Credit Crisis Solution

It’s hard to believe that the US may be dethroned within the next few decades, but the Chinese are doing many things to set a foundation for a run. A few weeks ago, I wrote some articles on China and Russia pushing for a new world reserve currency which would be backed by commodities. I’ve also been seeing a lot of articles about the Chinese intelligence and attempts to hack into the US energy grid and defense system, though these articles credibility may be suspect, I’ve been seeing them quite often and two major themes are Trojans and viruses in the Energy Grid (possibly our financial system), and special programs in military aircraft chips imported from China. These are extremely intelligent, as they are non-lethal offensive strategies, but would have severe consequences to the US.

Additionally, with the pushing for a new world currency, and most of the leading countries agreeing to the look into the idea ($1 trillion grant to the IMF), it is highly probable that a commodity backed reserve currency would replace the USD. China, the biggest promoted of the currency and largest holder of US bonds has expressed concern about the value of the $, especially with the increased printing. This concern has led them to begin diversifying their holdings into stock piles of Copper, which for good reason, may be a big part of the the worlds next currency. All this is not drawing much attention and will set them up for the future in 2 ways: 1) massive quantities of essential manufacturing metals, 2) if the new currency is put into place, China’s investments will pay off. This week is a big earnings release week, with all the uncertainty, stay on the sidelines and let the week playout, but much like there were drivers behind the banks beating estimates, Copper stocks may be a nice pick up.

This entry was posted on Monday, April 20th, 2009 at 9:15 am and is filed under Unintended Consequences. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.