Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
If the China stops propping up the US dollar, the dollar will fall relative to the Yuan, and American agricultural imports will rise,

And the oil required to make those agricultural products will be procured with which stash of hard currency?

Recall that the definition of American agriculture is "the process whereby farmland is used to turn fossil fuels into food." So the price of oil in US$ establishes a floor for viable prices for agricultural products (most oil substitutes are pegged to oil, price-wise). And the price of oil in US$ will go up when the US$ drops, because the US is a net importer of oil.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Nov 7th, 2009 at 09:22:45 AM EST
[ Parent ]

Others have rated this comment as follows:


Occasional Series