Will Grigg?s Liberty Minute

September 24, 2008

For years, Washington has depended on China?s central bank to prop up the dollar by buying Treasury notes. This is because America?s savings rate has been insufficient to finance government borrowing.

At some point, the Chinese government -- along with other foreign creditors ? will grow weary of accumulating depreciating dollars. They will start selling their Treasury notes, or simply stop buying them. The consequences for the dollar will be devastating.

Last week, the Federal Reserve generated hundreds of billions of dollars out of thin air. Over the weekend, Congress drafted a measure to pay $700 billion to bail out mortgage lenders, and raise the national debt to more than $11 trillion.

The Chinese central bank has also raised interest rates for the first time in six years. And China?s state-controlled media is giving broad hints that Beijing will soon stop subsidizing our government?s debt.

Our economic catastrophe has just begun to unfold.

Let us take back the liberty wherewith Christ has made us free.