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Silver Wheaton Corp. Message Board

  • stockideas18 stockideas18 Dec 15, 2006 10:18 AM Flag

    OT: China, U.S. to work on trade imbalances

    look at this article: http://news.yahoo.com/s/nm/20061215/pl_nm/china_usa_dc

    will this mean that US will go through a rapid pace of inflation???

    is that good for the metals?


    my two cents

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    • I doubt anything will come of these "talks". It isn't the first time we've had "talks" with china on this matter and in the past nothing of substance has changed. It is in their best interest to leave things exactly as they are. We have no practical way to force the issue and they know it.

      • 2 Replies to myrandsand
      • "no practical way to force the issue"... depends on what extremes you use to calculate your claim. China needs oil. Oil can only be bought using the dollar (that is the agreement that the US cut with the mid-east regimes after we removed the gold backing under bretton woods in '73). Therefore, they need dollars and if they sell some of them them in such a way that it depreciates the others that they hold then they defacto increase the price of the oil which they need to buy. Thus, you see: point #1. Whoever controls the oil controls the dollar (and #1b you see why mid-east is of such vip geo-political concern), #2: we are all in this pickle together and by controlling the mid-east oil the US ensures that we all stay in the 'game' together.

 
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