Why China Sells Bonds, US has no exit strategy

http://sg.news.yahoo.com/ap/20100124/tbs-as-china-bank-of-china-618743b.html

China has $2.4 trillion in reserves. It has so much cash that it does not know what to do with it! Why then, do they need to sell bonds (or debts)? Definitely not because they need more cash.

They are preparing the world for the coming decline of the USD. With the reckless inflationary policies of Washington, the world has been gearing itself up for the day when the USD is no longer the world reserve currency. For decades, trades around the world has been done in USD. This demand for USD has allowed the politicians in US to spend recklessly, thinking that it can go on forever, thinking that the model of consumption by the US and production by the rest of the world is sustainable. Now it's all coming to an end.

China is selling bonds to increase the liquidity of the Yuan. It is as obvious as that! The Chinese know that they are going to be the next economic superpower, eclipsing the US, and they are preparing the world for it!

The US commercial real estate looks set to burst next. When that happens, we can expect the politicians there to print even more money. This dose of money may prove to be fatal, the final straw for their dollar. Bernanke keeps saying that he has an exit strategy. He thinks that he can stimulate the economy and then exit. This will never be possible. Once the stimulus is removed, all the propped-up bubbles will collapse again. The best exit strategy is not to stimulate at all! All that he has done is to stimulate the collapse of the dollar.

The subprime crisis was caused by Greenspan and Bush. Interest rates were lowered to 1% back then. And budget deficit was around $200 billion if I recall correctly. With these, they created this monster of a subprime bubble, and the worst recession since the Great Depression. Fast forward to today, and we see interest rates at 0%, and budget deficit of more than $1 trillion!! Imagine the chaos that is to come. It's madness.

I have no sympathy for Bernanke and his Washington and Wall Street cronies at all. They have destroyed Americans' lives and the value of the Dollar. I would really love to see their faces when the next crisis hits.