Daily Kos :: Are the Chinese Pulling the Plug on the US Banking System?

Daily Kos by msaroff
Are the Chinese Pulling the Plug on the US Banking System?

The communist rag The Financial Times of London ran an article today, 'Dollar expected to fall amid China's rumored selling.'

It states that the Chinese are looking to move from dollar reserves to a 'basket arrangement' where they spread this around a number of different currencies.

It indicates that they have lost faith in the US Dollar, and US government debt. If this is accurate, then rates are going up A LOT.

Even without this move the Fed is expected to raise short term rates by 25 basis points (0.25%), and given the 'robust' economic numbers, I would not be surprised if they raise them by 50 basis points.

As interest rates rise, the home market slows down, and we will see a decrease in property values if the rates go from their current 5-3/4% to the historical norm of 9%.

In our hollow economy, the primary driver of economic growth, people tapping their increase in home equity will come to an end.

What's more a significant number of the homes out there have adjustable rate mortgages (ARMs)"


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