Can the US dollar find strength?...Maybe on a trade 'war'

As mentioned in The USD will only recover if China's economy collapses or there is a major war., the only aspect that will drive a USD upward is some sought of risk averse event. China's economic data released on 10/09/2009 the caused the USD to tank on the same day. So a correlation is becoming more evident that the more a stronger economy diversifies out of USD reserves the more it will effect the purchasing power of the USD. So the only thing that can change total USD selling is if both the Japanese and Chinese economies absolutely collapse, or a major conflict occurs.

The next best thing? A nice little trade war...and it seems to be beginning between China and the USA:

Sept. 14 (Bloomberg) -- China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.

Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site yesterday. The Beijing-based ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.

The European Central Bank said last week that rising protectionism may hamper world trade and undermine the global economy’s recovery from recession. The U.S. placed tariffs starting at 35 percent on $1.8 billion of tire imports from China, backing a United Steelworkers union complaint against the second-largest U.S. trading partner.

This is country to country survivalism. One thing that should be noted the more the USD is sold off the more friction it will put on export countries and trade, particularly commodity and Asian exports. As the currency's value of export nations is driven upward against the USD. China is trying to recover from a recession and it wants cheap imports, but against the US dollar commodity currencies are expensive therefore their 'goods' (exports) are expensive.

Now if you insert trade protectionism into the equation...then we are in a world of hurt.

So there is a lot of ripples unfolding even with the global ecomomy stabilizing.

It's a shame academic economists didn't study anthropology, human nature and psychology, sociology.