After all Gold above 5000 USD/oz could be not only Gold Bugs Dream, but Chinese reality. "There is simply not many big enough markets to accommodate Chinese surplus apart from US Treasuries" - argument goes. But does it mean that they will continue to accumulate Debt from Bankrupt State? From all recent developments they are pursuing different policy for their reserves: buying strategic assets like Copper and Zinc, stakes in companies in basic materials sectors and more and more talking about Gold. Will G20 push again agenda pronounced by Russians and echoed by Chinese privately in Davos of supporting alternative reserve currencies apart from US Dollar?
Into the Financial Abyss
By Dr. Mark W. HendricksonFrontPageMagazine.com Tuesday, March 10, 2009
The U.S. Treasury recently released its “2008 Financial Report of the United States Government.” In case you had any doubts, our government’s finances are in a terrible mess. According to the report, under generally accepted accounting principles (the ones that private businesses are required by law to use), Uncle Sam’s total financial liabilities—explicit debts and unfunded obligations—exceed $65 trillion. That’s five times as large as our national GDP—a GDP, by the way, that happens to be shrinking at an alarming rate.I don’t know about you, but I find those incomprehensibly large numbers disorienting. I feel like Alice when she fell down the rabbit hole and entered a realm of the absurd.Does anyone believe that the federal government will ever be able to scratch together an extra $65 trillion on top of the other trillions that Washington intends to spend every year? Not a chance. As I wrote last fall, “We’re Broke.”So, how does the current administration propose to put Uncle Sam’s fiscal house in order? What plan does it have to rescue us from outright national bankruptcy? For starters, President Obama has presented a budget with an estimated $1.7 trillion deficit for 2010. Far from pulling back from the brink, we are plunging headlong into the fiscal abyss. We’ll never climb out of the hole by digging it deeper.