Share on Google Plus Share on Twitter Share on Facebook 2 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit 1 Share on StumbleUpon Tell A Friend 2 (5 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   1 comment

General News

The Dollar's Not Almighty Anymore: A Little Dose Of Fear Among The Elite Can Be A Good Thing

By       Message Dave Lindorff     Permalink
      (Page 1 of 1 pages)
Related Topic(s): ; ; ; , Add Tags Add to My Group(s)

View Ratings | Rate It

opednews.com Headlined to H4 11/2/11

Author 63
Become a Fan
  (71 fans)
- Advertisement -

By Dave Lindorff


The Almighty Dollar is not almighty anymore by ThisCantBeHappening

Shanghai -- I was talking yesterday with the chief financial officer of a US-based drug firm that operates here in China, producing for the Chinese market, and got an up-close look at how bad things are for what used to be called the Almighty Dollar.  

The company in question, a joint venture between a very profitable U.S. drug company and a local Chinese company, is quite profitable itself.

The guy was explaining to me that his firm needed to add another factory, because the one they had was running full-tilt and couldn't keep up with demand. That might sound like a simple problem, and one that most enterprises would be happy to confront, but the shrinking US dollar, and concerns in China about inflation, complicate things.

You would think that it would be a simple matter of the parent company's sending over the $50 million or so that it would cost to build the new plant and that would be that, but it turns out that the dollar is falling so fast against the Renminbi (RMB), the Chinese local currency, that no contractors or other vendors necessary for setting up a new facility are willing to accept it as payment. That means the company has to try and come up with the construction costs in local currency.

- Advertisement -

I won't go into the arcane machinations that involves, except to say that because Chinese financial authorities and the country' central bank, the People's Bank of China (PBOC), aren't letting local banks or foreign-owned banks with offices in China lend money without going through a tough approval process, the outcome of which is iffy, and they are setting interest rates at 6.5% for those loans they do approve, which is a pretty stiff rate to have to live with.

The important point here is that the dollar is being viewed here in China the way people in the U.S. have typically viewed Mexican pesos or Chinese RMB...

For the rest of this article by DAVE LINDORFF in ThisCantBeHappening!, the new award-winning independent online alternative newspaper, please go to: www.thiscantbehappening.net/node/872

- Advertisement -

 

Dave Lindorff is a founding member of the collectively-owned, journalist-run online newspaper www.thiscantbehappening.net. He is a columnist for Counterpunch, is author of several recent books ("This Can't Be Happening! Resisting the (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -
Google Content Matches:

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Israel's Gaza Atrocities Recall America's Atrocities in Vietnam

Supreme Court Junket King Scalia Dies While Vacationing with Wealthy Patrons at Private West Texas Getaway

Something's happening here: Clinton's Crumbling, Bernie's Surging and a 'Political Revolution' May Be in the Offing

The Case for Impeachment of President Barack Obama

Barack Obama: Manchurian Candidate Version 2.0

Free John Walker Lindh, Bush's and Cheney's First Torture Victim!