How The Fed Crushed China's Ability To Join The Ease-Fest

Aahhh, the unintended blowback, er...consequences of a currency war.  The Fed's uber easy monetary policies have made ALLIES of China and South Korea, as they look to diversify AWAY from the USDollar with bilateral trade.  This is yet another nail in the coffin of the USDollar as the global reserve currency.

In previous eras, when a country had the cojones to jawbone down the USDollar as the international trade settlement currency, US foreign policy dictated that said banana republic (or OPEC member, whichever was appropriate) would be declared a rogue terrorist country, and some incidental event would conveniently trigger justification for invasion.  The natives are getting restless?  Just declare them freedom fighters and help them overthrow whichever current evil regime is in place.

However, China is unabashedly signing bilateral trade agreements with US allies, as well as our enemies in every continent, which means, the US is powerless to do anything about the dollar's demise as the "petrodollar."

Sounds benign enough.  So what's the problem?  Ummm, if and when the USDollar were to lose said reserve currency status, every single country holding dollars will have no need for them, and will be dumping them en masse.  The result will be soaring consumer prices domestically, crushing the US economy in the process.

But hey, no big deal.  The NFL football referees are coming back.  All is well.

http://www.zerohedge.com/news/2012-09-27/how-fed-crushed-chinas-ability-join-ease-fest