turning off screen, page-58

hey KG

if you read my earlier China will precipitate a global economic collapse, this will crater the commodity economies like Australia and Canada (both countries living in the delusion that they will some how survive like some economic oasis in the desert of economic destruction)

When this happens and the US and Europe follow very closely behind it then the USD will strengthen. The reason for this is that in a collapse people with USD debt will need to buy USD to pay those debts off. Debt deflation accelerates the delevaraging process, people sell asset to gain USD in order to pay debts.

The US has already printed massive amounts of USD over the last decade and these USD still exist in the form of trillions of dollars in USD denominated debt. These debts are the foundation of the massive asset bubbles we have experienced . The faster people try to sell their assets to pay off these debts the faster the value of their assets fall. Australia is in one of the worsts positions of all, we are one of the most traded currencies in the world yet our economy is really small in global terms. Billions of AUD float around the money markets, when the panic occurs the natural flow is away from AUD, Euro and Yen. AUD will crash compared to USD until

and thats the big word "UNTIL" the world G7-20 steps in and say enoughs enough and start to settle on currency trading ranges for the sake of stability

Thats what Sarkosy is talking about, creating a managed set exchange rate for all the worlds currencies . We will head back to pre Keating days because it will be the only way to stabilize the worlds economies