Have y'all been noticing the spitting contest that's going on? It goes like this...
The Chinese haven't been too happy with how the US government has been handling the mess on banking and investment firms going belly-up... and since the Chinese have a substantial stake in US dollars, they are worried about more losses.
They say they were deliberately encouraged (and mal-informed) by some firms to invest in derivatives. So, the Chinese recently announced they would allow some Chinese government-owned firms to default on derivatives. Spit one.
Then the US government issued a 35% tariff on Chinese tires, effective with a 2 weeks notice. Spit two.
Now the Chinese have spit back, threatening to cut off imports of American chicken.
I wonder how we will spit back? I did notice gold shot up dramatically on Wednesday.
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