By John Galt
October 11, 2011 – 18:45 ET
“Those who do not learn history are doomed to repeat it.”
So what part of that old saying, depending on which interpretation has escaped the idiots in the U.S. Senate? Apparently all of it. The U.S. Senate tonight passed the currency bill which would, if it becomes law, almost guarantee a trade war with our nation’s central bank. The problem is that the unpredictability of the House Republicrats who are in full blown election mode may allow this to sneak through much like Smoot-Hawley was a reaction to populist outcries about unfair trade. The problem now as opposed to the 1930′s is that our economy is on the precipice of a potentially destructive bout of deflation, which I think has already started back in August, which within the idea of a trade conflict with Communist China that could actually accelerated the deflationary pressures and crush the economy severely in the next two quarters.
By Pete Kasperowicz – 10/11/11 06:28 PM ET
The Senate approved legislation Tuesday that at once pressures China to allow its currency to appreciate more quickly, and forces House Republican leaders to consider how to handle the controversial yet popular bill.
On a vote of 63-35, the Senate approved the currency bill, S. 1619.
The vote poses an immediate quandary for House Republican leaders, who have so far dismissed the bill as a recipe for starting a trade war between the U.S. and China, just when the world is looking for the countries to work together to help maintain global economic growth.