http://www.fool.com/investing/general/2012/02/08/the-us-and-china-a-duel-to-the-debt.aspx
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Coggan shared his observations on some of the most pressing topics of the day. In the first of two articles, he explains why the current international monetary system is on its last legs and discusses the possibility of the Chinese renminbi replacing the dollar in a successor system:
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and
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Debtors and creditors: a historical struggle
As he makes clear, that dichotomy is at the root of the rise -- and fall -- of different monetary systems:
"Over history, creditors have tended to impose systems that control the supply of money -- the gold standard, the Bretton Woods system of fixed exchange rates, the euro -- that prevent borrowers from repaying their debts in debased currencies. The strain of keeping up this discipline is intense in democracies where more people are debtors. The gold standard broke down in the 1930s, Bretton Woods in the 1970s and the euro is struggling today, as is what might be called the post-Bretton Woods system of independent central banks and inflation targets. A new world order will emerge from the ashes."
Today, the struggle between debtor and creditor pits the United States -- the world's largest debtor nation -- against rising superpower China. With more than $15 trillion in outstanding public debt, Uncle Sam is in hock to China to the tune of a cool $1.1 trillion.
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(Entire article is at the link . . I thought it worth
reading. Zim.)
Mad Poet Strikes Again.
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