Wednesday, October 17, 2007

Will US protectionism pull the trigger?


An article by D R Schoon in GoldSeek (26 September) alerts us to a bill heading for a vote in the US Congress this autumn. It seeks to impose a 20% tariff on Chinese imports.

... China will retaliate; and, dumping $1.33 trillion of US Treasuries on the open market will be an all too easy and accessible option. It would destroy the US dollar and deal the US economy a body blow from which it would take years to recover...

Now unless US politicians are really abysmally stupid, they must have a backup plan to stop a torrent of dollars pouring back into the States - exchange controls? Repudiating the debt? If Russia's default forced the bailout of LTCM to prevent systemic crisis, what would a giant American default do?

We must hope for cool heads all round. US multinationals are already urging calm.

5 comments:

  1. Anonymous17 October 2007 at 18:44

    You can read about an earlier American default here:-
    http://www.grantspub.com/articles/inflation/

    ReplyDelete
  2. Sackerson17 October 2007 at 21:31

    Thanks, DM, I have saved it to favourites and will read at leisure. Hope all's well with you.

    ReplyDelete
  3. AntiCitizenOne18 October 2007 at 03:39

    Barclays just got a 23A exemption!

    ReplyDelete
  4. Sackerson18 October 2007 at 06:46

    Hi, ACO:

    1. Are you referring to section 238 (1) of the Financial Services and Markets Act 2000 (“FSMA”), relating to promotions to self-certified sophisticated investors and to associations of high-net worth or sophisticated investors, as amended in 2005 (http://www.opsi.gov.uk/si/em2005/uksiem_20051532_en.pdf)?

    2. What do you think is the significance of this development?

    ReplyDelete
  5. AntiCitizenOne18 October 2007 at 11:00

    Nope

    http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/2007/20071011/20071011.pdf

    ReplyDelete

Unfortunately, because of a plague of spam comments, you need to be a "registered user", otherwise your observations will be buried in a torrent of multilingual nonsense. Please do comment!

Say what you please, so long as it's phrased politely and is not libellous or legally proscribed. Fact, reason and wit are keenly welcomed.