Yes Virginia, The Chinese CAN Dump The Dollar

Implode O Meter ^ | 1/26/2011 | Aaron Krowne

[Hammerhead]

or we can just give China the middle finger when they try to claim their assets.

[unkus]

ping

[familyop]

Ping. There might be some interesting points in the piece re. strategy.

[Greysard]

or we can just give China the middle finger when they try to claim their assets.

First of all, most of those assets are not in the USA. They are more likely to be in Africa and Asia, where minerals and oil are produced. What assets do you see in the USA, other than the Treasury debt, that China can even remotely claim?

But more importantly China is a home for many US companies. They have factories there, and those factories are producing top notch products. In case of any hiccup on the international scene all these companies will be for sure seized for debts, and probably sold to Chinese businesses. The USA will be left with no offshore industry, with no money, with no oil, and with no credits for a long, long time. The only resource that the USA will still have is its military, and the nukes. The meaning of the word "diplomacy" may radically change.

[nickcarraway]

In case of any hiccup on the international scene all these companies will be for sure seized for debts, and probably sold to Chinese businesses.

That's the chance you take when you operate in a communist oligarchy. Too bad, so sad.

[nickcarraway]

This guy misses the point completely. China could dump the dollar, but it would hurt them. Not just because of their reserves, but because they can’t sell their products to the U.S. if they are too expensive.

[unkus]

The only resource that the USA will still have is its military, and the nukes.

---

And our military is likely to be cut to the bone. I fear a nuclear strike on our country.

[FromLori]

I don’t know about that China’s new play ground seems to be Europe

China devalues US buying power by 30%, Protects US Treasury Holdings

http://www.zerohedge.com/article/china-devalues-us-buying-power-30-protects-us-treasury-holdings

The End of the Dollar

http://www.thetrumpet.com/?q=7874.0.132.0

[MHGinTN]

Any nuclear strike on US which could neutralize us would result in devastation to the environment (read nuclear winter) and vulcanization (volcanoes all over the place; the planet rings like a bell). The planet only commits suicide if the insane mooslim’s are allowed to continue their present course. Sadly, it looks like the progressives have not a clue on that!

[Smokin' Joe]

China could dump the dollar, but it would hurt them. Not just because of their reserves, but because they can’t sell their products to the U.S. if they are too expensive.

China will wait until it will hurt us far more than them. In the meantime, we wear out our materiel without replacing it in sufficient numbers to fend off swarms of low tech adversaries and our own government is working against us using our own resources, much less developing the self-sufficiency that could maintain a major war footing.

[bruinbirdman]

ChiCom currency in not even convertible. They are a virtual barter economy with little leverage.

They cannot afford to play the currency game, they prefer commodities. That may be one reason Jim Rogers moved to Singapore and deals these days in commodities only.

Yitbos

[onona]

Point of consideration for your thoughts,

Articles I’ve read show China is at a tenuous point regarding being able to feed its population, due to lack of fresh water for crops.

I would think if this becomes a trend, all the other resources they have become worth much less, as they become dramatically dependent on those imports to sustain life, let alone growth.

I aslo saw an article calling fresh water “blue gold”, noting that Canada holds 20% of the world’s freshwater reserve, and is moving rapidly to protect it as an export item.

All in all, it looks like a very tricky relationship.

[nickcarraway]

Everyone is also ignoring their demographic time bomb.

[Fee]

It is too early for China to dump the dollar because the world does not have another reserve currency to replace it with. China however can take this time to develop the means to dump the dollar if the situation arises. Little reported in the press is China has set up third party accounts in Britain to make some of their US T bill buys. It hides the Chinese efforts thru other national banks. Reason for setting up this capability is if China chooses in the future to dump US dollars they do not want to alert the market and cause a panic. Thus China when she decides to dump the dollar without triggering a panic may use these third party bank accounts as the first wave of initial selling.
Before she can even dump the dollar and destroy her export markets, China needs to replace the US buyers.

[familyop]

Thank you. The situation makes a little more sense now.

[bruinbirdman]

For all the talk about ChiComs dumping Treasuries, this Fed website is the one you hear about, the TIC. Bookmark it for handy reference, all the countries are there:

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES

The TIC homepage is here:

TIC Home Page

And don't forget, these guys are getting greenback interest every 6 months.

yitbos

[vanilla swirl]

China is taking our fresh water from the great lakes. Fresh water is the new oil and China doesn’t have enough of it.

[maine yankee]

China is taking our fresh water from the great lakes. Fresh water is the new oil and China doesn’t have enough of it.

I’d like to know more about this.

[BfloGuy]

Theoretically interesting -- and, I suppose, possible.

But abandoning the dollar (and by extension, the US) loses them their primary export customer and causes a cascade of recessions around the world. Of course, they can get out of the dollar if they want -- but they are not a foolish people.