Archive for May 28th, 2009
Sweeney Ridge, recently added to the Golden Gate Recreation Area, is an interesting park. First, the on major trail is paved for a big portion of the way. Only after you have climbed up steadily for about an hour (really kills the legs) does the trail split. One way heads towards the point where the bay was first seen by explorers…a long time ago. The other continues along the paved path towards a Nike Missile Radar Station, long since abandoned. What’s amazing about these empty buildings, falling apart with graffiti and caved-in ceilings is that they are completely accessible. One can walk right in and wander around the carnage.
I’ve been reading about China’s attack, if you will, on the dollar as a reserve currency (kind of like a central currency for everyone, which can be easily converted to any other currency, and that acts as a relative “safe haven” to be kept in other countries’ central banks). Most people say that at best the yuan is a couple of decades away from having that much clout. The euro is way ahead of any other currency at this point and is highly convertible but is only 1/3 or so of how many transactions are done via the dollar (so currency A>dollar>currency B).
I think part of this is simply that China is making noise about the depreciation of the dollar as the government spends like crazy. Eventually, inflation will catch up to the stimulus (stimulus initially causes appreciation, though it’s not quite as simple as that) and all of China’s dollar-based assets will be worth less. But it will be a few decades probably before we get out of our deficit, and at least half of one before we’re done with deficit spending (i.e. – making our deficit deeper)
As has been the case with China for decades, it remains a “paper tiger” until it puts some substance behind its words. But when it becomes a real tiger, watch out…