Phase Two of the Currency Wars?

A while back we did an article about the first shots being fired in the currency wars.

A new volley may be under way in the background:

Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.

China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

(British Telegraph, emphasis added). That would be unfortunate, since the Obama Administration is making the best diplomatic efforts, the best outreach, and the most neighbourly gestures in a decade.

Those gestures offer a new era to our neighbour countries around the world.

But perhaps some of the damage the Bush II regime did to the US and to the world is that some of this cannot be avoided. Who knows.

But I hope the State and the Treasury Departments are taking note that it is not all just about us.