Tuesday, April 27, 2010


I don't think this morning's post could have been more right on. While the market was dropping we were typing that this only means that we'll be seeing more effort from our government to push forward demand, create confidence, and ultimately print money to escape the gravitational pull of deflation.

It looks like we (the US) aren't the only ones to print new currency. The Chinese are contemplating new efforts to keep the plates spinning. The Bloomberg article here cites that this will be announced in August.


We keep hearing that China is in a bubble and China will need to step on the brakes to stop rampant speculation. If there weren't real forces gripping their economy why would a government continue to distribute easy money?

I think the truth is that they absolutely need to keep printing and try to competitively devalue the yuan. If they don't, we'll see riots, unemployment, and a real estate collapse again in the most populous country in the world. More printing in China will create more printing in the USA to offset the devaluation. It is truly a race to the bottom for currencies.


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