Bailout Rumors, Settlement’s, More Bad Economic News-Drives Stocks Higher (Video)
When the fed did the QE things under the criminal Bernanke, the world was in a deep recession, and all the other currencies under the basket of world reserve currency were of US vassal states. Now, the Chinese RMB occupies 11% with only 44% of national debt to GDP ratio and paying 4.3% interest rate. For comparison, the US dollar is backed up by close to 110% of national debt to GDP ratio and 0.25% interest rate. It is no brainer that over time the Chinese currency would dominate and threaten the petro dollar status enjoyed by the US dollar since the 70’s. I don’t think the fed would allow that to happen. So, I don’t expect any more QE and aggressive interest rate hike over the near future after the election. With that said, both China and US have close to 300% of private debt to GDP ratio, but defaults on private debt if not bailed out should increase the value of the currency involved due to depressionary pressure from destruction of money supply.