Thursday, July 8, 2010

Triffin's End Game

Now here's an interesting quote:
We know the dollar is going to depreciate, so we hate you guys, but there is nothing much we can do.” – Luo Ping, director general, China Banking Regulatory Commission

The current rush to the dollar and away from the Euro is being done by sophisticated players who understand that the dollar is no more a reliable long term store of value than the soon to be lamented Euro.  But they're stuck.  And taking the view of short term speculators everywhere, they expect to be the ones to get out of the building before it collapses.

The problem is that there are so many people and the exit is so very small.  And what about us?  You know, the guys who live in the building?

Kevin Williamson at NRO has more here.

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