Dollar Drops as China to Diversify Holdings

MoneyNews ^ | November 10, 2006

[GodGunsGuts]

Watch many other countries follow suit.

[rellimpank]

--b--

[claptrap]

Tin-foil hat scare tactics-Just monday the conservative
talk show bloviators said the economy was chugging right along, now this is worldwide confidence eroding in our Quasi-french we cant surrender fast enough gubbermint?

[LibLieSlayer]

chicoms will now be pressured to stop holding down the value of their currency. WalMart will reduce purchases as other Nations goods will become cheaper etc.

LLS

[snarks_when_bored]

Not only have we allowed the Chinese to start building lots of essential stuff for us, but we've also allowed them to lend us the money to buy the essential stuff they build for us.

When they decide the bill is due and payable, ...

[jiggyboy]

"I'd expect the trend of reserve diversification to be unfavourable for the dollar over time, but we have to be cautious. I'm not sure this rhetoric means you should chase the dollar weakness, but I wouldn't expect significant dollar rebound in the near term," Elmer said.

This is perhaps the most mealy-mouthed, non-committal, all-bases-covered financial quote I've read in a while, and that's saying something. Does it have any content or meaning whatsoever?

[KTM rider]

and gas prices went up immediatly after the election

[Myrddin]

The Democrats were still the minority party on Monday. Other nations know exactly what to expect of Democrats and they are posturing in anticipation.

[Alberta's Child]

Chicoms will now be pressured to stop holding down the value of their currency.

Actually, they'll HAVE to stop "holding down" the value of their currency if they expect to buy currencies other than the U.S. dollar.

[LibLieSlayer]

Absolutely and it will destroy the cheap advantage that they have enjoyed.

LLS

[100-Fold_Return]

Thank God with your folks now in power the "housing bubble bursting" will go away--Houdini-style.

[durasell]

Uh oh, this isn't good.

[Reagan Disciple]

This is not new news as they have been jawboning about this for months for it would take some time to implement such a plan and the Chinese do nothing in short order (central planning mentality).

The threat is not the diversification away from USD as markets will adjust if economic conditions warrant.

The real threat is if and when they decide to bail on US Bonds, of which they are the second largest holder behind Japan. This would cause havoc in all markets.

When they do, you know they're getting ready to move on Taiwan.

[glorgau]

Didn't take long for the Chinese to tell the new Congress what to do.

[glorgau]

When they do, you know they're getting ready to move on Taiwan.

They haven't got the military wherewithal to prevail. Political is a whole 'nother story.

[Reagan Disciple]

Not sure why you would say that considering they have been purchasing SU-24/25/27s and TU-22s from Russia with Air-to-Sea missle systems for years.

Couple this with the expansion of PLA Navy and the rocket technology that they stole from us and have bought from the Russians and you have the makings of a formidable force that,

1) the Japanese cannot current counter
2) the Taiwanese cannot stop
3) the US would not engage if any Democrat gets the WH in 2008.

I understand the 3rd/7th Fleets would put an end to this fairly quickly, but considering we promote the "One China" policy in the UN and despite the 1979 Taiwan Defense Act, no way we would move unless China turned her sites on Japan.

[Finalapproach29er]

Let "diversify" our accounts with China with some tarrifs to price China out of our market.

Bastards.

[taxed2death]

Don't fret boys... the war will be happening right on schedule in 2008.

[RightWhale]

Everything is down. Even gold. Could be the start of a Democrat recession.

[taxed2death]

"Let "diversify" our accounts with China with some tarrifs to price China out of our market.

What do you think would be left on the shelves of Auto parts stores (Pep boys, Autozone), Home Depot, CompUSA, Walmarts, etc....?