Peter Schiff: When China Pulls the Peg, Cardiac Arrest Will Follow in the USA
Senate candidate Peter Schiff discusses The Truth Behind China’s Currency Peg:
While the peg certainly is responsible for much of the worldâ€™s problems, its abandonment would cause severe hardship in the United States. In fact, for the U.S., de-pegging would cause the economic equivalent of cardiac arrest. Our economy is currently on life support provided by an endless flow of debt financing from China. These purchases are the means by which China maintains the relative value of its currency against the dollar. As the dollar comes under even more downward pressure, Chinaâ€™s purchases must increase to keep the renminbi from rising. By maintaining the peg, China enables our politicians and citizens to continue spending more than they have and avoiding the hard choices necessary to restore our long-term economic health.
De-pegging will force the hand of U.S. politicians toward pursuing realistic policies. The Chinese will come to their senses eventually because it is in their interest to do so. Meanwhile, the longer the peg is maintained, the more indebted we become, the more out of balance our economy grows, and the more our industrial base shrivels. In short, the longer they wait, the steeper our fall.
I opined in a comment at InfoWars.com about why China may maintain the US Dollar peg for a bit longer:
If Peter Schiffâ€™s assessment is correct, and depegging would cause â€œcardiac arrestâ€, and the longer the peg continues, the harder we fall, then I suspect the Chinese have a strong motivator to keep the peg going as long as possible.
This is economic warfare folks. This is SERIOUS business.
They will pull the plug and stop funding our debt at a time of their choosing. Seems to be a solid strategy from the perspective of the Reds. They choose the battlefield. They choose when the final attack will come.
The Chinese are not doing this because they want to help us. The exact opposite is true.
I firmly believe we are engaged in a global war. No missiles have been fired yet, but perhaps at some point in the future they will be. Or, it may end similar to the Cold War, where the USA completely destroyed the economy of the Soviet Union through a variety of methods, namely by forcing them to spend billions to keep up with our defense spending. Eventually, the Soviets were bankrupted.
Read Peter Schiff’s full article here…
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Date: November 22nd, 2009
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