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"GREENWICH, Conn. (MarketWatch) — Federal budget deficits and balance-of-payment deficits have radically increased since World War II. Today’s dollar has lost 85% of its value since 1971. Relative to gold the dollar has lost 96% of its purchasing power.

But America has experienced sustained inflation and deindustrialization because of the overvalued reserve currency role of the dollar, overvalued relative to other paper currencies, especially the Chinese yuan USDCNY +0.19% .

While China is an important trading partner of America, it may also be a mortal threat. The Chinese economy is subsidized and sustained by the pegged, undervalued, yuan-dollar exchange rate. Neither the United States nor China seem to grasp the long-term, destructive consequences of the world dollar standard. The Chinese financial system has been corrupted by tyranny, deceit, and reckless expansionism. But, like America, China is destabilized by the perverse workings of the world dollar standard. "

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