U.S. Dollar Report / Opinion


Click Here to go to the U.S. Dollar Blog


The World Forex Economic Game and why the USA might be in a better position then most know!

September 4, 2011

I believe it was a United States General that once said “in China they play chess…in America we play poker”.

You ask, what does chess and poker have to do with the Forex Market or world economics or even world power? It has just about everything to do with it when the USA is involved.

You see when one plays poker it helps to have deep pockets and it also helps to know what your opponent’s next basic move will be (in chess there are so few forward moves). The USA has the deep pockets and the willingness to sacrifice a big chunk of their assets if need be or pass up taking profits just to throw the other players off balance.

Right now we are witnessing the largest economic poker/chess game in the history of mankind, between China and the USA.

China has been running full out since 2008 (since the USA’s economic slowdown) self capitalizing it’s own economy to pick up the slack of falling exports to the USA and Europe. China, much like the USA did, is suffering a major real estate bubble (especially inland China). And much like the USA the Chinese Government has been pumping billions of dollars into it’s domestic economy. Unlike the USA the Chinese economy has yet to break.

The USA play is to collapse it’s economy first and start rebuilding (which it did) while the other economies (players) in the world begin to falter or have yet to falter. This way the USA will be in a strong position to pick up the world economic pieces at relatively bargain basement prices.

It is in my opinion that the main reason TARP funding was used back in 2009 was to save financially crippled American companies from being purchased by foreigners, such as China, at fire sale prices. The same goes for the US Government propping up the stock market. Many exchange listed American companies’ stock prices in March 2008 were ripe for foreign takeover. Not to mention the fact that government and pensions plans are some of the single largest holders of U.S. stock.

So when China implodes or slows considerably watch for falling commodity prices (not so much food) and many of the foreign companies that China paid top dollar for may be available at fire sale prices. All this will be happening as the US dollar gains ground. That’s right, the US dollar will be worth more. With China and Europe falling apart the good old Yankee dollar should once again prevail.

That trillion US dollars that China is sitting on, they will need it to help jump start their economy after it implodes to stop their people from overthrowing the current Chinese government.

The ten trillion dollars the US Government has in circulation (much of it put into circulation over the last three years) no worries. The US dollar continues to be the reserve currency and with many third world nations and developing nations on their way up the economic ladder the dollars will be needed. Availability of a reserve currency is almost as important as it’s strength.

Below link ADDED on 3-24-2012
Why the U.S. dollar may be in a sweet spot … a place it hasn’t been for a long time.

Below link ADDED on 5-08-2012
What weak dollar? Look Where The Dollar’s Heading Now

Below link ADDED on 5-22-2012
Chinese Buyers Defaulting On Commodity Shipments As Prices Plunge

Anthony DiChi at TradeCurrencyNow,
America’s Forex News and currency information source.