While China and Japan fight over who should top of the list of US Treasury Bills, there is a 3rd challenger making its way toward the top…The Federal Reserve itself!
The higher the Fed goes up on this list the less likely anyone else is finding a US Treasury Bill inviting. There is only so far China is willing to devalue their own currency to keep pace with ours. Ya know about that right? The reason you can only buy things made in China is because, as our own currency loses its value, they become one of the few countries that matches our own devaluation.
In a healthy economy if our currency became devalued it would be CHEAPER to build things in the USA. Countries would see our value and relatively skilled workforce as an invitation to build their products by American workers but when China is your banker…you never really catch up as a country…even when your money buys less.
Now that in the last two years of the Bush administration and the first two of Obama’s we’re experiencing our once every three decade reminder that Keynesian economics fails about every time it’s tried.
And while I’m already not looking forward to hearing all of my so-called progressive friends whine and doing their best Henny Penny impression when so many Democrats are going to lose in November…I simply don’t see many of our countries idiotic monetary policies stopping.
Don’t worry, I’m sure the geniuses at the Fed will figure it all out.