Now, a final item that has been bugging the hell out of me in the last week also:
QUESTION: What is China going to do after its banks lose about 50 billion dollars on subprime mortgage backed securities that American financial institutions sold them by “putting lipstick on the pig”?
I think Chinese leaders will view it as conspiracy by corporate America (and American government) to defraud the Chinese. They will want revenge, and will have it. The question is how?
This is about running economic simulations in my mind, and figuring out how I can make money buy anticipating China’s revenge. Maybe China will disconnect the RMB$$ exchange rate, and dump that estimate trillion US dollars they are holding in reserves, which will destabilize the dollar. But I need to think more on this. Keep in mind I don’t see onset of this for another several years, at the earliest.
How will this revenge scenario play out, that is the question.
