The Chinese hold a very large amount of dollar-denominated financial assets. Just as the Federal Reserve’s agents, the bullion banks, dump massive shorts onto the bullion futures markets during periods of little activity in order to drive down the bullion price, China can dump the equivalent in US Treasuries of years of Quantitative Easing in a few minutes. If the Federal Reserve quickly creates dollars with which to purchase the enormous quantity of Treasuries so that the financial house of cards does not implode, the Chinese can then dump the dollars that they are paid for the bonds in the currency market. Whereas the Federal Reserve can print dollars with which to purchase the Treasuries, the Fed cannot print foreign currencies with which to buy the dollars. The dollar would collapse, and with it the power of the Hegemon. The war would be over without a shot or missile fired. In my view, Russia and China owe it to the world to prevent the nuclear war intended by the neoconservatives simply by replying in kind to Washington’s economic warfare. Russia and China hold all the cards. Not Washington. Russia and China should give no warning. They should just act. Indeed, instead of step by step, Russia and China could simultaneously use the counter-measures. With four US banks holding derivatives totaling many times world GDP, the financial explosion would be the equivalent to a nuclear one. The US and Europe would be finished, and the world would be saved. ~~ Paul Craig Roberts (Assistant Secretary of the Treasury in Ronald Reagan Adm), Dec 29, 2014
Posted on: Mon, 29 Dec 2014 20:53:40 +0000
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