China, whose $2.45 trillion in foreign-exchange reserves are the world’s largest, is turning bullish on Europe and Japan at the expense of the U.S.
The nation has been buying “quite a lot” of European bonds, said Yu Yongding, a former adviser to the People’s Bank of China who was part of a foreign-policy advisory committee that visited France, Spain and Germany from June 20 to July 2. Japan’s Ministry of Finance said Aug. 9 that China bought 1.73 trillion yen ($20.1 billion) more Japanese debt than it sold in the first half of 2010, the fastest pace of purchases in at least five years.
That's like saying I am bullish on the Titanic relative to Lusitania. Armstrong correctly suggests that Europe, the nations in banning together to create the Euro, indeed eliminated one avenue of default - currency depreciation by inflation. In other words, Europe has transformed itself into the position of the States in the USA. Countries like Greece that cannot devalue their currency have no other solution but to cut spending in the form of government jobs or withdraw from the Euro zone.
As Jim reminds us, everything is lining as an illustration of Currency Induced Cost Push inflation, i.e. our future.
Source: bloomberg.com
Source: martinarmstrong.org
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