Originally Posted by
Asturias56
China may be dumping US dollars but the renminbi is down...................
As for deficits people who think that countries are run in the same basis as their own personal funds are always wringing their hands over nations doing the same .
The USA is the country of last resort in the financial system - it's where money flees to whenever and wherever there is a panic and I can't see that changing for years. Would you REALLY take your cash and invest in a Russian or Chinese Bank rather than an American one???
Er money rushes into Gold when there is a panic. A point gets reached when a country has so much debt it cannot service what it has, it has nothing to do with borrowing more it basically becomes incapable of servicing what they have, so any new borrowing starts to pay higher and higher interest. Govt could cut back spending but politically that is fraught with difficult. Currency then drops so imports become even more expensive and economy tanks into a recession.
I keep pointing to the way Russia has been buying gold, now double from 10 years ago and any $$$ earned on selling oil get used to buy Gold.