
He also warns that rather than an
emerging superpower, China looks more like it is on the verge of collapse.
"China is the biggest holder
of our foreign debt," Gorrie told Newsmax TV in an
exclusive interview.
"When China stops buying
Treasury bills, that'll radically impact the bond market," said Gorrie,
author of "The China Crisis: How China's Economic Collapse Will Lead to a
Global Depression."
"When the U.S. bond market
is no more in demand by its largest purchaser — largest foreign purchaser …
then there'll be some real problems. That's why China's involvement in the
international economy will bring devastation to that realm as well and not just
China."
China is "facing a financial
collapse that will dwarf what happened in 2008," he said.
"Those aren't my words, but
those are the words of the head of China's accounting
association just last April. China's economy isn't what it appears to be. It's
tremendously wasteful, tremendously corrupt," he said.
"They have a real estate
bubble and a financial bubble that just is unsupportable. It's
unsustainable."
He also questioned whether China
can do anything to stop the spiral into crisis. He made a comparison with the
Soviet Union in the 1980s.
"[Mikhail] Gorbachev came to
power and tried to do a couple things: glasnost and perestroika – reform and
restructure, or restructure and openness," he said.
"Because that economy was
based on much the same type of processes in terms of corruption and graft and
so forth as the Chinese … especially the internal economy. That's how the
Communist Party runs the country," he said.
"There's been some dire
warnings from the outgoing premier who said we have to change this culture of
corruption or we're not going to last. The new premier had said the same thing
and is trying to do an 'openness and restructuring' type of campaign. It's
doubtful whether the economy can actually handle that because so much is based
upon that corruption, that model."
Gorrie didn’t
attach much significance to the issue of currency manipulation.
"It's not as crucial or a
unique event to China as much as other things that they're doing like polluting
their crops, polluting their land and their rivers and using up their arable
land and doing all kinds of horrible things in terms of pollution and smog and
fraud in terms of Chinese companies
[regarding] stock market and bank fraud and so forth," he said.
"[Currency manipulation is]
probably a second-tier issue from my perspective in terms of what China is
actually doing to themselves."
Shuanghui International's buyout
of Smithfield Foods
was also discussed.
"I don't like the idea of
China purchasing real assets, although they have to do it," he said.
"They have to do it because
their own food and water and farmland [are] toxifying. If China was so good at
doing what they're doing, growing their economy and creating it and developing,
then most of their money should be going back into China, but now they're
buying farmland and they're buying forests because they're using it up at an
enormously horrible rate," he said.
"China takes 10 times the
inputs to create something as it does in the U.S. — so grossly
inefficient. The Chinese themselves are very, very concerned about the food toxicity.
Farmers don't even eat their own produce."
Gorrie said China is a manufacturing economy
and not a knowledge-based economy, and that such systems must evolve in order
to keep growing, "otherwise they're just people putting widgets
together."
"They're trying to hobble
the U.S. any way they can, which includes cyber-attacks on Wall Street, on our
defense apparatus and infrastructure [to] get as much knowledge as they can,
technological knowledge," he said.
"We've lost millions of jobs
to China since China joined the World Trade Organization
in 2001, probably around 3 million jobs and those were manufacturing jobs. The
fallout is more tension and as China becomes weaker, their acts become
bolder."
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Re: Author James Gorrie to Moneynews: China's End to US Treasury Buying 'Final Nail in the Coffin' for the Dollar-Xanga10 Years Agoexcellent post. i want to thank you for this informative read, i really appreciate sharing this great post. keep up your work.
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