A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations.
In the brief period since President Bush announced his choice for the new Federal Reserve Board Chairman, a number of major financial markets have been dramatically affected. The purpose of this essay is to explore whether the hand of Alan Greenspan or his likely replacement, Ben Bernanke, were behind them.
It seems ahead of events that prompted a look at ‘confidence’ in the States, that it was timely and has now been emphasised in the storm that rippled beyond the weather. Stand back for a moment and pause for thought. Look back, just a year and compare today with then.
In April, 2003, I wrote an essay entitled, “A Canadian Dollar Bull Market Will Greatly Benefit Holders of Canadian Gold Mining Equities”. In it I discussed my belief that a Canadian Dollar Bull Market existed, and that it was destined to greatly benefit U.S. investors who purchased Canadian resource stocks. This was in addition to the substantial gains that I foresaw in the stocks themselves.
After nearly a decade-long fixed exchange rate, it was announced Thursday that the Chinese yuan was to be severed from its seemingly steadfast link to the U.S. dollar. Instead, it is to be allowed to “float” against a yet to be named basket of currencies.
China has cut the link to the U.S. $ of Yuan 8.277, switching the link to a basket of foreign currencies instead at Yuan 8.11 a 2.02% revaluation. This is a major step for the Chinese, always cautious, taking small steps to gauge the unseen impact before taking larger steps.
This new and necessary agency’s primary mission will be to provide perpetual stimulus for the economy. This agency will also guarantee the consumer with the security and dignity befitting their true contribution to global job creation.
The dollar is really pushing its luck here, having risen to hit 3 separate but concurrent targets. In the last update we forecast that it would confound most pundits by stubbornly pushing higher, despite the heavy resistance, and such has proved to be the case.
Finance Secretary Snow has his hands on his hips and is telling the Chinese to revalue. In turn they have said, not whilst speculation is so rife. The Chinese are always at best, inscrutable, so whether they are about to revalue soon or not, we just don’t know.
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