Quote from number22:
The way Nixon played out is perfect move to put the USD in every central banks.
Let's just say, there is a little luck involved; but lot of planning; back stabbing and double dealing to secure oil reserve and fight against USSR.
Wow, those are some serious delusions there. I think you need to look at the full history of the Bretton Woods system.
There is no trickery or luck or planning, USA simply could not fulfill its obligations anymore and had to go on a fiat currency basis under some made up pretenses. European nations were redeeming dollars for gold at an alarming rate. Why do you think the government has not been able to release any figures about Fort Knox or let anyone get access to it for several decades?
Only the use of the USD for oil retained the reserve currency power, up to a point. Is there a coincidence that at the same time, defense spending took a serious focus? Or that involvement of USA covert operations across the world started heating up? Gotta protect that imperialist position.
The truth is that USA's best days went away with going to fiat currency. Money supply growth undertook a new era of growth. Real wage growth started dropping. Cost of living started growing. Inflation became a common term entrenched and banged into the head of the masses. The Reagan administration did do some clever wonders with evolving the financial industry and creating a ton of white collar jobs. Ever since then, the financial industry has been booming, with occasional hiccups.
Similiar events followed U.K. and its attempt to force the pound to be valued higher than it really was on a gold basis. They tried, they sure did, but eventually that illusion was shattered as well. Guys like Soros made their fortune on those events, properly foreseeing that the British government could not force that illusion on the rest of the world.
It is one of reason why China is fearful; the same plan didn't work with China. Go figure; China was way less industrialized than USSR prior its collapse; and was considered economically bankrupted by western standard long time ago.
China has human rights issues; and Chinese are too smart.
A look into the Chinese finances will show you another picture. It's not exactly a great position to be the world's sweatshop that can and will be replaced at any moment. Fact is, China wants out of that business, because it is not too profitable. Being the world's center for exploited labor is not too smart. You may see a ton of "Made in China" but do you see many Chinese trademarks? I only know of one, Suntech, and for some weird reason their pricing is not competitive and their market share is stagnant or dropping.
Those sweatshops run on razor thin margins. The real profits go right into the pockets of the big corporations. China's GDP is still somewhat dependent on foreign investment. China's bank loans are in bad shape, even the Bank of China continually warns of this fact. About half of them are pretty much defunct. Many domestic non-sweatshop businesses in China are not profitable and have little hope. But the government will keep pressing, they want high employment and want industrialization. Hence the many upon many human rights abuses and one of the most supressed & controlled medias of the world.
China is a slave to the US & European multinational corporations and their consumers. If you research China's trade politics, you will notice that they are having problems transitioning. They want to start making higher end technology and selling it to their major nation neighbors. But that's what Russia and Japan are already trying to sell to China. It's a weird situation. Look up the politics behind Russia providing a pipeline to China, the two have been playing games for a long time because they can't come to a trade agreement.
Everytime the USD sinks lower, China has to look at their massive stockpile of US Treasuries and sees them go further in the red. But what are they to do? Hmmm. Well they have been buying up military equipment from Russia and other nations for almost 10 years. Sound familiar?
It's a very intricate game of paper pushing & geopolitics where little is as it seems.
